There is more to batteries than meets the eye, especially when it comes to their role in shaping the energy market’s future.
Both batteries and generators provide ways to prevent losses from outages, but are not magic bullets – they should be part of a holistic, proactive energy strategy to build resilience.
Batteries allow companies to tailor energy use and capture cheap and/or renewable energy for later use.
Generators can leverage tested technology and legacy fuels, while co-generation facilities can sell power back to the grid generating revenue.
You may already be aware of products like the Tesla Powerwall, a large, rapid charging stations for electric vehicles. However, industrial-scale batteries are much larger still, offering producers the ability to store enough energy for several hours of operation: forget the energizer bunny, we’re talking energizer behemoths.
There are several reasons why companies are investing in battery capacity, so let’s take a look at those.
Preventing Losses from Outages
One of the more obvious reasons to invest in batteries is to prevent work stoppages or slowdowns due to disruptions in the electrical grid. In such scenarios, batteries are one of several energy management options (including on-site generation) referred to as behind-the-meter capacity.
Behind-the-meter devices allow companies to generate / store energy independent of the larger grid, with batteries et al. powering local, on-site machinery and buildings, negating the need to draw energy from the grid. This helps your company’s peak-shaving (reducing your energy use during Peak hours) efforts.
Very few consumers will have the ability to generate and store enough energy to negate their reliance on the larger grid entirely. Hence, battery investment gives companies some breathing room when system maintenance, damage, equipment failure, or weather interrupts regular grid operation.
Batteries allow companies to bridge these gaps (at least initially), either to keep operating normally or to prevent abrupt power loss, which can result in equipment damage or risk employee safety.
Tailoring Energy Use
While blackouts come to mind as the kind of worst-case scenario that compels companies to invest in batteries, most battery systems rarely have to contend with such an issue. The real, day-in-day-out use case for batteries is to help companies tailor their daily energy use.
Installing batteries makes companies more resilient and flexible, incredibly valuable qualities if said company is also part of a Demand Response (DR) program. DR programs entail the regional system operator calling on participating companies to reduce or shift their energy usage to minimize stress on the grid during periods of high demand.
Having battery capacity on hand allows companies to outperform their competitors.
In such a scenario, the initial battery-related capital outlays can be recouped by allowing companies to operate at full capacity during Peak hours. In contrast, other firms participating in demand-side programs have to reduce or stop operations to comply with the system operator’s demands.
Having battery capacity on hand allows companies to outperform their competitors and avoid losses from curbed production and demand-side program fines (such as global adjustment) for failing to respond sufficiently.
Generators provide many of the same benefits (greater flexibility, resilience, Peak response) that batteries do, with the added capability to exploit legacy fuels (fossil fuels), which are more accessible to source and provide consistent power over more extended periods than batteries.
Investing in co-generation capacity also enables businesses to sell power back to the grid, which offsets some of the costs of generator ownership while ensuring local energy security at the same time.
Exploiting cheap / renewable energy
We’ve touched on how batteries can help you tailor how much energy you use during a given time. Batteries can also help you choose where your energy comes from. Batteries are an excellent way for companies to capture more renewable energy since storage capacity helps compensate for the intermittent nature of most renewables (such as wind and solar).
Proactive use of batteries can allow you to benefit from cheaper electricity prices at times when renewable generation is high, such as during windy weather or sunny periods, even if these times fall outside of your operating hours.
Battery systems can draw energy during greener, cheaper windows and use that energy during business hours, helping companies lower costs and reduce carbon footprints at the same time. This use provides companies with the ability to improve their green credentials and generate new leads among eco-conscious consumers by touting their use of renewable energy.
Even if there is not a lot of renewable capacity in your region, you can still benefit from investing in batteries by charging them from baseline sources (i.e., fossil fuels) during off-peak hours and using said energy to reduce costs during expensive Peak hour operation.
As a bonus, if you already own some electric vehicles, you can incorporate them into your overall power management plan. Vehicles are idle for the vast majority of the time, so you can opt to charge your electric vehicle fleet during off-peak times or exclusively from renewable sources and have them dispense energy while they are idle during more expensive energy windows.
Generators & Batteries: Some drawbacks
When it comes to energy management, there is no magic bullet: batteries and generators will not solve all your energy problems. As such, it should come as no surprise that batteries and generators have their share of drawbacks. Chief amongst these is the substantial upfront capital costs and the long payback periods, which can dissuade some businesses from investing in said equipment.
Further disadvantages include long installation times, which can complicate financing forecasts and discourage businesses on the fence, and fluctuating market rules that can affect potential cost-effectiveness.
Restrictions on installations depending on location, market, and government regulations can present problems, complicating efforts to learn, and effectively implement, batteries and generators alike.
Keep in mind the cost/benefit analysis between investing in batteries or generators and implementing other energy saving and efficiency measures.
Just as the answer to controlling Peaks at the system level is not to simply keep increasing generation capacity and consequently rack up expensive infrastructure bills, so too should businesses be wary of merely investing in battery and generator capacity, without also undertaking a thorough audit of their energy practices in order to identify other ways to save money.
What else can I do?
Batteries and generators can definitely provide benefits for some businesses (depending on industry) but all companies can benefit from adopting a holistic, proactive approach to energy management (of which batteries and generators can play a part).
Investing in the latest tech becomes moot when you are still falling victim to bad energy habits. Participating in demand response programs and adopting a suite of institutional and behavioral changes can often a better return on investment. This may seem like a tall order, as the number of options, tools, and regulations in and around demand response can seem daunting.
This is where services like EnPowered come into play, by providing you with simple, clear cut, and actionable information and advice to help you manage your energy needs.
EnPowered can help you reduce your Peak load by coordinating your response with your local demand response program, and taking the guesswork out of the equation: we only contact you when you need to curtail.
If you are interested in learning more about how to save money on your energy bills (and help maintain grid reliability to boot), why not take advantage of our free bill analysis and get EnPowered.