This is the latest in a series of articles on ideas that emerged from Microgrid 2019, held in San Diego May 14-16. Here we focus on a discussion about energy storage from the panel “Beyond Islanding: The Well-Connected Microgrid.”
Microgrids increasingly depend on solar-plus-storage — or the ability to generate solar power on site and to store excess electrons in batteries that would release that energy when it is needed. But is the technology ready for prime time?
Energy storage provides a Swiss army knife of services, from shaving peak load to storing and injecting wind and solar electrons onto the grid. It enhances reliability while also increasing efficiencies and allowing for more green energy on the grid. But energy storage remains costly, despite recent price declines and more expected to come.
“If you think about a battery, it is generator,” said Patrick Lee, president of PXISE Energy, at the Microgrid Knowledge 2019 conference last week. “It stores energy and releases energy again. That is the simple way to think about it. It is used as a spinning reserve” — power at the ready when the grid suddenly needs a boost. “It saves fossil fuels. The battery is a resource to allow you to reshape the load. It is the key to capturing external value.”
He added that he sees energy storage becoming easier to permit than generators.
The Brattle Group issued a study last year that said energy storage markets could grow to as much as 50,000 MW over a decade if costs continue to fall and if federal policies continue that promote the technology. Those policies must also be matched at the state level, according to the report.
Wood Mackenzie issued its “Global Energy Storage Outlook 2019” that forecast markets to 2024: Energy storage deployments will expand from a 12 GWh market in 2018 to 158 GWh market in 2024. That’s a 13-fold increase, the consultancy says, in what is becoming a global market. The United States is the clear frontrunner, making up 34% of deployed GWh capacity by 2024. China is next, followed by Japan, Australia and South Korea, all of which are driven by policies that favor renewable energy growth.
“Batteries are clearly the technology of the future,” notes Mike Byrnes, vice president of marketing and sales for Veolia, at the conference. “Any microgrid we look at is solar-plus-storage plus generation. Customers want a cleaner renewable solution. You must understand it if you want to include it: How does the cost of storage affect value proposition?”
Forward-thinking energy storage policies
The Federal Energy Regulatory Commission voted last year to allow grid managers to compensate energy storage in the same way they do traditional power generators. The decision paved the way for greater energy storage activity in wholesale markets.
For energy storage to pay off, those who deploy it must be able to do more than just dispatch electrons during outages. They must also be able to arbitrage the market — or sell their power on the open markets during peak periods.
“Batteries are not price competitive with generators,” Doug Sansom, director for NRG Curtailment Solutions told the conference. “But that will change over time. We would like to see open competition across the United States. It would bring down prices. It would help accelerate the size and scope of opportunities for energy storage as well as demand response.”
The good news is that prices are falling. Xcel Energy, for example, has had success using reverse auctions: It is integrating energy storage into its wind and solar energy networks, which are making such systems ever-more competitive.
Storage prices are dropping because such companies as Tesla are investing $5 billion into a battery storage facility. The states also have influence. California, for example, is mandating investments in energy devices, which should create economies of scale. To that end, it is requiring its incumbent utilities to provide 1,325 MW of energy storage capacity by 2020. Edison International, PG&E, and Sempra Energy are participating.
New York State, too, is actively involved in energy storage markets. New York state regulators late last year approved energy storage goals of 1,500 MW by 2025 and 3,000 MW by 2030. It is all part of the state’s goal to achieve 50% renewable energy levels by 2030 and reduce greenhouse gas emissions by 80% by 2050.
In Chicago, Siemens is partnering with Commonwealth Edison to develop “clustered” microgrids that use renewables and battery storage, said Sacha Fontaine, energy solutions director for Siemens Digital Grid. That involves putting two or more microgrids together. Clustering works best if the hosts have complementary load profiles and use electricity at different times of the day. He points to Puerto Rico, where a proposal is on the table to cluster eight microgrids, all of which use renewables, battery storage and demand response.
In the words of Jacqueline DeRosa, the panel moderator and vice president of energy storage for Ameresco, energy storage and distributed resources are thrusting the electric power industry into a new paradigm.
“Without the ability to store large amounts of energy, conventional power systems have been reliant on matching supply and demand in real-time,” DeRosa said.
Solar-plus-storage is critical to the future of microgrids. And forward-thinking policies at the state and federal levels are facilitating such development — progress that is improving the technologies while also working to bring down prices.
Read more Microgrid 2019 coverage…