Cost/Benefit Analysis of Energy Storage Identifies Hybrid Solution as Optimal for Renewable Energy Developer
A large renewable energy developer prioritized energy storage as a “blue chip” initiative within the company. The developer approached Strategen for guidance on developing a winning business plan, roadmap, and team structure for storage as a strategic opportunity.
Strategen completed a survey of market policies, incentive structures, value streams, and energy prices, and used that information to analyze the economics of sixteen energy storage configurations in multiple markets, either collocated with existing assets or as standalone resources. The analysis indicated that developing a hybrid energy storage solution to capture multiple revenue streams was the best path forward for the client.
During the first phase of work, Strategen used a time-series simulation tool to model the available revenue streams for storage and renewables in several key markets in the U.S. including ISO-NE, CAISO and MISO. We then looked at policy and macro trends and advised the client on regulatory strategy for the appropriate markets.
Strategen’s scope of work included the following:
- The development of a custom dispatch model for energy storage collocated with renewable energy assets.
- A competitive analysis of the costs and maturity of different energy storage technologies.
- A regulatory overview and framework to capitalize on key market opportunities.
- A deep dive into key procurement scenarios to inform bidding strategy (size, duration, price, etc.).
- A description of barriers and potential mitigation strategies.
- Introductions to partners with complementary solutions.
Our custom-built model allowed the developer to provide their product development and business development teams with clear guidelines on capturing the maximum value in priority markets. As price spreads increased, the need and the financial case for long duration systems also increased; however, fast response resources remain key in organized markets. Strategen was also able to identify the technical specifications of the technology that were the limiting factors for revenue generation, so research on improving those specifications could be identified as areas for further investment. Furthermore, Strategen’s research allowed the client to set up an organizational structure with clear objectives for the US market.