electricity

Utilities are starting to invest in big batteries instead of building new power plants

By Jeremiah Johnson and Joseph F. Decarolis
View the original article here.

This is what a 5-megawatt, lithium-ion energy storage system looks like. Credit: Pacific Northwest National Laboratory

This is what a 5-megawatt, lithium-ion energy storage system looks like. Credit: Pacific Northwest National Laboratory

Due to their decreasing costs, lithium-ion batteries now dominate a range of applications including electric vehicles, computers and consumer electronics.

You might only think about energy storagewhen your laptop or cellphone are running out of juice, but utilities can plug bigger versions into the electric grid. And thanks to rapidly declining lithium-ion battery prices, using energy storage to stretch electricity generation capacity.

Based on our research on energy storage costs and performance in North Carolina, and our analysis of the potential role energy storage could play within the coming years, we believe that utilities should prepare for the advent of cheap grid-scale batteries and develop flexible, long-term plans that will save consumers money.

Peak demand is pricey

The amount of electricity consumers use varies according to the time of day and between weekdays and weekends, as well as seasonally and annually as everyone goes about their business.

Those variations can be huge.

For example, the times when consumers use the most electricity in many regions is nearly double the average amount of power they typically consume. Utilities often meet peak demand by building power plants that run on natural gas, due to their lower construction costs and ability to operate when they are needed.

All of the new utility-scale electricity capacity coming online in the U.S. in 2019 will be generated through natural gas, wind and solar power as coal, nuclear and some gas plants close. Credit: U.S. Energy Information Administration

All of the new utility-scale electricity capacity coming online in the U.S. in 2019 will be generated through natural gas, wind and solar power as coal, nuclear and some gas plants close. Credit: U.S. Energy Information Administration

However, it’s expensive and inefficient to build these power plants just to meet demand in those peak hours. It’s like purchasing a large van that you will only use for the three days a year when your brother and his three kids visit.

The grid requires power supplied right when it is needed, and usage varies considerably throughout the day. When grid-connected batteries help supply enough electricity to meet demand, utilities don’t have to build as many power plants and transmission lines.

Given how long this infrastructure lasts and how rapidly battery costs are dropping, utilities now face new long-term planning challenges.

Cheaper batteries

About half of the new generation capacity built in the U.S. annually since 2014 has come from solar, wind or other renewable sources. Natural gas plants make up the much of the rest but in the future, that industry may need to compete with energy storage for market share.

In practice, we can see how the pace of natural gas-fired power plant construction might slow down in response to this new alternative.

Grid-scale batteries are being installed coast-to-coast as this snapshot from 2017 indicates. Credit: U.S. Energy Information Administration, U.S. Battery Storage Market Trends, 2018.

Grid-scale batteries are being installed coast-to-coast as this snapshot from 2017 indicates. Credit: U.S. Energy Information Administration, U.S. Battery Storage Market Trends, 2018.

So far, utilities have only installed the equivalent of one or two traditional power plants in grid-scale lithium-ion battery projects, all since 2015. But across California, Texas, the Midwest and New England, these devices are benefiting the overall grid by improving operations and bridging gaps when consumers need more power than usual.

Based on our own experience tracking lithium-ion battery costs, we see the potential for these batteries to be deployed at a far larger scale and disrupt the energy business.

When we were given approximately one year to conduct a study on the benefits and costs of energy storage in North Carolina, keeping up with the pace of technological advances and increasing affordability was a struggle.

Projected battery costs changed so significantly from the beginning to the end of our project that we found ourselves rushing at the end to update our analysis.

Once utilities can easily take advantage of these huge batteries, they will not need as much new power-generation capacity to meet peak demand.

Credit: The Conversation

Credit: The Conversation

Utility planning

Even before batteries could be used for large-scale energy storage, it was hard for utilities to make long-term plans due to uncertainty about what to expect in the future.

For example, most energy experts did not anticipate the dramatic decline in natural gas prices due to the spread of hydraulic fracturing, or fracking, starting about a decade ago – or the incentive that it would provide utilities to phase out coal-fired power plants.

In recent years, solar energy and wind power costs have dropped far faster than expected, also displacing coal – and in some cases natural gas – as a source of energy for electricity generation.

Something we learned during our storage study is illustrative.

We found that lithium ion batteries at 2019 prices were a bit too expensive in North Carolina to compete with natural gas peaker plants – the natural gas plants used occasionally when electricity demand spikes. However, when we modeled projected 2030 battery prices, energy storage proved to be the more cost-effective option.

