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Chapter | 5 Prospects for Renewable Energy 125 at 20­30% penetration levels of renewables may cause reliability problems in the electric grid, such as voltage fluctuations, and require a significant amount of reserves for capacity firming. The challenge of renewable resource intermit- tency can be met using a variety of energy storage technologies in lieu of con- ventional generators. The energy storage capacity for renewable generation varies from kW to hundreds of MW, depending on whether it will be used for power or energy management, (e.g., frequency regulation or capacity firming). The optimal technologies for addressing renewable energy integration will be application-specific and will scale with the size of variable generation, ran- ging from pumped hydropower and CAES for centralized, bulk storage at PV plants and wind farms to batteries and electric vehicles for distributed storage near rooftop PV installations. The increasing amount of distributed renewables has triggered an evolution from centralized to distributed storage. Smart grid deployment is facilitating this transition since integration of distributed storage requires more intelligent control, advanced power electronics, and two-way communication. Both central and distributed energy storage are required for source-load matching in a smart grid with high levels of renewable penetration. A cost-benefit analysis needs to be done to determine whether certain storage applications should address the supply or demand side. Key benefits of energy storage include providing balancing services (e.g.,