Traditionally, most people’s interest in electric power has been limited to flipping a switch — or telling your robot to do it — and expecting the lights to come on. Until recently, issues surrounding the grid, reliability and energy storage were left to engineers, planners and a few crisis managers. It was not a matter for the general public’s concern.
Now, though, Americans are more and more dependent not just on electric power but uninterrupted electric power. Individuals and businesses alike cannot really function in today’s economy or society without electricity. Most people have experienced at least one power interruption while they were at a retail outlet and found out that cashiers could not take their money for items they wanted to purchase.
In a purely free market, the reliability problem would be solved by throwing money at the problem — adding generators or whatever capital investment was required — financed by ratepayers. For most consumers, though, their electric power is delivered by a public utility. And while that has the advantage of curbing the natural monopoly power of electric power systems, it also separates the direct link of the two key elements of a demand curve: price and quantity.
The price of electricity for most consumers is not related directly to the quantity demanded but is instead determined by an indirect link by which an elected body sets rates that reflect the demands of the community.
There are many good aspects to this system, but because it separates price and quantity on the demand side it adds a level of complexity to the economics of electric power systems.
That complexity is possibly a major factor in shaping the energy storage picture, and it is one of two major forces explaining why so-called “alternate power sources” — principally wind and solar power at this time — took the lead in installing storage facilities.
The other force, of course, is that both wind and solar power have a built-in continuity problem. In the case of solar power, the power generation shuts down when the sun goes down each day. Wind power interruptions aren’t generally as predictable as solar, but wind-powered systems are equally in need of backup.
Backing up small-scale solar or wind-powered generation facilities that, for example, a homeowner might install, do not present a major technological or economic problem. The equipment needed is readily available and even sold by Amazon.
Playing in the electric power big leagues, though, is a different story. In addition to economic and engineering considerations, public utilities have a responsibility to the public, and that tends to make them more conservative, even stodgy, when it comes to adopting new, unproven technologies.
That is all changing today. Larger-scale generating plants are finding that energy storage technology is a better match for their growing need for backup power for reliability than adding traditional, surplus generating capability.
We are witnessing a major change in public utilities’ thinking about large scale energy storage. Batteries and capacitors are replacing smokestacks. The words “reliable” and “uninterrupted” are driving large scale energy storage projects in the US and around the globe. And the success of these projects has encouraged others to consider similar installations.
The recent experience in Australia gave a tremendous boost to the idea of energy storage facilities to provide backup to grid-scale power generation plants.
Called the Hornsdale Power Reserve, its core is a 100-megawatt energy storage facility, designed and installed by Tesla and is, for now, the largest of its type in the world. It reportedly incorporates both battery and capacitor storage technologies, but the actual design characteristics are closely guarded by Tesla.
One of the advantages of this type of energy storage is its response time. Recently there was a power outage on the grid served by the utility, and the energy storage system kicked in in four seconds — hardly enough time for “12:00” to start flashing on appliances.
There are other large energy storage facilities installed and operating on large, wind-power projects on Maui and Kauai in Hawaii. And there are other major installations under way on the U.S. mainland, Europe and elsewhere around the world.
The technology is still, in a sense, unproven, because the installations, while enjoying early successes, have not been installed long enough to determine their long-term economic value. There are also unanswered questions about its scalability that would affect this form of energy storage’s ability to fit into larger scale grids.
Still, if this energy storage system can be made to fit into power grids at the local, substation distribution level, it would help contain the impact of power outages not only from equipment failures but also from storm damage and even hackers. That’s a good thing.
James McCusker is a Bothell economist, educator and consultant.
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