In Energy Storage, Value Trumps Cost

Energy Storage Panel: Chris Campbell, A123 Systems, and John Zahurancik, AES Energy Storage at Green:Net 2011

Energy Storage Panel: Chris Campbell, A123 Systems, and John Zahurancik, AES Energy Storage at Green:Net 2011Some would argue that Americans place too much concern on the cost of things instead of on the value of those things, which could have them overlooking the potential for grid energy-storage solutions. Energy storage provides an on-demand, predictable source of energy to power systems to keep them running optimally, and even to enable new projects, but the cost seems to be scaring some people away.

At least, that’s the message from a Green:Net fireside chat with Chris Campbell, VP of business development for the Energy Solutions Group at A123 Systems, and John Zahurancik, VP of operations and deployment at AES Energy Storage. According to Campbell, lower prices for battery-powered energy storage units are important, but such concerns over price ignore the added value that energy storage brings. If, for example, a new energy storage unit can be used for multiple applications by a power company, it adds more value than its cost in kilowatts per dollar might suggest.

Zahurancik elaborated on that point, noting that energy storage systems aren’t just stores of energy, as the name might suggest. They actually improve overall power system performance. He compares them to the memory in a computer, which caches information to minimize the need to call the hard disk every time an application needs that cached data and results in a faster, smoother experience for the user. Additionally, he explained, battery-powered units are emission-free and don’t require any special geological requirements for siting, so power companies can save a lot of time and effort on those fronts. They’re also easily scalable, meaning capacity can be added as needed, generally, without much effort.

That being said, prices are coming down. Zahurancik said that his company, which buys and installs the units for customers, paid two or three times more for them just a few years ago. In part, he thinks prices are coming down in tandem with the popularity of electric cars, which are both improving the technology (they’re built by the same manufacturers) and driving up awareness. And of course, Campbell noted, more companies will start seeing the value of battery-powered energy storage as the prices drop. Demand is all about viability for particular applications, he explained, and lower prices make the technology viable for a lot more applications.

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