An economic comparison of battery energy storage to conventional energy efficiency technologies in Colorado manufacturing facilities

Abstract

Battery energy storage (BES) is one of a set of technologies that can be considered to reduce electrical loads, and to realize economic value for industrial customers. To directly compare the energy savings and economic effectiveness of BES to more conventional energy efficiency technologies, this study collected detailed information regarding the electrical loads associated with four Colorado manufacturing facilities. These datasets were used to generate a set of three scenarios for each manufacturer: implementation of a BES system, implementation of a set of conventional energy efficiency recommendations, and the implementation of both BES and conventional energy efficiency technologies. Evaluating these scenarios' economic payback period allows for a direct comparison between the cost-effectiveness of energy efficiency technologies and that of BES, demonstrates the costs and benefits of implementing both BES and energy efficiency technologies, and characterizes the effectiveness of potential incentives in improving economic payback. For all of the manufacturing facilities modeled, results demonstrate that BES is the least cost-effective among the energy efficiency technologies considered, but that simultaneous implementation of both BES and energy efficiency technologies has a negligible effect on the BES payback period. Incentives are demonstrated to be required for BES to achieve near-term payback period parity with more conventional energy efficiency technologies.