Falling Costs Drive U.S., Australia to Integrate Battery Storage in Grid Planning
With energy storage costs falling and large-scale applications on the rise, now is the time for U.S. utilities to begin building storage systems into their integrated resource plans (IRPs), the Energy Storage Association argues in a new primer on advanced energy storage.
Regulators in 33 states require utilities to support IRPs, designed “to determine the least-cost combination of resources that enables a utility to meet forecasted demand, as well as some established reserve margin, over a specified future period, typically ranging from 10 to 20 years,” Greentech Media reports. ESA notes that non-hydro storage deployments more than tripled from 60 megawatts in 2013 to 192 MW in 2015, and single installations now range up to 100 MW.
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But “while some utilities have expressed interest in studying energy storage in the context of resource planning, ESA notes that informational barriers remain. The problem is that many IRP modeling systems are not granular enough to capture the flexibility of storage operations, and use inaccurate and outdated cost information.”
That means utilities are “missing the opportunity to analyze, evaluate, and procure advanced storage as a cost-effective capacity resource, putting ratepayers at risk of significant imprudent investments,” the primer warns.
“As energy storage becomes more competitive, ESA argues that the case for utilities to include storage in their IRPs becomes more compelling,” Greentech notes. “And as resource mixes continue to include more variable [renewable] generation sources, ESA notes that supply flexibility will become essential. In this context, the trade group urged utility regulators to use their existing authority to ask utilities to appropriately consider storage in resource planning ‘and ensure they meet their duty to ratepayers.’”
That argument is reinforced in a report last week by Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) and electricity network owners. It points to a national grid powered almost exclusively by wind and solar as the most affordable way to deliver a reliable electricity system and reduce greenhouse gas emissions.
“The cost savings over business-as-usual—a grid powered primarily by coal and gas—were significant, with consumer savings of between one-quarter and one-third of their bills,” write RenewEconomy’s Giles Parkinson. The question is “what will happen when, as the detractors say, the wind don’t blow and the sun don’t shine? The answer, of course, is storage. But not nearly as much as the cynics suggest. And at not nearly the cost.”
Parkinson cites CSIRO Energy Chief Economist Paul Graham, who argues that wind and solar can deliver a reliable grid at up to 40 to 50% penetration, with no need for additional storage. Up to that point, existing fossil plants are sufficient to backstop more variable renewables. After that, “as the back-up generators gradually exit the grid, they can be replaced by various storage types, until storage then becomes the principal form of back-up and grid security on the grid.”
To ensure reliability on a renewable grid, “some renewable critics say that about a week’s worth of storage is needed, and multiples of wind and solar capacity required for back-up. These would be the same people who argue that climate science is a hoax, but it is a view that has more traction than it should,” Parkinson writes. The CSIRO modelling shows “that at those very high levels, about 0.8 GW of back-up was required for about every gigawatt of wind and solar capacity. This is around the same amount of back-up capacity currently needed by centralized power plants to meet peak demand and outages.”
And “Graham says battery storage costs are falling so quickly that the CSIRO team already had to upgrade its forecasts and bring forward recommended action by five years.”