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COLUMN: Want to reduce GHG emissions? Invest in energy storage for solar, wind power

by Colin Isaacs
EcoLog, 8/30/2019 3:03:00 PM

For too long renewable electricity has been seen as, and in many cases was, too expensive when compared to other sources. Two recent studies suggest that may no longer be the case. One shows that wind power is now price-competitive with electricity generated using natural gas, while another suggests that grid-scale battery technology is a good place for investors to put their money. 

The first study — 2018 Wind Technologies Market Report, from the U.S. Department of Energy, Office of Energy Efficiency & Renewable Energy — finds that the price of wind turbines is dropping and that the power output of new turbines is significantly greater today than in the past. As a result, you can buy, install, and operate a wind farm at a lower cost than the cost of fuel for an electricity-generating plant operating on natural gas. 

Although the data are for the U.S. and regulatory requirements and land prices in high wind areas in Canada may impose some additional costs, various reports from the Canadian Wind Energy Association suggest that the installed costs of wind turbines in Canada are not too different from those in the U.S. The comparison with natural gas generation should still be a good approximation as long as all costs are taken into account on the U.S. side. 

Extensive additional analysis is contained in the 2018 Wind Technologies Market Report. The following is a brief extract: 

  • in 2018, 7,588 megawatts (MW) of new wind power capacity worth $11 billion was installed 
  • at 21% of all capacity additions in 2018, wind power represented the third-largest source of new U.S. electric-generating capacity, behind solar and natural gas 
  • wind supplied over 40% of Denmark’s total electricity generation in 2018, and between 20% and 30% in Ireland, Portugal and Germany; in the U.S., wind supplied 6.5% of total electricity generation in 2018 
  • GE and Vestas, a Danish company, accounted for 78% of the U.S. wind power market in 2018 
  • U.S. wind sector employment reached a new high of 114,000 full-time workers; three turbine manufacturers have production plants in the U.S. 
  • independent power producers own 80% of the new wind capacity installed in the U.S. in 2018, with most of the remaining assets owned by investor-owned utilities (19.9%) 
  • large wind turbine prices hit a low of roughly $800 per kilowatt (kW) from 2000 to 2002, increased to more than $1,600/kW by 2008, and have now declined to the $700-$900/kW range 
  • the average installed project cost in 2018 was $1,470/kW, a decrease of nearly $1,000/kW from the 2009/2010 peak and roughly on par with the costs experienced in the early 2000s; some developers are now reporting installed turbine costs in the $1,100-$1,250/kW range 
  • wind now faces stiff competition from solar and gas; the once-wide gap between wind and solar prices has narrowed considerably in recent years as solar prices have fallen more rapidly than wind prices; with the support of federal tax incentives, both wind and solar prices are now below the projected cost of burning natural gas in existing gas-fired combined cycle units. 

Of course, all is not completely rosy on the U.S. wind power horizon. The U.S. Department of Energy reported that its analysts project that annual wind power capacity additions will continue at a rapid clip for the next couple of years before declining, driven by the five-year phased expiration of the production tax credit that was extended by Congress in 2015 and which will virtually certainly not be extended again. 

However, the U.S. Department of Energy states that the potential for continued cost reductions may enhance the prospects for longer-term growth, as might burgeoning corporate demand for wind energy and continued state renewable portfolio standard requirements. 

As is well known, and often held up as a barrier to wind power, the intermittent nature of the wind makes it difficult to increase reliance on wind to too high a level. This is the subject of a study — The role of energy storage in deep decarbonization of electricity production — reported by scientists from the Center for Sustainable Systems at the University of Michigan in Ann Arbor. Their key finding is that adding electricity storage can significantly increase the effectiveness of greenhouse gas (GHG) emission reductions achieved by the renewable energy generation. 

For example, adding 60 gigawatts (GW) of renewables to California achieves 72% CO2 reductions relative to the zero-renewables case with close to one-third of renewables being curtailed. Some energy storage technologies allow 90% CO2 reductions from the same renewable penetrations with as little as 9% renewable curtailment. 

Curtailment is the electricity that is “wasted” because supply of the renewable electricity exceeds demand and production from renewable sources cannot be controlled as effectively as production from many non-renewable sources. The more effective use can be made of renewable electricity through deployment of storage systems, the more the carbon footprint of the total electricity system can be reduced. 

The study examined nine currently available energy storage technologies: pumped-hydroelectric storage, adiabatic and diabatic compressed air energy storage, and lead-acid, vanadium-redox, lithium-ion, sodium-sulfur, polysulfide bromide and zinc-bromine batteries. The findings show that renewable curtailment and CO2 reductions depend greatly on the capital cost of energy storage. In addition, increasing the renewable penetration or the carbon tax makes energy storage more cost-effective. This is because higher renewable penetrations increase the opportunities to use stored renewable energy to displace generation from non-renewable sources. 

This is a quite technically detailed study but the bottom line is quite clear: storage technologies that support renewable power generation that may appear uneconomical when past performance is considered may in fact be economically viable as well as environmentally advantageous in the near future. Hence, the headline on the University of Michigan press release announcing the publication of the study: Investing in energy storage for solar, wind power could greatly reduce greenhouse gas emissions.

Colin Isaacs is a scientist and analyst with CIAL Group who focuses on sustainable development for business. He was selected by Environment Canada to be the principal author of the waste management chapter in the report The State of Canada’s Environment 1991. Colin can be reached at (416) 410-0432 (phone), (416) 362-5231 (fax), and colin@cialgroup.com (e-mail).

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