In a future that foresees an unmistakable electrical trend with fast evolving power sources in a decarbonization context, storage is essential as a complement to its infiltration in the energy matrix, which has been clearly evidenced by the exponential growth that this issue has had in recent years.
How to store solar energy that is produced during the day, or even wind energy that is dependent to the fluctuating nature of wind currents, is today one of the main challenges in energy transition. Consequently, its breakthroughs evoke great interest.
Today, the prevailing form of energy storage on a global level is water pumping, with 160 GW of installed capacity worldwide. However, the main development in present day is mainly in lithium ion batteries, to the extent that it is expected to increase from 4 GW of installed capacity today on an international scale, to 220 GW by 2040, and with decreasing manufacturing costs as years go by.
The drafting and implementation for this change to occur does not only go through development in the isolated scope of the electricity sector, but instead we must be prepared by adapting traditional segments in our society for a different use of our resources, where usual creations and distribution will no longer necessarily respond to current developing energy transition methods.
In this context, the following concern arises: Are storage systems a solution to the challenges of electricity systems in the Central America region? The answer of specialists and technicians in the field is a yes, basically because they can have multiple uses, resembling the characteristic that users of pocket-sized, Swiss army knives experience; they’re able to adapt to complex situations and offer a variety of solutions. Storage systems allow for off-grid energy supply, shift excess energy to other sectors, act as backup power systems, control voltage and optimize self-consumption, among other features.
Some time ago, Johannes Wullmer, Head of the Department of Applied Storage Systems of the “Fraunhofer Institute for Solar Energy Storage (ISE)” in Germany, commented that the requirements for the storage systems success’ go through three variables: legislation and regulation, because the development of a proper legal framework is important; research and innovation which ensure the stability of the system, and quality assurance systems, three basic measures that should be taken into consideration in our Central America area.
The importance of energy storage in the region is the mixture of three tendencies: decarbonization (led by the Paris Agreement), decentralization and digitization.
At a Central American level, competitiveness will depend on the regulatory adaptation carried out on different market schemes. It is not clear yet for the different markets and their regulations, how they will be adapted to the disruptive nature that new technologies tend to be to traditional and long-established processes. It is clear however, that energy storage can provide multiple services and most, if not all, consumers are much better off.
Subsequently, on a regional level it will be important to align criteria that the regulations must not generate new tech entry barriers, allowing open access points for the evolution of today’s current energy mechanisms. Today, the best technology can be lithium ion batteries, in the future it could be another technological advancement we are not yet aware of, but it’s important that the region maintains a progressive mindset, acknowledging that regulations are technologically neutral and that every time a new storage system is incorporated, we deliver regulatory certainty. The region must contemplate the neutrality that storage technology is able to offer, and that it is the most economical with the purpose of not making electricity services more expensive to the final consumer.
To this end, battery energy storage systems (BESS) have become one of the technologies with the most substantial growth in recent years, favored by cost reduction in its manufacturing, its installation versatility and the high demand for media that provide frequent regulation. Its use on a global level is also favoring the integration of both wind and solar energy plants, providing frequency regulation reserves, as well as helping mitigate generation variability due to the characteristics of its primary resource.
Regulations now require that energy generators maintain a reserve that functions for when there’s an offset between demand and generation; in other words, when suddenly there’s more energy needed than what is being produced, or on the other hand, when there’s not enough consumption for what’s being generated.
A storage system could encourage the entry of renewable energy in the Central American region, but above all provide more security to the Electrical Interconnection System of Central American Countries (SIEPAC) and appease the limitations or inconveniences that may surge in transmission aspects, which in Central America has always been a significant hassle, eventually boosting the penetration of renewable energy in the Central American market, which is a great expectation from a regional standpoint.
The regulatory authorities from the energy sector are currently developing studies to make proper modifications to the standards and introduce the batteries. Consequently, for market operators it’d be optimal for Central American countries to implement similar regulations in order to “bring these new solutions to the regional electricity market in a comprehensive and transversal manner.”
The electricity will be increasingly renewable, and it will be able to displace the use of combustion and fossil fuels in different industries, transport and even homes. Electricity will surely set the tone for climate change. Political measures and regulatory frameworks are key to hastening the implementation of these technological solutions, that market operators insist will ignite “a cleaner, cheaper, and more efficient power system”. We are heading to an electrical system dominated by variable renewable generation sources with an expected growth of electric mobility, which positions us in the midst of a diversification and transition of energy matrices, which is expected to have a massive decarbonization impact and improve air quality. Thus, we echo Cyrille Brisson, an executive of Eaton on a global basis: “This opportunity could be limited if we don’t redesign energy markets and their regulatory frameworks to capitalize on the enormous value of flexibility in the electricity system.”