There has been a dramatic drop in battery costs in recent years. Jeremiah Johnson and Joseph F. DeCarolis, of North Carolina State University, say if this continues grid-scale batteries could supplant the usual solutions to peak electricity demand: gas power plants and transmission lines. Inevitably, this will depend on the future price of gas, and the changing policy environment. But one thing is for sure: utilities don’t want to invest in peak power generation that batteries will make obsolete.
Due to their decreasing costs, lithium-ion batteries now dominate a range of applications including electric vehicles, computers and consumer electronics. You might only think about energy storage when your laptop or cellphone are running out of juice, but utilities can plug bigger versions into the electric grid. And thanks to rapidly declining lithium-ion battery prices, using energy storage to stretch electricity generation capacity.
Based on our research on energy storage costs and performance in North Carolina, and our analysis of the potential role energy storage could play within the coming years, we believe that utilities should prepare for the advent of cheap grid-scale batteries and develop flexible, long-term plans that will save consumers money.
U.S. Energy Information Administration
Peak demand is pricey
The amount of electricity consumers use varies according to the time of day and between weekdays and weekends, as well as seasonally and annually as everyone goes about their business.
Those variations can be huge.
For example, the times when consumers use the most electricity in many regions is nearly double the average amount of power they typically consume. Utilities often meet peak demand by building power plants that run on natural gas, due to their lower construction costs and ability to operate when they are needed.
However, it’s expensive and inefficient to build these power plants just to meet demand in those peak hours. It’s like purchasing a large van that you will only use for the three days a year when your brother and his three kids visit.
The grid requires power supplied right when it is needed, and usage varies considerably throughout the day. When grid-connected batteries help supply enough electricity to meet demand, utilities don’t have to build as many power plants and transmission lines.
Given how long this infrastructure lasts and how rapidly battery costs are dropping, utilities now face new long-term planning challenges.
Cheaper batteries
About half of the new generation capacity built in the U.S. annually since 2014 has come from solar, wind or other renewable sources. Natural gas plants make up the much of the rest but in the future, that industry may need to compete with energy storage for market share.
In practice, we can see how the pace of natural gas-fired power plant construction might slow down in response to this new alternative.
So far, utilities have only installed the equivalent of one or two traditional power plants in grid-scale lithium-ion battery projects, all since 2015. But across California, Texas, the Midwest and New England, these devices are benefiting the overall grid by improving operations and bridging gaps when consumers need more power than usual.
Based on our own experience tracking lithium-ion battery costs, we see the potential for these batteries to be deployed at a far larger scale and disrupt the energy business.
When we were given approximately one year to conduct a study on the benefits and costs of energy storage in North Carolina, keeping up with the pace of technological advances and increasing affordability was a struggle.
Projected battery costs changed so significantly from the beginning to the end of our project that we found ourselves rushing at the end to update our analysis.
Once utilities can easily take advantage of these huge batteries, they will not need as much new power-generation capacity to meet peak demand.
Utility planning
Even before batteries could be used for large-scale energy storage, it was hard for utilities to make long-term plans due to uncertainty about what to expect in the future.
For example, most energy experts did not anticipate the dramatic decline in natural gas prices due to the spread of hydraulic fracturing, or fracking, starting about a decade ago – or the incentive that it would provide utilities to phase out coal-fired power plants.
In recent years, solar energy and wind power costs have dropped far faster than expected, also displacing coal – and in some cases natural gas – as a source of energy for electricity generation.
Something we learned during our storage study is illustrative.
We found that lithium ion batteries at 2019 prices were a bit too expensive in North Carolina to compete with natural gas peaker plants – the natural gas plants used occasionally when electricity demand spikes. However, when we modeled projected 2030 battery prices, energy storage proved to be the more cost-effective option.
Federal, state and even some local policies are another wild card. For example, Democratic lawmakers have outlined the Green New Deal, an ambitious plan that could rapidly address climate change and income inequality at the same time.
And no matter what happens in Congress, the increasingly frequent bouts of extreme weather hitting the U.S. are also expensive for utilities. Droughts reduce hydropower output and heatwaves make electricity usage spike.
AP Photo/Marcio Jose Sanchez
The future
Several utilities are already investing in energy storage.
California utility Pacific Gas & Electric, for example, got permission from regulators to build a massive 567.5 megawatt energy-storage battery system near San Francisco, although the utility’s bankruptcy could complicate the project.
Hawaiian Electric Company is seeking approval for projects that would establish several hundred megawatts of energy storage across the islands. And Arizona Public Service and Puerto Rico Electric Power Authority are looking into storage options as well.
We believe these and other decisions will reverberate for decades to come.
If utilities miscalculate and spend billions on power plants it turns out they won’t need instead of investing in energy storage, their customers could pay more than they should to keep the lights through the middle of this century.
This is what a 5-megawatt, lithium-ion energy storage system looks like. Pacific Northwest National Laboratory
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Jeremiah Johnson is Associate Professor of Environmental Engineering, North Carolina State University
Joseph F. DeCarolis is Associate Professor of Environmental Engineering, North Carolina State University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
Colin Megson says
Have just done a blog post dealing with the cost of batteries to backup a random 5 days when the wind disappeared at the end of February in the UK. The headline ÂŁbillions figure uses $220/kWh, which is the ‘Low end forecast’ for 2021, and reads:
“…Just 5 windless days, in a 100% wind and solar UK, would cost ÂŁ1,164 billion in Battery Backup – 83X more than CCGTs…”
Conclusion: Renewables will forever require fossl-fuelled CCGTGs.
https://bwrx-300-nuclear-uk.blogspot.com/2019/03/just-4-windless-days-in-100-wind-and.html
John Daglish says
No, they may require a low cost combustable such as low carbon biogas – SNG synthetic natural gas from gasification of biomass, gas from methanisation of biological waste including landfill gas, hydrogen from electrolysis of excess renewable electricity that exceeds grid demand – injection up to ~15% into the (methane) gas grid, direct use with fuel cells (heat + electricity), conversion of hydrogen into more easily transportable methane via the sabatier process, reacting H2 excess CO2 in digesters,….
