Hybrid Storage: Adversary Conventional Peakers? | FTI Consulting
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Hybrid Storage: A Worthy Adversary for Conventional Peakers?

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Solar PanelsFor many years, U.S. storage and hybrid “solar + storage” projects have been a solution in search of a problem — and perhaps more importantly, a solution in search of market-based compensation mechanisms reflecting the value-added attributes a battery brings to the transmission ecosystem.

Markets have accelerated that evolution, opening doors for storage to play in the bilateral and wholesale realms, even if the benefits of FERC Order 841 (and the recent court decision upholding it) take years to play out in key RTOs and ISOs. Solar hybrid projects have now evolved from beta testing to mainstream solutions — in many cases being as big or bigger than peaking generation facilities — and are fundamentally changing how renewables are evaluated by grid operators, utilities, developers and investors.

Energy storage provides a number of key services to the electric grid, including reliability, frequency regulation and peak shifting. The type of service a specific battery system provides depends on factors such as technology choice, energy capacity, storage duration and warranty terms (which impact how a system can be financed, given an assumed-use case). Reliability is, and should be, paramount to system operators, who require the capacity and flexibility to ensure generating supply will be available to match expected and unexpected demand spikes.

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