September 10th, 2018 by Tina Casey by Clean Technica
File this one under O for Oops, Never Saw That One Coming. President* Trump campaigned on a promise to save coal jobs in the US, but he missed that thing about the potential for explosive growth in the energy storage market. Now the chickens are coming home to roost, and that spells bad news for fossil fuels.
In the latest development, the energy research firm Wood Mackenzie Power & Renewables (formerly GTM Research) reports a respectable — ok, so super impressive — year over year growth for Q2 energy storage deployments of 200% in the US.
Energy Storage And Renewable Energy
For those of you new to the topic, energy storage is an important factor in the growth of wind and solar power. These intermittent sources are threading into the national power grid with the help of “smart” energy management tools for balancing supply and demand.
Despite Trump’s pro-coal rhetoric, the US Department of Energy has been vigorously promoting wind and solar grid integration. To accelerate the trend, the agency is pursuing energy storage along with smart grid technology. That includes small-scale, distributed storage as well as utility-scale, long duration storage.
That utility-scale angle is somewhere off in the future (currently, pumped hydro is the primary option), but the business sector is already leaning on small-scale batteries to ensure resiliency and reliability at individual sites. So, for that matter, is the Department of Defense.
Small-scale batteries are also streaming into the individual home market. Aside from the convenience of being able to keep the lights on whenever the grid goes down, there’s the necessity factor. More people are working from home and receiving health care at home, and can’t afford an outage of any duration.
200% Growth For Energy Storage
So, how to quantify this trend? Wood Mackenzie partners with the Energy Storage Association to produce a quarterly report called the U.S. Energy Storage Monitor. The latest report is just out and it’s a doozy. Here’s the rundown from Wood Mackenzie: …156.5 megawatt-hours of energy storage were deployed in the second quarter of 2018, triple what was deployed in the second quarter of 2017. The residential segment led the way, growing tenfold year-over-year.
Not surprisingly, California and Hawaii powered the growth in residential energy storage. Hawaii established a 100% clean power goal back in 2015, and California lawmakers are also on track to establish a 100% goal for renewables.
Wood Mackenzie foresees that Arizona and Massachusetts could vie for a spot in the top three alongside California and Hawaii, which is something of a surprise until you factor in the relationship between wind, solar, and energy storage.
Massachusetts is not located in the southwest, which is the premier solar region in the US. However, the state does have a vigorous renewable energy policy and it is (finally) on track to dive headlong into its offshore wind resources.
Despite a history of conservative policymaking designed to trip up the solar market, Arizona is currently the nation’s number three state for installed solar capacity. That’s a big jump up from its number seven position last year. It looks like the folks at Wood Mackenzie are betting on state residents and businesses to keep demand for solar running high regardless of the political obstacles.
New York State is another up-and-comer. Like Massachusetts, the state’s location in the US northeast location makes it not a prime spot for solar cell efficiency, but policy makers are making up the difference with an ambitious new clean power plan. New York is also making the most of its window for offshore wind development.
The bottom line message here is that even where solar and wind conditions are not optimal, state policy can still force the transition from fossil fuels to renewables.
Coal-Killing Energy Storage
Brett Wood Simon, Senior Analyst on Energy Storage with Wood Mackenziee, got on the phone with CleanTechnica last week to flesh out the interplay between energy storage growth and coal power plant shrinkage.
Some analysts are concerned that the availability of energy storage could enable coal and nuclear power plants to keep running when they otherwise wouldn’t, but Simon doesn’t see that as a significant issue.
“Generation in long-term storage won’t prop up existing coal or nuclear,” he said. “It’s just not economical in the long run, especially for the large [battery arrays]. They are expensive, and you have to ask if it’s worth putting down to keep a power plant running just another three years.”
For those concerned about the impact of Trump’s solar tariff on energy storage, Simon noted that the tariff did reduce the forecast for solar growth. That did impact the energy storage forecast, but “not to a great degree.”
The lithium supply issue and a bottleneck in battery manufacturing is another factor that could limit growth, but Simon doesn’t see any significant, long-term impact:
In the last report and this report, we did notice a light increase in lithium-ion battery rack costs…but we don’t see it as persisting more than six months or so.
