Sandeep Dudhwewala, Director, Strategic Planning and Transformation, National Grid
2020 was a year of transformative shifts that changed the way we live and do things. However, not all change was bad. 2020 also marked a shift towards greater emphasis on sustainability and a renewed focus on clean energy. Despite economic hardships induced by the pandemic, we saw significant net-zero commitments from major countries, several U.S. states, and a growing number of companies around the world.
Technology is playing a big role in enabling this shift. Thanks to technological improvements, clean energy is no longer dependent on policy-driven subsidies in many parts of the world. Improvements in technology have brought down the cost of renewable energy to levels unimaginable just a few years ago. Renewable energy is no longer an uneconomic choice imposed by policymakers; instead, it is often the most economic choice. Levelized cost of solar energy is now lower than any other form of energy in most parts of the U.S. Onshore wind is not far behind andoffshore wind is quickly closing the gap.
A key technology that is enabling the transition to renewable energy is energy storage–particularly battery storage. Advancements in battery storage technology have significantly lowered the cost–according to Bloomberg New Energy Finance, battery packs cost nearly 90 percent less than in 2010, and will continue to get cheaper. Renewables are now finally becoming “dispatchable” sources of energy–sources that can reliably provide clean energy for a longer duration of time even when the sources that power them are not available. Solar + storage has become the norm with most solar power purchase agreements signed in the last couple of years including a battery component.
“Thanks to technological improvements, clean energy is no longer dependent on policy-driven subsidies in many parts of the world. Improvements in technology have brought down the cost of renewable energy to levels unimaginable just a few years ago.”
While energy storage paired with renewables is already providing both economic and environmental benefits, stand-alone energy storage is also providing similar benefits in some areas. During hours of peak demand, stand-alone storage resources can now displace gas-fired ‘peakers’ in some U.S. markets. For example, National Grid’s 2MW/3MWh battery storage system at the East Pulaski substation in Upstate New York has helped alleviate capacity constraints during peak hours. Other examples of stand-alone storage projects in New York are the East Hampton and Montuak battery storage systems (5MW/40MWh systems), developed jointly by NextEra and National Grid to provide capacity relief during peak hours. In Nantucket, Massachusetts, National Grid installed a 6MW/48MWh battery storage system to support transmission contingency and ensure reliability for customers during peak summer months, thereby deferring the need for a new transmission. While the Nantucket battery system provides a cost-effective solution to reliability and load growth needs on the island, its value can be further enhanced if it can be used to provide market services such as capacity and/or ancillary services. Several new economic use cases for battery storage can be unlocked if multiple value streams can be captured from better utilization of energy storage assets.
While technology has led the way, arcane market rules and regulations have failed to keep up and have prevented utilities from developing maximizing the value from energy storage. We need market and regulatory changes to allow utilities to unleash the full power of battery storage technologies. We are indeed living in uncertain times, but technology can pave the way to a brighter future if only rules and regulations can stop blocking the way.
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