Published on July 4th, 2016 | by James Ayre14
Study: Even At Current Prices, Energy Storage Makes Economic Sense For Many Renewables Projects
July 4th, 2016 by James Ayre
Even at current market prices, various different energy storage options make economic sense for renewable energy projects in some locations, according to new research from MIT.
The energy storage options profiled by the study included: battery systems, pumped hydroelectric storage, and compressed air energy storage, amongst others. While these options are economically a good choice in some locations, in other locations, they are not.
The study also found that “regardless of the particular circumstances at a given location, certain features of how electricity prices fluctuate are common across locations and do favor some specific types of storage solutions over others.”
“Researchers and practitioners have struggled to compare the costs of different storage technologies,” stated Jessika Trancik, the Atlantic Richfield Career Development Assistant Professor of Energy Studies at MIT. “Because of the multiple dimensions of cost and the fact that no technology dominates along all dimensions. Storage technologies can only be compared by looking at the contexts in which they are going to be used.”
The study examined the current situation in 3 different states — California, Texas, and Massachusetts. The findings indicate that, while energy storage systems often make sense in Texas and California today, they typically don’t in Massachusetts. The researchers involved are planning to continue the work, examining other states as well.
The press release notes pumped hydro’s particular usefulness in Texas. “In these systems, excess power is used to pump water uphill to a reservoir for storage, and then the water is released through a turbine to generate power when it is needed. The increased revenue the plant can produce, by waiting to sell the power into the grid until spot-prices for electricity — the constantly-changing market rate that electricity distributors pay to producers — are at their peak, would exceed the costs of the added storage system.”
Continuing: “Further, they found that such pumped hydro storage provides more value than a storage system using lead-acid batteries even though its power capacity components would cost several times more. This is because a pumped hydro system has lower energy-capacity costs than lead-acid battery system. (Energy capacity refers to the overall amount of energy that can be stored in the system, and power capacity refers to how much energy can be delivered at a given moment from that system). A compressed air storage system could also add value comparable to that of the pumped hydro system. However, batteries are attractive, the researchers note, because they can be installed essentially anywhere and do not rely on natural features that exist only in some locations.”
As noted by the researchers, while most recent work on energy storage systems being used in conjunction with renewables has focused on the smoothing out of intermittency, what matters most to investors is likely to be the price curve as opposed to the demand curve.
The researchers also made note of the fact that, while the opportunity for adding storage capacity is there now, it may not last — owing to the fact that if the price of renewables falls faster than that of energy storage, then it’ll often simply be cheaper to add more production capacity (rather than storage capacity). That has been the focus of many a discussion here on CleanTechnica.