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Utility-Scale Energy Storage: When Free Isn’t Cheap Enough

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Charles Botsford, PE's picture
Program Manager CWB Energy Solutions

Mr. Botsford is a professional chemical engineer in the State of California with 30 years’ experience in engineering process design, distributed generation, and environmental management. He has a...

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  • Jul 10, 2020

This item is part of the Energy Storage Insights - Summer 2020 SPECIAL ISSUE, click here for more


Utility-Scale Energy Storage: When Free Isn’t Cheap Enough

Charles Botsford, P.E., Monrovia, California

Why Do We Need Energy Storage?

Skeptics of renewable energy quote the old adage “you don’t make power when the sun doesn’t shine or the wind doesn’t blow.” The skeptics label renewables as intermittent and non-dispatchable. All of this is true for solar and wind generation. Renewable energy sources will require a measure of energy storage to overcome these arguments and increase their value to the grid—at some point in the far future to achieve high renewables penetration. The trick is to do this so that the economics don’t suffer.

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The grid requires the precise amount of energy to be generated as is being consumed, which makes generation and consumption a constant balancing act. Traditional power plants provide the generation and the capability to ramp up and down to meet demand. In a future without these baseload power plants, energy storage will be necessary to balance generation and consumption.

source: California Independent System Operator, w/labels from M. Zerega

Figure 1. 24-Hour Grid Energy Supply and Consumption

How much energy storage, exactly, do we need to have 100% renewable energy generation at some point in the future? Lots…and lots and lots. Or, again, that’s what skeptics of renewable energy would say. It’s more complicated than that and primarily has to do with capacity factor…and geography and wide grid balancing and coincident load management and many other things. For solar, the capacity factor is low (15-30%), while for land-based wind it’s medium (30-45%), and for off-shore wind it’s relatively high (40-55%). For example, the Hywind floating offshore windfarm off the coast of Scotland has reported a 12-month rolling average of 55.3% [1, 2].

For perspective, baseload generation in the form of the US nuclear fleet is on the order of 93% capacity factor. The other primary form of baseload generation in the US is fossil fuel with natural gas at about 60% (and rising over time) and coal at 48% (and dropping over time) [3]. The low fossil fuel capacity factors, especially for coal is market-based. A large portion of the US coal fleet lies idle because of high operating costs.

Some argue that the amount of energy storage required to enable a renewable source to provide value to the grid is inversely proportional to its capacity factor. This guidance would qualitatively say that energy storage is important to solar, while not as important to floating offshore wind—again, at some point in the far future where energy storage is needed for high renewables grid penetration.

Services that Energy Storage Systems Deliver

Energy storage systems deliver services to the grid and off-grid. The services listed below depend on the market, whether for renewables integration, microgrids or for standalone systems.

  • Peak shifting
  • Peak shaving
  • Supply capacity and firming
  • Frequency regulation
  • Spinning, non-spinning, and supplemental reserves
  • Reactive supply and voltage control
  • Transmission upgrade deferral
  • Congestion relief
  • Distribution upgrade deferral
  • Power quality
  • Power reliability
  • Demand charge management
  • Demand response
  • Time-of-use management

Electricity markets value these services to a varying degree. For example, frequency regulation is highly valued in many markets because when grid frequency goes out of range, electrical equipment can be damaged. Battery energy storage has the fast response time necessary to provide this service [4-9].

Frequency regulation is an example of a service that provides response on the order of seconds to keep the grid at 60 Hz +/- 0.05 constantly. Traditional power generation handles this via “regulating reserves”, which provide fast up and down balancing services. Without traditional power generation, i.e., 100% renewables, some would speculate, the grid needs energy storage to provide this service. Below is a graph of frequency regulation using unidirectional electric vehicle supply equipment (EVSE) to control the EV on-board charger autonomously by monitoring the grid. This is sometimes called grid-to-vehicle (G2V or V1G) managed charging.

source: Brooks, EVS27 paper [10].

Figure 2. Typical grid frequency variation in the US western interconnect over a 30-min period.

Other grid services rely on sub-hourly energy markets, which operate on time steps of five minutes [11]. Likewise, the grid requires myriad services as illustrated in the above list, not just the ride-through needed for a one-hour power outage, a four-hour emergency, or a three-week disaster such as a hurricane.

source: Abbot, COVID Lockdown Graphics Dept.

