The U.S. Department of Energy's National Renewable Energy Laboratory (NREL), announced that small battery systems reducing peak demand by 2.5%, offer the most attractive return on investment in the absence of state or utility incentives.

NREL used the Battery Lifetime Analysis and Simulation Tool (BLAST) to confirm the economic benefits, says Clean Technology Business Review.

By using the Behind-the-Meter (BTM-Lite) version of BLAST, the analysis calculated peak load reduction and electricity cost savings, while it also identified energy storage system configurations that deliver the most favorable return on investment in the shortest time possible.

The analysis put together recent utility rate structures and historic data on solar photovoltaic electricity generation and commercial facility loads to evaluate 6,860 unique scenarios.

NREL Energy Storage Task Leader Jeremy Neubauer says that "batteries for demand-charge reduction are most cost effective under today's rate structures when configured for higher power-to-energy ratios, targeting discharge durations from 30 minutes to one hour."

Developed by NREL and funded by the Energy Department's Office of Energy Efficiency and Renewable Energy, the BLAST tools enable prediction of long-term performance of batteries and identification of possible improvements in a wide range of applications, including in electric vehicles (BLAST-V) and stationary energy storage (BLAST-S).

BLAST BTM-Lite can also be paired with NREL's Battery Ownership Model to evaluate lifetime battery costs in conjunction with performance, longevity and new value propositions.

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