The real revolution of energy storage

The Californian example cannot be systematized as it includes 30% investment subsidies. Nevertheless, the fall in the price of batteries makes it possible to envisage being able to store one MWh for less than eighty euros (based on three thousand charge cycles), which will generate a considerable number of new business models in the coming decade.

One of those concerns the system services of the electrical networks. These services make it possible, among other things, to ensure that the frequency is stable or to have a substitution capacity in case of emergency shutdown of a large power plant. They must be ultra-reliable and quickly mobilizable: two characteristics that the batteries respond perfectly. As these very specific generation units do not always work, they are remunerated mainly according to their power capacity rather than the injected energy.

For example, the French electricity transmission network remunerates the so-called fast reserve at more than € 30,000 per MW and the so-called capacity reserve at more than € 20,000 per MW. These services cost RTE more than five hundred million euros each year. With limited regulatory changes, like a reduction in the minimum size required to offer those services, RTE could achieve nearly two hundred million savings ... this equal to 30% of its last annual net profit. At European level more than a billion can be saved each year by transmission grid operators.

The second concerns areas that remain fueled by diesel generators or located in non-interconnected areas (such as the French West Indies). The production cost of these generators is close to 300 € / MWh or more! They could advantageously be replaced by systems combining photovoltaic technologies with storage. The key, as far as France is concerned, is more than a billion savings.

The third concerns the optimization of distribution networks. Strategically positioned, the batteries would reduce the need for network reinforcement by shaving the load. At the end of the day, several billion euros of savings are achievable on the European level as far as the regulators accept that the distributors can make calls for tenders to acquire storage systems or services, as is the case in Italy.

Finally, the difference between the off-peak and peak price is sometimes considerable in some countries. In Japan, the price of electricity is two hundred euros during the day but only one hundred euros at night. The establishment of distributed storage facilities is already profitable. The same phenomenon is observable in Singapore, not to mention Germany where storage operators will be paid to store in their batteries more than one hundred and fifty hours each year because of the negative prices.

Although car manufacturing is the main factor in the collapse of battery prices, it will lead to the emergence of many new business models. In the end, the balancing of the electricity grid will essentially be based on distributed consumption shaving and Vehicle-To-Grid technologies, which will facilitate grid management and further reduce the cost of power grids.

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