The costs associated with energy storage need to fall by at least a half in the next five years if technologies are to realize mainstream adoption, according to a new report from the IEEE and Zpryme.
Based on a survey conducted last September of 460 smart-grid executives around the world, the research issues a stark warning to companies involved in the energy-storage market.
“Industry experts from the US Department of Energy, EPRI (Electric Power Research Institute) and KEMA estimate that costs must decrease by at least 50% relative to today’s costs in order for energy-storage technologies to realize mainstream adoption,” says the report. “If the costs do not significantly decrease, utilities will continue to rely upon gas-fired turbines (peaker plants) for lead shifting and renewable integration.”
Despite these concerns, some two thirds of respondents to the survey said they believe energy storage – whose benefits include the provision of supplemental power to meet peak demand, the improvement of power system reliability and the reduction of energy costs – will be very important to the future development of the smart grid.
Meanwhile, a half of respondents agreed that microgrids would be very important to the smart grid’s development.
The report claims that Europe is a “global leader” when it comes to adopting microgrids, while North America is prominent in energy-storage technology.
These regions stand to “take the lead when it comes to developing and deploying next-generation distributed energy systems,” write the authors, noting that Japan, South Korea and China “will also continue to make strong investments in energy storage as these countries are determined to lead the world when it comes to clean technologies”.
Nevertheless, in both areas, external private- and public-sector funding is needed to support R&D activities as well as pilot projects.
The benefits of more funding would include more cost-effective solutions and an improved business case for the technologies.
The report also claims that customer demand – and not further regulation, policies or subsidies – must drive the viability of the markets for energy storage and microgrids.