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Will Strong Storage Growth Make Renewables Practical?

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As a small business owner, I'm always trying to find ways to cut costs and boost the dependability of my services. To that end, I've become increasingly invested in learning about energy saving...

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Germany traded in nuclear for wind and immediately ran into load management problems. A historic heatwave this past summer pushed California’s grid to the brink and it’s likely the state’s heavy reliance on renewables exacerbated the problem. Texas’ large wind portfolio might have complicated things in the recent storm fallout, although that’s less clear. In anycase, what seems obvious is that renewables present a set of load management headaches that more traditional energy sources do not. Gas fanatics celebrate this fact, renewable zealots deny it, but most of us just accept it as the price we must pay to mitigate climate change. But that might not be the case for much longer. 

A new report from Wood Mackenzie and the U.S. Energy Storage Association (ESA) shows that energy storage deployment set a new record in the 4th quarter of 2020. Over 2,100 MWh of storage came online in Q4. That number marks a 182% increase over Q3. Looking beyond quarters, 179% more storage came online in 2020 than in 2019. 

Good news from this sector seems like it’s snowballing. Q3 of 2020 held the previous all-time record for storage deployment. If this most recent mark is bested in Q1 of 2021, it seems likely that we’re entering a period of exponential growth in deployment. Indeed, that’s just what Dan Finn-Foley, head of energy storage at Wood Mackenzie, predicted in the press release for this study, saying: "This is the hallmark of a market beginning to accelerate exponentially, and momentum will only increase over the coming years." 

In the report announcing the Q3 record, it was predicted that the storage market would grow 6x, reaching 7.5 GW by 2025. Many commentators, including the one writing this blog, thought the forecast was overly optimistic. I don’t think that anymore. This trend came about with an administration hostile to renewables and amidst a historic pandemic. Now the pandemic is ending, the government is set to pump tons of money into the economy, and the new administration has stated that it wants the grid carbon free by 2035. Fasten your seatbelts. 

Large scale storage will make renewables much more viable. However, storage won’t be a silver bullet in the next few years. Transmission infrastructure too will play a vital role. Many utility studies have come to this conclusion. Take the CapX2050, for example. The study put together by 10 major upper-midwest utilities, including Xcel and Great River Energy, predicted the need for major transmission upgrades in the region:

“Currently, Minnesota gets around 20% of its electricity from wind and just over 1% from solar. But those numbers are expected to surge as utilities pursue aggressive carbon reduction goals to 2050, partly through early retirements of the grid’s historic bedrock — coal plants.”

“More money will be needed for more transmission lines, too, and not only because wind and solar farms are geographically dispersed. As coal-fired plants close, more transmission will be needed to ship excess renewable power from one point on the grid to another point that needs it.” 

Luckily, we’re already starting to see big transmission investments with the stated goal to facilitate renewable adoption. On Tuesday, Xcel Colorado announced a $1.7 billion transmission plan in the western state. Specifically, the utility is proposing a 560 miles, 245 Kv transmission line that would connect rural, renewable rich areas to high energy consuming urban centers. Xcel claims the project will enable them to reduce their Colorado emissions by 85% below 2005 levels by the end of this decade. 

Right now, renewables are hard to balance. But things are changing, and fast.


 

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