Unlocking Renewables with Storage

Adding storage to renewable energy resources changes everything in the energy game. It creates a whole new animal.

The falling cost of solar PV and battery storage

The intermittence of solar photovoltaics (PV) and wind has caused many to question whether we can rely solely on renewables for our energy needs. After all, the sun only shines during the day and the wind is sporadic. But because of the falling cost of renewable generation and batteries, it makes increasingly more economic sense to use batteries to store renewable energy when generation is high and deliver it when it's needed.

In 1970, solar PV cost $100/watt. By 1977, the cost had dropped to $76/watt following several innovations in manufacturing. By 2013, it was 0.65¢/watt, and by 2015, only 0.30¢/watt.

The same is is true for lithium-ion batteries. The cost has gone from $1,160/kWh in 2010 to $176/kWh in 2018.

The increasing demand for these technologies attracts even more investment, which spurs further innovation and even lower costs. This virtuous cycle exponentially improves the efficiency and quality benefits of distributed energy. Soon all buildings -- homes, offices, schools, and businesses -- will be able to produce, consume, and share their own energy.

Walmart, Target, and other "Big Box" Rooftop Solar

Consider Walmart: as of 2018, America's largest brick-and-mortar retailer had 5,358 stores nation wide and 785 million square feet of rooftop space. That's equal to 18,012 square acres, or 28.1 square miles of rooftop. To put that in perspective, Manhattan Island is 22.82 square miles. If Walmart were to cover all of its rooftops with solar PV panels, it would generate about 3.6 GW of electricity during the day. [1]

There is an estimated 16.22 billion square feet of commercial rooftop space in the United States. Collectively that could generate 74.4 GW of solar energy [2]. And that doesn't include parking lot space -- it's feasible that solar PV-covered canopies could double these figures. We could produce as much as 150 GW of solar energy without using any additional land.

The future of the electricity grid

This is how I envision the future of distributed energy: homes, schools, and small businesses can reach net zero energy -- that is, produce as much energy as they consume on an annual basis. And the "Big Box" stores can reach net positive energy and sell what they don't use. Imagine Walmart, Target, and IKEA having charging stations for electric vehicles, battery swapping programs for homes and businesses, and offer retail electricity for the surrounding community. As of 2017, Target had a total of 203.5 MW of solar installed and Walmart plans to install solar in 1,000 of its stores by 2020. By adding batteries to the mix, and with 100% of new cars sold after 2025 being electric, these new markets will take off.

When batteries are used behind-the-meter and paired with solar PV, several value-streams emerge. Batteries provide a fast and high power capacity, which is ideal for peak shaving and peak load minimization; batteries support smart grids and allow networks of homes and businesses to control their own energy use; batteries improve system resiliency by protecting users from blackouts and brownouts; and batteries provide additional value-streams by performing ancillary services for the grid, such as frequency and voltage regulation. All of this adds up to big savings on electricity bills for rate payers.

Below is a 400 kW solar PV installation at the Marcus Garvey Village social housing complex in Brooklyn, New York.

Combined with a lithium-ion battery, shown below, the community is able to reduce its power bill by up to 20%. [3]

Batteries are also being paired with solar and wind farms and used in front-of-the-meter as grid-level energy storage. In 2018, Tesla installed a 100 MW/129 MWh Powerpack system at the Hornsdale Wind Farm near Jamestown, South Australia. [4] The batteries are charged from wind energy and deliver electricity during peak hours, powering more than 30,000 homes. The battery system has allowed the gird to become more reliable and more efficient, which has saved rate payers $50 million its first year of operation. [5]

The project was so successful that Tesla has been contracted to install an additional 50 MW/64.5MWh at Hornsdale, with expansion set to be complete in the first half of 2020.

Warren Buffett is also getting in on the action. He has funded the Gemini project in Nevada, 25 miles from Las Vegas. The project will create 1.19 GW of new power, enough to provide electricity to 230,000 homes. The projects includes 590 MW of battery storage, allowing solar energy to be stored and shifted to peak hours and at night. [6]

The large-scale front-of-the-meter battery storage systems will work in unison with the behind-the-meter systems through energy management controls. Together they will revolutionize the digital, distributed electricity grid.

