Renewables and Energy Storage: A Misunderstood Partnership

Stimulus funds have provided a big push to the utility scale energy storage sector, but there are still many misconceptions on the role of storage for integrating renewables. Luckily a recent report from NREL provides a great framework for understanding markets for storage, the integration of renewables, and how the two fit together.

Building on the momentum created with stimulus funding announcements a few months ago, we’ve seen a significant number of recent announcements including funding news for General Compression's GCAES concept, progress for PG&E's CAES project, Suniva's Solar/Battery project in Georgia,  SCPPA's 53MW Ice Energy thermal storage in southern CA , Iowa’s Municipal Utilities announcement about the beginning of drill tests for their long awaited ISEP CAES project, Xtreme Power's 10 MW dry cell battery plant in Hawaii,  Beacon Power's participation in the CEC's wind/flywheel project, Austin Energy's use of Ice Bear for thermal storage, AEP’s Li-ion community energy storage project, funding of 19 energy storage projects by New York State Energy Research and Development Authority (NYSERDA) and Xcel's recent announcement of CAES, NaS Battery and Wind-to-Hydrogen projects.  

Also, with storage bills being floated in the house and senate, and a storage portfolio standard being discussed in California, there appears to be growing political support behind the industry as well. All of this activity seems to indicate that utility-scale storage’s “coming out party” is on its way.

But the real question is why do we need all of this storage on the grid?  Many assume that the need to balance the variable output from renewables is the principle driving force.  This is a topic I’ve covered in previous posts and, as I discussed then, this will certainly be an increasingly critical role for storage.  But it’s only the beginning of the story.

Understanding the Role of Storage

When the topic of utility scale storage comes up, the picture that many people have in their head is that of a big battery storing wind energy at night and providing power during midday lulls to make renewables "as constant as coal". Unfortunately, this bears little resemblance to the role that storage will often play on the grid.  A recent report by the National Renewable Energy Lab on the role of energy storage with renewables helps to dispel many of the common storage myths and paints a more complete picture of the technologies involved.

I don’t have enough time to cover everything in the report, which includes a comprehensive overview of grid operations, storage participation in restructured markets, storage technology overviews, and renewables integration costs. But I highly recommend reading the full document, available here. In this post I want to highlight two principle points: the multiple markets for storage on the grid and the portfolio of renewables integration strategies (of which storage is a part).

1) The Role of Storage: Beyond Renewables

The first point to understand is that storage has many rolls to play on the grid. A storage plant typically interconnects to the grid as a whole rather than being tied to balancing the output from a specific wind farm or solar plant. This enables storage to effectively participate in multiple markets and generate multiple revenue streams. To understand how those market are subdivided, its important to know that stability of the grid is maintained on several different time scales (see the figure below). These management regimes produce different markets in which storage can participate. An example of this is the California Energy Commission’s wind/storage demonstration project, a flywheel facility providing both balancing support for a local wind farm and frequency regulation services to the grid.

(Denholm et al, 2010)

If you want to delve deeply into this issue, a recent report by Sandia National Labs analyzes seventeen discrete storage applications and their potential. A summary of the results and a good discussion of implications for niche storage markets (as well as a link to the full report) is here.

2) Renewables Integration: The Full Range of Options

To understand the impact of variable generation from wind and solar on the grid reliability, let’s look at two cases. In the first case, the amount of renewables is small enough that the existing amount of flexibility on the system can effectively balance the fluctuations from wind and solar.

(Denholm et al, 2010)

The grid is built to handle a lot of demand volatility and uncertainty (i.e. we don’t know exactly when people will turn on their air conditioners) and therefore small amounts of renewables do not impact system reliability. In the figure above, the net load (total demand for electricity minus the generation from renewables) is within the range where the existing grid flexibility is enough to handle the variability from the renewables on the system.

The more renewables you have, however, the more the net load is reduced. This continues until you reach a point where there are no more flexible power plants that you can back down to accommodate a sudden surge in renewables output. At this point all that’s left are nuclear plants and other "inflexible" facilities that aren’t designed to ramp their output. At that point you need to find something to do with the excess energy.

(Denholm et al, 2010)

Once you hit the point where you have too much output from renewables and nothing left to turn down, it’s time to deploy storage, right? Not necessarily. Storage is certainly one option, but there are several other means of dealing with this kind of issue and some might well be cheaper than storage:

1. Sharing Resources: Balancing demand and supply over a larger region means that you average out a lot of the peaks and valleys in renewables supply and electricity demand. Supply and demand are typically balanced over an area called a balancing authority. Consolidating these areas or coordinating their operation would allow us to both mitigate the variability of renewables and reduce the demand volatility on the system. This is typically one of the least-cost options available.
2. Flexible Generation: Natural gas and hydroelectric plants can provide flexible generation. In the figure above, this would increase the height of the dark blue “cushion” and create room for more renewables.
3. Demand Response: Instead of having flexible supply, you can have flexible demand. This can mean large commercial customers that agree to be shut off, or customers with advanced meters and advanced appliances that shut off when needed.
4. Curtailment: This means you are discarding some of the energy from the renewables on the system when the net load dips too low. This is not the best case scenario, but the economic hit can be minimal if managed correctly.
5. New loads: You can absorb some of the excess output from renewables to charge cars, make hydrogen or desalinate water.   

(Denholm et al, 2010)

The bottom line is that energy storage and renewables integration certainly intersect, but neither is a subset of the other. We could summarize all of this with a Venn diagram: 

What does all of this mean for the storage industry and all of the funds going to support projects in this space? The truth is will need every available option in the red bubble above, and therefore this is the time to invest in proving technologies and buying down the cost of energy storage. The scale of the climate crisis means we need as many options as possible to facilitate the massive task of decarbonizing our power supply. Pilot projects, research programs, demonstrations plants and deployment incentives today will make sure we have the tools we need to meet the daunting challenges that we face. Ideally incentives will be structured in a way that directs those investments effectively to produce the best outcomes at the lowest cost, but thats a topic for another post.

All images are shown courtesy of NREL and reproduced from the report reviewed in this post:

Denholm, P; Ela, E.; Kirby, B.; Milligan, M. (2010) “The Role of Energy Storage with Renewable Electricity Generation” NREL/TP-6A2-47187

http://www.nrel.gov/docs/fy10osti/47187.pdf

Many thanks to Carlin Rosengarten and Cai Steger for their help putting together this post

(bonus for reading this far: more Venn diagram fun)

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