Changing the electricity game

AEP views energy storage as a strategic investment for its future grid. The company has recognized that, in the long run, storage has the unique ability to act as a buffer between the grid and generation that is either intermittent or not controlled by the utility. Besides its strategic value, electricity storage offers many more tangible values that, if added up, would exceed the cost of deployment. AEP started with the capital deferral (peak shaving) value in its 2006 project, added service reliability (backup power) value in 2008, and is now exploring the addition of frequency regulation to the stack of values that need to be realized in order to make electricity storage an economically viable solution. Although electricity storage technologies have changed substantially over the past decade, making them economically feasible remains the greatest challenge for utilities. The key: utilities need to learn how to realize more than a few storage values at a time.