Figure 3. Southern California Windfarm with Energy Storage

Stationary Utility-Scale Battery-Based System Economics

Batteries, in particular lithium-ion batteries, are reported to be the most cost-effective stationary utility-scale energy storage systems—for storage durations up to four hours. For longer duration storage requirements, compressed air energy systems and pumped hydro systems are reported to be cost-competitive [12]. This is primarily due to the “balance of plant” or “balance of system”, which includes inverters, converters, cabling, housing, contactors, controllers, transformers, and other components. For shorter durations, the Power Cost (balance of plant) portion of the energy system cost, measured in dollars per kilowatt ($/kW) is quite high compared to the Energy Cost (battery, dam, chamber) portion, measured in dollars per kilowatt-hour ($/kWh) [13-16].

The U.S. National Renewable Energy Laboratory (NREL) uses a simple equation to compare system costs [16]:

Total Cost ($/kWh) = Energy Cost ($/kWh) + Power Cost ($/kW) / Duration (hr)

Many years ago, the cost of battery energy storage was $2,000/kWh. This cost was almost entirely due to the battery, not the balance-of-plant. Then the cost decreased to $1,000/kWh about a decade ago. The most recent system cost estimates are $200-400/kWh. Future systems cost projections vary widely, but some studies show a future cost on the order of $100/kWh in 2030.

However, as the capital costs decrease, other costs remain, the majority of which are not technology-based, and have little room for cost reduction:

  • Engineering, procurement & construction (developer cost)
  • Installation labor
  • Operation and maintenance (O&M)
  • Financing
  • Taxes
  • Depreciation
  • Battery degradation, which depends on kWh throughput

What Does the Cost of Stationary Energy Storage Need to Be?

The $200-400/kWh is the rough cost range of current utility-scale stationary battery energy storage systems for a four-hour duration system. Systems generally cost more for shorter durations because the balance-of-plant costs dominate. The duration factor also gets to the heart of the question of what the cost needs to be for the different services and the markets that energy storage systems serve.

What would the market costs need to be to provide firming and other services for a 100% renewables grid? Again the estimates vary widely—from $5/kWh to $60/kWh to $150/kWh. The studies are numerous as are the assumptions [18-22]. Let’s say the answer is a market cost of $60/kWh. If the 2030 energy storage system cost projections are $100/kWh, then the cost doesn’t meet the market price needs.

Would free battery systems be a better economic fit?

Free Systems

Why is free important?

Free battery systems, in the form of electric vehicles (EVs), are currently available for use by the grid. This style of energy storage is commonly known as managed charging, or smart charging and involves charging and discharging EV batteries when the grid requires their services [23-26]. The systems are free in the sense that the capital cost is paid for by the EV owner (e.g., the EV driver, fleet owner, car share company, etc.) So are the engineering costs, installation costs, O&M, financing, and taxes. The services themselves aren’t free, but the same can be said of stationary utility-scale energy storage.

EV Battery-Based System Economics

The EV owner pays for the vehicle, which comes with the storage, and in the future, the bi-directional inverter. The EV owner will be incentivized to participate in the market via payment for services, but many will no doubt opt out because: (1) they don’t want to be bothered, (2) fear battery degradation, and (3) fear outside control of their vehicle being charged/discharged. Advantages of EV energy storage over stationary utility-scale battery energy storage are:

  • Duration – In a future fleet of 20 million EVs, the duration is virtually unlimited
  • Degradation – No incremental cost for battery degradation (used EV batteries become retired)
  • Operation relative to markets – highly flexible, improved grid resiliency and reliability
  • Other Factors and Costs – No O&M, no financing, no taxes

How to Put Power onto the Grid – AC and DC

For distributed energy resources (DERs), putting power onto the grid requires compliance with the standard International Electrical and Electronics Engineers (IEEE) 1547. The most recent version is IEEE 1547-2018. To certify that the DER complies with IEEE 1547-2018 it must be tested according to the procedures laid out in IEEE 1547.1-2020.

Why is this important? The process is well established for stationary DERs, including big utility scale batteries and even EVs that use stationary bi-directional direct current (DC). This is called vehicle-to-grid (V2G). However, EVs in the U.S. that wish to use their on-board charger to provide alternating current (AC) V2G services must comply with Society of Automotive Engineers (SAE) J3072, which references IEEE 1547-2018 and 1547.1-2020. J3072 is still in development.

