(499f) Improving the Economics of Industrial Battery Storage: A Proactive Policy and Management Approach | AIChE

(499f) Improving the Economics of Industrial Battery Storage: A Proactive Policy and Management Approach


Powell, K., The University of Utah
Dougherty, A., University of Utah
Camacho, N., Intermountain Industrial Assessment Cent
Historically, implementation of battery energy storage has been proportionally higher in commercial and residential systems than industrial systems [1]. Economic and operational constraints of industrial facilities make battery installation close to infeasible. Industrial energy usage accounts for about 25% of total energy usage in the US. As the deployment of battery storage increases, lack of implementation in the industrial sector creates a gap, bridged by adapting control and policy strategies to constraints of industrial users. Projections indicate that battery prices will continue to fall, making it even more important to find ways to implement batteries in the industrial sector [2].

This research aims to show that the utilization of electric battery storage to decrease the energy costs and peak power usage of industrial energy users can be made attainable by identifying and closing the policy gap between affordability and utility of industrial battery installations. Similar studies have been done to improve economics and management of storage in residential installations [3]. Other studies have looked at regulatory design of energy storage coupled with renewable sources such as solar and wind [4]. Though these efforts have furthered the penetration of battery storage in the residential and commercial sectors, this same penetration has not been seen in the industrial sector from lack of analysis and specificity to the needs of industry. Policies specific to large electrical users in the industrial sector have also not been explored.

Load data from actual industrial facilities is used spanning a full year of typical manufacturing operations in which the daily electrical peak is about 2200 to 2500 kW. Two models are used, a battery model utilizing the facility load data to look at battery dynamics and effects of system load, and a financial model to analyze overall cost and effect of policy on project economics. The study identifies policies that are currently in place in parts of the US or similar policies that would allow batteries to be financially viable for industrial facilities.

[1] EIA, “Battery Storage in the United States : An Update on Market Trends,” Washington, DC, 2020.

[2] W. Cole and A. W. Frazier, “Cost Projections for Utility-Scale Battery Storage,” 2019.

[3] M. N. Sheha and K. M. Powell, “An economic and policy case for proactive home energy management systems with photovoltaics and batteries,” Electr. J., vol. 32, no. 1, pp. 6–12, 2019, doi: 10.1016/j.tej.2019.01.009.

[4] O. Zinaman, T. Bowen, and A. Aznar, “An overview of behind-the-meter solar-plus-storage regulatory design: Approaches and case studies to inform international applications (Report no. NREL/TP-7A40-75283),” NREL Rep., no. March, pp. 1–76, 2020.