Energy Storage: The Next Stage in Clean Energy!

by Emily Ruby, CCP intern   |   Nov. 11, 2015

[Map of energy storage project locations. Source: U.S. Department of Energy Global Energy Storage Database.]

With the debut of Tesla’s Powerwall in May of this year,
home-owners have begun to consider energy storage for residential use. For a
flat price of $3,000,
customers can acquire a 7 kWh lithium ion battery to store electricity generated
from solar panels to power the home or even that new electric car.

Aside from Tesla’s
Powerwall, however, energy storage for residential use has not yet hit the
mainstream. Batteries can range widely in technology type and cost, and a
homeowner may be on their own to research and design a solar system with
storage (especially if it’s off-grid). Some solar companies have been
partnering with energy storage providers to address this need (e.g. SolarCity
and Tesla; SunEdison and GreenCharge
Networks).  

One driver of the storage
market is that utilities are now required to meet energy storage procurement
targets, under rule-making by the California Public Utilities Commission
(CPUC). As a result, Power Purchase Agreements (PPAs) for storage have been put
out for the first time. PPAs and other financing policies have helped grow
solar into what it is today by making it more affordable. The CPUC has set a
total goal of 1,325 MW of storage from the investor-owned utilities by 2020. These
kind of policies can create the right economic environment for storage to
become commercially viable and widespread.

The benefits of storage are
plentiful. Storage can substitute for fossil-fueled power sources of energy. When
grid power is down, running gas-powered generators or bringing peaker plants on
line for periods of high demand can be both polluting and expensive. Storage
can be part of a utility’s larger connection plan—aiding in transmission and
distribution and relieving strain on the grid. Storage can even-out fluctuations
in frequency and voltage, changes that happen quite quickly (in milliseconds),
but that can impact the effective operations of machinery or computers. The
most evident use of storage is to compliment pure renewable energy—capture electricity
from intermittent renewable energy sources when it’s available, and feed the
energy back into the grid when the sun is not shining or the wind is not
blowing. This function of energy storage is crucial to the full transition from
fossil fuels to renewables.

Even today, energy storage
(with renewables) can be economic and attractive depending on the geography of
a project and other factors. High energy prices, an unstable or aging grid
infrastructure, and location can all drive customers and policy-makers to favor
alternative energy configurations. Places that are remote or where there is no
sufficient grid infrastructure—such as islands or villages in the third
world—can readily switch to alternative energy and energy storage rather than
rely on centralized conventional power that may be unavailable, very expensive,
or unreliable.

Solar installations paired
with storage in Hawaii have already reached grid parity (i.e. when alternative
energy becomes cost-competitive with conventional grid power). Ambitious projects
have been announced by SolarCity and Stem to continue banking on solar +
storage and reduce reliance on fossil fuels. For example, Kodiak Electric Association, a utility in Alaska, wanted to add more power to its
system. Given the choice between diesel generators or storage, they went with
batteries to allow utilization of more wind energy, thereby cutting down on
pollution and saving $560,000 in diesel generation. With advances in technology
and supportive public policy, storage should continue to become more
cost-competitive in other areas as well. To counter the looming threat of
climate change, storage in all forms—utility, residential, commercial—is
necessary and will allow greater reliance on clean renewable energy and wean us
off polluting fossil fuels.

Resources

  1. http://www.teslamotors.com/powerwall
  2. http://www.solarcity.com/newsroom/press/solarcity-introduces-affordable-new-energy-storage-services-across-us
  3. http://www.greencharge.net/sunedison/
  4. http://www.cpuc.ca.gov/PUC/energy/storage.htm
  5. http://energystorage.org/energy-storage/technology-applications/td-upgrade-deferral
  6. http://energystorage.org/energy-storage/energy-storage-benefits/benefit-categories/grid-operations-benefits
  7. https://www.cleanpower.com/2015/solar-storage-hawaii/
  8. http://microgridmedia.com/hawaiian-electric-launches-2-1mm-distributed-energy-storage-program/
  9. Rocky Mountain Institute. The Economics of Grid
    Defection. Feb. 2014. Retrieved 11/2/15.
  10. International Renewable Energy Agency (IRENA).
    BATTERY STORAGE FOR RENEWABLES: MARKET STATUS AND TECHNOLOGY OUTLOOK. Jan 2015. 

Want More Renewables? Think About Storage.