Do We Need to Put Power onto the Grid?

What about exporting power from the EV to the grid? In bulk, say with millions of EVs, managed unidirectional charging, sometimes called smart charging (also known as G2V and V1G), just uses the energy storage of an EV as a reservoir for the grid. Services include up and down frequency regulation, demand response, peak shaving, peak shifting, renewables firming, and many others. All EVs in the North American market are capable of unidirectional managed charging. However, very few EVs are currently capable of V2G services because they aren’t equipped with a bi-directional on-board charger, and SAE J3072 isn’t yet in place. Almost all grid services done by V2G can be done by unidirectional managed charging, and it avoids the V2G issues of:

  1. roundtrip efficiency loss,
  2. grid interconnect protocols,
  3. potential EV pack degradation (not something EV drivers want), and
  4. complex trading schemes for revenue capture.

However, that’s for bulk services. For services closer to home where one EV sits in a carport, or at a business where a hundred EVs sit in the parking lot, V2G can be very useful [27, 28]. V2G services can include vehicle-to-home (V2H) and vehicle-to-business (V2B), which aren’t the traditional power export to the grid of V2G, but are valuable in the case of emergency power requirements including:

  1. public safety power shutoffs or PSPS, which is an issue in California when a utility needs to curtail power for wildfire reasons,
  2. earthquakes, again a major West Coast issue,
  3. hurricanes, Gulf and East Coasts, and
  4. polar vortices and bomb cyclones, definitely not California.

In the early days of EVs, when a pack might only be 24 kWh, the available storage wasn’t nearly as bountiful as current EVs with 60 or even a 100 kWh pack. A house on minimal average power draw of 3 kW during an emergency, could be served for more than a day by one EV with an 80 kWh pack.

The EV, whether for home or business non-export power, would typically need to use a power converter to supply its energy. However, the same is true for stationary energy storage, such as residential battery systems, which have only 10-15 kWh of storage.

One of the first vehicle-to-grid demonstration programs was conducted by AC Propulsion in the 2001 timeframe. The program was sponsored by California Air Resources board [29]. More recently, the California Vehicle Grid Integration (VGI) Working Group submitted their final report to the California Public Utility Commission, which details methods, priorities, and policy recommendations for making use of unidirectional and V2G charging [30].

How Much Energy Storage Do We Need?

The amount of energy storage the U.S. needs is a decade-dependent question—i.e., 2020, 2030, 2040, 2050. Currently, in 2020, the U.S. doesn’t need much energy storage, relatively, because the amount of renewables penetration onto the grid is low in most markets. Standalone energy storage systems aren’t typically competitive except for frequency regulation, which is a small overall market (e.g., PJM), and demand charge management, which is a highly niche market (e.g., Southern California). As the percentage of renewables penetration increases, and fossil fuel power plants retire (i.e., coal, gas), the amount of required energy storage will increase.

2030 Power Projections for the U.S.

According to the Energy Information Administration (EIA) [31], by 2030 the U.S. will produce approximately 1,100 GWh of renewable electricity, with an approximate equal split between hydro, solar, and wind. EIA [32] estimates the current (2020) fleet capacity factors for solar at ~25%, wind at ~35%, and hydro at ~40%, or a bulk renewable 2020 capacity factor of 33%. This translates to about 380 GW of renewables by 2030. Another data point from Global Data [33] projects cumulative U.S. renewables at 443 GW.

If a four-hour duration were assumed, then the energy storage requirement would be ~1,600 GWh. This is a conservatively high estimate because the fleet capacity factors for solar and wind will be higher by 2030. Some would argue that a four-hour duration is too short. However, this does not consider market drivers such as the energy imbalance market (EIM), which is a cooperative effort between U.S. Balancing Authorities (BAs). The California Independent System Operator (CAISO) is the largest BA and created the EIM to minimize curtailment of renewables, which can greatly enable the penetration of renewables [34, 35]. A more likely energy storage requirement would be on the order of 1,000 GWh (1 TWh) or less. A study by Cal Berkeley [36] estimates 150 GW of four-hour battery energy storage, or 600 GWh, would be sufficient to meet grid demands with 90% renewables (Clean Grid) by 2035.

