PNNL

Abstract

The electric grid is planned, built, and operated to satisfy peak demand. But because peak demand only occurs for a few hours per year, customers end up paying full price for grid infrastructure that is only used for a small fraction of the year—an increasingly expensive proposition as peak demand continues to grow and more infrastructure is required to meet it. The emergence of cost-competitive energy storage technologies in recent years, however, offers the potential for a grid that is planned, built, and operated based on average demand. By strategically siting and operating energy storage throughout the electric grid, excess generation in low-demand periods can be captured and stored near customers, which then reduces the amount of electricity that needs to be generated and moved through the transmission and distribution systems during high-demand periods. This paper describes these potential benefits, supported by real-world examples of energy storage projects that have created cost savings, which points to the potential for profound and far-reaching reductions in the cost of electricity if energy storage technologies are deployed at scale throughout the electric grid. These examples will be of use to system planners and operators, utility regulators, decision makers, and stakeholders in those processes as they look for opportunities to reduce the cost of electricity in their respective systems and jurisdictions.