The Electric Power Research Institute (EPRI) has developed an analytical tool that quantifies the value and assesses the cost-effectiveness of energy storage.
The software enables utilities, regulators and other stakeholders to determine the economics of energy storage and better assess its viability and role in their systems. The tool was recently demonstrated in an analysis of the value of energy storage in 31 scenarios identified by the California Public Utilities Commission (CPUC) staff and included storage applications, technologies, product configurations, market conditions, and grid locations. These cases were defined and prioritized by the CPUC, tailored to its specific inputs. (see chart)
EPRI has published a report “Cost-Effectiveness of Energy Storage in California” that describes the results of this assessment.
Detailed assessments, such as the one tailored for the CPUC, can inform regulators of the potential value of energy storage technologies used in different applications. The tool is designed to equip utilities to determine the energy storage products and grid configurations that will work most effectively in their grids and regulatory frameworks. The effective deployment of energy storage technology can potentially improve grid reliability and resiliency, reduce frequency or size of rate increases, and support the effective grid integration of wind and solar energy.
Companies developing and producing energy storage technologies also may use the tool to better align their products and costs with the grid’s needs.
When the California legislature passed AB2514, the CPUC was directed to investigate setting a target for cost-effective energy storage in California. EPRI, which had been working on development of the software for more than 2 years, was among the organizations asked by the commission for assistance.
The Energy Storage Valuation Tool can play a role in clarifying the value and the variables of energy storage in the grid. It can inform business plans, regulatory proceedings and public discourse related to storage, and allows users to see the underlying calculations of the model.