Utility scale battery storage could satisfy a “substantial portion” of peak capacity needs in the United States, according to a new report from the National Renewable Energy Laboratory (NREL).
NREL says its analysis shows there is the potential for about 28 GW of 4-hour battery storage for peaking capacity.
U.S. generating capacity was about 1,187 GW at the end of 2017, of which about 261 GW was fossil-fueled peaking capacity. If peaking capacity retires at the same rate as the rest of the nation’s generation fleet, NREL estimates that about 150 GW of peaking capacity will retire over the next 20 years.
Using battery storage to meet peak demand needs could move the technology beyond its current “relatively small” ancillary services market and help further reduce the cost of energy storage, according to the report, “The Potential for Battery Energy Storage to Provide Peaking Capacity in the United States.”
In addition, battery storage used primarily to provide peaking capacity could also provide additional benefits, NREL said, such as a sink for low- or zero-value solar power generation during non-peak periods and that, in turn, could enable even wider deployment of solar power, further increasing the potential for 4-hour storage to provide peaking capacity.
The combination of those effects could increase the potential for 4-hour storage to 50 GW or beyond, if solar power penetration reaches 10%, NREL said.
The deployment of solar power and the potential for battery storage to provide peaking capacity will not be evenly distributed, however, NREL noted. For instance, the first areas to adopt 4-hour storage could saturate their potential before full national deployment is reached.
Some states have already taken steps to encourage energy storage, including providing guidance on durations. NREL notes that California regulations stipulate that energy storage with four hours of continuous discharge capability are eligible to meet the state’s resource adequacy requirements. And New York’s 4-hour rule allows energy storage to participate in the New York Independent System Operator’s capacity market.
The NREL report also noted a diminishing return on the deployment of 4-hour energy storage. As deployment rises, the peaking events it serves become longer, so energy storage must serve a wider part of the demand curve and that reduces batteries’ ability to act as a peaking resource and decreases their value.
In NREL’s analysis, 4-hour storage would be built first, until it reaches the point of diminishing capacity value. Developers then could take advantage of declining battery prices and build longer-duration storage facilities, increasing the competitiveness of 6- or 8-hour storage against conventional peaking plants, according to the report.
NREL notes its report is a preliminary analysis that does not consider several elements that could affect the potential of storage to provide peaking capacity, such as the effects of changing load patterns due to demographic shifts, changes in climate patterns, or the wider penetration of electric vehicles.
The report also does not take into account how additional transmission could enable larger regional sharing of wind and solar resources that could affect net load profiles.
NREL says its findings provide “a basic indication of the overall potential for storage to provide peaking capacity” but “robust regional calculations using standardized effective load-carrying capability calculations will be needed to verify the results for any specific location.”
The report is available here.