Stationary Utility-Scale Battery Energy Storage Cumulative Cost

At $60/kWh, the cumulative capital investment for 600 GWh would be on the order of $36B.

The above does not other costs, which include installation, O&M, taxes, battery degradation, developer costs, etc.

EV Storage

By 2030, the population range of EVs in the U.S. is projected to be in the range of 15-25M, depending on the study [37]. For an average usable pack capacity of 50 kWh, this translates to 750-1,250 GWh of EV battery storage. This likely wouldn’t be enough to completely offset the energy storage requirement, considering EV driver opt-out and other factors. However, light duty pack capacity will likely be higher, probably at least 100kWh, and trucks, buses, and other medium- and heavy-duty vehicles will add major storage capacity.

Many studies predict that managed EV charging by 2030 will significantly offset potential renewables curtailment, while deferring grid system infrastructure expansion [38].

EV Battery Energy Storage Cumulative Cost

At $0/kWh, the cumulative capital investment would be on the order of $0 B.

Energy Storage Market Projections – Why EV Energy Storage Will Dominate

Whatever shortfalls EV energy storage might encounter, could be made up via second use of EV packs, also called EV pack retirement. This is the subject of many studies and solicitations [39]. While a used pack may not have sufficient capacity for an EV, typically defined as 70 percent degradation, it still has many years of life for bulk energy storage. Many of the stationary utility-scale battery energy storage costs, such as balance-of-plant would still pertain, however, the battery cost portion would be minimal, possibly even negative [40, 41].

This partially addresses the issue of what to do with retired EV packs. Recycling and disposal has been the subject of many studies.


Will the U.S. and the rest of the world continue to install stationary utility-scale battery energy storage to support renewables? Yes, for as long as economic reward continues for investment. This trend will prove the viability of solar and wind projects at ever-increasing scale, and demonstrate to skeptics that allowing the retirement of natural gas and coal power plants won’t leave people in the dark, and in fact, be great for the environment.

Energy storage is needed for timeframes on the order of:

  • Seconds for frequency regulation
  • Minutes for sub-hourly energy markets
  • Hours for peak shaving, peak shifting, and other services, and
  • Days/weeks for disasters

Can stationary utility-scale battery energy storage meet the economic requirements to do this in 2030, 2040, or 2050? As EVs come of age, a low cost, robust energy storage alternative will emerge to make this question moot. Will this be an easy road? No. Besides the momentum and economic interests that favor stationary storage, primarily due to rate-based utility economics, a lot of work policy and regulatory work with public utility commissions remains to allow for the full potential of EVs to deliver their services to the grid.

The economics of renewables, and the grid value of renewables will only improve when the mass of low/zero cost energy storage from EVs hit the market.



1. Andrew ZP Smith, ORCID: 0000-0003-3289-2237; UK offshore wind capacity factors. Retrieved from, accessed June 18, 2020.

2. Energy Information Administration, U.S. Renewable Energy Consumption Surpasses Coal for the First Time in over 130 Years,, May 28, 2020.

3. Energy Information Administration, Electric Power Monthly, Table 6.07.A. Capacity Factors for Utility Scale Generators Primarily Using Fossil Fuels

4. Finkelstein, J, S. Kane, and M Rogers, McKinsey & Company, How Residential Energy Storage Could Help Support The Power Grid, March 2019.

5. Cooper, H., S. Brauer, and D. Kalow, Battery Energy Storage in Stationary Applications, Chemical Engineering Progress, May 2020.

6. Balaraman, K., California CCAs Solicit Info on Long Duration Storage, with Possible Procurement Launch this Summer, Utility Dive, June 9, 2020.

7. IRENA, Electricity Storage and Renewables: Costs and Markets to 2030, International Renewable Energy Agency, Abu Dhabi, 2017.

8. Energy Information Administration, Large Battery Systems are Often Paired with Renewable Power Plants,, May 18, 2020.

9. Energy Information Administration, Most of Hawaii’s Electric Battery Systems are Paired with Wind or Solar Power Plants,, March 20, 2020.

10. Brooks, A., Vehicle Charging as a Source of Grid Frequency Regulation. EVS27, Barcelona, Spain. November 2013.

11. US Department of Energy,, DOE/GO-102011-3207, May, 2011.

12. Mongrid, K., etal, Energy Storage Technology and Cost Characterization, Report, HydroWire, US Department of Energy, Pacific Northwest National Laboratory, PNNL-28866, July 2019.

