How utilities can leverage long-duration energy storage to accelerate the clean energy transition

By Hugh McDermott, SVP of Business Development and Sales, ESS Inc.

In November last year, the US Infrastructure Investment and Jobs Act was signed. It is asking for $355 million in funding for large-scale, long-term energy storage projects. Just two months earlier, the Dept. of being Energy”Long-term storage recording”, setting a target to reduce utility-scale energy storage costs by 90% for systems that will last more than 10 hours within this decade.

These initiatives are highlighting the value of long-term energy storage (LDES) for utilities amid a wave of announcements of state-level financing, major purchases and optimistic forecasts for the industry. This growing wave of market activity, coupled with the delivery and commissioning of grid-ready LDES systems, is attracting the attention of grid operators and utility planners around the world.

According to the DOE, “Energy storage has the potential to accelerate the complete decarbonization of the power grid. While shorter duration storage is currently being installed to support the current level of renewable energy generation, longer duration storage technologies are needed as more renewable energy sources are deployed on the grid. Cheaper and more efficient storage will make it easier to capture and store renewable clean energy for use when power generation is unavailable or below demand, so that, for example, renewable resources generated during the day, such as solar power, can be used at night. can be used.

While there are different types of LDES technologies — electrochemical, mechanical, thermal — and more will be developed in the coming years, not all are grid ready Today† Leading LDES candidates to date are advanced (non-lithium) batteries, including flow batteries, compressed air, and variations on decades-old pumped hydro storage.

Situation: 10 set goals; California leads in the long term

Graphics courtesy of ESS Inc.

As of the first quarter of 2022, 10 US states have set energy storage targets, each with different mechanisms and stimulus policies. Two-thirds are on the East Coast, which includes Maine, Massachusetts, Connecticut, New York, North Carolina, New Jersey, and Virginia. Once these targets have been mapped out, it is likely that a percentage will be allocated for LDES sources, given the added economic and performance value they bring to renewables.

One state has already done this – and placed its money where its mandates are. Last May, the California Public Utilities Commission called for a 1 GW LDES tender for 2026, which it defined as “technologies lasting between eight and 100 hours.” Earlier this year, Governor Gavin Newsom announced the state budget for 2022-23, which will include $380 million in LDES funding over two years as part of an overall $2 billion clean energy investment plan.

California leads the state with more than 3 GW of storage in use out of a total of 7 GW nationwide. Nearly all are short-life lithium-ion batteries — resources that helped state grid operator CAISO avoid power shortages last year. But CAISO has recognized that four-hour batteries cannot meet all national needs. The higher the share of renewable energy, the more long-term storage will be required.

In North Carolina, Duke Energy must provide 45% of new solar generation through power purchase agreements with companies in North and South Carolina, in accordance with North Carolina’s CO2 Reduction Act, HB 951. base load, LDES will inevitably be included in this new solar fleet.

What LDES does best

Intermittent renewables now dominate new power generation coming online. According to the US Energy Information Administration46 GW of new generating capacity will be commissioned in 2022. Intermittent solar and wind power will make up an eye-opening 29 GW or 63% of this total.

Long-term storage can help utilities smoothly integrate increasing amounts of renewable energy while making progress in decarbonizing the power grid. Some of the strongest use cases for LDES are:

Time-shifting solar and wind energy: LDES can store excess renewable energy production and shift energy to where it has greater economic and resilient value. Storage also helps to avoid curtailments to maximize the benefits of clean energy sources.

Smoothing out renewable intermittent: The rapid response capability of LDES allows it to respond instantly to changes in renewable generation output with fast, unlimited charge-discharge capability.

Extension or replacement of high-emission peaker installations: Fossil-powered peaker plants are the last resort generators that activate utilities when the demand for energy from the grid is highest. LDES can enable a solid power source of intermittent renewables with the duration, capacity and cyclical flexibility to help utilities avoid (or at least reduce) the use of polluting peak power plants.

Supporting market participation: LDES is also a multipurpose asset that can provide frequency regulation and other ancillary services. As the markets evolve, LDES can provide spin reserve and even energy capacity. Commercially available long-term storage can comply with grid operator PJM’s “10-hour rule” which requires non-generation sources of limited duration, such as batteries, to provide the stated capacity for up to 10 hours continuously.

Postponing transmission and distribution system upgrades: LDES reduces congestion on T&D routes by storing power when the lines are full and delivering it later. This service can delay or avoid expensive, long-term asset upgrades.

To stabilize microgrids and support virtual power plants: LDES increases the reliability and flexibility of distributed energy sources, significantly reducing or eliminating reliance on diesel generators for backup.

A microgrid for solar energy + storage

ESS installation for SDGE

California utility San Diego Gas & Electric recognizes LDES’ unique ability to provide comprehensive backup power and resilience to communities vulnerable to extreme weather events and wildfires. As part of its efforts to reduce the risks and impact of public safety power cuts (PSPS) during adverse weather conditions, the utility is installing a solar + storage microgrid in Cameron Corners (Campo, California), a rural community about 50 miles east of San Diego.

The microgrid, which will be commissioned in 2022, consists of 875 MW of solar PV and 540 kW/2 MWh of ironflow batteries that are now in use. Once completed, the microgrid will enable key facilities, including a high school, library, health clinic, telecommunications hub and fire station, to remain powered during PSPS events, avoiding the use of diesel generators. If it doesn’t support a PSPS event, the microgrid will return stored renewable energy to the grid when the sun goes down.

A global need for massive amounts of LDES

As the energy storage market matures and diversifies, innovations such as LDES will spread rapidly. Their complementary value and ability to deliver multiple use cases in conjunction with renewables is clear. The use of clean, earth-rich raw materials (such as iron, salt and water) and ready-to-use, domestically produced industrial components enhance their inherent safety and sustainability. Higher production volumes will further reduce costs, all of which will lead to widespread global deployment. On this point, industry analysts seem to agree.

According to an recent forecast from BloombergNEF, global energy storage deployments (all durations) will reach 358 GW / 1,028 GWh by the end of the decade – a 20-fold increase from 2020 figures. This wave of installations will undoubtedly contain a high percentage of LDES.

For an LDES-specific data point, the LDES Council forecasts that between 25 GW and 35 GW of LDES will be installed globally by 2025, representing approximately 1 terawatt hour (TWh) and $50 billion in investment.

The long view

Regardless of which forecast we bet on, or how quickly states will join California in taking the lead, it’s fair to say that the market advantage for LDES is huge — as are the associated network advantages.

Utilities have a big responsibility in generating and supplying enough power to keep the lights on. They also face increased scrutiny from regulators and stakeholders to decarbonise. Solar and wind energy are long-proven solutions that are essential to our clean energy future, and their low cost makes them economically attractive.

Long-term energy storage in all iterations – with its array of benefits, services and commercial systems now available – is key for utilities to unlock the greatest value of clean energy.

Hugh McDermott is senior vice president of business development and sales for: ESS Oregon-based developer and manufacturer of sustainable iron power battery solutions.

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