All too often technology is a lot of hype followed by disappointment. For example, shouldn’t there be a flying car sitting in my driveway by now?
Flying cars might still be years away, but there’s one hyped technology in particular that’s getting close to becoming reality.
Because batteries offer the perfect solution for integrating the intermittent and unpredictable output from solar and wind generators into a steady, reliable source of electric power.
Batteries: The Perfect Solution
Essentially, batteries will store power from solar and wind generators when supply is plentiful, and then release power to the grid when it’s needed.
Balancing electricity supply and demand is key for the electric transmission system operators to keep the grid running smoothly.
This is traditionally accomplished by having mostly natural gas-fired “peaker” power plants constantly up and running, even if they’re only providing those few extra megawatts of power when needed.
But with batteries, any extra power needed by the grid could be provided within 30 seconds.
Now, there’s no on/off switch for power plants. But these power plants could be switched off down the road as renewable power grows in volume and battery technology is adopted by electric utilities.
Costs Are Falling
Of course, it all comes down to the cost. The good news here is that the cost of producing such batteries is falling, thanks to companies like Tesla Motors Inc. (TSLA), and the Gigafactory and Tesla Powerwall.
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The investment bank Lazard thinks that within five years, the price of batteries will be low enough to be commonplace in the grid. Lazard believes batteries can be competitive even without government subsidies or tax breaks.
George Bilicic, the head of Lazard’s power, energy, and infrastructure practice, told the Financial Times, “Power grid applications were grade school science projects a few years ago. They are much more real now.”
And Jim Robo, the CEO of NextEra Energy Inc. (NEE), also backs up what Lazard is saying.
In September, he spoke at the Wolfe Research Power & Gas Leaders Conference, saying that after 2020, “there may never be another peaker built in the United States.” Electricity storage thanks to batteries would be used instead.
Utilities Choosing Battery Storage
Nearly all of the major U.S. electric utilities are investing in energy storage. And so is the regional transmission organization, PJM Interconnection.
Navigant forecasts that electricity storage installed on the grid in support of renewable energy will grow more than 60 times in the U.S. from just 196 megawatts (MW) of capacity this year to 12,700 MW in 2025.
This move toward battery storage is a global phenomenon, too.
Frost & Sullivan says that the global market for utility-scale, grid-connected storage will soar from only $460 million in 2014 to $8.3 billion in 2024.
The bottom line here: While my flying car is still just a dream, battery storage is becoming an integral part of our electric grid, will soon be a reality.