Will utilities embrace new forms of spinning reserves?

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Pike Research is predicting a 40 percent increase in the global capacity of spinning reserves by 2020 due to the increasing complexity of the smart grid, diversity of power generation assets and more sophisticated control capabilities.

Spinning reserves are power generation or storage assets that can come online quickly to serve as bridge power for the grid. Revenue from the market will more than double by 2022, Pike concludes. Natural gas and coal plants will still account for 93 percent of total spinning reserves capacity by 2022, but energy storage will grow to 7 percent of capacity in the same time frame, according to the research.

"The traditional technologies that deliver spinning reserves, including all types of dispatchable power plants, are mature and well-understood," said Pike Research Analyst Anissa Dehamna. "However, energy storage technologies, including pumped storage and newer forms of energy storage, are playing a larger role in this market. As markets begin to differentiate between technologies, such as with pay-for-performance regulations, energy storage technologies will gain market share in the spinning reserves market."

Utilities should pay particular attention to battery technology, particularly lithium-ion. Li-ion batteries can achieve up to 95 percent efficiency, but currently remain relatively expensive. Impressive economies of scale could reduce the cost of Li-ion for grid applications, according to Pike.

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