Sam Wilkinson, IHS
In 2013, confidence returned to the PV market and as a consequence, forecasts for market potential in 2014 remain optimistic. In 2014, IHS projects that 41 GW of grid-connected PV systems will be installed, and that this will increase to reach 58 GW in 2017.
WHile projected growth of the PV market is positive for everyone in the PV industry, utilities and grid operators have started to express concern over the effects of high PV penetration on the electricity grid. The issue with a PV system is the intermittency of its output and its injection into the grid. Because a PV system depends on irradiation levels, its output fluctuates with the weather. A PV system also has a characteristic output with a peak at mid-day, which often does not align well with peak demand in the electricity grid.
To allow PV systems to continue to penetrate the electricity grid, and the electricity mix to diversify, utilities and grid operators will have to adapt to maintain a reliable service to its customers.
Electricity grids were not built to incorporate a large amount of fluctuating, unpredictable energy, and were not designed to allow a bi-directional energy flow. Additionally, electricity grids are ageing and, in many cases, require an upgrade. With increasing integration of PV systems, in particular utility-scale PV systems that inject all the energy they generate to the electricity grid, the stability of the electricity grid will become an increasing concern.
An energy storage system (ESS) can quickly charge and discharge to compensate for fluctuations in energy, and therefore reduce instabilities in the electricity grid.
There are a number of ways that utilities and grid operators can modify the electricity grid to allow for high levels of PV penetration, including demand response, gas ‘peaker’ plants, and transmission and distribution line upgrades. However, the commercial availability of grid-connected energy storage systems (GCESS) is providing an alternative and potentially cost-effective solution to support the incorporation of large amounts of PV into the electricity grid.
IHS projects that over 500 MW of GCESS will be installed with utility-scale PV systems in 2017, and this will increase to reach over 800 MW in 2022. In the near-term, deployment of ESS in this application will be driven by the introduction of grid interconnection requirements that effectively mandate the installation of an energy storage solution at a PV system.
IHS projects that, in the long term, reductions in energy storage system (ESS) price will create opportunities for PV developers to benefit financially from the deployment of an ESS. It is likely that a developer will be able to negotiate ‘premium’ PPA rates with utilities and grid operators for PV plants with storage attached, as they are able to guarantee a more stable and predictable output to the grid.