The frontier of battery storage and microgrids in our electrical grid
by Allen Best
Cost-effective energy storage by batteries or other devices has been described as the holy grail of the transition to renewables. On Tuesday evening in Denver, a company manager explained why.
Mat Elmore, managing director of Micogrid Energy, a solar firm, explained that utility-scale solar projects can deliver power at 2.9 cents per kilowatt hour. That’s well below the cost of electricity generated from coal-fired power plants or natural gas-burning power plants. There’s just one difference: the fossil fuels can be burned at night and when it’s cloudy.
“Once you get storage on line things begin to change,” he said at the forum sponsored by the Alliance for Sustainable Colorado.
In his remarks at the forum about grid stability and resilience in Colorado, Elmore predicted a relatively rapid development of energy storage. “Battery storage and energy storage as a whole is where PV (photovoltaic solar) was eight years ago. Very expensive,” he said.
“A lot of the people didn’t see the solar trend coming. When I was selling solar, it was five times more expensive than it is today.”
In a March 2016 report, GreenTech Media predicted a 60 percent growth in energy storage from 2016 to 2020. But Elmore cautioned that figuring out where storage makes sense involves many factors. He drew attention to a chart prepared by the Rocky Mountain Institute.
“For customers, it doesn’t make sense in the vast majority of cases to invest in storage yet,” he said. “It’s exciting, but it’s also kind of bewildering, because you have to think of all these things,” he added.
Utilities tend to be cautious, some say to the extreme. “As engineers, we’re risk averse,” noted Steve Johnson, of the Western Area Power Authority, which delivers power to utilities from dams on the Colorado River. “And we have a bunch of risk-averse regulators who don’t want something like this on their resume,” he said, referring to a system breakdown.
Xcel Energy is starting out small with two projects in Denver. The company, working in a partnership with Panasonic and the City of Denver, will be focusing on improving the interoperability of renewables with the electrical grid at a new campus along the commuter-rail to DIA. Battery storage is part of that microgrid.
The Panasonic microgrid will include a 1.3-megawatt alternating current canopy solar installation and a 1 megawatt-2 megawatt hour lithium battery storage system. As explained by Microgrid Knowledge, the batteries will serve the grid and provide back-up power for the building. Cost of the microgrid is estimated at $10.3 million, with the utility picking up $6.7 million of the cost and Panasonic the balance.
“Over time, there could be a business model, where we use the battery part of the time to manage some grid issues, like voltage issues, with solar to reduce some of the intermittency,” explained Beth Chacon, director of grid storage & emerging technology for Xcel.“But we can also use the battery for energy arbitrage, storing power when it’s cheap and then discharging it when it’s worth more.”
A whole range of interoperability issues will be researched at the Panasonic campus, she said.
Another Xcel project will be in the Stapleton residential neighborhood, where nearly 20 percent of all homes have solar. “The rule of thumb is that at about 30 percent, you will start to see some issues. “We want to see how batteries can help with some issues,” she said.
Xcel’s investment at that project has been reported to be $4 million.
Faster than many, Xcel has embraced renewables. In 2005 Xcel got 56 percent of its electricity from coal in its eight-state region. Just 3 percent of power came from wind, Chacon said. Last year, a 17 percent of power was generated by wind, while the share of coal-produced electricity had shrunk to 43 percent.
In 2003, when Xcel was first looking at renewables, it was inconceivable that the utility could get 20 percent of its electricity from renewables. “We would have thought it couldn’t be done,” she said.
Now, Xcel in Colorado is on track to easily meet its next target of 30 percent renewables ahead of the 2020 deadline. Beginning in 2009, the company also set out to test emerging technologies through a Innovative Clean Technology program. In 2012, the company and partners tested a 25-kilowatt battery system connected to a simulated four-home neighborhood, where all the houses have rooftop solar panels.