Why It Is Important to Deploy BESS Now?

With the next phase of Paris Agreement goals approaching, governments and organizations from more and more countries and regions are seeking to increase the adoption of renewable energies by central incentive and investment stimulation. Battery energy storage systems (BESS) have therefore arisen and grown to capture various renewable energy sources and store them in rechargeable batteries for improved grid stability and reliability.

At present, sustainability transition has become a global priority with an urgent goal to reduce greenhouse gas emissions and curb climate change. The volume of battery energy storage is expected to grow dramatically in the next 5 years. In 2022, more than $5 billion was invested in BESS and its global market is estimated to reach $120-$150 billion by 2030. Now the importance of BESS deployment has never been clearer.

Declining battery costs: As we know that batteries take up almost 60% of the entire cost of a BESS. Following unprecedentedly price increase in 2022, battery prices are continuously falling this year. The price of lithium-ion battery packs has dropped 14% to a record low of $139/kWh, according to an analysis by BloombergNEF (BNEF). This was primarily driven by the falling of raw material and component prices arising from booming battery demand and increased production capacity. ?

Increasing electricity prices: Electricity prices in Europe rose in November amid increased demand. At the end of this November, the European Commission proposed a plan to increase investment in European power grids (Action Plan for Grids) which is said to modernize Europe’s electricity grid and prepare for the renewable-based electrification for the energy system. According to the Bureau of Labor Statistics' latest Consumer Price Index, the cost of residential electricity jumped 14.3% between 2021 and 2022, and the increase dropped to 8.4% from April 2022 to April 2023.

Rising renewable energy penetration: According to IEA, led by solar PV, renewable power growth is surging and the world’s total renewable electricity capacity is likely to reach 4500 gigawatts (GW) in 2024, equal to the total power output of China and the United States combined. Solar PV generation increased by a record 270?TWh (up 26%) in 2022, reaching almost 1?300?TWh.?In particular, distributed solar PV, such as rooftop solar on buildings, will experience faster growth as a result of higher retail electricity prices and growing policy support to help consumers save money on their energy bills.

Growing demand for backup power: The Global Backup Power Market size is expected to grow from?US$ 2.66 billion in 2023 to US$ 4.33 billion by 2030, at a?CAGR of 7.2% during the forecast period (2023-2030).? Driving factors include the increasing demand for uninterrupted power supply (UPS) systems, the rise in the number of power outages due to natural disasters, and the growing need for reliable power backup solutions in data centers. Additionally, increasing adoption of renewable energy sources and deployment of micro grids will also stimulate backup power demand in the coming years.

Emerging opportunities for grid services: Future-proof smart grid system needs to be integral with renewable energy sources, such as rooftop solar panels and wind turbines. Meanwhile, it’s necessary to get ready for soaring smart EV charging demand and vehicle-to-grid (V2G) technologies. Particularly, the deployment of microgrids aims for increased resilience,?reduced energy costs, and improved power quality, particularly in remote and rural areas.

A Case study

Focusing on C&I BESS, Infypower provides a comprehensive BESS portfolio targeted for industrial parks, commercial parks, residential and office areas and traffic centers. Solutions include distributed ESS, integrated ESS with solar power and EV charging as well as V2G/V2H ESS.?

This BESS is situated in an industrial park for user-side purposes. It consists of 2 sets of standard 1x3 (power cube x battery cubes) solution and makes a total of 750kW/1.29MWH capacity. The factory owner hoped to upgrade manufacturing workflow and cut overall electricity costs. By taking advantage of battery charging and discharging at different price levels every day, this BESS could save approximately 70 thousand US dollars on electricity bills annually. In the second phase of this project, the factory owner plans to integrate roof-top PV panels with this BESS. Eventually, it will help reduce CO2 emissions with the adoption of renewable energy source.

The application of user-side ESS plays an important role in peak and valley arbitrage, load-side response, electricity cost saving and emergency power supply. Through local and remote EMS, it could keep user-side power supply and demand in balance, and optimize the operations between the grid, load and batteries.

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