What About That Long Duration Thing?
Wood Mackenzie also found strong year-to-year growth in non-residential and utility-scale storage (aka front-of-the-meter) storage.
Simon underscored that point, in the context of the long-term, downward trend in the cost of renewables and energy storage:
The economics are going to influence quite a bit of interest in front-of-the-meter, and we forecast that it will be the largest single segment. We’ve seen large projects with Xcel in Colorado and NV Energy. We expect this market to continue to grow.
The front of the meter story dovetails with the Energy Department’s interest in long duration energy storage, and it’s important to pick apart the numbers here.
The new report found that if you’re using megawatts in capacity as your measuring unit, front-of-the-meter deployment dropped 30%.
That sounds like bad news, but it isn’t. There was actually an increase of 176% in megawatt-hours. Here’s the explainer from the report:
This is due to long-duration (4+ hour) projects coming online for services such as capacity and load-shifting, compared to shorter-duration frequency regulation projects. Notably this quarter all front-of-meter installations were paired with solar production.
All The Good News About Batteries
To cap off the good news, Wood Mackenzie expects annual energy storage deployment to continue increasing at a rapid clip.
The report notes that several major new battery manufacturing facilities are expected to come online and open up that bottleneck.
Diversification and expansion in the lithium supply chain should also help keep things humming along.
As Simon describes it, the residential solar market will continue to propel back-of-the-meter energy storage growth:
So far in 2018 we’ve seen more residential growth than in all of 2017. These systems have been getting cheaper, there’s more awareness, and solar installers are becoming more aware of how to sell them.
Avoiding demand charges and buying a cushion against power outages are the two main selling points cited by Simon. Then there’s this:
There is also an emotional undercurrent. My neighbor has it, now I want that, it seems cool. More people are asking for storage…practically all the solar installers we talk to are being asked about storage. Solar is the path to storage.
As for coal, the White House is trying its best to keep old coal power plants in operation to feed the domestic market for coal. More recently, it has begun eyeballing the potential for increasing coal exports.
That’s going to be a tough row to hoe. State policymakers aren’t generally on board with the idea that propping up 20th century power plants makes sense when 21st century alternatives are available.
Adding insult to injury, the Department of Energy has been enthusiastically pursuing its clean power mission at the expense of coal.
Any hope that the export market can pick up the slack will be short-lived. US coal exportsare expected to decline in the coming years.
Last January, Reuters noted a slight uptick in coal jobs overall during Trump’s first year in office. However, the modest increase applied only to a handful of coal-producing states. Many coal communities experienced a world of pain in 2017, and more is in sight.
Why We Don’t Need To Wait For Long Duration Energy Storage May 12th, 2018 by Tina Casey
Last week, CleanTechnica took a look the Energy Department’s vision for long duration energy storage, and we kind of brushed right past the nuclear energy angle. Here to fill in the gap is Mike Jacobs, senior energy analyst with the Union of Concerned Scientists’ Climate & Energy program.
Is There Something Going On Between Nuclear Energy And Energy Storage?
CleanTechnica called upon Mike to provide some additional insights into the Energy Department’s “DAYS” program, which is aimed at developing next-generation energy storage that can provide electricity in the 10-to-100 hour range.
A main goal of the program is to accelerate the transition away from fossil fuels and into wind and solar, while ensuring grid reliability and stability.
In an exclusive email to CleanTechnica, Mike indicates that the agency’s $30 million in funding is needed because the need for long-duration energy storage hasn’t jogged private investment dollars into action yet (following are Mike’s remarks in full, unedited except breaks added for readability and explication):
The ARPA-E initiative for long-duration energy storage (DAYS) is a welcome contribution to the RD&D stimulation of new solutions for our economy. The economic signals for private sector investment in long-duration stationary storage are weak, because the “customer” in the utility sector has separated the competitive power plant market, which has a short time horizon, from the responsibilities for reliability and over-all integration of technology types.
