Think of a product — chances are that Hawaii has to import it. From food and cars to electronics and building materials, there are few areas where the U.S. state is self-sufficient — and energy is no different.
Hawaii is in the middle of the Pacific Ocean and about 2,400 miles from California, its closest neighbouring U.S. state, so it clearly cannot link to a grid on the U.S. mainland. But it is still reliant on the mainland for the imported oil and petroleum from which it generates almost 90 percent of its energy.
Hawaii is now looking to change that. It has spent the last six years embracing renewable energy to reduce its reliance on imported fuels. Its efforts are an interesting case study on how nations are set to use energy storage to cope with fluctuating production from sources such as wind farms.
It also highlights some important reasons why investors in wind and solar should be interested in storage, particularly battery storage.
Here are four reasons why you should take this technology seriously:
1. Opening Remote Regions
The situation in Hawaii shows us the problems for islands if they develop renewable sources but can’t store the energy. Storage is now a vital part of the island’s ambitious attempts to go green.
In January 2008, the state of Hawaii and the U.S. Department of Energy launched the Hawaii Clean Energy Initiative so business leaders, policy makers and citizens could find a way for the island to become energy independent. This set a goal of 70 percent of energy from renewable sources by 2030.
The U.S. Department of Energy has reported 12.3 percent Hawaii’s energy in 2013 was from renewable sources, which puts it 20 out of the 50 US states. Solar and wind are its largest sources, but the fluctuating energy supply from both has been putting extra pressure on the grid. The Hawaii Electric Co. has said that this is causing a “severe emergency” for the island’s electricity grid.
Generous incentives for solar panels mean that 11 percent of Hawaii Electric’s customers now have them on their homes. The problem for Hawaii is that too much energy is being generated by solar in the middle of the day and this is loading more power than necessary onto some parts of the grid.
The result is that Hawaii Electric is now searching for energy storage projects up to 200 MW to help manage the solar and wind projects that are causing fluctuations for the grid. The utility is open to a range of proposals, from newer technology like batteries to more established hydro schemes. Bids in this tender round are due by 21 July, and the utility wants winning projects finished by 2017.
Other islands are set to make stronger demands for battery storage. For example, in Puerto Rico, the Puerto Rico Electric Power Authority (PREPA) released a set of minimum requirements for wind and solar projects that they must include energy storage equivalent to 30 percent of the project’s total capacity. This stand-by capacity will be called on to keep grid power constant.
Puerto Rico is seeking to add 600 MW of renewable power this year, which would take the total share of renewable energy in its energy mix from 1 percent at the end of 2013 to 6 percent at the end of 2014. That is a big change for the country’s grid, but energy storage is key to making the change happen.
2. Managing Load Capacity
It is not just islands that will embrace battery storage. Larger countries and regions will use similar technology in order to cope with fluctuating production from their renewables.
The best example of this is California, which is facing similar challenges as Hawaii as it seeks to gain 33 percent of its electricity from renewable sources by 2020. The state currently has 5.7 GW of solar power installed — the most in the U.S. In 2013, some $7.1 billion was invested in Californian solar, and this year NRG Energy, Google and BrightSource Energy opened the world’s largest solar farm, the $2.2 billion 400-MW Ivanpah Solar project.
The reason that discussion about battery storage currently revolves around solar power is for the simple reason that solar is more predictable than wind. Both solar and wind can face short-term drops in supply, if it gets cloudy or the wind stops blowing, but the peak production for solar is more predictable given that it is based around the movement of the sun. It is more difficult to predict the fluctuations in wind, although weather forecasting technology is improving and will help with this.
Even so, battery storage is just as important for wind farms as it is for solar farms.
It is one of the key types of technology required to help adapt the U.K. grid to cope with more wind farms. For the installation of more onshore and offshore wind farms by 2030, grid battery storage has already been identified as a vital change.
Investors need to be aware of battery storage because it is a fundamental driver in how the grid is set to develop over the next fifteen years. It can also help the industry answer the concerns of critics who argue that wind farms are of little use to established energy grids because their supply of energy is unreliable.
That should open up opportunities for wind development in countries currently cynical about wind.
3. Enables Better Management of Wind Energy Assets
Battery storage does not just benefit the grid. It can also help wind farm operators maximise the value of their asset by enabling them to store energy and supply it to the grid when the prices look most attractive; and enable them to make money selling energy that would otherwise be wasted.