News

The opportunities for storage in ancillary markets – and the uncertainties

Published: 19/02/2018

As one of the most lucrative applications for new stationary energy storage systems (ESSs), ancillary services have played a vital role in the industry to date. However, uncertainty remains around the future ability of ESSs to provide these services and what the value will be.

In an article for Recharge News, Alex Eller of Navigant Research explains why evolving ancillary service regulations represent both a major driver and a major threat to the market for ESSs. “Understanding these market dynamics and opportunities will be critical for success”, Eller writes.

The introduction of variable renewable power generation has been shown to have a direct effect on the need for ancillary services on the grid. Combined with retiring thermal power plants, the increased amount of variable generation will likely result in a greater need for both grid stability and reserve services. The need for operating reserves will arise from the discrepancies between forecast renewable output and real-time production.

Despite the advantages energy storage offers for ancillary services, Eller also points to the key challenges facing the technology from regulatory uncertainty and competition.

Read the full article.