Morgan Stanley predicts market for grid storage will explode in next 3 years

by Steve Hanley, Clean Technica

A new report authored by Stephen Byrd, a utility and cleantech analyst at Morgan Stanley, and Adam Jonas, its auto analyst, shows that they are bullish on the market for grid storage products. “Demand for energy storage from the utility sector will grow more than the market anticipates by 2019–2020,” the pair says.

They predict the demand for grid-scale storage will increase from less than $300 million a year today to as much as $4 billion in the next 2–3 years. Byrd and Jonas believe there will soon be demand for up to 85 gigawatt-hours of storage — worth about $30 billion a year. 85 GWh would be enough to supply most of New York City for a year.

Their report, entitled “An Underappreciated Disruptor,” claims that the low price of wind and solar energy together with the falling price of grid storage products has created a situation in which renewable energy is now reliable enough to be considered a mainstay of the utility industry and not just a specialty player, such as on the island of Kauai in Hawaii.

Demand for electricity peaks in the morning and late afternoon. Traditionally, that’s when so-called “peaker plants” get brought online to handle the extra load. But firing up and then shutting down those facilities costs utility companies lots of money. If they have access to grid-scale storage, they can access it instantaneously and save substantial sums of money.
Owners of those peaker plants will be squeezed by an increase in grid-scale storage capacity.

“Storage effectively provides a low-cost source of power, eliminating the need for the highest cost, least efficient conventional power plant,” says the report. “We think utilities could deploy storage as a way to enable the growth of renewables and/or defer costly transmission and distribution projects,” says Byrd.

More grid-scale storage will also promote a more distributed grid architecture, one that employs a “plug and play” model that better suits the needs of utility companies, rooftop solar customers, and electric vehicle owners. “The grid of the future is becoming more complex, necessitating improved grid infrastructure to accommodate a proliferation of distributed energy resources,” Byrd and Jonas suggest in their report.


Is 100% renewable energy doable?

With the publication of a study by Mark Z. Jacobson of Stanford University, the push for 100% renewables is seeing renewed fervor.  A group of U.S. Mayors just announced that they will back 100% renewable energy targets, and Senator Kevin de León recently introduced a new bill, SB100, to establish an overall state target of 100% clean energy for California by 2045. Many are citing Jacobson’s study as proof of the viability of 100% renewables.

However, a new report by several respected energy experts disputes Jacobson’s findings, warning that policy makers should not make decisions based on Jacobson’s study. The 21 authors of that report include some of the most prominent climate change and clean energy experts in the country, like Ken Caldeira of Stanford, Daniel Kammen of U.C. Berkeley, and Varun Sivaram of the Council on Foreign Relations. The lead author is Christopher Clack, a former research scientist at the University of Colorado and current CEO of the grid modeling consultancy Vibrant Clean Energy. The authors contend that because decarbonization is so hard, it requires a more diversified approach (than Jacobson suggests) for success.

Jacobson remains steadfast.

“Virtually every sentence in the Clack article is false as evidenced by [my] line-by-line response,” he wrote in an email Saturday, referring to a counter-rebuttal he had written. “There is not a single error in our paper.”

One of the major points of contention is the ability of hydropower to meet peak demand. In Jacobson’s vision, hydropower would not be used daily, but instead stored up large amounts of water for massive discharge on a few peaks each year. He assumes retrofits of higher capacity turbines on existing dams could make this possible.

In addition, Jacobson’s grid reliability study does not model the spatial dimensions of the transmission system (which must carry power over many miles from where it’s generated to where it is needed). Jacobson contends that he included 30-second time resolution instead (to illustrate that there’s enough power in the whole system at any given minute), while other models focus more on spatial resolution with less granular time resolution. He says models always require tradeoffs.

Jacobson devotes a large part of the study to storage. His model uses six types of storage, but does not include lithium ion batteries because of their cost. Underground thermal energy storage (UTES), modeled on a government-funded pilot project called Drake Landing in Canada, handles all storage for building air and water heating, and dwarfs the other types of storage. The reliance on UTES requires the technology to quickly transition from pilot scale to nearly every building heating system in the United States. Chilled water storage and ice storage handle cooling in Jacobson’s models. Of the six types of storage Jacobson discusses, only pumped hydro has achieved widespread commercial use on the grid.

In his rebuttal Jacobson said of the nascent storage technologies, “When something is so simple, and it’s cheap already, it has tons of potential to be commercialized and used on a large scale, particularly in new communities.”

With time running out on climate action and many decisions to be made about how to slash emissions, the debates sparked by Jacobson’s study may literally determine the fate of the planet for millennia. Stakes are high and both Jacobson and Clack clearly wish to see climate action moving forward. No matter who is right, investing in renewables, storage and grid technologies to the tune of trillions of dollars is essentially the task before us.

