Today, energy storage systems are generally categorized across just two simple dimensions, as utilities ask themselves: How much power can I have? and how long can I have it for?

Power output is a long-understood and accepted metric within the energy industry, however, the market’s understanding of storage duration is still based on the concept of fixed discharge rates, typically observed in lithium-ion technology. Recently, the US Department of Energy (DOE) Pathways to Commercial Liftoff: Long Duration Energy Storage study defined four separate duration categories: short (0-10 hours), inter-day (10-36 hours), multi-day/week (36-160 hours), and seasonal (160+ hours).

The DOE’s excellent report looks to provide definitive categorizations for the first time and provides much needed direction to the industry at large. Now, with alternative battery technologies commercially available and deployments scaling up, it’s time to update modeling to include greater flexibility across multiple dimensions. Flexibility is king, and it opens up new opportunities to maximize value and future-proof returns in a dynamic market over the entire 25+ year battery life.

How to Think About Flexibility

Operational flexibility of a battery is often constrained on four dimensions:

• Rest Periods: There are times it may be beneficial to run a battery but it’s restrained from doing so by the manufacturer’s mandated rest periods after charging and discharging – a measure usually in place to prevent overheating.
• Cycle Count: Some warranties lock owners into a specific maximum cycle count – for example, 6000 lifetime cycles – as a means to extend asset lifetime and avoid premature degradation and replacement.
• State of Charge: Certain battery types degrade significantly faster when sitting fully charged and can also be irreparably damaged if fully discharged to 0%. As a result, they have a narrow operating band which can prevent them from being available for a full charge.
• Charge & Discharge Durations: A system may be designed to operate exclusively at pre-determined and fixed charge and discharge durations; meaning a one-hour battery will always operate as a one-hour battery, even if in the future an eight-hour dispatch is more useful.

When flexibility is limited, the cost of exceeding these limits can be reduced battery life, warranty penalties, or severe losses in round trip efficiency. In the worst case, inflexibility creates stranded assets if their limited operational profiles become irrelevant.

Flexibility Unleashed

Energy markets are changing rapidly, and it’s difficult to predict the best operation of an asset 10 or 20 years in the future as patterns of generation and consumption shift even with each season. A flexible energy storage asset can help mitigate this risk and is more likely to continue delivering value to ratepayers and investors in the long term.

Flexible assets can also capture of more value today. For example, vanadium flow batteries can have an almost negligible marginal cost to cycle the battery, leading to extremely low levelized costs of operation in high-throughput applications and providing operators with the ability to access marginal revenue opportunities that they would have otherwise forgone.

Also, some storage technologies are also capable of a flexible range of discharge durations, opening up opportunity to stack value streams which require both short and inter-day duration discharges. For example, some of the project owners we work with today are stacking 4-8 hour solar shifting services with shorter, 30 minute frequency response duty cycles depending on the market that day – all provided from the same battery asset with no modifications.

Get a GRIP

Meanwhile, grid resilience is today at the center of many current government grants. For resilience, flexibility is key as duty cycles are so unpredictable. Often the ability to shorten the charge cycle is needed; there may only be one hour’s notice to charge a battery that usually runs a five hours charge cycle, so it needs to be available to do both.

Accordingly, flexible assets are an ideal fit for the DOE’s upcoming Grid Resilience and Innovation Partnerships (GRIP) Program funding rounds which explicitly call for enhanced grid flexibility and improved resilience.

Ideally though, resilience duty cycles will be rare: gas peakers providing resilience today run as little as 10 times a year. A flexible asset can also deliver value the rest of the time, for example running a short 4-hour charge/discharge cycle on a daily basis but shifting seamlessly to a rapid charge and 12-hour inter-day discharge profile at short notice.

For today’s utilities, thinking multidimensionally about assets is a vital factor in technology choice. Storage systems that offer greater flexibility today and in the future de-risk this choice, ensuring long-term capital investments made today will deliver value on the grid for years to come.