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There always seems to be something to hype in the energy industry. This time it’s energy storage. Having been actively engaged in the industry for many years (no, I’m not giving away my age), I have learned to be suspicious of hype.
Remember IGCC, LNG import, clean coal, the hydrogen economy, gas to liquids, and biomass gas, as a few examples from the last two decades?
Reputable sources are forecasting the installation of hundreds of gigawatts of electrical energy storage systems over the next few years. A study presented by McKinsey predicts the installation of 200 GW by 2025 and over 1,000 GW by 2040.
That’s a lot of batteries! This is all based on the need to provide flexible capacity for intermittently available alternative energy electricity, primarily solar photovoltaics and wind turbines.
Most everyone by now has heard about the California duck curve, a graphic representation of the mismatch of electric supply versus demand in a state that has a large installed base of renewables. To address this mismatch, large storage systems are being proposed to temporarily hold any oversupply of energy and release this electricity at times of demand. It’s a good idea, but public discussion is ignoring conventional energy storage that’s proven, efficient, flexible, and has been around for over half a century.
Basic economics are being overlooked in forecasts for storage demand. Power from renewable sources remains more expensive than power from gas turbine combined cycle plants on a basis of dollar per kilowatt-hour produced (not on a misleading metric like kilowatts installed).
Once one adds the cost of storage to this, including the round-trip efficiencies of storage systems, electricity from alternative energy sources becomes rather expensive. Several recent studies showed that giving away the surplus electricity or even paying a “tipping fee” for it when there is too much available is still cheaper than storing it due to the expense of storage systems.
There are several small- to large-scale storage technologies available including many different types of batteries (some of which have been commercially available for many years), compressed air energy storage, pumped heat electric storage, thermal storage, hydrogen fuel cells in conjunction with electrolytic hydrogen generation, pumped hydro storage, and flywheels.
These range from several thousand to several hundred dollars per kilowatt-hour installed, and with round-trip efficiencies from below 40% to near 90%. Each has advantages and disadvantages. They are applicable to some, but not all grid storage applications.
Nonetheless, they all add cost: Dollars per kilowatt-hour of electricity stored. Although this cost has gone down over the years, it is currently still well over $200 per kilowatt-hour in capital costs. This number can be integrated into basic levelized cost of electricity calculations and usually adds somewhere between 3 to 11 cents per kilowatt-hour to the electric bill.
One should remember that in most states the average electricity cost to produce electric power (not the consumer price) is somewhere between 3 to 4 cents per kilowatt-hour. Therefore, storage costs will more than double the cost of providing electricity.
As well as looking into newer and more expensive storage technologies, we need to take advantage of an existing commercial energy storage technology that is currently available and has most of the necessary infrastructure already built.
It’s called the natural gas pipeline system and associated storage facilities. The U.S. alone has over 300,000 miles of interstate and intrastate pipelines. Hydrocarbons such as natural gas “store” energy and can make it available when needed in thermal power plants through the combustion process.
There is a huge amount of capacity in the pipeline system that is flexible. Any system deficits can be compensated by fresh gas from thousands of natural gas wells.
But it is not just the cost of storage facilities but also the cost of additional grid or pipeline capacity that must be considered and compared. A study published by the Northwest Gas Association showed that both the installed cost and the energy cost delivered on an equivalent dollar per kilowatt-hour is approximately 60% lower for a natural gas pipeline than an electric transmission line.
Consequently, most of the time it is cheaper to place a natural gas storage facility locally or at a strategic energy demand intersection than placing electric energy storage onto the grid.
The U.S. alone already has about 370 active natural gas storage facilities with a design capacity of over 4,600 billion cubic feet of gas. This infrastructure is often not fully used. Before new large-scale electric storage is implemented, these facilities could provide flexible energy capacity upon demand.
Energy storage is certainly important for the future. But a lot of the dynamic imbalance in the electric supply system created by wind and solar can be addressed by natural gas power plants, the pipeline system, and natural gas storage capacity.
This can be done at a much lower cost than adding hundreds of gigawatts of electric storage systems. Yes, we will see electric storage added to our energy system. But the current hype about batteries is unrealistic.