A Look at Storage for Renewables
Some think storage is needed for wind energy. New studies show it may have a growing role in the power system, but not specifically for enabling more renewable energy.
We'll need to add storage to the grid for all that wind energy, right? We get this question all the time. Wind and solar power do vary with the weather, and weather forecasts do have uncertainty. So, it seems logical to think that large batteries or other energy storage systems would be ideal for converting this 'variable and uncertain" power into nice, smooth power at the time we most need it.
This concept is both intuitive and logical; however, the business case behind building new storage is far more complex. The economics of energy storage must compete with the costs of providing equivalent services with conventional generation. In addition, the value of these services depends on how they are applied: fast frequency regulation over just seconds or minutes (a timeframe where wind energy has only a modest impact to the system) as compared to load following or arbitrage over hours.
To understand this better, think like a power system operator. As a system operator, your job is to keep the generation and demand for electricity in balance. If you are short of power, you must increase the generation or reduce the load (i.e., the demand). If you have excess power, you must reduce the generation or increase the load.
Storage acts as load when charging and generation when discharging, but it isn't free. You must buy the power to charge the storage system, and you always get somewhat less power back out when you discharge. You need to "buy cheap" and sell at a premium to make this profitable, and you need to do this with enough volume to pay for the costs of building, financing and operating the storage system.
The power system operator also has other options for balancing the system as part of normal operation. Many generators can adjust their generation up or down, and they are instructed to do so all the time. Increasingly, load can also be paid to reduce usage with demand response, load management and emerging "smart grid" programs. Large power systems can absorb variability and uncertainty at modest cost...that 's what they are designed to do!
For fast regulation services, which demand a premium price and vary frequently, some storage technologies may find cost-effective application. Storage technologies must still compete with conventional generation that can also provide these regulation services, but emerging storage technologies (flywheel, battery, capacitor, etc.) may become economically attractive on some power systems for providing the services.
Can storage be used for smoothing and shifting renewable energy to peak load hours? While the prospect of smoothing or shifting renewable energy from off-peak to peak periods sounds attractive, it is difficult to justify new storage for this purpose. The latest integration studies, now looking at how we would operate our grid with up to 35% of our energy from wind and solar power, continue to show that adding storage is not needed. In fact, a forthcoming study from GE shows that storage costs would need to fall by more than an order of magnitude to make new storage economically attractive.
The studies also continue to show that wind forecasting helps the operators of the bulk power system accommodate substantial wind and solar energy. A forecast allows power system operators to do a better job of planning for the next day and efficiently adjusting the balance of generation and load for the next hours. And even though a wind forecast is not perfect, studies like GE's new Western Wind and Solar Integration Study for the Department of Energy will show that a currently available "state of the art" day-ahead wind power forecast already provides 90% of the benefits we would see with a perfect forecast for the next-day planning activity.
OK, but can't storage systems exploit wind forecasting errors and make money on the spot market? Forecasts do have errors, and conventional wisdom would say that these errors would contribute to periods of excess generation (lower prices for power on the spot market) and under generation (higher prices). If storage system operators can predict when these wind forecasting errors will occur, and therefore buy low and sell high, they should be able to make lots of money. Right?
Yes, but in general, knowing the forecast error also means that it can be corrected, thereby making the forecast better. If a storage system operator's forecast of the spot market prices is better than what others know (including the power system operator), there are certainly ways to profit, but the new study also shows that even perfect knowledge of when prices will spike and drop is not sufficient to justify building new storage systems.
Moving forward with renewables. Reasonable adjustments to power system operations, coupled with prudent investments in transmission and the ongoing evolution of our overall power system, can support large amounts of wind and solar energy and deliver reliable, clean and reasonably priced electricity. If storage can continue to improve in cost and performance, it will eventually play a growing role on its own merits, but storage is not needed specifically for renewable energy.
For more information on how the smart grid is integrating wind power, have a look at this recent, front page article in Renew Grid magazine, featuring comments from WindLogics. To learn how the WindLogics Forecasting and Data Center works with system operators to plan for the next day and the next hours, please contact Grant Brohm, WindLogics Business Development Director.
WindLogics Participates in NERC 's Variable Generation Power Forecasting Team
Mark Ahlstrom, WindLogics CEO, is currently the team leader for a report on "Variable Generation Power Forecasting " for NERC (the North American Electric Reliability Corporation). Chartered with presenting recommendations to the NERC Operating Committee in March, the team has prepared a draft report currently under review.
Team members include representatives of many operating regions (SPP, ERCOT, MISO, PJM, BPA, Hawaii, ISO New England, Ontario IESO, California ISO, WECC and others), utilities (Xcel, FPL) and government laboratories (National Renewable Energy Laboratory and Pacific Northwest National Laboratory).
This work is part of the second phase of NERC's "Integrating Variable Generation Task Force" (IVGTF) activity that produced a major report last year. The new phases are consolidating best forecasting practices and lessons learned from across the industry. This work will help NERC move toward appropriate operating recommendations and rules in the future.
"While each power system has some unique issues, we found strong and constructive consensus in our analysis and recommendations," said Mark. "Working toward best practices benefits both the developers of wind and solar projects and the power system operators."
Established in 1968, the North American Electric Reliability Corporation is responsible for establishing and enforcing Reliability Standards to maintain and improve North America's bulk power system. Look for more information on IVGTF efforts in future News from WindLogics communications.
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