C&I battery storage: all you need to know

But there’s plenty of energy storage options between Hornsdale’s 194 MWh and the 20 kWh or so you get with a residential battery. And right now, one of the most interesting is the kind of batteries being used by commercial and industrial (C&I) customers.

Talk to Australians about stationary energy storage and they’ll tell you about the Hornsdale Power Reserve, for a long time the largest lithium-ion battery system in the world. Talk to Germans and they will point to the residential battery that is helping their household to run off solar power.

Their battery installations are typically behind the meter, with investment usually made off balance sheet or through traditional loans rather than complex financial deals. But what makes these projects really interesting is the range of ways that C&I companies can benefit from batteries.

The C&I segment includes businesses that range from retail centres to manufacturing companies. These companies tend to have energy storage requirements that run from a few hundred kilowatt-hours to a few tens of megawatt-hours.

In the UK, for example, there are easily a dozen potential C&I battery use cases. They mostly fall into one of four categories: avoiding electricity network charges, benefiting from tariff differences, delivering value-added grid services or enhancing on-premise energy use. 

Here’s what you need to know about each one. 

How C&I firms can use batteries to reduce electricity charges 

Electricity bills can be a major headache for certain C&I businesses, from manufacturers to data centre owners. And the expense is not just related to energy consumption, but also charges that apply at times of high electricity demand.

In the UK, for instance, the electricity bills of heavy energy users can go up dramatically when demand is stressing the grid. This happens during three winterly half-hours a year, known as the Triads, and more widely in what are called red-band periods.

Large electricity users also have to pay for capacity market supplier charges, based on users’ energy demand during peak periods. All told, these charges can massively inflate a company’s annual electricity bills.

However, they can also largely be avoided by installing a battery system that can supply power to the business during peak demand periods. The potential savings are potentially significant, but C&I companies should seek expert advice on this topic since regulations are subject to change.

How C&I companies can use batteries to benefit from tariff differences

Even without peak demand charges, C&I companies can use battery storage to benefit from daily fluctuations in energy pricing. The simplest way to do this is to charge a battery using low-cost electricity at night and then use that energy to offset higher-cost daytime consumption.

Large C&I operations might even want to resell some of that low-cost electricity on energy markets when the price goes up. To do this, the company needs to have a licence to operate in wholesale markets.

But if a business is already producing electricity from wind or solar assets then it may already have the paperwork in place, making it easy to unlock new revenue streams not only to support the business, but also help the asset pay for itself.

In Britain, there may be even further opportunities for energy trading through the Trans European Replacement Reserves Exchange, a cross-border electricity balancing market that the UK is due to access in 2021.