Saturday, July 2, 2016

ClimateProgress: Falling Renewable Energy Prices Threaten Energy Storage. Here’s What We Need to Do.

 JUN 28, 2016 12:46 PM
A worker checks the inverters attached to an array of solar cells that provide energy for a storage facility, in Decatur, Georgia.

Clean energy and energy storage go together like peanut butter and jelly. But the falling cost of renewable energy threatens to break up this indispensable pair.
According to a new paper in Nature Climate Change, energy storage stands at a critical juncture. For now, energy storage can make wind and solar more profitable, but that may not always be the case.
“If storage isn’t adopted now and renewables’ costs continue to fall, then the added profitability of storage would go away, because at that point it would make more sense to build more solar or wind than it would to install storage,” the study’s co-author, MIT professor of energy studies Jessika Trancik, said in an interview.
Tranick and her colleagues note that, in the near-term, cheap energy storage will support the growth of wind and solar. In the long-term, energy storage could obviate the need for long-distance transmission lines or gas-fired power plants to supply electricity when renewable output dies down. But energy storage must continue to be cost-effective.
Currently, energy storage is profitable in some places and not in others. Trancik says we need to embrace storage where it adds value today. This will help drive down prices to the point where energy storage becomes profitable everywhere.
“There is this window of opportunity where, with limited government incentives — or in some cases without government incentives at all — [energy storage] can make it sense from the perspective of increasing profits,” said Trancik. Once that window closes, it will become much harder to foster the growth of energy storage.

The Intermittency Problem

Wind turbines and solar panels generate power when the wind is blowing and the sun is shining. They work intermittently, unlike gas- and coal-fired power plants which can generate steady power as needed to meet consumer demand.
“At the end of the day, if we want renewables to provide more than a small share of electricity globally, we have to deal eventually with the intermittency problem,” said Trancik.
One way to deal with intermittency is to install a lot more wind and solar over a large geographical area. Another way is to reshape the demand curve — deferring energy-intensive tasks until renewable output is at its highest. Another is to store surplus energy until it is needed.
Energy can be stored in a Tesla home battery or in an electric car. It can also be stored by pumping water into an elevated tank or compressing air. Energy storage can make wind and solar more profitable by allowing users to store surplus power and sell it back to the grid when demand peaks and the price of electricity is at its highest.

The Best Kind of Battery

To understand what forms of energy storage offer the greatest value, Trancik and her colleagues looked at the relative costs of energy capacity and power capacity.
Energy capacity refers to the amount of energy a battery can store. Power capacity refers to the amount of energy battery can deliver at a given time. If a battery were a squirt gun, then energy capacity would be the size of the tank and power capacity would be the diameter of the nozzle.
“There is no single storage technology that dominates along both dimensions,” said Trancik. Across the board, she and her colleagues found the cost of storing energy to be more important than the cost of discharging energy. The best way to make storage more profitable, she explained, is to lower energy-capacity costs.
Pumped hydro and compressed air outperform lead-acid batteries on this front. For pumped hydro, the cost of expanding energy capacity is the cost of creating a reservoir. For batteries, it’s more complicated.
Where pumped hydro and compressed air are feasible, consumers stand to profit from energy storage. Where those technologies are not feasible, batteries will be needed. In all cases, cutting energy-capacity costs is critical.
“[Developers] should be focused on reducing the cost of expanding energy capacity,” said Trancik. “Early market growth is needed to stimulate private sector efforts to improve storage cost.”
What happens if we miss the window on energy storage? Grid operators could look to red-tape-intensive transmission lines or carbon-intensive gas-fired power plants to fill in the gaps between supply and demand. Those could prove more dirty and cumbersome than energy storage.
The study serves as a guide for engineers, business leaders and policymakers looking to minimize costs and maximize adoption rates. And if there’s one lesson to be learned from it, it’s this: Invest in storage where it’s profitable today to drive down costs for the next generation of users.
Jeremy Deaton writes about climate and energy for Nexus Media. Tweet him your questions at@deaton_jeremy.


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