The Role Energy Storage Plays in a High-Renewable-Energy Future

The Role Energy Storage Plays in a High-Renewable-Energy Future

This piece was originally published in the March 2016 issue of ei, the magazine of the electroindustry.

By Garrett Fitzgerald, PhD, Senior Associate, Rocky Mountain Institute

With Tesla announcing a home battery that uses electricity generated from solar panels, the German company Sonnenbatterie entering the U.S. market, and massive grid-scale storage projects popping up in Hawaii and California, 2015 was the year of the battery.

It also happened to be the year of the first global commitment to address climate change. COP 21 (also known as the Paris Climate Conference) was a momentous step in the effort to address climate change on a global scale.

As the world moves aggressively toward a high-renewable-energy future, the question remains, “What will be the role of energy storage in the next generation of sustainability?” Answer: It will be potentially huge and likely diverse. Here’s why and what you need to know about it.

This welcomed shift toward a renewable-energy future comes with several operational challenges. Supply and demand for electricity on the grid must always be balanced to avoid disruptive and costly grid outages. For nearly a century, that balance has mostly been achieved through flexibility on the supply side (i.e., generation), which entails constantly ramping dispatchable resources up or down to match demand.

Path to Success

Batteries’ recent rise in popularity and deployment primarily stems from four developments over the past decade:

  • Deregulation of electricity markets: Deregulation has created a market that allows storage and other distributed energy resources to compete against traditional grid assets in the wholesale market.
  • Parallel markets: The growth of battery electric vehicles has accelerated the cost declines and performance gains of lithium-ion batteries.
  • Aging infrastructure: The century-old electricity grid is in need of a major overhaul. Energy storage can now contribute in a meaningful way to the smart grid of the future.
  • Growing renewable market: Many new photovoltaic (PV) installations—whether residential, commercial, or industrial—now include onsite energy storage, allowing for increased onsite consumption and providing a dispatchable, carbon-free power source.

These developments have paved the way for the new generation of sustainability, one in which energy storage is poised to play an increasingly large and diverse role in the grid of the future.

The Role of Storage on the Grid

Rocky Mountain Institute recently published a report, The Economics of Battery Energy Storage, which defines 13 services in which energy storage can provide value to both customers and the grid (see figure below).

Areas in which energy storage provides value
Areas in which energy storage provides value

In this framework, we show how energy storage can be sited at three different levels on the grid (behind the meter, at the distribution level, or at the transmission level) and how it can provide value to various stakeholder groups at each level. Of these 13 services, only one—increased PV self-consumption—is explicitly tied to renewable integration. However, many, if not all, of the other services will be increasingly necessary as renewable penetration grows and the need for grid flexibility increases.

The Role of Storage in Renewable Integration

Renewables such as wind and solar are occasionally subject to abrupt changes in output, caused by changes in weather conditions—for example, a cloud passing over a large PV facility or a sudden lull in wind speed. Adequate weather forecasting can mitigate variability by making it more predictable, but the first line of defense against this natural variability is geospatial diversity. Installing PV and wind across a wide geographic area can help minimize variability and ensure that aggregated output is relatively smooth.

Geospatial diversity can only do so much, however, and this is where storage comes into play. Energy storage can be used to quickly and accurately respond to a drop in variable generation and so create a firm and reliable clean-power source. These short-timeframe services are generally categorized as fast-ramping or frequency regulation services and are needed to ensure the second-by-second stability of the grid.

Storage is also a valuable resource to assist in longer-timeframe grid balancing, on the order of hours to days. Misalignment of hourly variable generation and variable demand creates the need to either generate electricity when it is needed, shift when it is consumed, or store it for later use. Grid operators make use of all these methods today via dispatchable generation, demand response programs, and storage technologies, respectively.

Previously, most forms of energy storage, other than pumped hydro, have been too expensive to cost-effectively shift excess renewable production to times of high demand, so excess renewable production was typically curtailed. Recently, in light of falling costs and improved controls and communication, we are seeing more and more instances in which firming renewables with storage is more favorable than curtailment.

The role of storage in a high-renewables future can be boiled down to three high-level types of services:

  • Ancillary Grid Services: Frequency regulation, voltage control, and fast ramping response are required to ensure stable grid operation in response to small-timescale (seconds to tens of minutes) fluctuations in both demand and generation. 
  • Energy/Demand Shifting: Energy shifting services typically operate over a longer time period and are used to align load with renewable output or to shave peaks.
  • Increased Self-Consumption: Minimizing the export of electricity generated from behind-the-meter PV systems increases the financial benefit of solar PV in areas where net energy metering is not offered or for customers with rate structures that are unfavorable to onsite PV ownership.

 Dr. Fitzgerald focuses on innovative solutions to integrate distributed energy resources onto the electricity grid of the future. His doctorate is in earth and environmental engineering.

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