Energy storage: the notion is simple, the implementation is complicated. Various technologies work, but their value is highly application- and location-specific. We've illuminated several angles to how energy storage is applied and evaluated for cost effectiveness. But expert readers with direct utility experience offered their insights on the complexities, too. We offer their remarks in this column.
We have illuminated numerous angles on the subject of energy storage over the past two weeks. Our astute readers added several thought-provoking angles to the discussion that in themselves are worthy of attention. Expert reader input ranged from the big-picture economics of storage alternatives to life-cycle environmental impacts to project-specific evaluations of cost effectiveness.
"Energy Storage Research Just Published ," discussed a new EPRI report that suggested that "energy storage" is a meaningless term because it's all about the application and location-specific needs first. Then a utility can assess the business value of applying a storage medium or process, compare competing technologies (traditional and nascent) and determine the most cost-effective alternative. This approach makes generalizations difficult.
One reader provided a bracing (to borrow a phrase) "it's the economics, stupid."
"There's no question storage will work and many of the options outlined in the EPRI report will work just fine," one reader, focused on the California market, wrote. "The issues are cost and value.
"For vertically integrated utilities operating in a stand-alone mode, value is likely determined by the long-run cost of alternatives that are avoided if storage is installed," this reader suggested. "Those estimates are uncertain, they rely on a number of critical assumptions and they typically assume storage will displace some other peaking plant.
"However for utilities and others who operate in regional wholesale markets, the important but missing factor is that value is determined largely based on the price of capacity, energy, frequency regulation and contingency reserves that can be sold from a storage project. When regulators step in to guarantee reliability or minimize the cost of capacity by mandating new build, their actions have the effect of artificially depressing prices for these grid level services, which makes storage look less cost effective."
Another correspondent illuminated the cradle-to-grave environmental impacts of storage options.
"You have not touched on the potential lifecycle environmental impact of storage," this reader wrote. "All energy solutions, including storage solutions, have an environmental footprint and some are more significant than others. Pumped hydro requires that land be set aside for holding the water that is used in that technology. Batteries have significant environmental impacts both in their manufacturing and their eventual disposal. That is not to say that these technologies do not have a net positive environmental impact, but it is important that the entire lifecycle impacts of each technology be evaluated and compared."
In one specific case in Iowa, discussed in "The Business Case for Compressed Air ," one reader dialed in on the CAES (compressed air energy storage) project's goal of providing energy for the "intermediate use cycle"—that is, to meet load between baseline and peak from 6 a.m. to 6 p.m.
"I'm glad to see that [the Iowa Stored Energy Plant Agency is] planning an intermediate use cycle, because (mysteriously) some CAES analyses put it in the peaking column, which would seem to be a waste of generating capacity and high efficiency," our correspondent wrote. "Being recognized for its intermediate generation capabilities means that [CAES] is competing against a combined cycle rather than simple-cycle combustion turbines, which is more fair, given the much higher cost of combined cycle than simple-cycle CTs."
Finally, in "Four Ways to Think About Energy Storage ," we listened in on the testimony of four leading California utilities before the California Energy Commission that agreed on two major themes: it's all about the application and mandates or set-asides for storage technologies lead to ill-considered investments and higher end-user costs. Our readers applauded.
"PG&E has it right!" one reader exulted. "First a utility should 'identify the need' in the form of a written problem statement. Potential solutions can then be evaluated based upon how well they solve the problem. A benefit-to-cost ratio for each solution that solves the problem can then be calculated."
Because the practical approach to "energy storage" (and discussions of the options) is highly application- and site-specific, we'll be bringing you details on more actual projects in the near future.
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