Battery Energy Storage Solutions (BESS), can help industrial businesses reduce capital expenditure while making their electrical systems more efficient and robust. Carlos Nieto, Global Product Line Manager for Energy Storage Solutions at ABB, explores when it makes commercial sense to invest.

Industrial and commercial suppliers are facing pressure from all angles. Just as many of them are seeking to recoup losses incurred during the national shutdowns and unprecedented operational disruption enforced by the pandemic, energy costs are rising, and governments are introducing more and more stringent environmental regulations to drive towards a sustainable post-pandemic recovery.

The result is that industrial businesses are increasingly seeking solutions that can drive efficiencies and optimize energy consumption levels without the huge capital expenditure that comes with a full system upgrade.

Although not new, battery energy storage is one solution that is coming to the fore as an attractive option for businesses looking to make sizable carbon reductions while keeping costs and disruption to a minimum.

Not only can these systems help businesses manage energy costs by leveraging peak shaving, load shifting and maximization of self-consumption; they also provide critical backup power, preventing revenue losses from production outages, which in the U.S. alone cost the economy $150 billion annually.1

When to invest in battery energy storage

There are four key scenarios where investing in battery energy storage is likely to make commercial sense for industrial businesses.

1. The first, which will likely apply to many operators, is when energy costs have risen, and they need to be more tactical about the way energy is used on the grid to reduce their costs. For example, an automotive manufacturer may have recently extended its infrastructure to add EV charging to their portfolio and wants to offset the additional cost brought on by the resulting large peak loads. Or, a manufacturer’s utility contract may have changed to incur higher demand charges, which they want to negate while safeguarding themselves from future price hikes.

2. The second is the more proactive approach, whereby a business is seeking to reduce its carbon footprint as part of a wider decarbonization strategy, which has likely already involved investment in other green assets such as integrating solar or wind energy. In this case, investing in energy storage will enable further environmental gains.

3. Thirdly, there are a growing number of businesses seeking energy independence. In this case, the business may have installed various distributed energy sources on site already to negate reliance on the grid. Energy storage can offer what is effectively the glue to connect those individual fuel sources together.

4. Finally, businesses that rely on an uninterruptible power supply are increasingly looking for cost-effective back-up power sources. For a busy factory or manufacturer, even a few minutes of downtime can result in catastrophic losses of productivity. Energy storage can be critical in ensuring ‘business as usual’ even in the event of a grid failure.

There is no better time than now to give energy storage the green light, but the specification process can be a minefield. To learn about the three most important considerations industrial businesses should take into account to get the most out of their investment, head to the second post in this two-part series here.

1. https://www.energy.gov/ne/articles/department-energy-report-explores-us-advanced-small-modular-reactors-boost-grid