Behind-the-Meter Energy Storage Benefits Everyone in the Power Industry

17th Sep 18

Written by James Doyle

After staying unchanged for more than a century, the power industry is experiencing a drastic transformation with the rise of new technologies. These changes have created opportunities, but they also bring challenges.

First of all, modern lifestyles lead to a higher electricity consumption per person, but it is not spread evenly throughout the day. For example, residential consumption tends to be higher in the hours after sunset, and a secondary demand peak occurs in the early morning.

Network operators are faced with the challenge of increasing grid capacity just to keep up with the peaks in demand. At all other times of the day, the grid only operates at part load. This is a problem because network upgrades are expensive and they drive up kWh prices.

Generators face the challenge of balancing multiple energy sources with different behaviours. In countries with a high percentage of solar and wind power, production is often curtailed because demand is not high enough. All these kilowatt-hours not sold represent a loss for generation companies.

Managing Surplus Production

Behind-the-meter energy storage provides an alternative to curtailment when dealing with surplus generation from wind farms and solar arrays. Energy storage systems can be programmed to absorb surplus generation, to be used when demand is high.

This approach increases the use of the most economic energy sources, while reducing dependence on the most expensive sources, which are normally brought online during high demand periods. Peaker natural gas plants are one example.

Avoiding Expensive Network Upgrades

Peaks in demand occur because too many buildings are consuming large amounts of power at once. However, this can be solved with energy storage:

  • Energy storage systems are configured to charge up during hours when the grid experiences low demand.
  • They then supply the stored electricity when demand on the power network is high.
  • This reduces the total demand handled by the network operator, delaying or avoiding expensive grid upgrades.

This approach does not have a notable effect when used only by a few buildings, unless they are large industrial or commercial facilities. However, the benefits of behind-the-meter storage add up when deployed in multiple properties. A virtual power plant project in South Australia will use 50,000 small-scale solar systems with energy storage rated at 5 kW each, reaching a total capacity of 250 MW and 650,000 kWh.

Benefits of Energy Storage at the Point of Use

Behind-the-meter storage is also highly beneficial for homeowners and businesses.

  • Storage can be used to avoid consumption during high-demand hours, when electricity retailers apply the highest tariffs.
  • Storage can also absorb surplus generation from behind-the-meter solar systems. This way, the user gets the full savings of each kWh instead of a reduced feed-in-tariff.
  • Storage systems can act as backup power during a service interruption, allowing their use instead of a diesel generator.

Instead of solving their problems separately and less efficiently, the different stakeholders involved in the power industry can collaborate to develop a solution that benefits everyone: behind-the-meter energy storage.


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    power purchase agreements 7 things you must know when dealing with PPA