Energy Storage Determined Prudent in Massachusetts
January 30, 2017
Energy storage is a crucial solution for our changing electricity grid and an intelligent answer to flexible management of commercial energy costs. One American state in particular – the commonwealth of Massachusetts - is planning to meets its energy reserve margin and peak demand and operating reserves by determining energy storage targets and mandating energy storage procurement by utilities. The result will be reduced electricity rates and lower greenhouse gas emissions.
In order to set “the appropriate target scale, structure and mechanisms,” DOER collected stakeholder input. Now energy players are patiently watching Massachusetts to see the final plan for energy storage integration unveiled this summer. One debated topic of discussion is whether 600 megawatts of energy storage is a feasible target, or if the commonwealth should strive for more.
Trend setting commonwealth
Massachusetts is looking to put together an energy storage procurement plan by July, 2017, with the aim to help reduce greenhouse gas emissions 25% by 2020. The mandate would become the second to be ratified in the United States. California, a leader in renewable and sustainable energy solutions, has already passed AB 2514, a famous energy storage target well known throughout the industry.
Now all energy industry eyes are currently on Massachusetts.
The proposed energy storage target of 600 MW would actually just be a drop in the bucket. The Department of Energy reported there are currently 193 gigawatts of functional energy storage worldwide, making 600MW rather small.
In fact, the Massachusetts Department of Energy Resources concluded that 1,766 MW of storage would maximize savings for ratepayers. However small, still prioritizing distributed energy storage over peaking plants, defers expensive gas plant construction and lowers commercial energy pricing.
"Storage is the key technology to help us to really use renewables when the sun isn't shining, when the wind isn't blowing," says Matthew Beaton, the state's secretary of energy and environmental affairs.
Also, important, too, is the battle being waged by utility providers. The Edison Electric Institute which represents investor-owned utilities, said that energy storage is a “game changing resource that has the potential to help the grid become more reliable, flexible, and resilient.”
Currently, the grid is vastly outdated and inefficient. Baseload power plants meet underutilized nighttime loads then during the day peaking plants come online to meet peak electricity demands. To see how inefficient this is, imagine the power grid as a multi-lane highway with enough lanes to meet the worst rush hour traffic of the year. Besides a huge waste of money, this demand management solution would result in an underused roads. Yet, this is how the grid is designed to operate today.
Sprawling upgrades are needed to bring electric grids into modernity. While at the same time, renewable energy is pushing nations forward into higher levels of peak energy consumption. These spikes in peak energy usage that happen when the sun is setting is causing many problems for grid operators. In the state of Hawaii, solar without energy storage wrecked havoc on the grid and California is having to deal with the infamous duck curve.
Currently, most grid systems are largely unfit to replace ALL fossil fuels with solar or wind power affordably. This is because the systems don't have enough storage capacity to make the transition to renewable energy a viable option. Fossil fuels are a form of energy storage. Any energy source such as sun or wind that replaces fossil fuels must contain the energy storage characteristic. "Storage is the key technology to help us to really use renewables when the sun isn't shining, when the wind isn't blowing," says Matthew Beaton, the state's secretary of energy and environmental affairs.
One of the main arguments utility providers have is that energy storage technologies are just fledgling opportunities, and production and manufacturing costs haven't yet settled to a point that would make their introduction on a mass-scale a conceivable business plan. This is not entirely true.
While there are certainly some new technologies, commercial-based energy storage options like ice storage are 10 times more affordable than grid-scale, utility-driven projects and have existed for over 3 decades. There is 1GW of thermal energy storage worldwide in 60 countries. As for batteries, the International Renewable Energy Agency recently reported that battery energy storage capacity will top 250 GW, or one-quarter of all current storage capacity, for the first time by 2030.
Implications of Massachusetts
As more storage projects are introduced, the prices of batteries may likely drop in tandem and therefore create a larger market share. As for thermal energy storage, some customers in Massachusetts are already taking advantage of its low cost and of the nearly 80% less expensive night-time electricity.
Take the thermal energy storage system that stores ice at the Moakley Federal Courthouse in Boston. According to NPR, a farm of frozen batteries is charged at night when energy is cheap and discharged when demand on the grid is high. The system is saving the courthouse a million and a half a year.
Adoption of Energy Storage
Under the energy storage procurement mandate, more commercial energy users will stand to gain as much as 15% on power bills by reducing peak demand.
On a societal level, energy storage will improve resiliency, balance out renewable resources and reduce greenhouse gas emissions. The Conservation Law Foundation states "that deploying 1,766 MW of energy storage by 2020 would reduce greenhouse gases by at least 1.06 million metric tons of carbon dioxide equivalent (MMtCO2e) over a ten-year period".
Ultimately, the decision Massachusetts makes will cause a ripple effect, incentivizing increased adoption of energy storage in the state and proving as yet another example for other governments - truly win-win-win for all: people, the planet and profit.
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