Increased battery storage capacity can and should be encouraged to help with the transition to decarbonized electricity generation and improve the resilience and efficiency of integrated grids, but there are still several impediments to widespread adoption.
Fremont, CA: In recent years, the energy markets have witnessed a steady and growing shift toward electricity generated from renewable and sustainable sources. Renewable energy's reliance on the sun and wind results in a variable and relatively unpredictable output, leading to a short- and medium-term imbalance between energy generated and consumer demand. Energy storage can help with this, as demand for storage solutions is increasing simultaneously as demand for renewable energy producing sources. As more countries seek and expand renewable energy programs and switch to local or smart grids, interest in battery storage has surged globally. Despite the advantages of battery storage, there are still a few roadblocks in the way of general implementation.
Challenges in battery storage adoption
Stay ahead of the industry with exclusive feature stories on the top companies, expert insights and the latest news delivered straight to your inbox. Subscribe today.
Although there are some hopeful signals that regulators and legislators are striving to make policy reforms that would assist the industry, regulatory policy tends to lag behind developments in the growing sector. The UK government, for example, declared in 2019 that it would exempt practically all battery storage projects from the nationally significant infrastructure projects (NSIPs) system, following a consultation. As a result, planning authorization for battery storage will be granted under the Town and Country Planning Act, which should cut down on the time and money spent on development under the NSIP regime.
Another significant obstacle for battery storage is the unpredictability of revenue in the medium to long term. While having numerous revenue streams can help to mitigate the risk associated with any one revenue stream, this "stacking" of revenues has its own set of issues for battery storage projects' long-term investment prospects.
Battery storage revenue contracts are still very short when compared to other energy storage options. An increased frequency response contract, for example, which is a pillar in the UK's battery storage revenue stack, normally lasts between one and two years.
The penetration of battery storage is hampered by more than simply financial considerations. The short shelf life of batteries, the quantity and nature of the raw materials required for their manufacture, and the significant pollutants produced during the manufacturing, storage, treatment, and disposal of large-scale batteries, in particular, has raised serious environmental and, more general sustainability concerns.