The state of battery storage and brief history of energy reliance in the United States. How California, New York, and China are handling their commitments to a cleaner energy grid.
Historically, the electric grid in the United States (US) has been predominantly fueled by traditional brown energy sources, mainly coal which account for more than 40% of the nation’s electric power generation between 1949 and 2011. From 1973 to 2008 natural gas provided less than 20% of electric generation but then quickly rose to more than 25% in 2011 due to advancements in hydraulic fracturing and horizontal drilling which flooded the market with cheap natural gas. In 2016, natural gas surpassed coal for the first time ever and in 2019 increased to 38% while coal provided only 23.4% of the electric mix. The next most common fuel in the mix is nuclear which hit an all-time peak of 21.8% in 2001. It is reliable, cheap, and a low-emissions source of energy that doesn’t rely on traditional fossil fuels. Its drawbacks, however, include high initial costs, radioactive residual outputs, and potential nuclear incidents – think Three Mile Island and Fukushima.
When we look at the history of renewable generation in the electric mix, the main obstacle has been economic viability. The high cost of renewables, more than electricity from fossil fuels, didn’t incentivize the market to incorporate high volumes. This is not an issue in today’s world as renewable energy is frequently the most competitive source of energy generation. In 2019, electric costs from utility-scale solar PV fell 13%, reaching a global average of 6.8 cents per kilowatt-hour. Onshore and offshore wind both declined by about 9%, reaching 5.3 and 11.5 cents per kilowatt-hour, respectively. Even with the decreased prices of renewables, they only accounted for 17.6% of electric generation in 2019. If renewable energy is now competitive with fossil fuels and has the low-emissions benefit, why hasn’t it been incorporated more into the energy mix?
The answer, in part, is reliability. The reliability of traditional fossil fuels is very high, meaning power plant operators can run practically 24/7 and in almost any weather. This isn’t the case for renewables, where the generation of solar energy requires the sun to be out and the generation of wind power requires wind. In order for renewables to become a majority of the electricity mix, energy storage to provide stability to the grid is necessary. Without that reliability, the electric grid will continually need to rely on fuels such as natural gas that can provide generation during peak hours or usage when not enough renewable energy is available. The importance of reliability was highlighted with the recent events in Texas where winter weather conditions caused major power outages leaving 3.4 million people without power, heat, or running water for multiple days. Planning for extreme weather by building a stronger electric grid requires more storage capacity and infrastructure improvements than what we have today.
Lithium-ion batteries are currently the leading storage technology utilized to integrate off-grid renewables. These batteries, which store electricity as chemical energy, are not currently cost-effective. Therefore, innovation to reduce price and improve performance will be required to allow for renewables to become a majority of the electric grid. Great strides have already been made towards this goal. Utility-scale battery storage prices have dropped nearly 70% between 2015 and 2018. A projection by the US National Renewable Energy Laboratory sees mid-range costs for lithium-ion batteries falling an additional 45% between 2018 and 2030; this will unquestionably help states with their Renewable Portfolio Standard (RPS) goals, as well as nations in the Paris Climate Agreement, in the upcoming years as more and more utility-scale battery projects develop.
California, the current global leader in the deployment of high capacity batteries, is home to the largest battery storage project in the world with its development of Moss Landing Energy Storage Facility in Monterey County, a 300-megawatt project. This project with PG&E will assist in California’s aggressive target of a carbon-free electrical grid by 2045.
In New York, Consolidated Edison and 174 Power Global, a solar energy company, have agreed on plans to build the largest battery storage project in New York State with the hopes of the new batteries running by 2022. The 100-megawatt project will store enough green energy to power over 16,000 homes for several hours during peak demand. This development is just the beginning of 30 additional facilities set to be built in New York within the next decade to assist in the state’s RPS goal of achieving 70% renewable energy usage by 2030. More and more renewable energy, such as a 9,000-megawatt offshore wind project, is expected to be added to the state’s energy portfolio in the upcoming years.
In China, their largest battery project to date is underway with the construction of a 200-megawatt Vanadium Redox Flow Battery (VRFB) in Dalian. The system is expected to peak-shave about 8% of the city’s expected load. Europe has also been expanding its energy storage industry, going from 9-megawatts of project announcements in 2010 to 5,700-megawatts in 2020.
Globally, battery storage is set to rise to 741 gigawatt-hours by 2030, mostly with projects integrated by the US and China. As technology continues to evolve, we will see a grid increasingly dominated by battery storage and natural gas, which will support government bodies and corporations with net-zero commitments in the upcoming years. This is a space NUS Consulting Group will be monitoring closely with the greening of the electric grid.
More: Research Notes, Sustainability