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Transmission and Energy Storage 2014 Outlook: The Macro and Micro Transformation of Electric Grids

The transmission industry enters 2014 with a lot of work ahead as it continues to recreate the grid and make it more renewable energy-ready.

On the macro level, transmission lines are being developed worldwide to move green power long distances from remote regions to power-hungry population centers. On the more micro level, new energy storage systems are helping grid operators fine-tune their management of wind and solar variability. Energy storage is a natural partner to renewable energy since it evens the peaks and valleys created by wind and solar production on the grid.

The rise of energy storage comes with an accompanying focus on microgrids, self-contained entities that can island from the main grid during power outages or can feed the grid special services when connected. Energy storage often is a key element of a microgrid, along with solar energy or combined heat and power.

Cleantech Group reports growing investment in energy storage in recent months. By early December, investments for fourth quarter 2013 had already exceeded all of third quarter with 15 venture stage financing rounds. The types of storage technologies raising money varied widely from batteries to nano technologies to solar thermal storage, according to Cleantech Group.

“The door is open; storage is now welcome,” said Chris Shelton, President, AES Energy Storage, which has 174 MW of utility-scale storage projects operating in Chile and the United States.

The 64-MW Laurel Mountain Wind Farm in West Virginia includes battery storage supplied by AES Energy Storage. Credit: AES Energy Storage.

Storage takes several forms: batteries, thermal, pumped storage, ocean wave, fly wheel, compressed air, fuel cell. Batteries continue to drop in price and rise in use. Navigant Research foresees the grid-scale battery energy storage market reaching $7.6 billion in 2017 and $29.8 billion by 2022.

The Marriage of Solar and Storage

The renewables industry for years has discussed the value of pairing solar and energy storage. As we enter 2014, more and more of these projects are coming online. Lux Research estimates this market will grow to $2.8 billion from 2013 to 2018. Japan will lead the way with 381 MW of storage paired with solar, Lux says, as it grapples with high electricity prices and nuclear power concerns.

In Europe, Germany will follow developing about 94 MW of solar-linked storage during the same period, says Lux. The U.S. comes third in the Lux forecast, with about 75 MW.

As governments lend increasing support, the solar/storage market could expand even more rapidly. Lux noted that Germany is offering $67 million in subsidies for solar-tied energy storage, and the U.S. Senate introduced a program to fund $7.5 billion in new storage projects.

In the U.S., a lot of the storage activity is expected to occur in California, where the Public Utilities Commission set a goal to achieve 1.3 GW by 2020. 

More and more storage projects are being announced elsewhere in the U.S., as well, particularly as microgrids emerge. 

Connecticut, for example, awarded $18 million in 2013 to nine microgrid projects, many which encompass battery storage, fuel cells, solar or combined heat and power. The state plans to offer an additional $15 million in 2014 for microgrid projects selected in a competitive bidding process.

The contribution of each energy storage technology to the overall operational capability in the U.S. is shown in Figure 1. Credit: U.S. Department of Energy.

Driving Down Costs with Storage

The coming year also is likely to accelerate use of solar and storage to support the larger grid and manage consumer costs.  Standard Solar and Solar Grid Storage offer an example with their 402-kW plant in Maryland. The solar/storage system not only serves Konterra’s corporate headquarters, but also sells services into the PJM Interconnection.

Solar City is using storage to drive down the demand charges businesses pay. The company is making this move using Tesla battery technology. The system works by regulating the amount of energy the business buys from the grid during peak periods. It differs from demand response in that the business does not have to curtail its energy use, but instead uses the solar/storage system to offset need for grid power. The system is being rolled out in California, Massachusetts and Connecticut.

Meanwhile, in China, wind and solar farms have been built, but remain unconnected to the grid because of concerns about the impact of their variability to the larger transmission system. The government is looking to storage as a way to solve this problem. To that end, Canadian battery manufacturer Corvus Energy is working on a 10 MWh grid-tied energy storage project in Dunhuang, Gansu Province, China.

China’s Transmission Growth

China also is undertaking a dramatic build out of new transmission lines because its generation sources are so widely spread around the country, according to equipment supplier Alstom. China has coal deposits in the north, great wind potential in the far west and nuclear plants on the coast.

State Grid Corporation of China and China Southern Power Grid is investing in ultra-high voltage lines, and by 2015 that investment will reach $75.5 billion, according to Alstom.

“It will function as the backbone of the whole system, connected to 400 GW of clean energy sources, of which hydropower will account for 78 GW, and wind power from the North a further significant portion. Wind capacity by 2020 is planned to be 100 GW,” said Patrick Plas, senior vice president for grid power electronics and automation at Alstom Grid.

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Meanwhile, in Western Europe, transmission expansion is driven largely by aggressive European Union renewable energy targets for 2020, according to Plas. Germany is looking at grid improvements to correct growing difficulties on existing north-to-south lines transmitting wind power.  The German government has okayed a proposal to build 1,740 miles of high voltage new lines (AC and DC), and upgrade 932 miles of existing grid, he said.

“Plans for a 1,400 MW HVDC link to benefit from Norway’s hydro potential are a promising answer to help Germany meet its renewable energy objectives,” Plas added.

France also is investing in transmission to accommodate renewables and improve security of supply, he said.  The grid operator RTE plans to invest EUR 15 billion on the nation’s grid by 2020 and an additional EUR 20 billion by 2030.

The North Sea Grid, one of the largest green transmission projects underway, would link 100 GW of offshore wind for Germany, Denmark, Norway, Sweden, Belgium, France, Netherlands, Luxembourg and the United Kingdom. The project is expected to begin operating in 2023.

Table 1 describes some of the country-specific highlights of international grid storage. Credit: U.S. Department of Energy.

Reaching Populations

Several major transmission projects are underway in the U.S. to move renewables from remote places to heavily populated regions.

In the Northeast, Transmission Developers Inc. plans to begin construction in 2014 on a 1000-MW DC line to move hydropower 333 miles from Canada to New York City. A second project to move hydro from Canada to the U.S. Northeast remains mired in controversy.  Northern Pass, being planned by Northeast Utilities, would bring 1,200 MW from Hydro-Quebec into demand-heavy southern New England. However, the line would pass through New Hampshire, where it faces vocal opposition from property owners.

Offshore transmission projects also are in planning, particularly along the U.S. eastern seaboard, for yet-to-be built offshore wind farms.  A partnership that includes Internet giant Google continues to move forward with plans to develop an offshore super grid, a 300-mile DC line from Virginia to New Jersey.

Because of large additions of wind power, particularly in the West and Midwest, the North American Electric Reliability Corporation is taking a careful look at transmission and wind integration issues. Technical and policy issues have led at times to wind curtailment, especially when transmission systems are undergoing maintenance. These curtailments are likely to continue until the U.S. expands its transmission network, according to NERC. The organization is studying wind integration with the grid operator in California, a state that expects to add 11,000 MW of variable resources over the next eight years.

In all, the Edison Electric Institute has identified 150 transmission projects valued at $51.1 billion that are planned for the U.S. by 2023.  Most of the projects – about 76 percent – support the integration of renewables, EEI says. The utility organization expects transmission investment in 2014-15 to remain significantly ahead of where it was in 2011.  But it has ratcheted down its long-term forecast because of falling electricity demand in the U.S.

So what’s the big picture for 2014?  New inroads for energy storage and continued expansion for transmission systems, as green power supply reshapes how, where and when we move electrons on the grid.

This article is part of our Renewable Energy World January/February Annual Outlook Issue for 2014, which will be published on February 10, 2014. The issue includes our Global Directory of Suppliers.  If you are not already a subscriber, why not subscribe now?

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