I attended a symposium last week hosted by Joint Venture Silicon Valley on energy storage.  As renewable energy becomes an increasingly significant part of California’s generation resources, storage will become critically important.  Enough solar pv has been installed in the last few years to actually change the peak demand profile of the load in California. Three of the speakers at the symposium spoke about the duck curve (for more on the duck curve and possible solutions see Gridtechgrid), a graph that  essentially documents the trend that with the rise of solar power production in California noon to afternoon are no longer a peak demand period. As we increase solar production there will even be a potential problem of over generation in the afternoon.  Storage can help smooth this out and save the energy for the new peak demand time at about 9 pm.

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Several speakers suggested that the prices of storage are coming down quickly enough that it already makes economic sense for many applications. Janice Lin, Director of California Energy Storage Alliance, explained that under AB 2514 the state set a target for 1.325GW of energy storage by 2020. She also mentioned that the state’s Self-Generation Incentive Program (SGIP) enabled by AB 412 provides financial incentives for the installation of clean and efficient distributed generation technologies. These incentives can cover up to 50% of the cost of an eligible storage installation and there is an annual statewide budget of $74.7 million through December 31, 2015.

The most important take away from the symposium for me was that we have to increase our capacity to store power hand in hand with our increase in renewable energy development and that there are many ancillary benefits to doing so.

For example, Matt Roberts the director of the Energy Storage Association pointed out that storage at utility scale or aggregated can help with frequency regulation. Frequency regulation refers to the alternating current (AC) frequency produced by numerous grid generators that must be kept within tight tolerance bounds for smooth and reliable power flow from the grid.  This is often done by idling generators or firing up “peaker plants”.  Roberts presented evidence that storage can accomplish this both faster and cheaper than starting up a plant. More on frequency regulation>

Vic Chao, the CEO of Green Charge Networks noted that demand charges are an increasingly significant part of commercial and industrial customer’s utility bills. Storage can help contain these costs by providing surplus power at key times when the customer’s consumption may spike and result in demand charges.

The keynote speaker, JB Straubel, Tesla’s CTO emphasized that the potential market for storage is huge.   To give you a sense of scale, he explained that the new battery gigafactory Telsa will be building to supply batteries, employing approximately 6500 workers, will produce about 35 GigaWatts of storage capacity per year.  He claims that this will just cover Tesla’s planned 2020 automobile production of 500,000 cars and some stationary storage to support SolarCity’s solar installations. It barely scratches the surface of the potential market. More About Tesla’s Battery Factory at Greentechgrid.

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Unfortunately, the regulatory framework at the California Independent System Operator and the Public Utility Commission appear to be behind the market, still figuring out how to streamline new applications for utility scale storage.

 There are already about 128 different solar businesses in California looking for market share.   This is a dynamic sector of the economy that many of the symposium’s speakers compared to the solar industry ten years ago.  Storage promises to create more cleantech jobs and help us build a more resilient and reliable energy system.

Barry Vesser

Advanced grid and climate change

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Experts in the power industry have long said that our grid infrastructure is old and inefficient and that we need to move to a smart grid.  But what exactly is a smart grid and how will changes in the grid affect climate change?

There are many smart grid definitions – some functional, some technological, and some benefits-oriented. The tepid vision that some utilities are rolling out simply replaces human meter readers with automated meter monitoring. A stronger vision adds two-way communications and digital control systems.

This is important because the current system requires vast amounts of standby power sources since we cannot accurately predict how much electricity will be needed. Adding interactive communications to the power grid would reduce this waste. Similarly, waste from imprecise management can be reduced by running the system with digital controls rather than knobs and gauges.

Massoud Amin, referred to by some as the “father of the smart grid,” explains how and why the country should invest in the “smart grid.”  He argues that a fully automated grid could yield 12 to 18 percent annual reduction in carbon emissions. Amin states, “Investing in the grid would pay for itself to a great extent. It would save stupendous outage costs—about $49 billion per year. Improvements in efficiency would cut energy usage, saving an additional $20.4 billion annually.”

Looking at it another way, we are not going to have sufficient greenhouse gas reductions from the electricity sector unless we build a smart grid to manage a variable energy supply from large amounts of renewable energy.

Without wholesale changes, grid engineers would not be able to handle the deficits or surpluses of power on a cloudy day or a very windy day once a high percentage of our electricity comes from renewables. Smart grid technology can significantly reduce these problems by matching power supply with power demands in real time. 

For a more in depth explanation of the opportunities offered by the smart grid see this longer interview with Massoud Amin. Or for those on a limited time budget check out this short entertaining video on the how the grid works and how improvements could support more renewable energy.

  – Barry Vesser