The Troubled Teens of Renewables

In the news this week, German Chancellor Angela Merkel negotiated an agreement with state leaders to limit the expansion of solar and wind. The short of it is that intermittency and time-specific abundance of these resources is causing real problems for the stability of the German grid. Curtailment of renewable production has been a reality in Germany for years, and it has reached a point where Merkel had to do something about it.

We need to pay close attention here. We’re hitting similar problems to Germany in states like Hawaii, Texas and California, where renewables have been aggressively deployed. In the past two months, we’ve seen multiple cases of solar curtailment in CA. Texas has recently witnessed negative costs on wind energy. On Oahu in Hawaii, certain circuits occasionally produce solar power that is over 250% of demand.

It’s a big deal, with big implications. It presents a ceiling on renewables, unless generation like solar and wind can be made to better match load profiles, particularly in the late afternoon and early evenings when peaks typically occur. The way to do that is through broadly distributed energy storage to support wind and solar generation, allowing solar electrons from 2pm to service 7pm load.

Energy storage appears essential to enable decarbonization strategies dependent on very high shares of wind and solar energy. 
- The Value of Energy Storage in Decarbonizing the Electricity Sector

It’s a challenge of cost. Energy storage is still in it’s early days, and it’s on the front-end of being economic as a grid contributor. We need to reduce costs and accelerate scale. One bit of good news is that scale will have a self-fulfilling impact on reducing costs as manufacturing efficiencies factor in, as we’ve seen with solar.

Something like an Incentive Tax Credit (ITC) or feed-in tariffs for storage would be a good start. From a financial perspective, storage is roughly where solar was in 2006. In the chart below, you can see the impact that incentives have had on acceleration of solar.

Photo credit: Treehugger

A quick side note. For those that argue that incentives like the ITC subsidize an uneconomic technology, I disagree; They are a tool to accelerate the maturity, scale and cost declines of a promising technology. I’ll also note that the lack of a price on carbon represents a huge subsidy for coal and gas, both of which are mature technologies. #justsayin

Beyond a storage ITC or feed-in tariffs, the following should be explored further:

  1. incentives for dispatchable solar or “zero carbon” microgridding, to motivate balanced deployments of distributed solar with storage that make solar electrons available to meet load at different times
  2. reductions in cost and speed of interconnection and permitting for addition of storage to the grid
  3. remote net demand allowances (within a grid area) to expose new configurations for storage deployments across different meters, thus enabling new flexibility and business models

It is shortsighted to push solar and wind without thinking about the cost to make these sources dispatchable to meet load needs. That means pushing aggressively to get storage in a more economic place.

We need to get past patting ourselves on the back that solar and wind are now comparable to the cost of coal and gas. Let’s chart the path that puts the combined cost of solar+storage and wind+storage on par with coal and gas.

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