Why Future-Proofing Energy Storage Systems is Key to Long-term Success
In recent years, the commercial and industrial (C&I) sector has seen a significant shift in focus towards energy storage solutions (ESS), reflecting a growing awareness of the sector’s energy needs. With a focus on resilience, economic benefits, and the rise of EVs, C&I enterprises are increasingly turning to BESS as a solution and a cost-effective route to achieving energy goals.
Let’s take a look at what’s driving the growing interest in C&I energy storage and the importance of a technology-agnostic control platform in not only facilitating the full range of benefits that an optimized ESS can provide but also in ensuring that systems remain future-proofed in a rapidly evolving sector.
Steady Growth in C&I Energy Storage
After utility-scale storage, the C&I sector is the second-largest segment in the energy storage market, and analysts predict that it will experience steady growth in the coming years. With the increasing frequency of electricity market transactions and a widening gap between peak and off-peak prices, the economic viability of C&I energy storage is becoming more evident.
In Q2 2023, the C&I sector’s deployed storage capacity experienced a year-over-year increase of 25% from Q2 2022, Wood Mackenzie reported. The agency forecasts 3 GW of commercial capacity installed over the next five years. However, it noted this forecast is dependent upon a variety of factors, such as state incentives and local solar programs.
In specific markets, New York deployed 18.4 MW, its best second quarter ever, with the previous record of only 2.5 MW set last year. Meanwhile, analysts expect growth in California’s CCI storage market due to NEM 3.0 and AB 2316.
Benefits of C&I Energy Storage
What’s driving the steady growth of energy storage systems?
Strengthening Resilience
One of the primary benefits of on-site battery storage for C&I enterprises is the enhancement of energy resilience. This is particularly important as many businesses transition from traditional diesel or gas generators to low-emission solutions like Battery Energy Storage Systems (BESS) and hybrid generators. The transition often begins with hybrid genset solutions, gradually moving towards BESS. Energy storage is critical in ensuring uninterrupted power supply during brief grid outages or fluctuations to safeguard operations and avoid costly disruptions.
Economic Potential
BESS can potentially reduce energy costs in some areas by up to 80%, according to a recent McKinsey analysis. The savings are especially notable in regions where demand charges are standard or markets with time-of-use (TOU) electricity pricing structures that encourage off-peak consumption. Commercial buildings and factories can leverage energy storage systems for a range of economic benefits, such as peak shaving, integrating on-site renewables, self-consumption optimization, backup applications, virtual power plants, and electricity trading within the provision of grid services.
Rise of EV Charging
The rise of electric vehicles (EVs) is another driving force behind adopting BESS in the C&I sector. With EVs expected to account for 45 percent of all global vehicle sales by 2030, there will be a considerable demand for charging infrastructure. Installing BESS on their properties allows C&I enterprises to support EV charging without overburdening the existing grid infrastructure, reducing the need for costly upgrades. Installing bidirectional vehicle-to-grid (V2G) charging can also unlock additional resilience benefits for C&I fleets.
The Importance of Future-Proofing ESS Systems
Against this promising backdrop, EPC (Engineering, Procurement, and Construction) Firms and developers working with C&I customers in the energy storage sector face a rapidly evolving landscape of technology and trends.
A growing divergence has emerged between ESS batteries and EV batteries. ESS increasingly has a strong focus on cost-effectiveness, durability, and extended storage duration rather than just the energy density and charging speed needed in EV batteries. Lithium iron phosphate (LFP) batteries, particularly, are becoming a popular new option in ESS due to their safety and cost advantages.
Additionally, market conditions and regulatory frameworks continue to shift as the energy sector adjusts to the increasingly critical role of distributed energy resources (DERs) connected to the grid.
As storage technology advances and marketing conditions remain dynamic, EPCs need a simple future-proof solution to adapt to varying requirements, integrate new technology, and ensure seamless scalability as needs change.
The Heila EDGE®, a technology- and hardware-agnostic control platform, allows for easy scalability and integration of new storage innovations as they enter the market. The flexibility also ensures that BESS owners and operators can adapt to changing energy needs and market dynamics.
Interested in how to remain flexible to changing energy dynamics and advancements in storage technology? Reach out to us to learn how the EDGE can play a vital role in future-proofing energy storage systems.