Tom Burton, Chair of Mintz Levin’s Energy Technology Practice, has published a weekly installment providing insight into the challenges and possible solutions that, if implemented, promise a bright future as clean energy moves America forward. In this series, Tom included one challenge per week and the potential solution(s). This is the sixth and final installment of the series. Click to read Part I, Part II, Part III, Part IV, and Part V.
The Problem: Renewables Intermittent Power Generation
Renewable energy sources are intermittent in nature, depending on when the sun shines and the wind blows. Because of this, suppliers face “ramp up” and “ramp down” issues.
- Ramping up: Renewable supply is typically lowest during the evening, while at this time demand spikes as people return home from work. The California Independent System Operator (ISO) developed a "duck curve" to describe how massive amounts of customer-sited PV systems could cause problems to the state’s supply-demand balance on its electricity grid. The ISO worries that the “neck” of the duck curve, situated where consumers come home and turn their electricity on as the sun sets, could overwhelm the state’s available generating capacity.
- Ramping down: Generation is highest in the middle of the day as demand troughs. This creates an overgeneration risk where grid operators often have to ask renewable suppliers to reduce production so as not to overwhelm transmission lines. In Vermont, Green Mountain Power has, on several occasions, had to cut back the power it sends to the grid because the operator told them it was overloading capacity. Compounding the issue is that it is more difficult to synchronize wind’s fluctuating power flow with a system built for the steadier electric stream of fossil fuel plants. This comes with financial consequences – for example, cutbacks cost the Vermont Electric Cooperative $1.5 million in 2013.
A widespread, cost effective method is necessary to smooth out the duck curve and deliver clean power at all hours of the day.
Solution: Policies Supporting Energy Storage Deployment
Energy storage offers a way to harness renewables at their peak supply and deploy them at their peak demand. As battery storage costs have dropped (72% in the last five years according to Clean Energy Pipeline), Baird Equity Research has compared their market to solar 5-7 years ago. That said, there’s still a little ways to go - in its latest analysis, the Department of Energy estimated that storage technology is economical around $250/kwh for short term system capital cost and $150/kwh in the long term. Government policy can help accelerate adoption:
- Massachusetts is incentivizing the storage technology through government programs. In May, Governor Baker announced the launch of a $10 million Energy Storage Initiative (ESI) that will include the financial commitment from the Department of Energy Resources (DOER) along with a two part study from the DOER and MassCEC analyzing opportunities to support MA storage companies. With the funds, DOER will support energy storage demonstration projects at all scales.
- California also offers financial opportunities for storage. Its flagship program in this area is the Self Generation Incentive Program. The program provides $83 million per year until 2019 for behind-the-meter generation technologies, including rebates for stand-alone storage systems.
- Additionally, in 2013 California passed the nation’s first storage mandate. The state’s largest utilities are required to have 1,325 GW of storage operating by 2020. In one of the largest efforts to meet this standard yet, in September 2014 Southern California Edison announced plans for a 32 MW storage project in Tehachapi, CA.