US battery storage triples

 From ClimateCrocks

The challenges of the Texas grid were on display in February when a winter storm led to the loss of almost half of ERCOT’s generation, leaving millions without power for days. In May, the North American Electric Reliability Corp. (NERC) warned that Texas faces an “elevated risk” of energy emergencies this summer due to high heat or potential long periods of low wind production. Although ERCOT itself said that it expects to have sufficient generation to meet peak loads, it did outline three “extreme” scenarios that could lead to blackouts, including extended hot weather that spikes demand, thermal generator outages or a shortage in generation from wind and solar.

“One of the pretty clear lessons learned from Texas’ power challenges this year is that renewable power is outperforming other forms of generation when the grid is under stress,” said Gregory Wetstone, president and CEO of the American Council on Renewable Energy. 

According to S&P, there are nearly a dozen storage projects ranging from 50 MW to larger than 200 MW scheduled to start up this summer, headlined by the 203 MW Crossett Power Battery Storage system in Crane County. ERCOT expects that battery storage on the system could rise from 225 MW at the end of 2020 to 1,771 MW at the end of 2021 and 3,008 MW in 2022. Developers have announced large-scale projects expected to come online in 2022, like a pair of 100 MW battery storage facilities announced by Wärtsilä Energy a month after the February cold snap. 

North Carolina-based FlexGen is one of the largest storage installers in the state, claiming to be responsible for more than three-quarters of the storage there by megawatts. Yann Brandt, FlexGen Chief Financial Officer, said ERCOT’s market is attractive for developers looking to engage in energy arbitrage, but value of storage as an ancillary resource has risen as Texas faces more extreme weather events. 

“It’s a unique situation where you’re able to maximize revenue when the market needs it because you’re providing a valuable service,” Brandt said. “I hope grid operators and planners start viewing energy storage as part of the planning process and not try to plug it into a generation-first power market.”

If the plans of developers and utilities pan out, total installed utility-scale energy storage capacity in the U.S., not including conventional pumped hydroelectric storage, could jump roughly 185%, to 5,582 MW, through August from a year prior, according to S&P Global Market Intelligence data.

This summer’s storage surge, consisting mostly of four-hour lithium-ion battery systems designed to discharge during critical periods of peak demand, is centered in California and Texas, the country’s two largest states by population and economic output, respectively.

Along with market reforms, improved planning and energy conservation, these large storage systems could help both states, which have arguably the nation’s most fragile electric systems, ride through the summer turbulence with few of the sorts of widespread outages that have plagued them in the past 12 months. 

California, which in recent years has struggled with blackouts related to wildfires, in August 2020 experienced two rounds of rotating outages amid a regional heatwave. Now the California ISO, the state’s primary transmission grid operator, is battling with other southwestern states also thin on reserves over access to resources needed to keep the lights on this summer.

Texas, meanwhile, saw its primary power grid, managed by the Electric Reliability Council Of Texas Inc., severely buckle under the weight of a rare Arctic blast in February, leaving millions of residents without electricity for days. The state could be in for another rocky ride this summer, the North American Electric Reliability Corp. said in its summer 2021 assessment.

California could have more than 2,800 MW of largely four-hour lithium-ion battery storage at its disposal before September, nearly five times as much as a year before, while Texas could have about 1,400 MW, roughly eight times more, S&P Global data show. Combined, the two states account for three-quarters of the total installed nonhydro energy storage resources slated to come online by the end of August.

That profit-seeking utilities are installing battery storage on this scale suggests that the price of large-scale batteries has fallen enough that they are now cost-effective, if one includes the arbitrage opportunities.