Industrial energy storage – why are they becoming so popular?

Industrial energy storage – why are they becoming so popular?

You are considering an investment in energy storage, but terms like “prosumer,” “net-billing,” or “peak-shaving” are causing confusion? In this series of articles, we will provide you with basic knowledge related to investments in industrial energy storage. Through our posts, you will grasp essential concepts, learn about the main advantages of using energy storage, and make a more informed decision about the solution that suits you best.

Electricity storage – a key element in the current transformation

The energy market is changing at a pace unprecedented in history. Virtually all countries worldwide have decided to gradually shift from fossil fuels to renewable energy sources, driven by various motivations, including economic and ecological aspects. The injection of funds from the National Reconstruction Plan (KPO) is expected to accelerate the dynamics of these changes, mobilizing countries and private enterprises for larger investments. To understand why energy storage is a crucial component of the entire power system chain, it’s essential to first examine how such storage is built and how it functions.

How does energy storage work?

Energy storage is typically built using lithium-ion cells, similar to the construction of an electric vehicle battery. The storage can be charged, for example, by a photovoltaic installation, but this is not essential—a storage facility can just as well be charged from the power grid. The stored energy can be utilized practically at any moment and discharged for personal use. It is not necessary to fully charge the storage before discharging it. The energy storage is connected to an energy management system, which protects against over-discharge and overcharge, among other functions.

Energy storage – the next step after a photovoltaic installation

Photovoltaic installations can be found everywhere—mounted on private homes, on the buildings of large companies, or on specially designated areas for photovoltaic farms. Initially, the settlement for photovoltaics was relatively simple—electricity was generated at virtually zero cost for personal use, and any surplus electricity could be transmitted to the power grid. This is when the term “prosumer” emerged, combining the words “producer” and “consumer.” A prosumer is any entity, including an individual, that produces electricity for personal use. Over time, energy settlement systems changed, the profitability of investments decreased, and that’s why owners of photovoltaics increasingly began connecting installations to energy storage.

Net-Metering and Net-Billing – what’s the deal?

Prosumers who supplied energy to the power grid received various types of compensation. Until 2022, for prosumers with a photovoltaic installation with a capacity of up to 50 kW, the prevailing settlement method was Net-Metering, also known as net metering. In essence, prosumers who supplied energy to the grid could then retrieve it without charge. However, this was not without a loss for the prosumer—only 70-80% of the supplied energy could be retrieved.

Currently, Net-Metering is being replaced by Net-Billing, which also applies to prosumers with a photovoltaic installation of up to 50 kW. This settlement method involves a buy-sell transaction. The prosumer, when supplying electrical energy to the power grid, receives compensation in currency. This is a fundamental difference from Net-Metering, where settlement was in kilowatt-hours. However, in the Net-Billing system, the prosumer does not receive cash in the bank account. The amounts for the sale of energy are accumulated in a separately designated deposit, from which the money can only be used to purchase energy. Net-Billing is thus directly dependent on current energy prices, unlike Net-Metering.

In both cases, the prosumer cannot retrieve the same amount of energy that was previously introduced into the grid without additional payment. The solution to this problem has been home energy storage. An energy storage unit connected to a photovoltaic installation allows the retention of surplus energy and its almost lossless utilization in the future. This allows the prosumer to avoid unfavorable settlement systems.

Surplus energy from photovoltaic installations – where does it come from?

The production of energy from photovoltaics is usually highest between 10 am and 2 pm, and during these hours, energy consumption is typically low. Hence, a photovoltaic installation generates more energy than the prosumer can use for immediate needs. A photovoltaic installation coupled with an energy storage unit allows for a much more efficient utilization of the produced electrical energy. This also reduces the phenomenon of over-sizing a photovoltaic installation—even theoretically too large photovoltaics, with the support of an energy storage unit, will operate efficiently.

Energy storage – a way to achieve energy independence?

Energy storage is also an idea to ensure power supply security, not only in household installations but also in industrial ones. Energy storage units are often combined with emergency power supply—stored energy can cover the energy demand and sustain power supply when there is a power grid failure or for any other reason causing a power outage. Furthermore, energy storage is also an answer to emerging issues with the availability of connection power. If a particular facility only sporadically exceeds the established power demand, these excesses can be covered precisely by energy storage.

Industrial energy storage – a solution for businesses

The basic parameter of an energy storage unit is its size, determined by the amount of accumulated kilowatt-hours (kWh). Relatively small energy storage units, with a usable capacity of a few to a dozen kWh, work well in residential installations. In industrial applications, the size of an energy storage unit often reaches several GWh, and entire complexes of storage units are created, accumulating hundreds of MWh. In such a solution, an energy storage unit not only performs well in large photovoltaic installations but also enables additional savings and even allows earning money from electrical energy, which will be covered in a separate series of articles.

Installing an energy storage unit – what is needed?

Energy storage is designed for both internal and external use and remains weather-resistant. An energy storage unit for photovoltaics can be connected to an existing photovoltaic installation or constructed in parallel with it. The energy storage unit should be equipped with an energy management system, battery management system (BMS), inverter, and cables with appropriate electrical properties, characterized by resistance to moisture, temperature, and ignition.

Energy storage units – summary

Energy storage units complement photovoltaic installations excellently, increasing energy self-consumption and making energy management more cost-effective for the prosumer. At the same time, energy storage units ensure energy independence, offering power supply in case of a grid failure. This is a safe and practically maintenance-free solution. The popularity of energy storage units will grow with the development of renewable energy sources (RES), which are inherently unstable and require regulation. Even this year, there were situations when negative energy prices were recorded precisely because of their temporarily excessive amounts in the grid. In the current energy transformation, the role of energy storage units will be crucial, and it is evident that significant financial investments are being made in this sector of the market.