In 2018, the Governor’s Office of Energy and the Public Utilities Commission of Nevada (PUCN) facilitated a study mandated by legislation for The Brattle Group to determine the cost-effectiveness and prospective need for a storage procurement mandate of energy in the state of Nevada.
In response to the results of the study, the PUCN accepted Brattle’s report in December 2018 that determined it was in the public interest to proceed with establishing biennial energy storage procurement targets. Consequently, the PUCN adopted Order No. 44671 in March 2020 that set energy storage procurement goals at 100 MW by December 31, 2020, with an increase to 1 GW by 2030. According to the Morgan Lewis Global Law Firm, Nevada is one of seven states to adopt an energy storage mandate.
“When people talk about energy storage on the grid today, they primarily mean grid-scale batteries that are basically power plant-sized batteries,” Roger Lueken, Senior Associate at The Brattle Group, said. “One aspect of the energy system to date is that electricity is difficult to store. But these batteries can charge and discharge power the same way a battery works in your phone or in your electric car, with the main purpose of these batteries being to help provide services to the power grid.”
The yellow dots on the interactive map below mark the locations of solar power generation facilities with battery storage capacity. Click on the dots for details.
To best understand the relationship between grid-scale batteries and energy storage, a key concept is something called ‘energy arbitrage.’
“The idea is to charge the battery when the price [of energy supply] is low and discharge the battery when the price [of energy demand] is high,” Lueken said. “If you can build a battery that can charge earlier in the day when the sun is out and then discharge [energy] during peak load hours in the evening, you can avoid the need to build other types of power plants, which is a big benefit in a place like Nevada that has growing loads and the need to build new types of supply to meet the peak load.”
According to Lueken, utilities have traditionally supported greater load demands, or consumption of electricity, by building additional power plants that harvest the energy from natural gas, oil, coal, nuclear and hydro-power plants. A greater number of power plants was always necessary due to the constant need for the power grid to be able to meet the demands of the highest potential load throughout the year at any given point in time.
As it relates to a greater shift toward renewable resources, particularly for the power grid, that’s where grid-scale batteries can have a significant role to play.
“There’s a lot of public policy reasons to build renewables because they don’t emit carbon dioxide, but a problem with those resources is they just generate power when the sun shines and when the wind blows, which might not be when you need that power,” Lueken said. “However, what batteries allow you to do is to integrate those resources by charging the battery when you have a more wind generation or more solar generation than you need and then discharging that power later whenever you need supply. So in essence, a combination of batteries and renewables can really displace the need for a lot of fossil fuel generation.”
Another benefit of grid-scale battery usage is what Lueken refers to as the ancillary services benefit, which is the relative ease with which power levels can be altered to balance and meet load demand.
“With the power system, you need the exact same amount of energy generation every minute so the load and supply can be balanced perfectly,” Lueken said. “Batteries can switch from charging power to injecting power into the grid very quickly to meet an exact balance of the grid’s supply and demand. Therefore, you can control the battery and the amount of energy it discharges very precisely and instantaneously.”
Meanwhile in the traditional power system, for example, a large coal power plant requires a greater amount of time to increase or decrease its energy output to adjust for load demand.
An additional asset for grid-scale battery usage is that they can be sized relatively flexibly to suit a variety of environments, like in a home or neighborhood. This is important considering all points in the western United States, except for the state of Texas which has its own grid, receives power from the Western Interconnect power grid. Consequently, if a power grid were to fail at any point in time, like what happened to Texas’s power grid system earlier this week, grid-scale batteries can provide support to consumers during the interim.
“Because you can put batteries at customer’s houses or in their neighborhoods, you can help them reduce [the effect of] outages,” Lueken said. “So if a customer had the power go out for an afternoon, you can have a battery in their house or their neighborhood that keeps that neighborhood online during the outage and that’s a big benefit of batteries that other power plants don’t have.”
Although there are many benefits to using grid-scale storage, the transition to primarily renewable energy and storage batteries is decades away in Nevada. A primary limiting factor is that the current demand for batteries is dominated by the electric vehicle industry. According to Lueken’s speculative estimates, roughly 90 percent of batteries being built are going to electric vehicles while only 10 percent are going into stationary grid-scale storage.
Therefore, as a shift toward a green energy future takes shape in the coming decades, grid-scale batteries will likely be integrated into the current power grid in a complementary capacity.
“The next decade is going to be a really exciting time for the energy industry because we’re really starting to see the economics of renewables and batteries since the costs have fallen so far,” Lueken said. “We’re starting to see a lot of policy activity to support these resources, while consumers demand renewable and clean energy and utilities adopt aggressive decarbonization goals.”
Scott King writes about science and the environment for the Sierra Nevada Ally. Support his work.
