Stabilizing the energy system with energy storage

Jeff Perry, executive vice president of Asset Management for Agilitas Energy, writes on how energy storage technology can improve grid and renewables reliability, taking pressure off grid operators at peak demand periods.

At the start of the summer, the North American Energy Reliability Corporation (NERC) issued a warning that two-thirds of North America would be at risk of energy shortfalls during periods of extreme demand. This means that in the event of a heatwave, a spike in electricity use would ultimately test the power grid’s ability to meet supply with demand, potentially resulting in summer brownouts or blackouts.

As power grids are increasingly reliant on intermittent renewable energy sources, like wind and solar power, these types of warnings tend to spark debate over the energy transition to renewables and grid reliability.

While the intermittent nature of renewable energy resources could present operational challenges for grid operators managing electricity generation with demand, this doesn’t mean the energy transition needs to slow down. Instead, it emphasises the importance of increasing energy storage to stabilize the energy system.

Energy storage can improve renewable reliability by storing excess renewable energy and distributing it back to the grid when it’s needed; thus enhancing grid reliability, taking the pressure off utilities and grid operators during times of increased demand and containing electricity costs.

Improving renewable reliability

Renewable energy resources, like solar and wind power, may be cheap, but their intermittent nature creates reliability concerns. These concerns make it difficult for the grid to fully rely on renewables. But as massive amounts of renewable energy look to come online, energy storage is emerging as the keystone capable of bridging the gap between renewable energy production and consumption.

Energy storage enables these intermittent renewable resources to be reliable and persistent sources of energy, available in the same way that fossil-fuel-fired generation is. By being able to dispatch renewable energy as needed, energy storage provides the grid and grid operators with the needed flexibility to ensure that there’s enough power capacity to meet peak demand, ultimately providing the needed resilience for them to manage the transition to renewables in the wake of increasing threats of extreme weather conditions.

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Maximizing the power of renewables

Another concern is that as fossil fuel power plants are being retired, there needs to be enough renewable generation to replace them and keep the grid running during periods of peak demand. This means that, especially in the case of extreme weather events, more wind and solar generation is needed to meet the grids power demands. Yet, solar, in particular, is saturating some US markets.

Solar peaks in the middle of the day, when demand is at its lowest and hours before demand peaks in the late afternoon and evening. As a result, grid operators can be forced to reject megawatts of excess solar power during the day and are unable to use all the renewable energy generated during peak production hours when it’s needed most.

This highlights the concern around the amount of renewable generation available, when in some markets, this renewable generation is being left unused.

With energy storage, that excess renewable energy can be stored, ultimately reducing or eliminating curtailment—the deliberate reduction of renewable energy when it can’t be used immediately in order to balance real-time supply and demand.

And, that stored excess renewable energy can then be used for say running a home air conditioning unit overnight long after the sun has set. Energy storage not only enables the balance of renewable power supply with demand, but also provides a cushion during periods of peak demand.

Keeping the power on while keeping costs down

During periods of peak demand, energy storage can boost grid reliability and is critical to making the grid more flexible. As an aide during extreme weather conditions, energy storage can serve as a backup power source during outages, taking the pressure off utilities and grid operators to keep the grid running.

When relying only on fossil fuels, utilities and grid operators are also challenged to meet peak demand in a cost-effective manner. Energy storage can reduce the cost of electricity by storing renewable energy when it is cheapest and demand is low, and dispatching it when it is most expensive and demand is high. This enables a more environmentally prudent supply of electricity to meet peak power loads, while also containing costs.

Just consider the Texas power grid this summer, for example. Despite ongoing extreme heat and increased energy demand, the power has stayed on, and prices haven’t spiked as high as they have years prior. According to the Energy Information Administration (EIA), when the state experienced a heat wave in late June, which led to record-breaking demand for electricity, non-fossil fuel resources contributed as much as 55% of total electricity generation.

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This ultimately matched electricity supply with the elevated electricity demand, and while the electricity prices were also elevated, they were much lower than prior record heat waves in 2019 and 2022. If it wasn’t apparent before, this summer has shown renewables are a very important part of the grid’s resiliency during extreme weather conditions.

In short, the energy system won’t transform overnight, but hoping for mild summers is not a long-term solution. At the moment, no one power source is perfect, but increasing energy storage will improve renewable reliability and unlock the power of renewable resources. Furthermore, energy storage can help keep the power on while keeping costs down, enabling a more resilient grid that’s needed to withstand extreme weather conditions.

ABOUT THE AUTHOR

Jeff Perry is executive vice president of asset management at Agilitas Energy, the largest integrated developer, builder, owner and operator of energy storage and solar PV systems in the northeastern US.