The US increased its energy storage capacity by 350.5 MW and 777 MWh in 2018. This is 80% higher than the capacity installed in 2017, and the number of new installations in 2019 is expected to exceed 1,600 MWh.

The Role of Energy Storage in Grid Stability

Michael Tobias | New York Engineers

The cost of solar and wind power has decreased rapidly in recent years, and some utility-scale installations have reached electricity prices of around 2¢ per kilowatt-hour. However, photovoltaic arrays and wind turbines both have a variable electricity production, since they rely on energy inputs that cannot be controlled - sunshine and wind. Energy storage has promising applications in the renewable power sector, since it has the potential to eliminate this issue.

Fossil fuels continue to have a key role in the power sector because they can provide electricity on demand. While renewable sources can now achieve lower costs than fossil fuels, they are still held back by their variable generation. For example, grid operators can count on gas turbines to provide electricity when consumption reaches is peak, but wind and solar power cannot perform this role unless they are enhanced with energy storage.

 

How Energy Storage Can Improve Power Grid Stability

One of the main challenges for power grid operators is managing sudden changes in electricity production and consumption. Consider the following examples:

  • Electricity demand normally reaches its peak value during the evening, when the population is returning home and using electrical appliances. Natural gas turbines and hydroelectric generators are the most common electricity sources for peak demand, due to their flexible operation and quick response.

  • In regions with a large number of solar power systems, a production peak is present around noon. Grid operators must ramp down generation from other sources to keep an adequate voltage and frequency.

The traditional approach followed by grid operators has been to adjust the output of power plants, as needed to balance generation and consumption. Energy storage enables an alternative solution: shaping the supply and demand of electricity by absorbing generation peaks and supplying power during demand peaks.

Lithium batteries are emerging as a viable energy storage solution: they have the scale flexibility for projects of all sizes, from small residential systems to utility-scale installations. Batteries can achieve synergy with solar photovoltaic systems, which are also characterized by adapting to any project scale.

 

Energy Storage Benefits for Power Companies and Consumers

Energy storage can reduce costs for both grid operators and electricity consumers, simply by balancing peaks in consumption and surplus generation:

  • Many electricity tariffs have time-of-use rates, where electricity prices are increased during high-demand periods. Power consumers with energy storage systems can shape their demand to avoid the highest kWh prices.

  • There are also tariffs with capacity charges, typically applied to large commercial and industrial consumers. These charges are based on individual peaks in power consumption over a specified billing period, and can be mitigated with energy storage.

  • Grid operators also benefit from a reduction of peak loads, since the required network capacity is based on the highest expected load. If the large-scale deployment of energy storage can reduce peak demand, grid operators can delay expensive upgrades to the network infrastructure.

In a few words, a stable load on the power grid is beneficial for both electric companies and consumers. On the other hand, a grid with frequent peaks in generation and consumption is more expensive to operate, and the added costs tend to increase electricity bills.

 

A Success Case: The Hornsdale Power Reserve in South Australia

The Hornsdale Power Reserve is a utility-scale lithium battery system in South Australia, with a storage capacity of 129,000 kWh and an instantaneous power output capacity of 100 MW.

  • The project helps prevent blackouts by responding to power grid disturbances within fractions of a second, giving time for slower backup measures to be brought online.

  • The system is charged with surplus wind power at night, and the stored energy is exported to the grid when spot market prices reach their peak value.

  • Although the project had a cost of around $66 million, it saved over $40 million during its first year of operation.

The Hornsdale Power Reserve operates along with the Hornsdale Wind Farm, which has an installed capacity of 315 MW. This combination provides an example of how energy storage can enhance variable renewable sources, adding response features that were previously possible only with natural gas or hydroelectricity.

The South Australian government is also working on a virtual power plant project, where 50,000 households will be equipped with solar photovoltaic arrays and lithium ion batteries. The total installed capacity will be 250 MW and 650 MWh, and all individual installations will be connected and managed as a single power plant.

 

Energy Storage Outlook in the US

Several states have already established energy storage targets, recognizing how the technology can improve grid stability while achieving synergy with renewable sources.

  • The New York Public Service Commission aims for 1,500 MW of energy storage by 2025 and 3,000 MW by 2030.

  • New Jersey also has an ambitious target of 2,000 MW by 2030.

  • California was a pioneer with energy storage, establishing a target of 1,325 MW in 2013, which was then increased to 1,825 MW. The target has been met as of March 2019, and an expansion is being discussed.

According to Wood Mackenzie, the US increased its energy storage capacity by 350.5 MW and 777 MWh in 2018. This is 80% higher than the capacity installed in 2017, and the number of new installations in 2019 is expected to exceed 1,600 MWh. As technology prices drop and electricity tariffs become higher, the business case for energy storage projects continues to improve.

 
 
About Michael Tobias
Michael Tobias is the founder and principal of New York Engineers, an Inc 5000 Fastest Growing Company in America. He leads a team of 30+ mechanical, electrical, plumbing, and fire protection engineers from the company headquarters in New York City; and has led over 1,000 projects in New York, New Jersey, Pennsylvania, Connecticut, Florida, Maryland and California, as well as Singapore and Malaysia.
 
 
The content & opinions in this article are the author’s and do not necessarily represent the views of AltEnergyMag

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