S&C Electric’s Troy Miller describes what utilities and commercial power users need to consider when choosing an energy storage partner.
Energy storage is proving its value by making the grid more reliable and efficient. The market is growing, driven by demand from utilities, municipalities, and commercial facilities seeking increased reliability and low-carbon operations. Grid-scale and commercial applications such as frequency regulation, grid hardening, and demand response underscore energy storage’s long-term significance.
What is now being called into question is not the viability of the energy storage market, but the longevity of the energy storage system integrators and component suppliers—those developing and installing energy storage systems. And what is really on the line is the security of investments in energy storage made by utilities and commercial power users.
A recent study by Navigant highlights that four of the 10 market leaders for energy storage systems integration have gone bankrupt and been acquired in the past several years. Lack of defined strategy and market experience was likely the driver of their financial failure. Together, these four companies account for 21 percent of the global market share for the top 10 systems integrators, according to Navigant.
Now, with new management and new strategies, each of these companies is repositioning itself as a leading integrator with expertise in various battery deployments and energy storage technologies. While each of these companies has a particular focus now, others in the marketplace have to ask, “for how long?”
When you invest in energy storage, you need a secure partner. For example, the cost of the battery can account for as much as 80 percent of your investment, and often under warranty for at least 10 years. During those 10 or more years, you need your battery supplier and energy storage integrator to be able to maintain, service, and monitor your energy storage system. You would like the company to exist for years after your project is completed.
When something changes in your grid architecture or your needs shift, you want your energy storage system provider to guide you toward the best solution and consider your long-term objectives. To do this, it needs the experience and perspective to be able to strategically address your energy storage and power system needs. In fact, you actually need a lot from your energy storage system integrator, but at a minimum you need:
• Bankability: Your integrator has to be bankable. Lack of financial security can impact your project schedule and future service needs. Your integrator’s viability is vital to your investment and your energy storage system’s performance. In some cases, you won’t be able to secure financing without bankable partners.
• Deep utility experience: Any time you are integrating new technology or a new component on to a system, your integrator has to have a deep understanding of both local and large-scale power systems. This knowledge includes current regulation and utility standards and requirements. You want your integrator to have completed projects that are currently yielding positive results. Without utility expertise, your system’s performance as well as project execution is at risk.
• A long-term strategy: An integrator should counsel customers on how to maximize the energy storage system beyond just getting it online. It should consider your system and anticipate your needs five, 10 or even 20 years into the future. Depending on your objectives—improving reliability, capitalizing on frequency regulation, or reducing carbon emissions—an experienced partner will counsel, plan, and create a system that delivers results for years to come. A steadfast and experienced integrator will also ensure your system–and investment–is flexible for the future grid applications and needs, whether that means new performance goals, capitalizing on new regulation, or meeting future standards and system requirements.
What jumps out to you about Navigant’s research? What else do you need from an energy storage system integrator? Please comment below.
Troy Miller is a business development and marketing manager in the Power Quality Products Division at S&C Electric. This blog originally appeared on S&C Electric’s corporate blog, GridTalk