Alternative energy storage technologies

Some critics argue that lithium-ion batteries are not a safe investment because they rely on rare earth minerals extracted from unregulated countries like the Congo. They say batteries cannot be relied upon as a central component of a new renewable energy infrastructure.

Those critics will be surprised to learn that there are several non-lithium-ion batteries in the works. IBM recently announced a new battery that doesn't use cobalt or nickel – two metals needed for lithium-ion. IBM's new battery is made from seawater, and has a faster charging time than lithium-ion, with 80% charge in less than five minutes when configured for high power. And it has a higher power density and a lifecycle of more than 90%. [7] Additionally, a group of private investors, including Bill Gates, Jeff Bezos, Michael Bloomberg, and Richard Branson, have invested billions into iron-flow batteries, the so-called "next-gen" lithium-ion. [8] And also, the US Energy Department is developing four new energy storage technologies: iron or manganese chemical batteries, non-flammable solid state batteries, multi-valent batteries, and sodium-ion batteries. [9] By 2030, there will no doubt be cheaper, safer, and more efficient batteries made from more abundant and more biodegradable materials. 

There are also a number of alternative storage technologies: compressed air, gravity energy storage, liquified air or cryogenic energy storage, thermal energy storage, and hydroelectric energy storage. Below are two examples of gravity storage that are powered by solar PV:

The death of conventional utilities

Consider the impact of widespread renewables plus storage on the fossil fuel and nuclear utilities. Demand for utility power will continue to drop. Their highest margin product -- peak pricing -- will soon be eliminated. Competition in the retail and wholesale electricity markets will increase as solar plus storage is commoditized and electric vehicles become dominant. The utility's margins will be squeezed, both on the retail side and wholesale side, and a vicious cycle of lower revenue, lower margins, and lower returns will set in. In turn, utility energy costs will go up, making their energy even more expensive, and this, in turn, will feed into the vicious cycle. [10]

Before long, renewables plus storage will also disrupt baseload power, that is, the minimum amount of power needed to be supplied to the electrical grid at any given time. When that happens, the utilities' infrastructure and business model will become obsolete. A new electricity grid will have emerged, one that can provide cheap and clean de-carbonized energy.

References

1. Fessler, David. The Energy Disruption Triangle: Three Sectors That Will Change How We Generate, Use, and Store Energy. 2018.
2. Ibid., Fessler
3. "Brooklyn's social housing microgrid rewrites relationships with utility companies", https://www.theguardian.com/sustainable-business/2017/aug/17/energy-brooklyn-social-housing-microgrid-rewrites-relationships-with-utility-companies
4. See: https://www.tesla.com/blog/tesla-powerpack-enable-large-scale-sustainable-energy-south-australia?redirect=no
5. See: https://www.neoen.com/var/fichiers/20191119-neoen-mr-australia-hprx.pdf
6. "Warren Buffett Is Making a Big Bet on Solar Power", By Avi Salzman. https://www.barrons.com/articles/warren-buffett-berkshire-hathaway-solar-power-nv-energy-690-megawatt-51577995149
7. https://cleantechnica.com/2019/12/18/ibm-changes-the-energy-storage-game-with-cobalt-free-battery/
8. "Gates, Bezos bet on flow battery technology, a potential rival to big bets on lithium-ion", by Tom Connor for CNBC, https://www.vanadiumcorp.com/news/sustainability-news/gates-bezos-bet-on-flow-battery-technology-a-potential-rival-to-big-bets-on-lithium-ion/
9. "Four New Energy Storage Technologies to Power the EV Revolution", https://cleantechnica.com/2019/12/14/four-new-energy-storage-technologies-to-power-the-ev-revolution/
10. Seba, Tony. Clean Disruption of Energy and Transportation: How Silicon Valley Will Make Oil, Nuclear, Natural Gas, Coal, Electric Utilities and Conventional Cars Obsolete by 2030. First Edition (2014). Page 77.