Energy Storage Tech Finally Starting To Compete With The Grid
Critics of renewable energy always cite the fact that the sun does not always shine and the wind does not always blow. As such, the intermittency of renewable energy needs to be backed up by baseload power, which would need to come from natural gas, coal, or nuclear power.
The key to resolving the intermittency problem is energy storage, but batteries have thus far been too expensive to offer a viable solution. But that is quickly changing.
Energy storage technologies are now cost-competitive with conventional grid electricity in certain markets. That is not the claim of some environmental outfit, but the conclusion of an in-depth study from asset management firm Lazard.
To be sure, there is still a ways to go before battery storage can compete on a mass scale. But Lazard finds that energy storage is actually a preferred option already in a few scenarios, such as replacing the need for major new transmission lines, or for circumstances where microgrids are needed. Lazard conducted its first levelized cost of energy storage. The analysis is complicated because storage can be valued in so many different ways. Energy storage not only can provide electricity during downtimes, but it can obviate the need to build new power plants. Or it can increase the reliability of the grid. These aspects make it difficult to come up with concrete cost figures, but Lazard lays out a range of cost scenarios. The bottom line is that energy storage is rapidly becoming cost-competitive.
Lazard also expects the cost of battery storage to decline significantly over the next five years, due to rising penetration of renewable energy and specific policies to support storage. At the same time, the aging power grid supports the economics of energy storage, as the costs of maintenance of transmission and the need for more power lines make energy storage competitive by comparison.