Recent developments in energy storage are sure to impact the way that utilities plan to meet the energy demands of their client base both across the US and beyond. Given its potential to offset intermittent solar and wind resources, battery storage has long been considered the holy grail of cheap and resilient renewable energy. The major problem with renewables is that the energy isn’t dispatchable in the same way as it is for power plants powered by fossil fuels. That is, as solar power can only be produced when the sun is shining, you can’t simply switch it on or turn up to meet demand. Thus, the basic idea behind combining renewable assets with energy storage is simple: store the excess energy produced when the sun is shining and the wind is blowing, and use that excess when they are not. The problem is bringing that idea to the grid scale in a way that is economical.
When it comes to the economics of energy in Texas, batteries are still a wildcard. This is due in part to the fact that ERCOT, Texas’ Independent Systems Operator, has yet to develop the rules for integrating batteries into the Texas energy market. As a result, debate on the topic of when batteries will become safe and affordable rages on.
This uncertainty surrounding emergent energy storage technology dominated much of the early conversation around energy resource planning in Austin, as the city’s 2019-2020 Resource Planning Working Group members tried to come to a consensus on which market projections should be trusted and how optimistic they should be. Throughout the working group meetings, utility representatives consistently advocated for what they considered to be a more cautious and hesitant approach to batteries. According to Cary Ferchill, who chaired the working group, the technology is just not there in terms of affordability, at least for the moment.
Ferchill and others substantiated their hesitance by citing the recent studies conducted by Wood McKenzie, Austin Energy, and this Vox article, which tried to put the financial risks of renewables and energy storage in more common terms. However, other working group members disagreed with the utility’s position, claiming that they had been cherry-picking their sources. For instance, local environmental photographer and climate activist, Al Braden responded to Austin Energy’s numbers with confusion and skepticism: “I am confused because according to ERCOT, there are other studies on energy storage that are a lot cheaper than this. This seems a bit pessimistic based on the average… according to the studies I have seen.” Erika Bierschbach, VP of Market Operations and Resource Planning at Austin Energy, quickly interceded, explaining that while ERCOT does produce projections, its primary responsibility is to serve as an Independent Systems Operator for the Texas grid. Thus, the utility preferred to consult the data and projections produced by Wood McKenzie, which specializes in energy market forecasting.
Disagreements over which sources to trust continued to flare up throughout the five months that the working group was in session. In the end, it was decided that a mandate on developing batteries would be left out of the 2030 recourse plan, as more information was needed before the utility could develop a firm plan on constructing or leasing energy storage. The plan did, however, include a caveat stating that by the end of 2022, the City’s Electric Utility Commission would assess whether or not to reconvene the working group in order to update the plan according to any significant developments in storage technology or prices. Given the massive uptake in energy storage projects in California, this is likely to be the case.
In recent years, California has become the world’s leader in high-capacity battery projects. Most recently, the former Moss Landing Power Plant (a natural gas plant) was converted into a 300MW energy storage facility, the largest facility of its kind in the state. Other energy storage projects are also being launched across the state, including 250MW up and running in San Diego and up and coming projects in San Francisco (150MW) Long Beach (100MW). Plus, an extra 282.5 MW of storage is scheduled to come online at the Moss Landing site by the end of 2021.
While California may be the tip of the storage spear, so to speak, the work they’ve undertaken is also paving the way for other regions to develop their own ventures into grid-scale energy storage. Due to the recent and projected increase in market competition, “the U.S.National Renewable Energy Laboratory sees mid-range costs for lithium-ion batteries falling an additional 45 percent between 2018 and 2030” (Katz 2020). As a result, such diverse locales as South Florida (409 MW), London, England (320 MW), Lithuania (200 MW), and Chile (112 MW) are all developing massive energy storage projects of their own.
Though Texas may currently lag behind California and other regions in regard to its current energy storage portfolio, this is changing too. ERCOT’s Battery Energy Storage Task Force met throughout the year 2020, producing numerous policy recommendations that are painting a clearer picture of how energy storage will fit into Texas’ uniquely structured energy market. Furthermore, some energy storage developers have started to take note of the relative advantage of Texas’ lax permitting process, which enables hopeful storage companies to get the ball rolling faster than in heavily-regulated states like California. As a result, the ERCOT grid now has numerous energy storage projects in the que. Though they vary in sizes, some of the larger projects are planning for a whopping 500MW capacity, matching the scale of California’s biggest facilities (Spector 2020).
Thus, the evidence is clear that in high-value energy markets like Texas and California, developers are headed decidedly towards the option of renewables-plus-storage. That being said, as of yet, batteries are still too expensive to become mainstream anytime soon. What remains to be seen is the degree to which the incoming Biden administration will be able to speed up this process and bolster this burgeoning industry. Either way, most experts agree that it’s just a matter of time: the future of energy has plenty of renewables in store.
Source
Katz, C H Eryl. 2020. “In Boost for Renewables, Grid-Scale Battery Storage Is on the Rise.” Yale Environment 360, December.