With occasional use this will be below CCC (Committee on Climate Change) CO2 limits.
A most important task is to reduce demand through efficiency reducing the cost of a high renewable system.
And looking at other energy vectors such as heat, when in temperate climates up to half the energy need is heat. The excess renewables can be converted to heat (via HV grid to MW heat pumps and low cost pond inter-seasonal heat stores) for use in District Heating & Cooling networks, much cheaper than storing potential electrical energy eg. batteries, pumped hydro,.. Cooling can be via (heat) absorption chillers for example.
Colin Megson says
Or alternatively, let’s keep it simple – The Occam’s Razor approach!
100%, low-carbon, 24/7 electricity for 60 years at a cost of ÂŁ65 billion – or:
ÂŁ527 billion for backed-up renewables. That’s 8X the cost; 17X to 27X the use of precious resources; 100X the scenic desecration, ecological destruction, species wipe-out and waste mountains:
https://bwrx-300-nuclear-uk.blogspot.com/2019/03/butwhat-about-100-low-carbon.html
Hans Hyde says
Here’s the issue with university researched power sector proposals… they have no experience in the industry, then don’t know how to read or assemble all the date available to them from the US EIA. They obviously do not know the technology differences that exist within the broad-brushed “gas plant” nomenclature which actually make a difference in the US, so let me define it.
There are over 280,000 MW of combined cycle gas plants (seasonal “peakers” or flexible baseload; 70,000 MW of conventional steam turbines using gas, oil or both; 168,000 MW of simple/single/open cycle combustion turbines aka the “peakers”; and 12,000 MW of internal combustion engines. All combined 530,000 MW of “gas plants” +/- 15,000 MW.
Scattergood in Southern California has combined cycle, single cycle and steam turbines operating units. California has 42,000 MW of “gas plants” not to mention those in Nevada & Arizona which import into CA. California’s “big batter[ies]” are replacing very, very low capacity factor below 5% single cycle – direct carbon/NOx improvements in this “swap” barely registers on the scales.
Now let’s talk batteries with large scale RE project…. those in the Great Plains, where all the wind & a lot of solar is coming soon. This phenomenon has been enabled by massive investments in new transmission builds. To read this report, would suggest investments in transmission would be expensive and short-sighted, and could be avoided as batteries will be a better option… if not today, then in the very near future as battery prices plummet (which caused the authors to recalculate over year). Wrong, without the transmission investment, wind would not be what it is today, and the doors wouldn’t be wide open for solar. Of course, deployment of NG Combined Cycle predated the transmission investment a few years… and all this has allowed Xcel to make its recent historic announcement. Batteries are like candles on a birthday cake, not the cake, frosting and “Happy Birthday” itself. Don’t believe me? Just look at California’s RE curtailments to date this year of either 200 or 280 gigawatt-hours (sorry can’t remember which). The reason? No transmission investment, no building of storage… largely pumped storage, given the massive 25-40,000 MWh every day that exists under the evening peak curve. Those 25-40,000 MWh translates directly into CO2 & NOx emission from “peakers” as we wait for the “ideal” solutions of battery storage or “digitized” grid…. neither of which is coming fast enough.
So, what about solar “rockstar” North Carolina? All that solar… no wind. But, all NC needs is [battery] storage, right? Wrong. Appalachia already has around 8,000 MW of pumped storage. It just doesn’t have enough solar and it has almost no wind to charge it.
Michigan has lots of wind, 2,000 MW of pumped storage, but little solar PV to charge it either.
New England & NY have substantial pumped storage too, and almost no more coal either… but barely any wind or solar to charge them. Both relying on roughly 35 Terrawattt-hours per year of hydro imports from Quebec.
And then there are the massive “batteries” that were just added to New England… 2 LNG FSRUs – Floating Storage Regasification Units to compliment all the new Combined Cycle plants built in Rhode Island, Massachusetts & Connecticut. With offshore wind still a decade out.
Let’s bring batteries… but let’s stop fooling anyone that they are some carbon/climate savior that’s going to solve all our power generation issues in the US on their own or that they provide anything more than a marginal improvement to our system.
Colin Megson says
Lets not bring [massive material-resource-using] batteries, with 10 year lifespans, creating waste mountains. Lets not develop any new conventional or pumped [ecosystem and species destroying] hydro-power for electricity generation backup.
Let’s have 100% nuclear powered electricity generation, from low-cost SMRs close to population centres to cut grid losses and costs and provide heat/cooling and hot water for buildings.
Let’s have dedicated, high-efficiency, load following SMRs to make up any ‘gap’ from existing hydro-power.
Let’s have high temperature reactors to provide process heat for industrial use to make syn-fuels [for air travel, shipping, heavy goods]; cement; chemicals and plastics.
Let’s have Elysium Industry’s Gen IV, MCSFR to ‘burn’ TEMPER [The Earth’s Most Precious Energy Resource the ill-informed call ‘nuclear waste’], so we can ‘resolve’ the unwarranted negativity of ‘nuclear waste’.
Let’s get all of the energy 10 billion people, with high living standards, can possibly use in the most cost- effective and environmentally fashion possible. And only nuclear power can do that.
Hans Hyde says
You provide a nuclear product that can be deployed on time and on budget, then we could have your discussion. But as that is not the case… let’s not waste our time.