Posts

Batteries are ancient, by today’s tech standards.  Benjamin Franklin is the first person we know of to use the term, and the first published science on the topic dates to 1791.  The days of metal disks stacked in brine are long gone (except in middle school science class).  Lead-acid batteries in cars and golf carts are still common and will be for years, given their low cost.  But the focus here is on the next generation of large-scale systems.  And the question is how these batteries – bigger and more powerful than anything we’ve known  can redefine and remake the world’s electrical grid. 

You’ve likely heard the expression “lightning in a bottle”.  Storing electricity at industrial scale is very much like that.  Electricity moves fast.  In copper wire or other conductors, it’s traveling at somewhere between 50% and 99% of the speed of light.  And in grid operations, it has to be sold – that is, used – as soon as it’s produced.  If it isn’t, grid and utility engineers run the risk of power plants disconnecting, since they’re only designed to run in a very narrow range of conditions.  What this next generation of battery tech provides is a way to store that electricity and in doing so provide a whole basket of benefits – financial, technical and environmental.   

Arguably the biggest single benefit battery storage provides is the ability to capture electricity from renewable sources.  Obviously, the wind doesn’t always blow.  And even when it does, that’s an issue in itself.  In February 2017, the Danes powered their entire country for 24 hours on windpower.  But if a wind farm produces more power than needed, the system operator must start shutting down turbines or face overloading the grid.  And while the sun defines “predictable”, solar plants only provide power for so many hours per day.  Large-scale storage means that intermittent, low-cost, and environmentally-friendly electricity can be stored now and used later.    

Having large amounts of electricity in storage and ready to go at a moment’s notice is a financial boost for power companies.  It means that utilities can sell back low-cost power from renewables to meet peak demand; when power sells for far more than it cost to generate.  It also means that utilities can meet their own demand spikes without having to pay the often-bruising high prices electricity markets produce at peak demand. 

There’s more.  Energy storage can improve the system’s operating reserve.  Like energy, the grid is always moving – more demand here, less demand there, big storms and equipment failures now and again.  It’s a dance that never stops.  Engineers and analysts meet these constant changes with machines and data to keep the system balanced.  But they are never 100% correct in predicting what will happen on any given day.  Having stored reserve power that can be deployed in seconds boosts the operating reserve, and in doing so, boosts grid stability.  Improving stability can mean lower infrastructure investment costs.  It can also cut the costs of “black starts” when generators go down.  Typically, they have to be restarted with diesel generators, but battery systems for just this purpose have already been successfully tested. 

So, what do utility-scale batteries look like?  Imagine shipping containers lined up in an electrical substation, or row after row of gigantic desktop computer towers.  The Hornsdale Power Reserve, in South Australia, was designed and built by Tesla.  It uses lithium-ion batteries (like in your computer) and provides 129 MWh of power – enough to supply all the electricity for about 3,500 homes for an hour.  These projects sound large, though total deployments to date are tiny – globally about 6 GWh through 2018.  But there’s one simple fact that you need to remember.  In 2010, commercial battery packs cost about $1,100 per kilowatt-hour.  By December 2019, that price had fallen to $156 per kilowatt-hour, a drop of 87% – and nearly 50% of that total decline came in the preceding three years.  With costs set to break the $100 mark by as early as 2024, batteries are increasingly likely to be included in energy infrastructure and development for years to come. 

So where, as COVID redefines economies and politics, is the renewable energy sector?  What happens over the next few years – to technologies, investments, deployments and incentives – will determine multiple trajectories.  These include the jobs of millions of people, how quickly carbon accumulates in the atmosphere and oceans, and the possibility of stranded assets hampering any rapid, substantive switch from old to new.

If you’re thinking purely in terms of dollars and cents, the latest issue of Forbes has a fascinating article.  A joint study by the International Energy Agency (IEA) and Imperial College London reviewed returns on energy investments starting in 2009.  Combining German and French stock market data, the past five years showed returns of 178% for renewables and -20.7% for fossil energy.  UK renewable stocks returned over 75%, legacy energy 8.8%.  Here at home, where utility-scale renewable buildouts began later than in Europe, renewable returns were north of 200%, while oil, gas and coal stocks didn’t quite double.  Renewable investments proved more stable over the same periods measured.  But the same article notes that the biggest fossil energy shareholders – pension funds – are reluctant to disinvest from dividend-rich stocks.

Beyond that, an ostensible renewable energy transition is up against multiple countervailing factors – for starters $900 billion or more in potential “stranded assets” of global fossil energy companies.  The oil majors have talked a good game for years now, but the numbers don’t bear out their proclaimed commitments to renewables.  Exxon is now in court for, among other things, bragging on its green energy tech while spending less than ½ of 1% of revenues on renewable energy.  In 2019, BP projected spending between 3% and 8% (at best) of capex on renewables, and in February the company dumped an advertising campaign highlighting renewables.  And so on.

American utilities face the same kinds of stranded asset risks, though only 18% of utility employees view sunk costs in infrastructure as a top worry.  But power plants can be ferociously expensive to build.  Evergy’s Iatan 2 project, which went online nearly 10 years ago, came in at nearly $2 billion, with state-of-the-art environmental retrofits of the Iatan 1 plant adding to costs.  It can take large projects like this decades to pay for themselves; securitizing early retirement of fossil fuel plants can blunt risks to utilities, but so far has only been tried in three states.

Even bigger picture – there’s a substantial inertia built into an energy economy created more than 100 years ago – a vast, complex system that works remarkably well to meet the needs of its customers.  To date, renewables are still a small slice of total US electricity output.  In 2018, natural gas generated about 35% of our electricity, coal about 27%, nuclear a bit over 19% and all renewables, including hydroelectric, not quite 17%, with niche sources making up the rest.

To be clear, renewable energy’s recent eclipse of coal in the US has been remarkable.  In fact, the US Energy Information Administration (EIA) announced the very day this was written that in 2019 consumption of energy produced from renewables passed that produced by coal, the first time per EIA that this has happened since before 1885.  But a decarbonized energy economy is still decades away.  The International Renewable Energy Agency (IRENA) estimates that to even approach climate goals, renewables must increase to around 65% of global Total Primary Energy Supply by 2050 – and we’re nowhere close to that yet.  More on all of the above, COVID impacts and the state of play in our next renewable installment.

Join us at the last of our four events in Kansas on October 3rd to learn about the Volkswagen Settlement and what it means to fleets in the state of Kansas. At each event, we’ll provide the latest information, a forum for discussion, and give you tools to participate in decision-making for the state’s plan for its $15 million share of the VW Environmental Mitigation Trust.

MEC and Kansas City Clean Cities encourage all stakeholders in Kansas to let their views be known on this important settlement.  This includes private-sector fleet operators, school district transportation directors, public works and public transportation professionals, along with transportation contractors, alternative energy providers and elected officials.  We’re hosting this event to let you know about what’s at stake – and we need you to let the agencies in charge of the settlement what direction you think the state should take.

Join us at Wichita State University Old Town, 238 North Mead in Wichita Kansas, 672025

Click here for parking information.  To register for this event, just click here to sign up through EventBrite.

 

 

As part of a Department of Energy award for Mid-America Collaborative for Alternative Fuels Implementation, Metropolitan Energy Center requests proposals from qualified consulting companies or agencies to create a program designed to provide technical assistance to fleet operators and their host businesses regarding incorporating alternative fuel vehicles. Interested?  Read more

Events

Nothing Found

Sorry, no posts matched your criteria