Credit: The Conversation

Credit: The Conversation

Federal, state and even some local policies are another wild card. For example, Democratic lawmakers have outlined the Green New Deal, an ambitious plan that could rapidly address climate change and income inequality at the same time.

And no matter what happens in Congress, the increasingly frequent bouts of extreme weather hitting the U.S. are also expensive for utilities. Droughts reduce hydropower output and heatwaves make electricity usage spike.

The future

Several utilities are already investing in energy storage.

California utility Pacific Gas & Electric, for example, got permission from regulators to build a massive 567.5 megawatt energy-storage battery system near San Francisco, although the utility’s bankruptcy could complicate the project.

Hawaiian Electric Company is seeking approval for projects that would establish several hundred megawatts of energy storage across the islands. And Arizona Public Service and Puerto Rico Electric Power Authority are looking into storage options as well.

We believe these and other decisions will reverberate for decades to come.If utilities miscalculate and spend billions on power plants it turns out they won’t need instead of investing in energy storage, their customers could pay more than they should to keep the lights through the middle of this century.

The Price of Large-Scale Solar Keeps Dropping

JOHN ROGERS, SENIOR ENERGY ANALYST, CLEAN ENERGY | SEPTEMBER 13, 2018, 11:49 AM EST
View the original article here.

PV modules at the Kerman site near Fresno, California
The latest annual report on large-scale solar in the U.S. shows that prices continue to drop. Solar keeps becoming more irresistible.

The report, from Lawrence Berkeley National Laboratory (LBNL) and the US Department of Energy’s Solar Energy Technologies Office, is the sixth annual release about the progress of “utility-scale” solar. For these purposes, they generally define “utility-scale” as at least 5 megawatts (three orders of magnitude larger than a typical residential rooftop solar system). And “solar” means mostly photovoltaic (PV), not concentrating solar power (CSP), since PV is where most of the action is these days.

Here’s what the spread of large-scale solar looks like:

Solar Drop 2

In all, 33 states had solar in the 5-MW-and-up range in 2017—four more than had it at the end of 2016. [For a cool look at how that map has changed over time, 2010 to 2017, check out this LBNL graphic on PV additions.]

Watch for falling prices

Fueling—and being fueled by—that growth are the reductions in costs for large-scale projects. Here’s a look at power purchase agreements (PPAs), long-term agreements for selling/buying power from particular projects, over the last dozen years:

Solar Drop 3

And here’s a zoom-in on the last few years, broken out by region:

Solar Drop 4

While those graphs show single, “levelized” prices, PPAs are long-term agreements, and what happens over the terms of the agreements is worth considering. One of the great things about solar and other fuel-free electricity options is that developers can have a really good long-term perspective on future costs: no fuel = no fuel-induced cost variability. That means they can offer steady prices out as far as the customer eye can see.

And, says LBNL, solar developers have indeed done that:

Roughly two-thirds of the contracts in the PPA sample feature pricing that does not escalate in nominal dollars over the life of the contract—which means that pricing actually declines over time in real dollar terms.

Imagine that: cheaper over time. Trying that with a natural gas power plant would be a good way to end up on the losing side of the contract—or to never get the project financed in the first place.

Here’s what that fuel-free solar steadiness can get you over time, in real terms:

Solar Drop 5

What’s behind the PPA prices

So where might those PPA price trends be coming from? Here are some of the factors to consider:

Equipment costs. Solar equipment costs less than it used to—a lot less. PPAs are expressed in cost per unit of electricity (dollars per megawatt-hour, or MWh, say), but solar panels are sold based on cost per unit of capacity ($ per watt). And that particular measure for project prices as a whole also shows impressive progress. Prices dropped 15% just from 2016 to 2017, and were down 60% from 2010 levels.

Solar Drop 6

The federal investment tax credit (30%) is a factor in how cheap solar is, and has helped propel the incredible increases in scale that have helped bring down costs. But since that ITC has been in the picture over that whole period, it’s not directly a factor in the price drop.

Project economies of scale. Bigger projects should be cheaper, right? Surprisingly, LBNL’s analysis suggests that, even if projects are getting larger (which isn’t clear from the data), economies of scale aren’t a big factor, once you get above a certain size. Permitting and other challenges at the larger scale, they suggest, “may outweigh any benefits from economies of scale in terms of the effect on the PPA price.”

