Energy Storage Key to Grid Transformation

Posted on July 11, 2016
Posted By: Andy Beck
The Council of Economic Advisers, an agency that provides the President advice on domestic and international economic policy, recently released a new report, “Incorporating Renewables into the Electric Grid: Expanding Opportunities for Smart Markets and Energy Storage”.

The report argues that a transition to an electric grid powered substantially by renewable energy will help reduce emissions and lessen future impacts from climate change. Thanks in large part to forward-looking policies and technological advancements, the cost of renewable energy has already dropped while the amount of generation has increased. Wind and solar generation accounted for 5.3 percent of total U.S. electricity generation in 2015, more than doubling from under 2 percent in 2009, and utility-scale solar has decreased in price 80 percent (and wind 60 percent) since 2009.

The report puts forth that continued integration of high levels of renewable energy—most notably solar and wind—will require a “reimagining of electricity grid management”.

Foremost among the advancements touted? Energy storage.

Solar and wind are “variable energy resources” (VER), and their outputs vary based on the weather. Our electricity grid is based on century-old technology rendering it inflexible and inefficient, especially when it comes to renewables. Grid operations and markets were not originally designed with energy storage in mind, so we literally have to consume the energy as soon as it’s created, leading to higher costs and mass inefficiencies.

Not only is this counterintuitive, but it’s also counterproductive and a complete waste of resources. Energy storage makes the grid smarter and dynamic, enabling the grid to integrate larger percentages of renewable energy more efficiently—and ultimately saving money for consumers.

Emerging technologies and approaches in smart markets and energy storage can help smooth our nation’s transition to a smarter and cleaner grid, which will only further increase the demand and open up important opportunities for promising technologies and approaches.

And it’s not just the federal government recognizing the value of, and investing in, energy storage and solar.

Elon Musk recently offered to purchase SolarCity, one of the biggest players in solar energy, for an all-stock deal worth $2.8 billion. Calling the deal “obvious” and a “no-brainer”, Musk wants Tesla to become a one-stop-shop for electric vehicles, solar panels and home batteries (i.e. energy storage).

Just think—consumers that purchase electric vehicles and install solar panels on their home or business could charge their cars whenever needed and sell any unused power back to the grid…or at the very least, store their excess energy for future use. Considering that futurists believe the future of transportation is electrified, automated and fleet-based, we’d say Musk is making a smart investment.

Energy storage and solar truly represent a transformative proposition, and it’s clear that when done correctly, these two harmonious commodities can modernize our nation’s electricity grid, help combat climate change and save consumers money.

It’s time for energy storage companies to elevate their messaging and leverage this opportunity to expand the industry’s overall market share. Solar and energy storage aren’t codependent, but it’s clear that what’s good for one industry can have a direct and positive impact on the other.

Authored By:
Andy Beck is Executive Vice President of Makovsky's energy, manufacturing and sustainability practice, and general manager of Makovsky's Washington, D.C. office. Previously, Andy served as the Director of Public Affairs for the U.S. Department of Energy.

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July, 14 2016

Kevin Prouty says

I wholeheartedly agree with the theme of this article. We have been researching and seeing the same thing. The grid will continue to muddle along with small steps in the direction of true operational efficiency. But the real transformation will only happen when storage is viewed as not just a critical part of the transformation, but an integral part of it. Its not about batteries...its about storage systems.

Manufacturing companies are successful because they can store their products and materials to balance cost, demand, and supply. Utilities and IPPs have a very clumsy and difficult approach to that same balance.

Is storage there yet, from a technology standpoint? The answer is yes, and no. The systems are there to manage it and allow proper decision-making for local consumption and grid access. But the technology side of the battery business is still having a market shake out.

Anyone who knows me knows I am a heavy skeptic about major transformation of the grid itself. But storage systems are key to the future of the grid and especially to the people that want "off-grid". Again, very good write up.

July, 19 2016

Jack Ellis says

Electric energy storage has been around for a long time. The existing technologies are plagued by high capital costs and institutional arrangements that don't allow storage devices to be used efficiently. It's likely to be quite some time before the capital cost problem is solved. As for the institutional arrangements, I'm not sure regulators and policymakers will ever be willing to do what's necessary to make storage work the way it needs to. As a result, storage will be built whether it makes sense or not, and then it will be operated wastefully.

July, 19 2016

Gordon Matthews says

We truly live in fortunate times that the technology to directly produce electricity from insolation can now be considered a commercial reality. Recall that PV cells were a remarkable 'breakthrough' and a novelty fit for only the most exotic applications a scant 50 years ago (think TeleStar, circa 1964). And let us give credit to the current Administration that made 'the big bet' on PV technology less than 8 years ago as a stimulus measure that not only offers us a path to a carbon-free future, but secured a place for the US in a global market that can only grow (if we are to address climate change) while fueling our economy. I do take issue with the characterizations of the current electric utility infrastructure as 'clumsy' and 'inefficient': recall that when our present technological system first was envisioned, we were transitioning from whale oil and gas lamps to what has become a seamlessly integrated system of systems that produces mind boggling amounts of energy - on demand and in real-time - 'invisibly' to those that depend upon it for prosperity - and survival. The new paradigm - harvesting naturally occurring energy as it is available-isn't entirely new. We made great investments in hydro electric power (indeed, even before that, hydro-mechanical power) to fuel our economy and create our standard of living. Witness the incredible power of the Columbia River system, among others. But there were limits to what hydro resources could be reasonably exploited, and the contribution that the advent and evolution of supercritical steam plants cannot be denied. As always, every technology has its price: hydro, for disrupting the natural stream flows and potentially adverse impacts on fish, wind with its toll of avian species, nuclear in the challenge of safe operations and stewardship of the waste products, and coal for many pollutants. The industry valiantly adopted ever-more sophisticated technologies to remove 'toxic' pollutants, only to discover that a benign effluent - CO2 - likely would be our undoing as a species if we continue to utilize fossil fuels (good old hydro-carbons) at our historical rates. Again, the Administration - and especially the DOE deserve credit for the intelligent and substantial investments in energy storage that are now almost ready for prime time. (in particular, the exciting progress in flow batteries that may truly develop to 'utility scale' in short order). We are fortunate to be positioned to consider if we replicate the legacy grid structure of central generation + T&D, or if we adopt a mesh of micro/nano grids, or 'all of the above'. Having options is a good thing! Yes, we are moving to a brand new paradigm - an exciting time filled with great new challenges. But before we leave the past behind, let's give credit as it is due to the past 100 years of remarkable engineering and vision that got us where we are today: a rich society with options.

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