Contributed by Graham Ault, co-founder and executive vice president of Smarter Grid Solutions
From the outside, they may just look like a cross between a shipping container and a giant refrigerator. But don’t let their regular everyday appearance fool you because, beneath their unremarkable shells, grid-scale battery energy storage offers one of the smartest ways to solve America’s green energy conundrum.
How to provide clean power to the grid when the sun isn’t shining or the wind isn’t blowing has been one of the most urgent questions for the renewable energy industry in recent years. Now, battery energy storage systems (BESS) offer power companies and renewable energy developers the chance to overcome that intermittency by storing the electricity generated by solar panels, wind turbines, and other green power devices until it’s needed. BESS can resolve other grid and market problems too – addressing spikes in grid prices, regulate frequency and voltage, contribute to overall adequacy of resources to meet load demand in advance, and more. This creates a range of additional value streams for developers and the overall system too.
Last autumn, President Joe Biden’s Inflation Reduction Act made standalone BESS eligible for Investment Tax Credits (ITCs). Previously, ITCs were only available for BESS that were connected to solar farms. So, there are currently plenty of financial and technical reasons to invest in energy storage.
Those new financial incentives are already starting to transform the market, with developers adding standalone grid-scale battery sites to their pipelines, as well as coupling more BESS to their solar farm projects. Yet, while delays in sourcing materials and components due to global supply chain issues are holding back some developments, there’s a bigger risk that a lack of grid connections could slam the brakes on the rollout of grid-scale batteries.
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Grid connections hold the key to unlocking battery storage
Figures released by Standard & Poor’s (S&P) Global showed that some 710 MW of battery storage capacity was added to the United States’ electricity grids during the first three months of 2023, taking the total to 10.777 GW, marking a 52% year-on-year increase. However, those figures could have been even higher.
According to S&P Global’s data, projects with a combined capacity of 2.448 GW were pushed back from the first quarter into the second quarter. Around the world, battery storage project delays are being blamed not only on supply chain issues but also on a lack of cost-effective or timely grid connections.
Those connection issues are particularly acute in Texas. The Lone Star state is racing to connect more storage capacity to its grid following the blackouts caused by Winter Storm Uri and its destructive siblings during February 2021. Moreover, Texas is also trying to harness further wind and solar resources in the more rural western reaches of the state and send electricity back east to its major population centers. Batteries are set to exploit the pricing trends and value-adding services of the unique wholesale energy market in Texas.
But grid connections for batteries are at a premium, especially as more and more developers want to connect wind and solar farms to the network. Developers experience the high cost and long delay (or non-existent) grid connection directly but utilities and system operators also face tough challenges to accommodate battery resources that themselves provide solutions to a range of grid problems.
While BESS can flex to solve problems, grid operators need to respect physical limits of the grid and fairness across its rate-paying users. Solutions to technical limits (e.g. voltage control, thermal limits of lines, communications, and control) can be existing grid assets in the form of circuits and substations but it is often the permitting and the allocation of costs and benefits of those solutions among the different users of the grid and the source of the problem that creates the major delays. To minimize the number of those expensive upgrades to the grid’s physical infrastructure, distribution system operators are turning instead to powerful software to help manage their grids.
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Getting smart about harnessing grid capacity
When electricity grids were created, they were designed to carry energy from coal and hydro then nuclear and later gas-fired power stations at the center of the network to the homes and businesses that needed it on the edges of the network. The advent of renewable energy devices is turning that model on its head.
Wind farms, solar farms, some hydroelectric schemes and other clean power generators need to be located where their renewable energy sources are greatest – and those tend to be at the periphery of our current electricity grids. BESS is the latest in a long line of examples of these distributed energy resources (DER), with power being generated or stored throughout the grid, rather than in neat, centralized locations.
DER management systems (DERMS) offer grid operators an opportunity to control when power is being pumped into or taken out from their networks, allowing them to balance supply and demand. If agreement can be reached on when the BESS will operate in its different modes then the worst of the grid technical problems can be alleviated. This requires a forecast of system loading, generation production, and market needs and then a means in the software of calculating the required operating schedules for BESS. Those schedules can be implemented and monitored using existing cloud, control, and communications infrastructure by the DER owner and the grid utility. Coupling BESS with DERMS also creates opportunities to avoid curtailment, when wind turbines, solar farms, and other generators are ‘told’ to stop producing power because the demand from the grid isn’t high enough or the power lines are already at full capacity.
Instead of curtailment, grid-scale batteries give generators the chance to continue producing power and store it until the grid signals that demand has risen or other supplies have fallen. In this way, tackling intermittency can produce benefits all around. Additionally, energy storage can help balance the whole system, tap new revenue streams for grid and market services and cut costs and enhance service to host customers and communities.
EV rollout creates more storage opportunities
Using DERMS to harness BESS will become even more important as the adoption of electric vehicles (EVs) accelerates. As more and more consumers and fleet managers choose automobiles running on electricity, they are – in effect – driving around with portable batteries.
If fleet managers use DERMS to control their charging regimes during quiet periods then they have a chance to adjust charging load or even sell some electricity back to the grid when it’s not needed for transportation. That combination of EVs and DERMS can help companies to go green while staying in the black. The potential for managing fleets of EV batteries is broadly the same as for grid-scale BESS but the user goals and constraints and the technical means of managing EV charging load are different and involve different actors. The future pathway for DERMS includes managing large-scale and EV energy storage and implementing the functions to manage storage for big battery developers, EV and charging infrastructure developers and for grid utilities and system operators alike.
The Energy Information Administration (EIA) estimates that the U.S.’s total battery storage capacity could increase by 9.4GW this year, more than doubling from its base of 8.8GW at the start of the year. Some 71% of that additional capacity is expected to come from the renewable energy powerhouses of California and Texas.
In order to accommodate that increase in BESS capacity, grid operators need to get the most from their existing networks before embarking on expensive infrastructure upgrades. DERMS gives distribution system operators (DSO) the opportunity to make sure grid constraints don’t put the brakes on grid-scale batteries at the moment when we all need their rollout to accelerate to tackle the climate emergency.
