How Utility-Scale Energy Storage Lowers Costs for Consumers
- Energy Arbitrage (Storing Low-Cost Energy and Using it During Peak Demand): Batteries store electricity when prices are low (typically during off-peak hours) and discharge it back to the grid when demand and prices are high. This process, known as peak shaving, helps reduce the need for utilities to purchase or generate expensive peak power, which translates to lower electricity costs for consumers. For example, energy storage deployments in Texas helped save consumers $750 million in energy costs during the summer of 2024 alone.
- Reducing Risk and Costs of Power Outages: By enhancing grid resiliency and providing emergency power during outages, utility-scale energy storage reduces costly power disruptions, thereby saving money for consumers who might otherwise face expensive damages or losses.
- Enabling Greater Use of Renewable Energy: Energy storage systems help integrate renewable energy sources like solar, which are low-cost and clean, by storing surplus energy generated during sunny periods for use when the sun is not shining. This reduces reliance on more expensive and volatile fossil fuel power, stabilizing and lowering electricity prices over time.
- Improving Grid Efficiency and Deferring Infrastructure Upgrades: Storage can provide services such as frequency regulation, voltage support, and demand response, which improve grid operation efficiency. It can also defer or avoid investments in costly transmission and distribution upgrades, savings that utilities can pass on to consumers.
- Lowering Long-Term System Costs: As battery storage costs have rapidly declined and continue to improve (with projected average cost reductions per year), these savings will increasingly be reflected in consumer electricity bills over the long term.
In summary, utility-scale energy storage reduces electricity costs for consumers by storing cheaper energy for use during peak demand, improving grid reliability, enabling more cost-effective renewable energy integration, and deferring expensive grid infrastructure investments. These benefits are already manifesting in significant consumer savings and are expected to grow as storage technology advances and becomes more widespread.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-utility-scale-energy-storage-contribute-to-cost-savings-for-consumers/