Mike notes that pumped hydro, which is virtually the only bulk energy storage technology on the market today, has limited application:
You can see the change in the utility industry that once supported the construction (if not new innovations) of long-duration storage. As ARPA-E says, pumped storage hydro (PSH) has played a role on the grid, but has been limited by the large size that inhibits financing and the large environmental impacts that reduce the chance for permitting.
The nuclear angle comes in where Mike points out that the nuclear energy boom spurred the development of pumped hydro:
The boom-times for PSH was when the utilities were building nuclear power plants, and the storage in PSH was intended to absorb surplus production from nuclear plants at night and use that energy in the day.
Nuclear or not, the basic problem still is that without the investment motivation, the private sector is not going out on a limb to develop new long-duration energy storage technology:
The utility industry does not make such coordinated and long-term decisions now. The competitive market supplies the next needed increment of supply at the lowest possible cost.
There Is Something Going On
Before we get to the rest of Mike’s email, let’s pause and note that our friends over at Oil & Gas Journal picked up on another side of the nuclear angle.
In addition to the new $30 million round of funding for new long-duration energy storage, Oil & Gas notes that last month the Energy Department also issued another $60 million funding opportunity announcement for next-generation nuclear development.
Put the two together, and you get the idea that advances in long-duration energy storage could benefit the nuclear energy sector in addition to accelerating wind and solar grid integration.
Wind And Solar Are Winning, So Far
There is a case to be made for continuing to invest public dollars in nuclear R&D, but it’s also possible that if nuclear energy fills any role for generating electricity in the sparkling green future, it could be a very small niche.
That appears to be the case in the US, where the nation’s fleet of nuclear power plants isn’t getting any younger. As Mike describes it, long duration energy storage could fill in the US grid puzzle pieces where nuclear was supposed to fit:
The role of storage in supporting wind and solar grid integration is important, and 10-hour storage technology would re-make the electricity sector, as I described in my blog. For no other reason than age, the electricity sector will need new power plants as the plants that were built in the 1960s and 1970s.
Already, wind and solar are filling the need. The tools available today for grid integration are serving the need now. The power pools created for an economic and reliable power supply before wind and solar came along are demonstrating the ability to integrate very large levels of renewables.
Mike also cites examples where wind and solar grid integration are sailing along nicely, even without long duration storage:
The Midcontinent ISO grid operator includes the state of Iowa, which uses windpower to produce 36% of the electricity generated annually in state, some 7,300 MW. Texas, most of which is served by grid operator ERCOT, has over 22,600 MW of operating wind generation. ERCOT presently has over 20,000 MW of installed wind generation capacity, with more in the interconnection queue.
These accomplishments are not dependent on new storage added for the wind. The areas with renewable energy production and good transmission ties to their neighbors can integrate more renewables by essentially extending the pooling through sales to their neighbors.
To be clear, if the nuclear picture looks gloomy in the US, that’s just the US. In other countries — China (thanks, Bill Gates!) and Saudi Arabia, for example — policy makers are all over nuclear energy.
How Long Do We Have To Wait For Long Duration?
CleanTechnica has taken note of some concerns that electricity stakeholders are using energy storage to keep leveraging natural gas and coal into the grid. That’s what happens when your energy storage is designed to fulfill daily cycling needs rather than longer periods of time.
That leveraging is going to grow weaker as more wind and solar are added to the grid. Even without the benefits of long duration storage, the financials favor renewable energy:
At some point in the future, when every grid has high levels of renewables and all the old and inflexible conventional generation has retired, the 10-hour duration storage contemplated by ARPA-E will be vital.
Right now, these existing means to integrate wind and solar are truly cheap. The success of the power pools, the flexibility of existing generation, the retirement of old plants all provide alternatives to energy storage.
When those tools have been used to their limits, the contest everywhere will be between gas-fired peaking plants and longer-duration storage. Wind is already cheaper than burning gas simply on fuel price.
If the ARPA-E DAYS program leads to storage technology that can be built in competition with gas-burning plants, the conversation changes from “integration” of renewables to “elimination” of carbon-emitting generation.
Any thoughts? Leave us a note in the comment thread.
Thanks again to Mike Jacobs for sharing his insights with our readers. Visit him online at the Union of Concerned Scientists.