Powering Strong Communities

Report Looks at Role of Energy Storage in Cutting Grid Congestion

Energy storage can reduce transmission congestion, but not all forms of energy storage do so equally effectively, according to a study by Lawrence Berkeley National Laboratory.

The study, Interactions between hybrid power plant development and local transmission in congested regions, looked at 23 locations in the bulk power system that already experience significant congestion and have a stand-alone solar or wind plant that, the authors said, can serve as a “window to the future.”

Transmission congestion can prevent low-cost resources like wind and solar power from being fully utilized, limiting their market value and can lead to higher marginal prices in the affected area, according to the report. On the other hand, energy storage, which can often be built more quickly than new transmission, can help ease transmission congestion by shifting generation and load over time, the report said.

Adding stand-alone storage to congested generation locations reduces congestion both in load centers and wind-rich and solar-rich areas while adding generation reduces congestion but exacerbates congestion in wind-rich and solar-rich areas, the study found. Moreover, hybrid plants that combine renewable generation and energy storage are better for congestion if they are allowed to charge from the grid and use storage technologies with lower degradation costs.

“These options can be the difference between a positive and negative congestion impact metric for some hybrid sites in wind-rich and solar-rich areas,” the study’s authors wrote.

They said that expanding transmission would benefit stand-alone wind plants in wind-rich areas significantly, stand-alone solar plants in solar-rich areas moderately. Most wind and solar hybrid plants would also benefit from expanded transmission, but to a lesser degree than their stand-alone counterparts, the authors said.

The study presented its results from two perspectives, that of a regional grid manager and that of a power plant developer assessing revenue potential.

From the perspective of a grid manager, the ability of a hybrid plant that combines renewable generation with energy storage to charge the battery from the grid is an important determinate in the ability of a plant to reduce grid congestion, the study found. In solar-rich and wind-rich areas, new hybrid plants that charge from the grid and can cycle their battery frequently and typically decrease congestion, though the effect is small.

New hybrid plants that only charge from the paired renewable generator increase congestion but result in less congestion than building a stand-alone solar or wind plant, indicating that adding batteries to an existing stand-alone wind or solar plant will almost always reduce congestion, the authors said. Those findings show the importance of flexibility in incentive programs, they added. They noted that the Inflation Reduction Act provides incentives for hybrid plants that charge from the grid, while previous incentive programs focused on hybrid plants with storage that charged only from the paired solar or wind generation.

From a developer’s perspective, wind plants saw a larger increase in revenue potential from transmission expansion than did solar plants, while both types of plants saw roughly similar percentage revenue increases from hybridization, that is, from adding energy storage to a plant’s design.

The study also looked at how transmission expansion would affect projects in congested regions. In variable resource rich areas, wind plants saw large revenue opportunities from both local transmission expansion and from hybridizing by adding battery storage. Solar plants also benefit from transmission expansion, but the value is small compared with wind plants and compared with adding storage, the study found.

In conclusion, the authors said, “policy decisions and energy storage technological advances will affect the cost of congestion through the location and configuration of wind-plus-storage and solar-plus-storage hybrids.”