The smart grid research branch at Zpryme recently released a report spotlighting the three advances shaping our energy future. The report, titled “Power Systems of the Future: The Case for Energy Storage, Distributed Generation, and Microgrids,” polled 460 smart grid executives to get their outlooks on what lies ahead.
While these innovations may be in their infancy, the development and deployment of energy storage, distributed generation and microgrids stand to cut costs, lower load, reduce emissions and bring about an entirely more reliable grid. Nevertheless, there are always challenges standing in the way. Here’s what you need to know:
1. ENERGY STORAGE:
The numbers: 69% of surveyed smart grid executives believe energy storage is "very important" to the development of the smart grid. Meeting peak demand (45%), improving power reliability (36%) and reducing energy costs (31%) were listed as the top three first-best benefits. Over the next five years, battery energy storage technologies (62%) will be the most in demand, of which lithium-ion (48%) and fuel cell (27%) energy storage systems are anticipated to be the most popular.
Industry research and development (84%), integrating renewables (68%) and private/venture capital (65%) were deemed "very important" to deploying or developing energy storage. Energy management (66%), distribution management (59%) and communications technologies (54%) were seen as "very important" to integrating grid-scale energy storage.
When asked how much global capacity for energy storage would increase, 35% said capacity would increase up to 5 gigawatts (GW) while 33% projected an increase between 5.1 and 10 GW and 18% project an increase between 10.1 and 15 GW. Of those polled, 45% predicted North America would be the region to see the most growth in grid-scale energy storage, while 26% and 23% said Europe and Asia-Pacific, respectively.
The value: The implementation of energy storage systems will minimize the effect of disruptions and outages to produce a more stable and reliable grid. Wholesale power costs will drop and load will level out, especially during peak demand. Energy storage systems will make it easier to use cleaner energy because they can accumulate intermittently generated renewable energy, such as solar and wind. Utilities can expect long-term savings as a result of diminished operational costs.
The challenges: 64% of those surveyed in Zpryme's report agreed that cost is the biggest challenge to energy storage adoption. Current market prices for energy storage will need to decrease by at least 50% to reach mainstream implementation. Companies will need to hedge their bets on the future.
The future: Although an aggressive market shake-out is expected over the next five years, energy storage system manufacturers who survive this initial period of turbulence are extremely well-positioned for big market shares and the subsequent profits. Similarly, the emergence of energy storage systems will create opportunities for advanced energy management and distribution management systems. The most potential for energy storage systems exists in regions where they can be integrated with intermittent renewable energy resources, such as wind and solar. The U.S. energy storage market is anticipated to be $10 billion by 2015. If growth in renewable sources continues, market projections anticipate an additional 205 GW of global capacity by 2050. Although energy storage systems are not a short-term investment, utilities that do not adopt them may not survive in the long run.
2. MICROGRIDS:
The numbers: 50% of the smart grid executives polled believe microgrids are "very important" to the development of the smart grid. Meeting local demand (49%), enhancing grid reliability (36%) and ensuring local control of supply (30%) were listed as the top three first-best benefits. Healthcare/hospitals (44%), military (43%), government (40%) and utilities (39%) were anticipated to be the industries most likely to deploy microgrids over the next 5 years.
Standards (66%), industry research and development (64%) and integrating renewables (55%) were viewed as "very important" to deploying or developing microgrids. Communications technologies (60%), energy management systems (60%) and distribution management systems (60%) were seen as "very important" to integrating microgrids.
Of those polled, 39% said the global capacity of microgrids would increase up to 5 GW, 28% said capacity would increase between 5.1 to 15 GW and 16% said capacity would increase between 10.1 to 15 GW. Europe (32%), North America (31%) and Asia-Pacific (20%) were listed as the regions that would see the most growth over the next five years.
The value: The development and deployment of microgrids will enable autonomous grid operation, DC current generation potential, better grid security, enhanced acclimatization to new technologies and improved integration of distributed energy generation sources. Microgrids are going to be the answer for organizations that cannot lose power, such as hospitals, military and government facilities. There are expected to be lucrative opportunities abounds for communications technology, energy management and distribution management systems providers.
The challenges: The microgrid market is relatively small right now. Without industry and/or government research, development, standards, targets and incentives, the microgrid market will struggle to get on its feet.
The future: The developing world cannot sustain its growth without microgrids. Essential industries such as hospitals, the government and the military are expected to implement microgrids in the near future. While the U.S. microgrid market is predicted to be $2 billion by 2015, the global microgrid market is projected to be $10.2 billion by 2017, with a generating capacity of 1.1 GW. In the long-term, the global microgrid market is expected to grow exponentially as centralized power systems, such as those in the U.S., are quickly becoming a thing of the past.
3. DISTRIBUTED GENERATION:
The numbers: 69% of the smart grid executive surveyed believe distributed generation is "very important" to smart grid development. Adding supply where it is needed (47%), reducing costs for large-scale generation facilities (37%) and improving reliability (36%) were listed as the top three first-best benefits. Utilities (49%), residential (46%), manufacturing (42%) and government (non-military) (41%) were anticipated to be the industries most likely to deploy distributed generation over the next five years. Solar (49%), wind (18%) and aggregated (virtual) sources (12%) were picked to be the most in demand distributed generation technologies over the next five years.
Integrating renewables (74%), industry research and development (67%) and standards (67%) were seen as being "very important" to deploying or developing distributed generation. Distribution management systems (74%), energy management systems (62%) and communications technologies (61%) were seen as being "very important" to integrating distributed generation.
Of those polled, 28% projected global capacity for distributed generation to increase between 10.1 to 15 GW, 22% projected capacity to increase between 5.1 to 10 GW and 21% projected capacity to increase by more than 20 GW. Europe (32%), North America (26%) and Asia-Pacific (26%) were predicted as the regions that would see the most growth over the next five years.
The value: Distributed generation is expected to be the answer for electric utilities attempting to meet the needs of large-scale commercial and industrial consumers. Widespread implementation of distributed generation is projected to improve quality of life for the poor, extend the grid's reach into rural areas, minimize emissions and sustain economic growth in developing with as yet unreliable energy grids. As a result of distributed generation, power supplies will increasingly become decentralized, signifying fewer outages, reduced congestion and improved overall reliability.
The challenges: For widespread implementation, commercial and industrial end-users will need to be convinced of the value of distributed generation's long-term benefits over its short-term costs. While distributed generation will be able use existing distribution lines, sophisticated distribution management systems will be required for integration into different distribution grids, improved stability and the integration of renewable energy sources.
The future: Distributed generation is going to be very popular in the next five years — utilities, residential consumers and large-scale manufacturers will increasingly use distributed generation to satisfy their energy demand. The global market for distributed energy generation is expected to reach $140 billion by 2015. In the long run, end-users can anticipate selling their excess energy back to the grid.
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