Smart Grid

November 12, 2012

Increasing Complexity of the Smart Grid Heightens Spinning Reserves

With more diversity of power generation assets and sophisticated control capabilities, the importance of a range of ancillary services for grid operators, including spinning reserves has been heightened by the increasing complexity of the smart grid.

Using information and communications technology to gather information such as information about the behaviors of suppliers and consumers, a smart grid improves the efficiency, reliability, economics and sustainability of the production and distribution of electricity, in an automated fashion.

To serve as bridge power for the grid, spinning reserves are storage assets that can come online quickly. Over the coming decade, according to a report from a part of Navigant's Energy Practice, Pike Research, the capacity of such systems will grow steadily as will their value.

By 2022, the study concludes that the total capacity of worldwide spinning reserves for the grid will rise by 40 percent. During that period, the global spinning reserves market will more than double in size in terms of revenue, from $261 million in 2012 to $578 million by 2022.

"The traditional technologies that deliver spinning reserves, including all types of dispatchable power plants, are mature and well-understood. However, energy storage technologies, including pumped storage and newer forms of energy storage, are playing a larger role in this market," says Research Analyst, Anissa Dehamna, in a statement.

She added that in the spinning reserves market, energy storage technologies will gain market share as markets begin to differentiate between technologies such as with pay-for-performance regulations.

According to the report, natural gas and coal plants will still account for 93 percent of total spinning reserves capacity by 2022, but energy storage will grow to seven percent of capacity in the same time frame. Of particular interest to grid operators are advances in battery technology, particularly lithium-ion (Li-ion) batteries.

Compared to other forms of energy storage, Li-ion batteries can achieve up to 95 percent efficiency, but they remain relatively expensive. The cost of Li-ion for grid applications can be reduced by impressive economies of scale. Using a scenario-based forecast, global market analysis for spinning reserves and forecasts of the amount and revenue associated with this rapidly changing market has been detailed in the report, "Spinning Reserves for the Grid".

Edited by Amanda Ciccatelli