This is Big. Batteries Edging Out Gas Turbines on Price.

September 7, 2017

solarminnesota

A 60-acre solar farm in Camp Ripley, a National Guard base in Minnesota.

One reason mainstream predictions for the uptake of solar energy have been historically so wrong, is that they were always predicated on the high price of solar panels for the average business or homeowner.
What was missed was that solar didn’t have to be the cheapest source of energy at the beginning, all it had to do was start beating out the most expensive sources – which in the utility world, are the “peaking” units that produce power during the highest demand hours of the year. These units, which sometimes are run only a few days,  or a few hours a year, represent the highest cost part of the electric grid system.

About a decade ago, a milestone was crossed for solar energy when PV solar installations in California started beating gas turbine peaker plants on price.
Sounds wonky, but what it meant was that, now there was a clear, unsubsidized market rationale for increased deployment and production of solar panels in the largest US market – meaning economics of mass production could take over, and we would see a massive drop in the price of that tech. Which, now we have.

Similar dynamic now happening in battery storage technology.

MIT Technology Review:

When it comes to renewable energy, Minnesota isn’t typically a headline-grabber: in 2016 it got about 18 percent of its energy from wind, good enough to rank in the top 10 states. But it’s just 28th in terms of installed solar capacity, and its relatively small size means projects within its borders rarely garner the attention that giants like California and Texas routinely get.

A new report on the future of energy in the state should turn some heads (PDF). According to the University of Minnesota’s Energy Transition Lab, starting in 2019 and for the foreseeable future, the overall cost of building grid-scale storage there will be less than that of building natural-gas plants to meet future energy demand.

Minnesota currently gets about 21 percent of its energy from renewables. That’s not bad, but current plans also call for bringing an additional 1,800 megawatts of gas-fired “peaker” plants online by 2028 to meet growing demand. As the moniker suggests, these plants are meant to spin up quickly to meet daily peaks in energy demand—something renewables tend to be bad at because the wind doesn’t always blow and the sun doesn’t always shine.

Storing energy from renewables could solve that problem, but it’s traditionally been thought of as too expensive compared with other forms of energy.

The new report suggests otherwise. According to the analysis, bringing lithium-ion batteries online for grid storage would be a good way to stockpile energy for when it’s needed, and it would prove less costly than building and operating new natural-gas plants.

The finding comes at an interesting time. For one thing, the price of lithium-ion batteries continues to plummet, something that certainly has the auto industry’s attention. And grid-scale batteries, while still relatively rare, are popping up more and more these days. The Minnesota report, then, suggests that such projects may become increasingly common—and could be a powerful way to lower emissions without sending our power bills skyrocketing in the process.

Utility Dive:

Vestas began working toward combining wind power with energy storage since 2012 when it paired its 12 MW Lem Kaer wind farm in western Denmark with two lithium-ion batteries, one a 1.2 MW, 300 kWh system and the other a 400 kW, 100 kWh system.

The Danish company stepped up those efforts at its general meeting in April when it announced it wanted to focus on energy storage.

Vestas is now working with about 10 different companies to come up with an integrated wind turbine-plus-storage solution that would make wind power attractive for a wider array of use-cases by making the energy more dispatchable.

“Across a number of projects, Vestas is working with different energy storage technologies with specialized companies, including Tesla, to explore and test how wind turbines and energy storage can work together in sustainable energy solutions that can lower the cost of energy,” the company said in a statement to Bloomberg.

The partnership with Tesla is also likely to spur sales of batteries and improve economies of scale for manufacturers like Tesla. And it’s not the first time the electric car manufacturer is pairing its battery packs with wind. Earlier this year, wind developer Deepwater Wind announced it would pair a 144 MW offshore wind farm with a 40 MWh battery storage system from Tesla.

Vestas is the leader in wind turbine market share, according to Bloomberg New Energy Finance’s February rankings. A total of 8.7 GW of Vestas turbines were installed in 2016, representing 16% of all onshore installations, according to BNEF. General Electric took second place in the rankings with 6.5 GW of turbines installed.

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6 Responses to “This is Big. Batteries Edging Out Gas Turbines on Price.”

  1. Canman Says:

    Here’s a chart of Minnesota’s electricity generation for 2015:

    From the MIT Technology Review quote:

    When it comes to renewable energy, Minnesota isn’t typically a headline-grabber: in 2016 it got about 18 percent of its energy from wind, good enough to rank in the top 10 states. …

    Minnesota currently gets about 21 percent of its energy from renewables. …

    Those 18 and 21 percent figures are almost certainly for electricity and not energy. that’s pretty sloppy work for an MIT publication.


  2. Reblogged this on The Most Revolutionary Act and commented:
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    According to the University of Minnesota’s Energy Transition Lab, starting in 2019 and for the foreseeable future, the overall cost of building grid-scale storage will be less than that of building natural-gas plants to meet future energy demand.

    • wpNSAlito Says:

      Aye, this is a recurring feature of many efficient architectures: Put the fast, sexy, expensive storage in front of the slower, cheaper bulk storage.
      – RAM backed up with disk storage; fast RAM backed up by slow RAM
      – retail stores backed up by warehouses
      – liquid investments in front of long-term investments

      I’ve long been impatient with the fixation on Li+ “champagne” battery technology to the point of negligence of cheap heavy high-volume slab-mounted hot-pluggable modular batteries needed for off-peak energy production.

  3. Canman Says:

    Grid scale battery storage is still a daunting problem. From the Utility Dive quote:

    Vestas began working toward combining wind power with energy storage since 2012 when it paired its 12 MW Lem Kaer wind farm in western Denmark with two lithium-ion batteries, one a 1.2 MW, 300 kWh system and the other a 400 kW, 100 kWh system.

    1.2 MW, 300 kWh is 10% of the 12 MW wind farm’s capacity, while 400 kW, 100 kWh is less than 5%. Together they are less than 15% and only for 15 minutes!


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