Energy Storage: The Great Leap Forward

Energize Ventures
November 7, 2018

Energy storage holds the potential to propel us on a great leap forward in the changing energy landscape.

We are in the middle of a dramatic transformation of the energy landscape: plunging costs and growing demand for cleaner energy have led to greater penetration while demand response systems seek to do more with less.

With energy storage, the intermittency of renewable energy can be smoothed, allowing both grid operators and consumers to add more renewable power to their portfolios. As renewable sources become a viable alternative in more situations, greater adoption of renewables and energy storage will reduce costs for both, creating a virtuous cycle. This simultaneously enhances the value of energy storage, enabling more applications and enlarging the market.

As the industry requires energy storage to do more, two important points have surfaced:

Energy storage can be an immensely flexible resource. Deployment (and revenue potential) can be optimized for a myriad of uses including: demand response, load shifting, peak shaving, frequency regulation, transmission capacity relief, distributed energy resource management, transmission and distribution deferral, microgrids, voltage support, as well as increased efficiency and reliability. Add to that the massive potential of electrified transportation into the grid. The closer battery storage systems are to the end customer, the more services they can offer.

Optimizing the system for these flexible use cases requires the integration of smart analytics and intelligent control systems. Regardless of the underlying components, batteries are still only as “smart” as the software and hardware controls that regulate them. With software, storage’s value can be maximized — and monetized — as the reserve energy gets put to use in its most valuable form. Instead of being deployed for a single use, batteries controlled with smart software can deliver a stack of multiple services. For example, stored solar power can be discharged at peak hours (when it is most expensive) to arbitrage the system’s price fluctuations and balance load demand — essentially replacing a gas-fired peaker plant with reserve renewable power.

It is in this “application layer” of data analytics and smart software controls that the Invenergy Future Fund sees the greatest potential: the intelligence controlling how stored energy can be best monetized.

Like in other infrastructure-heavy technology markets, we believe the value in energy storage will shift from the “spike in the ground” assets to the application layer built on top of a wider network. By combining next generation data analytics, vast computing power, and a growing distributed asset base, companies can capture this potential as batteries shift to serve customers’ specific needs. With greater aggregation capabilities, a system-wide dispatchable capacity resource can unlock significantly more value and have a meaningful impact on the way energy flows through the grid.

Energize Ventures believes that energy storage — if efficiently controlled — can be great leap forward to help make energy more affordable, more reliable, and more secure. If you are an entrepreneur executing on a mission and these thoughts resonate with you, please reach out.