13. Caiazza, R., NREL Energy Storage System Cost Benchmark,, July 16, 2019.

14. Weaver, J., Utility Scale Solar Power Plus Lithium Ion Storage Cost Breakdown, PV-Magazine-USA, January 2, 2019.

15. Lazard, Lazard’s Levelized Cost of Storage Analysis—Version 4.0, November 2018

16. Cole, Wesley, and A. Will Frazier. 2019. Cost Projections for Utility-Scale Battery Storage. Golden, CO: National Renewable Energy Laboratory. NREL/TP-6A20-73222.

17. Fu, Ran, Timothy Remo, and Robert Margolis. 2018. 2018 U.S. Utility-Scale Photovoltaics-Plus-Energy Storage System Costs Benchmark. Golden, CO: National Renewable Energy Laboratory. NREL/TP-6A20-71714.

18. Patel, P., How Inexpensive Must Energy Storage Be for Utilities to Switch to 100 Percent Renewables, IEEE Spectrum, September 16, 2019.

19. Roberts, D., Getting to 100% Renewables Requires Cheap Energy Storage. But How Cheap?,, September 20, 2019.

20. Colthorpe, A., BloombergNEF: “Already Cheaper to Install New-Build Battery Storage Than Peaking Plants”, Energy Storage News, April 30, 2020.

21. Colthorpe, A., Behind the Numbers: The Rapidly Falling LCOE of Energy Storage, Energy Storage News, May 6, 2020.

22. Martin, J., Solar Hits New Milestones as Renewables Become World’s Cheapest Choice, PV-Tech, April 29, 2020.

23. Shahan, Z., This Stunning Chart Shows Why Electric Vehicles Win, CleanTechnica, June 10, 2020.

24. IRENA, Innovation Outlook: Smart Charging for Electric Vehicles, International Renewable Energy Agency, 2019.

25. Dayem, K., C. Mercier, and P. May-Ostendorp, Electric Vehicle Charging Control Strategies. Xergy Consulting sponsored by National Rural Electric Cooperative Association (NRECA), January 2019.

26. Enel X, Enel X_Smart Charge Hawaii Residential Case Study, 2020.

27. Chhaya, S., etal, “Distribution System Constrained Vehicle-to-Grid Services for Improved Grid Stability and Reliability”, Final Project Report, California Energy Commission, Publication Number: CEC-500-2019-027, March 2019.

28. Szinai, Julia, Colin J.R. Sheppard, Nikit Abhyankar, Anand Gopal. Reduced grid operating costs and renewable energy curtailment with electric vehicle charge management, Energy Policy (2019), Nov. 2019

29. Brooks, A., Vehicle-to-Grid Demonstration Project: Grid Regulation Ancillary Service with a Battery Electric Vehicle, California Air Resources Board Contract Number 01-313, December 2002.

30. Vehicle-Grid Integration Working Group, Final Report to the California Joint Agencies, CPUC DRIVE OIR Rulemaking R.18-12-006, June 30, 2020.

31. Energy Information Administration, Annual Energy Outlook 2019 with projections to 2050,, January 2019.

32. Energy Information Administration, Electric Power Monthly, Table 6.07.B. Capacity Factors for Utility Scale Generators Primarily Using Non-Fossil Fuels,

33. Global Data, US Power Market Outlook to 2030, Update 2019 – Market Trends, Regulations and Competitive Landscape, July 2019.

34. Larson, A., How Does the Western Energy Imbalance Market Work?, Power,, October 2018.

35. California Independent System Operator, Western Imbalance Benefits Report, July 31, 2017.

36. University of California Berkeley, Goldman School of Public Policy, 2035, The Report, Plummeting Solar, Wind, and Battery Costs Can Accelerate Our Clean Electricity Future, June 2020.

37. IRENA, Electric Vehicles: Technology Brief, International Renewable Energy Agency, 2017.

38. Sheppard, C, J. Szinai, N. Abhyankar, A. Gopal, Grid Impacts of Electric Vehicles and Managed Charging in California, Energy Analysis and Environmental Impacts Division, Lawrence Berkeley National Laboratory, November 2019.

