Storagepricesaredroppingmuchfasterthananyoneexpected,duetothegrowingmarketforconsumerelectronicsanddemandforelectricvehicles(EVs).MajorplayersinAsia,Europe,andtheUnitedStatesareallscalinguplithium-ionmanufacturingtoserveEVandotherpowerapplications.Nosurprise,then,thatbattery-packcostsaredowntolessthan$230perkilowatt-hourin2016,comparedwithalmost$1,000perkilowatt-hourin2010.McKinseyresearchhasfoundthatstorageisalreadyeconomicalformanycommercialcustomerstoreducetheirpeakconsumptionlevels.Attoday’slowerprices,storageisstartingtoplayabroaderroleinenergymarkets,movingfromnicheusessuchasgridbalancingtobroaderonessuchasreplacingconventionalpowergeneratorsforreliability,1providingpower-qualityservices,andsupportingrenewablesintegration.Further,givenregulatorychangestoparebackincentivesforsolarinmanymarkets,theideaofcombiningsolarwithstoragetoenablehouseholdstomakeandconsumetheirownpowerondemand,insteadofexportingpowertothegrid,isbeginningtobeanattractiveopportunityforcustomers(sometimesreferredtoaspartialgriddefection).Webelievethesemarketswillcontinuetoexpand,creatingasignificantchallengeforutilitiesfacedBatterystorage:ThenextdisruptivetechnologyinthepowersectorLow-coststoragecouldtransformthepowerlandscape.Theimplicationsareprofound.DavidFrankelandAmyWagner©YounicosSustainability&ResourceProductivityJUNE20172withflatordecliningcustomerdemand.Eventually,combiningsolarwithstorageandasmallelectricalgenerator(knownasfullgriddefection)willmakeeconomicsense—inamatterofyears,notdecades,forsomecustomersinhigh-costmarkets.Inthisarticleweconsider,asthesetrendsplayout,howstoragecouldtransformtheoperationsofgridsandpowermarkets,thewaysthatcustomersconsumeandproducepower,andtherolesofutilitiesandthirdparties.OuranalysisisdirectedmostlyatdevelopmentsinEuropeandtheUnitedStates;theevolutionofstoragecouldandprobablywilltakeadifferentcourseinothermarkets.ImplicationsfortheutilityindustryStoragecanbedeployedbothonthegridandatanindividualconsumer’shomeorbusiness.Acomplextechnology,its...