Jacobson’s report has given many people the imagination and moral courage to reach for what the planet is demanding. Many would argue that those are the ingredients that have been lacking in humanity’s struggle to stop climate change. So perhaps, despite the shortcomings of his report, we owe Jacobson more than a scathing review.

Related: An Interview With Mark Jacobson on the 100% Renewables Debate



El Paso Electric powers up state’s largest community solar grid

by Steve Hanley, Clean Technica

El Paso Electric has powered up the largest community solar grid in the state of Texas. As a kind of trolling of the outgoing pollution industry (unintentional trolling, we would presume), the community solar facility is located next to an existing natural gas generating facility. It’s a 21 acre solar farm, which would be hard to miss, and has a max output of 3 megawatts of power thanks to the whopping 33,000 solar panels in the “farm.” Basically, this makes it “commercial scale” more than “utility scale” (large solar farms go into the hundreds of megawatts), but the “community solar” designation means that consumers can buy into the ownership and rewards of the solar project.

The community solar farm “is currently maxed out at 1,500 customers with an additional 500 customers on a waiting list,” Fox News reports.

The solar panels are mounted to racks that tilt to follow the sun during the day, maximizing efficiency. Each has been treated with a special coating to reduce the reflected heat they give off on a sunny Texas day, something that has proven hazardous to birds in some areas.

El Paso Electric began the permitting process in June of 2015. Construction began in November of last year. Enrollment opened in March 2017. And the community solar project was fully subscribed by the end of April. In other words, there seems to be clear and strong demand for community solar power opportunities … even in Texas (which already has large and well known wind power and natural gas industries).

“This is actually one of the first facilities where we actually now own it. And now with our customers voluntarily being part of that program it becomes a program I think our customers will be proud to see,” said Eddie Gutierrez, a spokesperson for El Paso Electric.

Community solar is designed to meet the needs of people who can’t have rooftop solar of their own, like renters and condo dwellers. There’s a large portion of the population that simply doesn’t have a roof they can put solar panels on in order to clean up their electricity supply, or who perhaps have a roof but one that is not able to produce a lot of solar power (often due to shading). Community solar is the solution that allows them (you?) to go solar as well.

Subscribers pay a fixed rate of $20.96 per kilowatt per month for their community solar power. That’s higher than the regular retail rate in the area but it protects customers from any price increases for conventional power in the future, which are likely. Subscribers must sign up for a minimum of one kilowatt but can add to their subscription in half-kilowatt increments. Pricing details are available on the company website.

A one-year agreement with El Paso Electric is required initially, but customers are free to leave the program at any time after the expiration of the first year. The membership is portable, provided the subscriber moves to another location in the EPE service area. El Paso Electric is planning similar community solar projects for subscribers in New Mexico in the near future.

“Utility community solar programs have proven to be successful around the nation as electric utilities are able to utilize cost effective utility-scale solar resources in developing customer offerings, and EPE is excited to bring this new program to our community,” says former EL Paso Electric CEO Tom Schokley. (What are the odds that a utility company CEO would be named Schokley?)


California Number One in Grid Modernization

By Woody
Hastings, CCP  |  February 10, 2016

California ranks number one in
terms of modernizing its electrical grid for the 21st century according
to a new study by the GridWise Alliance in collaboration with Clean Edge.

The study also finds that the
number of smart meters capable of two-way communication surpassed that of
old-fashioned meters in 2013. This means that more and more customers can
feed clean rooftop solar power into the grid, as well as receive power from the

The study includes a Grid
Modernization Index that ranks states according to actual grid operations,
customer engagement, and state support. What this means is that the higher the
ranking, the more the state in question is dedicating money, activities on the
part of its grid operators, and state policies to modernizing the 100+ year old
electric grid. According to the report, only these top ten states are making
significant progress, with the remaining 40 are doing relatively little to
modernize their grids.

California’s distribution resource
planning (DRP) proceeding
at the
California Public Utilities Commission (CPUC) imposes one of the most
rigorous requirements for planning out grid modernization efforts on the State’s
three Investor Owned Utilities. The Climate Center partners are
influencing this important work.

One of the study’s cautionary takeaways
is that grid modernization still faces serious obstacles, even in states like
California. “As long as utilities and regulators continue to view grid
modernization predominantly in terms of costs to ratepayers, rather than also
considering benefits, investments will likely fall short,” the authors state.

You can download the entire
GridWise Alliance report for free here.

Woody Hastings is the Renewable Energy
Implementation Manager for The Climate Center. Email him at

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

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.


  9. Rocky Mountain Institute. The Economics of Grid
    Defection. Feb. 2014. Retrieved 11/2/15.
  10. International Renewable Energy Agency (IRENA).

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.


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.


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


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