39. California Energy Commission, Validating Capability of Second-life Batteries to Cost-Effectively Integrate Solar Power for Small/Medium-sized Commercial Building Applications, GFO-19-310 Solicitation,, February 2020.

40. Engel, H., P. Hertzke, and G. Siccardo, McKinsey & Company, Second-Life EV Batteries: The Newest Value Pool in Energy Storage, April 2019.

41. Anderson, M., Used EV Batteries Could Power Tomorrow’s Solar Farms, IEEE Spectrum, June 10, 2020.



Charles Botsford, PE is a professional chemical engineer in the State of California with 30 years’ experience in engineering process design, distributed generation, EV charging infrastructure, and environmental management. He has participated in California’s Vehicle Grid Integration (VGI) Working Group and participates in the Society of Automotive Engineers (SAE) J3072 AC Vehicle-to-Grid standards committee. Mr. Botsford holds a bachelor’s degree in chemical engineering from the University of New Mexico, and a master’s degree in chemical engineering from the University of Arizona.

Bob Meinetz's picture
Bob Meinetz on Jul 11, 2020

Thanks Charles, an excellent overview of proposals for battery storage systems. I think you underestimate the importance of long-term grid reliability, however. and miss several elements which show why battery storage systems, in conjunction with solar and wind, will never be capable of providing a reliable supply of 100% clean electricity:

  1. Resistance losses. Li-ion batteries, with roundtrip charge/discharge and bi-directional inversion losses, waste anywhere from 10%-30% of energy stored in them. Renewable output is meager enough - subtract roundtrip losses, and we've made what was a tough sell already 10-30% tougher.
  2. There can never be enough. How much storage is enough - 8 hours? 16 hours? 1 day? 1 week? Are we ready to accept the entire grid going down after one week of cloudy/calm weather?
  3. Cost. Quoting prices for 4-MWh batteries is unrealistic when considering long-term backup. According to EIA, 10MWh prices remain high (avg. $1,500/kWh). That means powering California for one day of cloudy, calm weather, at average consumption, would cost over $1 trillion in batteries - 6 times our annual state budget. They would need to be replaced every 10-12 years. A non-starter.
  4. Binding grid constraints. Over the last century, grids have been built with radial topology - like branches of a tree, transmission has been specifically designed to transmit electricity from large, centralized centers with thick wires, which branch off to thinner and thinner ones as electricity is distributed where needed. Proponents claim we could replace these plants with batteries, but doing so would double the roundtrip resistance losses of the grid itself (avg. 9% in California).
  5. Beware of "free" systems. Is reliance on vehicle-to-grid systems really "free", or does it simply transfer costs to the owners of the vehicles - of never knowing how much mileage will be available in their vehicles, of having to replace their batteries up to twice as often, with duty-cycling doubled?

Don't get me wrong - it is possible to design grids with 100% renewables and batteries - in a world where money is no object; where every family has the income of a family living on Long Island, NY.; where solar's capacity factor is three times the global average (11%); where no one would find forests of industrial wind and transmission hardware blocking their view objectionable.

I guess I was wrong - such a system is indeed impossible, and to expect these obstacles to be overcome in any reasonable timeframe is not only foolish but extremely reckless, given the responsibility of lowering global climate emissions to zero in the next 70 years.

Larry Farmer's picture
Larry Farmer on Jul 13, 2020

The fundamental challenge we are facing is flipping the electric grid from a centralized to a de-centralized system. Storage and EVs are but a small piece of the change. When looked at in isolation, i.e., introduction of storage or EVs, the challenges do seem insurmountable. However, in parallel with the introduction of storage and EVs, may other assumptions about the electric grid are changing. Trying to evaluate all of these changes and their various interactions is daunting, to say the least. 

