EXPLAINER: Why Energy Storage is ‘Rewiring’ the U.S. Utility Industry
Low-cost energy storage is a “future-proof” technology that is rewiring the way the U.S. electricity and automotive industries operate, and the way homeowners, businesses, and utilities use power, according to an explainer published this week on the Energy Collective blog.
“Energy storage in this context simply means saving electricity for later use,” write Eric Hittinger and Eric Williams of the University of Rochester. “It’s like having a bunch of rechargeable batteries, but much larger than the ones in your cell phone and probably connected to the grid.” That matters, they say, because of the way electricity works.
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“Without the means to store electricity, utilities have to produce just enough to meet demand around the clock, including peak hours,” they explain. Which means “it takes a hidden world of complexity and a series of delicate balancing acts to power homes and workplaces, because the grid has historically had little storage capacity. After being generated at power plants, electricity usually travels down power lines at the speed of light and most of it is consumed immediately.”
It’s a mode of operation that would be “maddening and ridiculous” for any other industry. “But electric grid operators basically pull this off, balancing supply and demand every few seconds by turning power plants on and off,” Hittinger and Williams note. “That’s why a storage boom would make a big difference,” even if a booming U.S. sector can still only store the equivalent of 0.2% of the country’s average power consumption.
“Storage creates the equivalent of a warehouse to stow electricity when it is plentiful for other times when it is needed.”
That capacity essentially makes storage “a Swiss Army knife for electricity grids,” they write. “It can help balance short-term power fluctuations, manage peak demand, or act as a backup to prevent or recover from power outages.” It can deliver “at any scale and at any point in the grid, from a small home storage system to a pumped hydroelectric reservoir big enough to power a small city. While storage actually consumes a little electricity rather than producing any, it makes the electricity business more economically efficient. As the volume of storage grows, we expect grids to become more stable and flexible.”
As energy storage scales up, “utilities will meet peak demand more easily with less total capacity and fewer power plants,” Hittinger and Williams conclude. And if its price goes low enough, total capacity grow from a gigawatt-hour now to dozens or even hundreds of GWh.
“If or when that happens, wind and solar power will become more competitive, increasingly displacing both coal and natural gas—now the nation’s two top sources of electric power,” they write. “Cheaper storage would also make electric vehicles more affordable, reducing the amount of gasoline and diesel Americans consume. The electricity and automotive industries operate nearly the same way they did 50 years ago. But a world of low-cost batteries would change them both in exciting and unprecedented ways.”