A glimpse of the "infinite scalability" of energy storage, and some other key takeaways from this very exciting utility bid solicitation
By Joe Smyth | email@example.com | @joesmyth
After I posted Xcel Energy’s report showing unprecedented low prices for renewable energy and storage bids, several energy industry experts added some helpful context and analysis of the implications of these bids.
Much of that discussion focused on the low bid prices for projects that would combine renewable energy with energy storage. The Xcel Energy report showed that the median bid price for solar and storage projects was $36/MWh, while the median bid price for wind and storage projects was just $21/MWh. There were also seven bids for combined wind and solar and storage bids, with a median price of $30.60/MWh.
"The numbers in these bids are the lowest prices we have seen for any combination of renewable plus battery storage," said Ravi Manghani, director of energy storage at Green Tech Media.
Matt Gray, Utilities & Power Senior Analyst at Carbon Tracker, added: “Based on our modelling, the median bid for wind plus storage is lower than the operating cost of all coal plants currently in Colorado, while the median solar plus storage bid is lower than 74% of operating coal capacity.”
An Xcel Energy representative told the Minneapolis Star-Tribune that given the level of interest from bidders, "there will probably be some amount of renewables plus storage.”
Still, key details remain unclear - as Shayle Kann noted, we “don't know the storage duration” for these proposed renewable energy and storage projects. “You don’t know if it is two drops or two gallons of storage,” said James Lazar, senior advisor at the Regulatory Assistance Project.
However, the Xcel Energy report did provide a few details about the size of some of the stand-alone battery storage bids - and some of them are absolutely massive.
Here’s the section of Xcel report with details about those stand-alone battery storage bids. Note that these aren’t all of the energy storage bids that Xcel received, just the ones that sought a particular classification as a new type of clean energy resource. This table shows bids that Xcel didn’t consider new enough to qualify for that classification, but was still considering pursuing.
That last bid for a 150 MW battery storage project with a duration of 10 hours would mean a storage capacity of 1,500 MWh. I followed up with Jason Burwen, Policy and Advocacy Director at the Energy Storage Association, and he provided some more details about how that proposed project compares to other large battery projects currently being pursued around the world:
The highest power battery in the world presently is the Tesla 100 MW / 129 MWh battery in South Australia. However, the largest battery in terms of stored energy is the NGK 50 MW / 300 MWh battery in Japan. Fluence has a 100 MW / 400 MWh battery that is currently under development in southern California and will be the largest in the world when it comes online—unless the UET 200 MW / 800 MWh flow battery in China is developed successfully before then. A 150 MW / 1,500 MWh battery would of course dwarf all of these.
In other words, if Xcel pursued that 1,500 MWh battery project, it would be by far the largest battery in the world, more than ten times larger than the project that Tesla recently completed in South Australia.
Like solar power, batteries can be scaled to fit basically any application, from backup power for homes and small businesses to these huge utility scale applications - and everything in between, including for smaller electricity providers like electric cooperatives and municipal utilities. United Power, an electric cooperative in Colorado, will build a 4 MW / 16 MWh community battery this year, and other co-ops in the region are closely following that project.
As Elon Musk put it, batteries can be designed for “infinite scalability.”
With this wide variety of markets, along with expectations of significant cost declines over the next five years, battery project deployments are set to grow quickly. The US energy storage market is expected to grow almost nine times larger between 2017 and 2022, according to the most recent US Energy Storage Monitor report.
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