Household distributed energy storage capacity electricity charges

Does energy storage deliver value to utility customers?

Energy storage (ES) can deliver value to utility customers by leveling building demand and reducing demand charges. With increasing distributed energy generation and greater building demand variability, utilities have raised demand charges and are even including them in residential electricity bills.

Can energy storage technologies reduce demand charges?

Demand charges are based on peak power, not energy, and therefore energy storage technologies have unique value potential for demand charge reduction since energy storage capital costs are a stronger function of energy stored than power delivered.

How much would a household pay for energy storage in January?

Applying a demand charge of $10/kW-month, which is on the high end of residential demand charges, this household would pay $56.40 in demand charge for the month of January. Energy storage devices could level this demand by charging during low demand hours and discharging during peak demand hours.

How efficient is a battery energy storage system?

Studies on current battery energy storage systems cite roundtrip efficiencies from 83 to 89%. 4, 21 – 24 Battery cell cost scales largely with energy while inverter costs scale with power so systems with higher power to energy ratios generally cost more but bring greater value for demand charge reduction applications.

What is the difference between rated power capacity and storage duration?

Rated power capacity is the total possible instantaneous discharge capability (in kilowatts [kW] or megawatts [MW]) of the BESS, or the maximum rate of discharge that the BESS can achieve, starting from a fully charged state. Storage duration is the amount of time storage can discharge at its power capacity before depleting its energy capacity.

What is a battery energy storage system?

A battery energy storage system (BESS) is an electrochemical device that charges (or collects energy) from the grid or a power plant and then discharges that energy at a later time to provide electricity or other grid services when needed.