Why your business needs battery backup

By Gareth Dauley

Most modern organizations are fortunate in having access to steady, reliable electricity supplies. From hospitals and universities to data centers and manufacturing plants, it’s hard for many of today’s public and private entities to survive without power. When it fails, the results can be devastating.

In the UK, for example, a 45-minute blackout in August 2019 affected a million electricity customers and caused three days of rail chaos. In January that year, the Australian Energy Market Operator had to cut over a quarter of a gigawatt of energy supplies to businesses on two separate occasions.

This year, meanwhile, a “catastrophic breakdown” of the Texas grid left more than 5 million people without power for up to three days. In some countries, such as South Africa, blackouts are almost a feature of daily life.

These outages seem to be getting more common, particularly in advanced economies. The blame is often laid at the door of the growing volume of intermittent renewable generation sources on the grid. These are rarely the real cause of the problem, however.

lights out in US

In Texas, for example, natural gas supply constraints played a major role in the outages. In Australia, load shedding was instigated by thermal inefficiencies and equipment failures, among other factors. In the UK, the Hornsea One wind farm went offline but then again so did a 740 MW gas power plant.

So the energy transition is not contributing particularly to growing instability of grid supplies. Not only that, but for many organizations that rely on a continuous supply of power the energy transition could even offer a solution to blackouts.

That’s because the move towards cleaner energy sources is leading to a boom in energy storage.

As new generation overwhelmingly leans towards intermittent renewables such as solar and wind, there is a growing need for storage devices that can soak up excess supply and use it to cover demand shortfalls.

ReportLinker estimates the global battery energy storage system market is expected to see a compound annual growth rate of 32.8% from 2020 to 2025, reaching USD$12.1 billion by the middle of the decade from $2.9 billion last year.

This is leading to rapid cost reductions for lithium-ion batteries, currently the most common battery chemistry used in stationary storage. The average cost of a lithium-ion battery has already fallen 82% since 2012 and by 2023 will have declined 86% in a decade, according to the analyst firm IHS Markit.

...the global battery energy storage system market is expected to see a compound annual growth rate of 32.8% from 2020 to 2025

As a result, lithium-ion batteries are increasingly an attractive option for providing backup power to public sector institutions and private enterprises.

They are not the only option, of course: before the advent of batteries, organizations with a critical need for power supplies would usually have relied on diesel gensets for backup. However, diesel gensets have three key shortcomings compared to batteries. The first is the need for maintenance.

Because gensets have many moving parts, they need regular maintenance and servicing. Manufacturers recommend six-monthly services as well as frequent inspections to check for issues such as coolant contaminants or loss of lubricants.

Batteries, on the other hand, are almost maintenance free. Since they have no moving parts, they rarely break down. Their only failing is that they lose capacity over time, but it is a gradual process that is unlikely to impair their ability to provide backup power.

diesel engine
Diesel is not cheap, and even if a genset only uses a small amount of fuel in backup power situations, it will still add to an organization’s bottom line.

A second issue with diesel gensets is the cost of fuel. Diesel is not cheap, and even if a genset only uses a small amount of fuel in backup power situations, it will still add to an organization’s bottom line.

These fuel costs can mount up over a short span of time because gensets only have limited ability to ramp power output up and down to meet demand. Hence, if demand is low then you could end up paying for fuel which is mainly being burnt just to keep the generator on.

Furthermore, gensets have to be switched on regularly just to keep them in working order, so asset owners can end up paying for fuel even when the generator is not serving any useful purpose.

Batteries, on the other hand, can be charged overnight or at any time when electricity is cheap—and the draw on the battery almost exactly manages the load, so the delivery of energy is much more efficient than with a genset.

However, perhaps the biggest challenge with generators is that they are really only useful for providing backup power. As an asset, they only deliver value when they are switched on and so, in a backup power environment, they are mostly costing money as a result of depreciation.

Batteries, on the other hand, can carry out multiple functions as well as delivering backup power. Some examples include:

  • Increasing self-consumption of own generation from solar panels, wind turbines, combined heat and power plants, and so on.
  • Generating revenues through the provision of capacity, demand response, frequency and other grid services.
  • Reducing electricity charges by storing low-cost nighttime supplies for use when electricity prices rise.
  • Supplementing grid supplies during expensive peak periods, to avoid excessive utility costs.

This wide array of cost-saving and revenue-generating applications means battery systems can not only power your organization in the event of a blackout but also help your finances at other times.

Indeed, for most asset owners the backup capabilities of battery systems are near the bottom of the list of reasons for investing in energy storage. To get the most out of your battery investment, however, it pays for an expert to carry out a full analysis of your situation.

At Pacific Green Energy Storage we can provide that expert perspective.

We have a track record that includes installing more than 1 GWh of battery storage around the world, and as well as evaluating your energy storage requirements we can offer all the services you need to take a project from concept to realization.

That includes everything from project design and battery procurement through to commissioning and operations and maintenance. Contact us now to find out more about how a backup battery could benefit your organization.