Energy storage is at a crossroads between the "generation side" and the "consumption side," prompting the question of which will ultimately prevail. Well-established renewable technologies like solar and wind energy are facing substantial subsidy reductions in various parts of the world as regulators and governments reassess their support. Developers argue against these cuts, asserting that sustained government backing is crucial for the continued development of renewables. The debate revolves around whether solar and wind can compete with coal and gas without incentives. Despite recent drops in the cost of solar panels and wind turbines, the long-term viability may hinge on economies of scale. Proven renewables may find themselves in marginal competition with mainstream fossil fuels.
Regulators seem intent on slowing the momentum of large-scale solar and wind projects to safeguard power grids from disruptions until large-scale energy storage becomes economically feasible. Industry experts recognize that energy storage is poised to be the next major revolution for the sustainable growth of renewables. This raises the crucial question: "Energy storage, but where in the energy supply chain?" - on the "generation side" or the "consumption side."
To avert grid disruptions caused by renewables, a portion of the generated energy from large solar or wind farms could be stored locally and only delivered during peak hours, akin to expensive pump storage or diesel engines. The increased revenue from selling peak energy (£/MWh) could offset some of the additional costs (£/MW) of the storage facility. Regulators need to establish a payment mechanism for both base and peak energy to support the development of "renewables with storage." The mathematics behind generation-side storage differ significantly from those of consumption-side storage.
Examining options to support consumption-side storage reveals that households and businesses, connected to the power grid 24/7, could store cheap/off-peak energy (kWh) for use during peak hours without straining the power grid. The payback period would depend on the peak energy demand at the specific consumption end. Incentives akin to those for rooftop solar should be implemented to promote "consumption-end storage," with a particular emphasis on community storage for maximum impact.
In conclusion, we are on the brink of an energy storage era. Electricity, a unique commodity traditionally produced and consumed simultaneously, will now be stored to balance real-time supply and demand. To avoid repeating past mistakes, regulators must take the lead in making the right choice between storage at the "generation end" or the "consumption end."