energy stored or energy released? - by Tate Cantrell

Views and Opinions on Green IT (Mar 29 2010)

1. 

   There is certainly a lot of buzz in the media regarding grid-scale energy storage solutions.  Unfortunately, with a lot of buzz, comes a lot of misinformation.  I wanted to take the opportunity today to look at the numbers driving the debate to see what options really come out ahead. 

   Recently, California took the lead, as it often does, in the environmental energy debate and began discussing California Assembly Bill 2514 on the state legislature floor.  AB 2514 would require that by the year 2014, all public utilities must invest in and deploy energy storage technologies that cover a minimum of 2.25% of the average peak load of the previous five years.  If the Bill goes through as written, this total requirement will go up to 5% by 2024.  A quick read of the Bill and a perusal of the public commentary shows that while the scope of future transmission projects may be slightly reduced as a result of AB 2514, the main reason for California’s interest in pushing energy storage is job generation.  California is looking for opportunities to take advantage of $770 million in available federal funding for energy storage projects, while promoting California’s interest in renewable energy solutions and associated technologies.

    While the Bill clearly has advantages to the economically strapped state, the intent of the law needs to be upheld to ensure maximum benefit for everyone.  For example, the Bill offers no guidance about the length of time that the installed energy storage solutions must support the fractional amount of peak load.  So technically speaking, the letter of the Law could be met by introducing less expensive storage technologies such as flywheels that provide only minutes of ride through as required for applications such as short-term peak shaving and frequency regulation.  However, with that approach, California may see its utility companies raising electricity rates as specifically allowed for in the Bill while not meeting the Bill’s intent to provide for long term storage to smooth out the variability of green power techniques as identified in a 2008 study by the Electrical Advisory Committee to the U.S. Department of Energy.  If, on the other hand, the legislature does step in and demand 6, 8, or 10 hours of peak capacity storage as they should, they will have raised the bar significantly on the cost per MW of energy storage. 

   Let’s take a look at the numbers.

   California’s peak demand is approximately 60 GW and will reach 80 GW or better in the next 5 to 10 years.  To meet the 5% requirement for energy storage, the utility companies will need to install 4,000 MW of long duration energy storage.  If we assume an 8-hour requirement – that’s 32,000 MWh of energy storage required.   Currently, the only well-proven, well-tested technology that allows for long duration discharge is a Sodium Sulfur (NaS) battery solution with six to eight hours of run time and a cost between $400,000 and $600,000 for each MWh of capacity.  Assuming that California has already installed 1,000 MW of the 4,000 MW of long duration energy storage, Californian ratepayers could expect to pay $10 billion or more in first cost alone on energy storage projects to meet its ultimate objective of 5% with NaS batteries as the energy storage technology of choice.

   Now in truth, California is betting some of its energy storage future on other technologies that are less expensive, in theory.  PG&E is pushing forward with the design phase of a 3,000 MWh compressed-air energy storage (CAES) facility that takes advantage of natural caverns.  These caverns act as reservoirs for air pressure that will be charged by renewable energy sources and discharged when the renewable sources are unavailable.  If successful, this technology could bring the cost of energy storage to $120,000 - $200,000 per MWh.  This is a significant improvement, but the best-case scenario would still amount to a ratepayer increase of nearly $3 billion.  And the other small matter is viability.  PG&E is currently engaged in the first $50 million dollar phase of the project – a hefty price tag just to prove the feasibility of the facility.  And to make matters worse, a 5-year, final development timeline may be outside the practical limits of what California needs to kickstart its demand shaving goals.

   So the question is – Is there another solution?  One option is to search for renewable energy sources that are continuous in nature and attached to electrical grids that are highly efficient, highly reliable and targeted to industrial-grade consumers.  Iceland’s energy users are powered by two continuously available sources of green energy: geothermal and hydroelectric.  On the Icelandic grid, there is no need for grid-scale energy storage installations to drive up the cost of power, as only pure energy is delivered to industrial-grade users at long-term, guaranteed rates.  In addition to its pure energy sources, Iceland’s aluminum smelting industry may be the source of inspiration for future generations of low-cost, long-term energy storage as noted by Scientific American.  California may be leading the way on bottling the wind, but Iceland presents compelling options for truly harnessing the earth’s forces.

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