Perhaps more noteworthy is the fact that the solar-plus-storage bid beat out other generation sources, including multiple proposals for natural gas plants. (The utility has an agreement with an existing natural gas-fired plant for a total of 570 MW for the summers of 2020 through 2026.)
Storage is something of a “Swiss Army knife” for the grid
Natural gas-fired combustion turbines are the go-to technology that utilities have long relied on to meet peak demand.
Similar to a jet engine, a gas combustion turbine can ramp up to full power within minutes to meet demand in places from Phoenix to Pittsburgh when air conditioners are cranked up on the hottest summer days.
Solar PV, on the other hand, has been considered by many in the industry to be an intermittent generating resource at best. At night and on cloudy days, the familiar argument goes, there’s no power.
But a dramatic drop in the cost of battery energy storage, driven in large part by an increase in lithium-ion battery production to satisfy growing demand for electric vehicles, is silencing some of that argument.
The cost of lithium-ion batteries has dropped “about 90 percent” in recent years, says Garrett Fitzgerald, manager in the Mobility Transformation Project for the Colorado-based Rocky Mountain Institute. Prices that had been as high as $1,000 a kilowatt-hour (kW) are now “sub $200/kWh,” and falling.
At the same time, storage is gaining a reputation for versatility. Utilities are learning that they can use a single storage project to do many different things. It’s something of a “Swiss Army knife” for the grid, Fitzgerald says, noting that storage is capable of providing services like frequency regulation, which maintains the grid’s electric frequency on a second-to-second basis, and reactive power support, which supports the voltage that must be controlled for grid reliability.
EV demand and a reputation for versatility are two factors that are working in favor of utility-scale energy storage, Fitzgerald says. Market rules among grid operators like PJM Interconnection in the eastern United States also are enabling the deployment of still more storage projects.
The Energy Department’s Energy Information Administration says PJM has the most utility-scale battery storage capacity in both power and energy terms. That’s because in 2012, PJM’s ancillary services market introduced a frequency regulation product designed to pay generation resources that can quickly adjust power output.
Since then, battery storage capacity in PJM has grown from 38 MW to 274 MW in 2016. More than 90 percent of that capacity helps with frequency regulation. Battery storage with electronic controls can respond faster than sources that rely on inertia from thermal power plants that provide “spinning reserves,” Fitzgerald says.
Read more at Arizona Utility Opts for Solar and Storage to Meet Peak Demand
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