How energy storage is starting to rewire the electricity industry
Eric Hittinger, Rochester Institute of Technology and Eric Williams, Rochester Institute of Technology
(THE CONVERSATION) The market for energy storage on the power grid is growing at a rapid clip, driven by declining prices and supportive government policies.
Based on our research on the operation and costs of electricity grids, especially the benefits of new technologies, we are confident energy storage could transform the way American homeowners, businesses and utilities produce and use power.
Energy storage in this context simply means saving electricity for later use. It’s like having a bunch of rechargeable batteries, but much larger than the ones in your cellphone and probably connected to the grid.
After annual average growth of about 50 percent for five years, the U.S. electricity industry installed a total of 1 gigawatt-hour of new storage capacity between 2013 and 2017, according to the firm GTM Research. That’s enough to power 16 million laptops for several hours. While this amount of storage is less than 0.2 percent of the average amount of electricity the U.S. consumes, analysts predict that installations will double between 2017 and 2018 and then keep expanding rapidly in the U.S. and around the world.
To see why this trend is a big deal, consider how electricity works.
It takes a hidden world of complexity and a series of delicate balancing acts to power homes and workplaces because the grid has historically had little storage capacity. After being generated at power plants, electricity usually travels down power lines at the speed of light and most of it is consumed immediately.
Without the means to store electricity, utilities have to produce just enough to meet demand around the clock, including peak hours.
That makes electricity different from most industries. Just imagine what would happen if automakers had to do this. The moment you bought a car, a worker would have to drive it out the factory gate. Assembly lines would constantly speed up and slow down based on consumer whims.
It sounds maddening and ridiculous, right? But electric grid operators basically pull this off, balancing supply and demand every few seconds by turning power plants on and off.
That’s why a storage boom would make a big difference. Storage creates the equivalent of a warehouse to stow electricity when it is plentiful for other times when it is needed.
Energy storage can help in a variety of ways, essentially serving as a Swiss Army knife for electricity grids. It can help balance short-term power fluctuations, manage peak demand or act as a backup to prevent or recover from power outages.
And it can be deployed at any scale and at any point in the grid, from a small home storage system to a pumped hydroelectric reservoir big enough to power a small city. While storage actually consumes a little electricity rather than producing any, it makes the electricity business more economically efficient. As the volume of storage grows, we expect grids to become more stable and flexible.
Storage may also make a big difference with electricity generated through solar or wind power – which can only be harnessed when the sun is shining and the wind is blowing.
But, in general, it isn’t necessary for that purpose yet. While those industries are growing quickly, wind power generates only about 6 percent of U.S. electricity and solar less than 2 percent. Electricity grids can currently use almost all of that power as it is produced.
Grid operators, accustomed to managing the variable supply and demand for power, can manage the extra unpredictability they get from wind and solar energy now. But as utilities, businesses and consumers bring more renewable energy online, the grid may become harder to balance without additional storage.
To be sure, hydroelectric plant operators have been storing power for a long time. The U.S. has the capacity to store some 22 gigawatts in pumped hydropower, about 2 percent of U.S. generating capacity. Yet its reliance on large water reservoirs, which can’t be easily constructed near power markets, limits the growth potential of this energy option.
Once energy storage scales up, utilities will meet peak demand more easily with less total capacity and fewer power plants. If they can rely on storage to supply power during high-demand hours instead of building new power plants, it can save money all around.
But storage isn’t the only game in town – other technologies offer similar benefits. Utilities can install new transmission lines or rely on flexible natural gas, which is essentially the biggest competitor for energy storage.
Natural gas generation produces about a third of the nation’s electricity today and provides many of the same benefits as storage since these power plants are easy to switch on and off. The relatively low prices for natural gas, less than half of what they were a decade ago due to widespread hydrofracking, have probably slowed energy storage growth until now.