Energy Storage, Smart Grids Help Drive Cheap Electricity Rates

An increasingly important trend in the energy field these days is energy storage. It’s not just a means by which bigger users can hedge their bets on usage and costs, leading to cheap electricity rates. It’s also a way to balance out the instability in the renewables that have a growing role in the energy mix.

It’s all tied in to the utility grid and the need to maintain an efficient flow of power. In order to meet peak demand, supply and demand must be steady.

Most grids don’t currently store energy because of the cost. Instead, balance is provided by additional fossil fuel-burning plants ramping up or down as needed. Here’s the problem with that, though. Since these plants don’t run consistently at full power, which is when they’re most efficient, they add to our pollution problem – even more than the plants that meet the utility’s base-load energy demands.

Increasingly, we’re turning to create smart – Internet of Things-driven – energy grids that optimize the conservation and delivery of power. By 2030, according to the non-profit Smart Energy Consumer Collaborative, this will improve the efficiency of our current system by 9 percent, saving some 400 billion kilowatt hours annually. Energy storage, such as grid and distributed solutions and battery systems, is a key component of this smart system.

The evolution of the smart grid and energy storage systems has micro and macro implications.

First, look at the local impact on the electricity cost burden of Ontario businesses. Our increases have been over three times greater than what businesses in other provinces have experienced. It’s a function of the Global Adjustment (GA) charge, which covers utilities’ costs of providing adequate generating capacity and conservation programs.

Ontario’s Industrial Conservation Initiative provides a solution for better control over those GA charges to capture cheap electricity rates. The catch is that it requires predicting when your electricity peak demand is likely to occur and temporarily reducing it for that period – without upending your operations.

This is where an intelligent energy storage solution comes in. Active Business Services reviews informed by usage trend data on the Ontario grid, it’s a means for transferring your building’s load onto the system during times when peak usage is expected. You’ll lower what you add to peak demand and accordingly see a sharp drop in your GA rate.

From a macro perspective, it’s important to look at the growth in renewables, like solar and wind energy. They’re increasingly deployed as cost competitive solutions, but have drawbacks. The sun doesn’t always shine. Wind conditions aren’t always consistent. Yet as we depend more on these resources, we are asking more of our grid, which needs to be more flexible to adjust.

This is where energy storage has an important role in meeting the need to balance the fluctuating and often unpredictable supply and demand. California, for example, passed the first energy storage mandate in the U.S. in 2010. It’s designed to provide frequency regulation on the grid and help stabilize it for solar and wind energy fluctuations. It can also accommodate weather-related demand peaks and provide backup power if it’s lost on the grid. It can also save everyone money on expanding transmission lines and infrastructure.

Energy storage is a work in progress. But as the market expands and matures and the promise of the smart grid becomes a reality, it’s going to help solve many of the issues we face with our power.

Author: Active Business Services

Active Business Services is an energy management firm that has dedicated the last ten years to providing Canadian commercial and industrial customers with natural gas and electricity supply and risk management solutions.

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