  1. Efficiency: Yes, electrically, storage is less efficient than balancing generation with load. However, that only considers a very small portion of the cost. Fossil fuels are by definition a form of solar storage which we are draining more quickly than we are regenerating. Furthermore, the fossil fuel systems have not been designed to account for their unintended consequences. If we fully load the cost of fossil fuels to our current system, we will find that the true costs are *much* higher than currently accrued. 
  2. Ultimate capacity: Agreed. That is why we are moving away from fossil fuels: the supply is finite and effectively irreplaceable. The move to renewables is replacing a fundamentally unsustainable systems (how do we continue when fossil fuels are exhausted?) with a sustainable one. Effectively we are accepting short-term unreliability to ensure long-term reliability.
  3. Cost: I agreed that building and operating transmission-scale, fixed storage does seem unsustainable. However, as suggested in the article, there are other models. Tapping into the fleet of rechargeable EVs is much more sustainable. Repurposing derated batteries from EVs makes much more sense for stationary storage. To do so requires us to envision the birth of a market for derated batteries.
  4. Grid constraints: Rather than replace large generators with large renewable and storage facilities, we need to rebuild the grid. Not only do renewables and storage work better (scalability, resource usage, capitalization, etc.) in small scales, but this also adds tremendous resilience to the system. This also helps to mitigate the concerns in #3.
  5. "Free systems": Absolutely this model shifts cost from the central operator to the network edge. Naturally, the asset owner would have control of their asset, as is the case today. Charging/discharging would be discretionary. Ideally, this decision would be informed by price signals. The DOE is developing the concept of transactive energy to achieve this very thing. Fundamentally, it is an instananeous energy market. Ideally, owners buy energy (charge) during (relatively) low cost and sell (discharge) at relatively high cost. The owner sets max. discharge level, duty cycling, etc. in order to manage their needs. 

We also need to recall that the grid is also transforming from a load-following to a supply-following model. This would allow consumers to leverage the transactive energy infrastructure to modify / reshape their load profile, i.e., consumers would be much more aware of their energy usage. Users who *need* a certain amount of power at a certain time, either need to pay the instantaneous price or acquire enough capacity support their needs.

Charles Botsford, PE's picture
Charles Botsford, PE on Jul 13, 2020

Hi Bob,

I agree with your points, mostly. The reason I wrote this article was to make the points you've brought up. 

1. Roundtrip efficiency losses -- yes, a problem for stationary systems and V2G. Not a problem for unidirectional G2V (aka V1G) managed charging, which should dominate the future charging scheme. 

2. Never enough -- yes, a problem for stationary systems. Not a problem for EV managed charging when you have 100 million EVs (plus battery second life) by 2050.

3. Cost -- yes, I completely agree. Stationary systems are ridiculously expensive and always will be even with free battery cell technology. You still have the costs of the system -- inverters, converters, cabling, housing, contactors, disconnects, etc. However, the big costs are O&M, taxes, rent, control, etc.

4. Grid Architecture -- While your theory is correct, your implementation is not. Bi-directional power flow should only happen at the distribution level not the transmission level, and even then only to a small degree.

5. Free -- EV owners (fleets, individuals) buy EVs and get very little reward (really none) for grid services. Payment/incentives for grid services will substantially boost EV adoption. Managed charging will likely follow the 80-20 rule: 80% unidirectional, 20% (or less) V2G. Unidirectional charging has no battery degradation, while V2G might (debatable).

6. 100% Renewables -- I completely agree with you that paying for stationary energy storage to support 100% renewables by 2050 is ridiculous. We should get it for free.

Matt Chester's picture
Matt Chester on Jul 13, 2020

Great insights, Charlie-- thanks for sharing!

EVs and their storage capabilities have been realized to be an opportunity by grid operators who see them as potential 'free energy storage systems,' but of course when they were developed they were done so to be optimal for the driver and not necessarily for the grid functions, right? Is there any discussion of ways in which EV batteries could be designed in such a way that were more beneficial to the grid? Not sure that would work at all since it would be a sacrifice of an EV purchaser to go for the grid-optimized rather than driver-optimized battery, but I"m just curious if that comes into play at all.

Also-- are EVs the only free battery systems being discussed? I suppose residential solar+storage type models are another, but are there any potentially under the radar opportunities that might arise naturally like EVs did?

Charles Botsford, PE's picture
Charles Botsford, PE on Jul 13, 2020

Hi Matt, 

Thanks for the comment. Many groups have conducted demonstrations on EV managed charging for grid integration. EV batteries are already perfect for grid integration, especially for unidirectional charging (G2V, aka V1G). For bi-directional charging to take place (V2G), vehicles need a bi-directional on-board charger and the grid protocols and standards need to be put in place (SAE J3072). Reportedly, some Tesla EVs have bi-directional on-board chargers, but they would need to comply with IEEE 1547 and SAE J3072 to put power back onto the grid.