Solar resource. Having more of the solar happen in sunnier places would explain the price drop—more sun means more electrons per solar panel—but sunnier climes are not where large-scale solar’s growth has taken it. While a lot of the growth has been in California and the Southwest, LBNL says, “large-scale PV projects have been increasingly deployed in less-sunny areas as well.” In fact:

In 2017, for the first time in the history of the U.S. market, the rest of the country (outside of California and the Southwest) accounted for the lion’s share—70%—of all new utility-scale PV capacity additions.

The Southeast, though late to the solar party, has embraced it in a big way, and accounted for 40% of new large-scale solar in 2017. Texas solar was another 17%.

But Idaho and Oregon were also notable, and Michigan was one of the four new states (along with Mississippi, Missouri, and Oklahoma) in the large-scale solar club. (And, as a former resident of the great state of Michigan, I can attest that the skies aren’t always blue there—even if it actually has more solar power ability than you might think.)

Capacity factors. More sun isn’t the only way to get more electrons. Projects these days are increasingly likely to use solar trackers, which let the solar panels tilt face the sun directly over the course of the day; 80% of the new capacity in 2017 used tracking, says LBNL. Thanks to those trackers, capacity factors themselves have remained steady in recent years even with the growth in less-sunny locales.

What to watch for

This report looks at large-scale solar’s progress through the early part of 2018. But here are a few things to consider as we travel through the rest of 2018, and beyond:

  • The Trump solar tariffs, which could be expected to raise costs for solar developers, wouldn’t have kicked in in time to show up in this analysis (though anticipation of presidential action did stir things up even before the tariff hammer came down). Whether that signal will clearly show in later data will depend on how much solar product got into the U.S. ahead of the tariffs. Some changes in China’s solar policies are likely to depress panel prices, too.
  • The wholesale value of large-scale solar declines as more solar comes online in a given region (a lot of solar in the middle of the day means each MWh isn’t worth as much). That’s mostly an issue only in California at this point, but something to watch as other states get up to high levels of solar penetration.
  • The investment tax credit, because of a 2015 extension and some favorable IRS guidance, will be available to most projects that get installed by 2023 (even with a scheduled phase-down). Even then it’ll drop down to 10% for large-scale projects, not go away completely.
  • Then there’s energy storage. While the new report doesn’t focus on the solar+storage approach, that second graphic above handily points out the contracts that include batteries. And the authors note that adding batteries doesn’t knock things completely out of whack (“The incremental cost of storage does not seem prohibitive.”).

And, if my math is correct, having 33 states with large-scale solar leaves 17 without. So another thing to watch is who’s next, and where else growth will happen.

Many of the missing states are in the Great Plains, where the wind resource means customers have another fabulous renewable energy option to draw on. But solar makes a great complement to wind. And the wind-related tax credit is phasing out more quickly than the solar ITC, meaning the relative economics will shift in solar’s favor.

Meanwhile, play around with the visualizations connected with the new release (available at the bottom of the report’s landing page), on solar capacity, generation, prices, and more, and revel in solar’s progress.

Large-scale solar is an increasingly important piece of how we’re decarbonizing our economy, and the information in this new report is a solid testament to that piece of the clean energy revolution.

Solar Roadways ‘Could Power America’

May 27, 2014 by Leon Walker
View the original article here

An Idaho couple is using the Internet to fund their Solar Roadways project that would convert roads and highways into photovoltaic arrays, which they say could produce enough energy to power the entire US.

Scott and Julie Brusaw are using crowd-funding website Indiegogo in an attempt to raise $1 million to manufacture the product commercially, reports SingularityHub.

The product (artist’s impression pictured) previously received two rounds of funding from the Federal Highways Administration, buy that contract is set to expire in July.

Solar Roadways is a modular paving system of hexagonal solar panels that can withstand up to 250,000 pounds of pressure. These panels can be installed on roads, parking lots, driveways, sidewalks and bike paths, and the panels contain LEDs that road managers can light up to display lane lines and other road features that would traditionally be painted.
The surface of the panels, which are about the size of a car tire, is covered with hexagonal bumps that SingularityHub reports offer better traction than asphalt.

According to the crowd-funding website, panels pay for themselves primarily through the generation of electricity, which can power homes and businesses connected via driveways and parking lots. A nationwide system could produce more renewable energy than a country uses as a whole, the website says.

The roadways also have the ability to treat stormwater. Currently, over half of the pollution in US waterways comes from stormwater, according to Solar Roadways. The company has created stormwater treatment and storage areas in the pipelines used for housing cable.

Earlier this month, the Energy Department announced plans to use crowdsourcing in an attempt to spur innovation in the US solar marketplace.