For the better part of a decade, industry voices have been heralding battery energy storage system (BESS) technologies as the ‘Swiss Army Knife’ of the power grid.
Indeed, batteries have shown themselves capable of providing valuable services ranging from backup power to frequency response to demand charge management to replacing gas peakers plants to renewables integration and mitigating renewable curtailment. In their most recent ‘world first,’ last year in Australia large batteries provided grid-scale inertia services.
Yet as BESS technology has matured and as their economics have been competitive with (and increasingly, superior to) traditional power grid solutions, they are on the verge of fundamentally flipping how the grid operates altogether. Industry trade media’s preoccupation with spotlighting the latest ‘shiny’ achievement of batteries misses seeing the forest for the trees.
FROM REACTIVE LOAD-FOLLOWING GENERATORS TO A FUNGIBLE ‘ELECTRON INVENTORY’
During the prior century, so-called “traditional” grid balancing involved starting with predictable demand, then pairing that with baseload thermal power — supplemented with modest-ramping, load-following gas peakers when needed.
As we move deeper into the 21st century, times have changed. “Modern” grid balancing now involves increasingly dynamic and peaky demand, paired with growing contributions of variable supply-side renewable generation (especially wind and solar PV), resulting in reliance on strained, expensive, polluting fast-ramping fossil peakers.
Now, times are ready to change again. Batteries are staged to forever shift how we think about (and actually execute) grid operations, thanks to their unique ability to serve as an always-ready, fungible ‘electron inventory’ that can equally serve supply- and demand-side power grid needs.
THE GRID GETS A SUPPLY-SIDE ‘SLUSH FUND’
The status quo for ensuring sufficient supply-side capacity to meet forecasted demand means there are required minimum spinning reserves, waiting to get connected to the grid. These peakers are essentially sitting ‘idle’ in the wings — like soccer players warming up along the sideline in the recent FIFA World Cup — waiting to get called into the game and ramp up.
Meanwhile, solar and wind inject power when they’re generating — in part thanks to their priority position as zero-marginal-cost generators in the dispatch stack — but they also have to throw away perfectly good electrons via curtailment when there’s not enough demand to absorb that supply.
In the unfolding new era of a battery-centric electricity grid paradigm, batteries serve as an always-ready, always-connected ‘slush fund’ that continually stocks the grid’s electron inventory with a generation-agnostic power ‘bank.’ The implications are far-reaching.
For example, instead of ramping up gas peakers — a costly and dirtier way to run the grid — those power plants can run at a more-efficient, less-polluting steady state, pumping their electrons into waiting batteries that can then respond and discharge that energy when grid demand starts rising.
For another example, with massive proliferation of smart, IoT-connected distributed energy resources (DERs), we’re seeing more demand response and DERMS programs aimed at trying to absorb excess renewable generation and reduce solar and wind curtailment. Instead, batteries can absorb those green electrons like a sponge and release them back onto the grid as demand is ready for it.
READY FOR EVS AND THE RISE OF ‘ELECTRIFY EVERYTHING’
On the demand side, in the coming years the grid is going to see more demand than it ever has, in no small part due to the ‘electrify everything’ movement. Electrification will soon touch every facet of everyday life: induction cooktops, grid-interactive water heaters, electric air-source heat pumps, and of course, electric vehicles (EVs).
EVs are a great case in point: a new electrified technology that represents not just huge amounts of new aggregate load, but also big spikes in demand over very short periods of time as EVs plug and unplug from fast-charging stations. The old school power grid management approach isn’t designed for those types of near-instantaneous, massive load fluctuations; batteries are.
We’ve already seen growing instances of EVSE operators installing battery banks co-located with their charging stations, in order to buffer the grid from such impacts. Yet a grid rewired and redesigned around battery energy storage technology altogether becomes purpose-built for the new reality, rather than being retrofitted to accommodate EVs and the rest of ‘electrify everything.’
It’s time to stop talking in the future tense about the technical potential of what batteries could do for the grid. It’s also time to move beyond celebrating each new battery ‘first,’ like last year’s story out of Australia.
BESS is now at a point of technological maturity and coming down the cost curves into competitive economics, such that we should instead be thinking harder and differently about how we operate the grid in a battery-enabled brave new world. That’s what we’re doing here at Available Power. We invite you to join us.