EVs are the only free systems I know of. Why would anyone pay for and mount a small 10kWh pack (and system controls) in their garage to support their solar panel, when they could use a 60kWh EV pack for free? Okay, maybe they need to wait 2-3 years for that. :)

Nathan Wilson's picture
Nathan Wilson on Jul 14, 2020

Don't forget that power-to-fuel will also compete with storage and managed charging, since, as a dispatchable load, it also can provide supply-demand balancing.  Ammonia production (for fertilizer) currently comprises somewhere around 3% of the fossil gas market.  As grid renewable penetration increases, we may see sufficient hours/year with near-zero-priced electricity to make power-to-fuel viable.   It will start with ammonia production, and may progress to ammonia and/or hydrogen as a vehicle fuels.  As the power-to-fuel industry grows, it could drive the grid to be increasingly over-supplied, which decreases the opportunities to sell energy from storage.

It should also be noted that compressed air energy storage is not really viable anymore.  The existing systems in the US were built using fossil gas re-heat of the stored air.  That gas re-heat looked like a pretty efficient use of gas when compared to old-fashioned steam cycles and simple combustion turbines.  But compared to modern combined cycle plants, compressed air plants look more like gas-fired plants and less like storage.

Charles Botsford, PE's picture
Charles Botsford, PE on Jul 14, 2020

Hi Nathan,

Great comments. I focused on the grid, but your power-to-fuel comment is really good. Biofuels, fertilizer, and even plastics will need to be produced via renewables. Well before light bulbs and iPhones humanity used wind to pump water, grind grain, and power ships.

I'm not a fan of hydrogen. The thermodynamics are terrible for vehicles, and the logistics are even worse. For sedans, the hydrogen well-to-wheels efficiency is just above diesel--not good. Stick to electricity, which has a much higher efficiency, better logistics, and lower cost.

I confess to not knowing much about CAES, but the problem is the same for all energy storage that is not EV. It's too expensive for a renewables-based grid.

Mark Silverstone's picture
Mark Silverstone on Jul 14, 2020

Many thanks for a well researched, thoughtful and thought provoking article.   Your description is for a solution that only a year or two back was unimaginable.  You´ve moved the discussion to the point of almost doable, though far from easy.

I especially appreciate that you quoted realistic figures for present capacity factors for solar and wind and that you allow that “the fleet capacity factors for solar and wind will be higher by 2030.”

I would suggest that, while your analysis of what is possible in the US is conservative, the concept is far more plausible in Europe.  For one thing, the European EV market is far more mature, where the last gasoline and diesel powered cars may be built for use in Europe in the next ten years or less. For another the European energy grid will be far more integrated than the US. 

This issue was reported in the "EC Green Deal":

So, progress has been made in the US, Europe and Japan and there is hope that it will continue.

The larger question is where the present and future bulk of carbon emissions will be generated. The data paint a stark picture.

Note that the bars indicate the change in emissions 2018-2019. So, consideration must be given to reducing carbon emissions from where most emanate.  As difficult as our western politics make the problem, they are more difficult in Africa, Asia and Latin America. It is all too likely that renewables, nuclear, gas and coal will battle it out for energy dominance in the next ten years with no clear winner anytime soon.  With the western democracies lacking a clear leader, there is no visible likely positive result.  Not yet anyway.

But, your article deals with crucial nuts and bolts of how renewables may lead us toward the low carbon future we need.   And it sounds as though much of what you suggest may be taken up by the EC.  It may be a plan that can be used elsewhere.




Willem Post's picture
Willem Post on Sep 13, 2021

$60/kWh for site-specific, custom-designed, utility-grade battery systems?

Try $600/kWh

Charles Botsford, PE's picture
Charles Botsford, PE on Sep 14, 2021

Hi Willem,

Yes, I agree. People mean many things when they mention system costs. I've heard the cost you mention of $500-$750/kWh for a fully integrated battery farm, which includes siting, construction, installation, etc. It's very expensive considering the full balance of plant. That's why taking the battery-specific price from $100/kWh to $60/kWh doesn't really move the needle. That also why using free energy storage in the form of EV batteries is a compelling solution.

Charles Botsford, PE's picture
Thank Charles for the Post!
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