ORIGINAL REPORTING: Taking Energy Storage To The Markets
Enabling storage integration through market-driven procurements; Competitive solicitations could grow energy storage the same way as low-cost renewables.
Herman K. Trabish, Feb. 25, 2019 (Utility Dive)
Editor’s note: Demand for storage continues to rise and procurements through competitive solicitations, aka reverse auctions, are proliferating.
Rising renewables growth shows mandates and incentives for them work. But continued demand for renewables is creating a need for more energy storage to stabilize the grid which is estimated to be significantly bigger than current build-out plans, driven by existing policies, are likely to achieve. Many say more use of the competitive auctions that have helped drive renewables growth can also accelerate the deployment of storage.
In November 2018, 100 or more cities had 100% renewables commitments. Fortune 500 companies with 100% goals more than doubled in 2018 to 53. The storage incentives and mandates to reliably integrate such high levels of variable renewables into the grid are lacking, with some notable exceptions like California, New York and Massachusetts. But market-based auctions may propel procurement of energy storage.
Energy storage "is particularly well suited" to cost-effectively meet the "critical challenge" to grid reliability created by high levels of variable renewables, according to a new study from the Environmental Defense Fund (EDF). It can store excess renewables generation when prices are low and dispatch the power on demand. It can also integrate rising levels of renewables by smooth the supply disruptions caused by “cloudy days or calm nights," David Hart, Information Technology and Innovation Foundation (ITIF) senior fellow recently wrote.
Getting the United States to very high levels of renewables could take 10,000 GWh of battery storage, but a December 2018 Wood Mackenzie-Energy Storage Association (ESA) report found the total U.S. installed battery energy storage capacity at just over 500 MWh. Recent renewables procurements have reversed the traditional auction structure of a single seller and multiple buyers. Instead, one utility buyer has solicited bids from multiple sellers. These market-driven procurements, designed to maximize competition, have long been used by utilities to procure resources. In recent solicitations, they have unexpectedly delivered not just low-cost renewables but low-cost renewables-plus-energy storage products…” click here for more
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