Cite as
Anonymous, "In Boost for Renewables, Grid-Scale Battery Storage is on the Rise", contributed by James Adams, The Energy Rights Project, Platform for Experimental Collaborative Ethnography, last modified 4 January 2021, accessed 25 April 2024. https://energyrights.info/content/boost-renewables-grid-scale-battery-storage-rise
Critical Commentary
Recent developments in energy storage are sure to impact the way that utilities plan to meet the energy demands of their client base both across the US and beyond. Given its potential to offset intermittent solar and wind resources, battery storage has long been considered the holy grail of cheap and resilient renewable energy. The major problem with renewables is that the energy isn’t dispatchable in the same way as it is for power plants powered by fossil fuels. That is, as solar power can only be produced when the sun is shining, you can’t simply switch it on or turn up to meet demand. Thus, the basic idea behind combining renewable assets with energy storage is simple: store the excess energy produced when the sun is shining and the wind is blowing, and use that excess when they are not. The problem is bringing that idea to the grid scale in a way that is economical.
When it comes to the economics of energy in Texas, batteries are still a wildcard. This is due in part to the fact that ERCOT, Texas’ Independent Systems Operator, has yet to develop the rules for integrating batteries into the Texas energy market. As a result, debate on the topic of when batteries will become safe and affordable rages on.
This uncertainty surrounding emergent energy storage technology dominated much of the early conversation around energy resource planning in Austin, as the city’s 2019-2020 Resource Planning Working Group members tried to come to a consensus on which market projections should be trusted and how optimistic they should be. Throughout the working group meetings, utility representatives consistently advocated for what they considered to be a more cautious and hesitant approach to batteries. According to Cary Ferchill, who chaired the working group, the technology is just not there in terms of affordability, at least for the moment.
Ferchill and others substantiated their hesitance by citing the recent studies conducted by Wood McKenzie, Austin Energy, and this Vox article, which tried to put the financial risks of renewables and energy storage in more common terms. However, other working group members disagreed with the utility’s position, claiming that they had been cherry-picking their sources. For instance, local environmental photographer and climate activist, Al Braden responded to Austin Energy’s numbers with confusion and skepticism: “I am confused because according to ERCOT, there are other studies on energy storage that are a lot cheaper than this. This seems a bit pessimistic based on the average… according to the studies I have seen.” Erika Bierschbach, VP of Market Operations and Resource Planning at Austin Energy, quickly interceded, explaining that while ERCOT does produce projections, its primary responsibility is to serve as an Independent Systems Operator for the Texas grid. Thus, the utility preferred to consult the data and projections produced by Wood McKenzie, which specializes in energy market forecasting.
Disagreements over which sources to trust continued to flare up throughout the five months that the working group was in session. In the end, it was decided that a mandate on developing batteries would be left out of the 2030 recourse plan, as more information was needed before the utility could develop a firm plan on constructing or leasing energy storage. The plan did, however, include a caveat stating that by the end of 2022, the City’s Electric Utility Commission would assess whether or not to reconvene the working group in order to update the plan according to any significant developments in storage technology or prices. Given the massive uptake in energy storage projects in California, this is likely to be the case.
In recent years, California has become the world’s leader in high-capacity battery projects. Most recently, the former Moss Landing Power Plant (a natural gas plant) was converted into a 300MW energy storage facility, the largest facility of its kind in the state. Other energy storage projects are also being launched across the state, including 250MW up and running in San Diego and up and coming projects in San Francisco (150MW) Long Beach (100MW). Plus, an extra 282.5 MW of storage is scheduled to come online at the Moss Landing site by the end of 2021.
While California may be the tip of the storage spear, so to speak, the work they’ve undertaken is also paving the way for other regions to develop their own ventures into grid-scale energy storage. Due to the recent and projected increase in market competition, “the U.S. National Renewable Energy Laboratory sees mid-range costs for lithium-ion batteries falling an additional 45 percent between 2018 and 2030” (Katz 2020). As a result, such diverse locales as South Florida (409 MW), London, England (320 MW), Lithuania (200 MW), and Chile (112 MW) are all developing massive energy storage projects of their own.
Though Texas may currently lag behind California and other regions in regard to its current energy storage portfolio, this is changing too. ERCOT’s Battery Energy Storage Task Force met throughout the year 2020, producing numerous policy recommendations that are painting a clearer picture of how energy storage will fit into Texas’ uniquely structured energy market. Furthermore, some energy storage developers have started to take note of the relative advantage of Texas’ lax permitting process, which enables hopeful storage companies to get the ball rolling faster than in heavily-regulated states like California. As a result, the ERCOT grid now has numerous energy storage projects in the que. Though they vary in sizes, some of the larger projects are planning for a whopping 500MW capacity, matching the scale of California’s biggest facilities (Spector 2020).
Thus, the evidence is clear that in high-value energy markets like Texas and California, developers are headed decidedly towards the option of renewables-plus-storage. That being said, as of yet, batteries are still too expensive to become mainstream anytime soon. What remains to be seen is the degree to which the incoming Biden administration will be able to speed up this process and bolster this burgeoning industry. Either way, most experts agree that it’s just a matter of time: the future of energy has plenty of renewables in store.