The primary task of grid operators around the world is to ensure that energy gets from the source of generation to the end users safely, reliably, and affordably. With the transition of electricity generation from fossil fuels to renewable sources well underway, grid operators are increasingly facing the dilemma of maintaining reliability while depending on sources that tend to be intermittent. This issue will become more pressing as the influx of renewable generation increases. DNV GL’s Energy Transition Outlook predicts that renewables will make up 80 percent of global electricity production by 2050. In addition, electricity as a source of energy will more than double in that same period, which makes maintaining a reliable grid even more urgent as more people and processes rely on it as their primary source for power, heat, and transportation.
What can grid operators do to ensure the reliability of their girds as the generation mix changes from very predictable generation from fossil fuels to intermittent generation from renewable sources? There aren’t many market incentives to curtail any type of generation, which can cause an excess of energy that can result in an unstable grid system. On the other hand, insufficient supply can be an issue, as there is no guarantee that the wind will blow or the sun will shine, while more fossil fuel plants, which once could be used as peakers, are being retired because of regulatory, societal, or economic pressures. To solve this, grid operators are turning to energy storage as a way to transition the power system from one that is dominated by large fossil fuel power plants to one that features large amounts of generation from renewables.
The role of storage in the grid
The discussion about storage’s role in the grid began with regulators in California, where DNV GL’s analysis became the foundation of Assembly Bill 2514, which mandated the deployment of 1.3 gigawatts of storage. This policy has been used as a model by a number of other states in the US and has been a major contributor to the development of a battery storage market around the world.
Following the lead of California, several other states have adopted promoting storage, but the focus has been more on grid resilience rather than the integration of renewables. New York, New Jersey, and Massachusetts are often hit by disruptive storms that can knock power out for days or even weeks in some communities. And even when states don’t have storage policies, the merchant and wholesale markets have set new precedents. FERC Order 841 will establish energy storage participation markets in all independent system operator markets across the US by the end of 2019. Meanwhile, cities are starting to include storage technologies as part of their climate action planning and resilience activities. Even building developers are including storage when addressing occupant safety and comfort, as well as seeing their building’s resilience as a selling point.
At the same time, renewable energy project developers are recognizing the value in storage, especially in Europe, where a burst of deployment has led to a steep decline in prices. Rather than having to sell electricity at the time it is generated, which more often than not does not coincide with peak demand, storage allows developers to dispatch the energy when it will earn the highest return. The world is moving toward renewable plus storage peaker plants.
Enabling flexibility and responsiveness
Not to be left out, utilities are investing in storage technologies to find solutions to problems that are new, like the integration of renewable generation, or old, like ensuring that the grid infrastructure can handle future loads. Technologies like solar plus storage can solve the issue of variability at the plant level. When storage is combined with renewable power plants, the output is less variable and intermittent, addressing balancing and system reliability issues at the source. Storage also has the potential to mitigate or defer infrastructure investments by giving grid operators the ability to respond quickly to load growth, which will likely accelerate as more electric vehicles are on the road. With storage, utilities don’t have to replace wires or build peaker plants; they can construct battery storage systems in as little as six months.
Energy storage offers tremendous promise for electricity grids, whether it is improving resilience, easing the integration of renewables, or creating a more flexible and responsive grid as power demand grows and changes.