A “narrow focus” on the initial costs of energy storage is leading to misconceptions about the true value of the technology, a report has concluded.
A World Energy Council study published yesterday contends that because discussions about storage regularly revolve primarily around the questions of investment costs, its broader, longer-term benefits are often overlooked.
Christoph Frei, secretary general of the World Energy Council, said: “Too often the industry only talks about one half of the profit formula, namely cost. Policymakers should recognise the wide span of market places that can benefit from energy storage. These range from bringing down the cost of home solar systems, enabling the electric car industry to grow, helping electricity suppliers to manage problems when the grid goes down or there is grid overload to taking advantage of market price fluctuations and selling electricity across borders.
“To take full advantage of the growing wind and solar electricity shares, policymakers must review electricity market design so as to incentivise the build-up of storage capacity and ensure reliable and affordable electricity supply.”
The report said the true value of energy storage should be recognised by taking into account both its cost and revenue benefits.
Based on analyses of a number of storage costings across the technology spectrum, the report concludes that the widely used levelised cost of energy methodology is hindering the progress of energy storage. Reasons for this include arbitrariness of the methodology, which does not allow for differences in application cases, and incompleteness as only limited account of revenue is taken, the report said.
the report made a number of recommendations. Among these it advised would-be investors to look beyond costs – that “cheapest is not always best”.
A full version of this article can be found on PV Tech’s sister website, Energy Storage News.