California’s Utility Scale Battery Storage Paves the Way for Renewable Energy Usage

It started with a bang. I’m not talking about the universe. On October 23, 2015, workers at the Aliso Canyon natural gas storage facility near Porter Ranch, California, heard a big noise. That noise meant big trouble. A wellhead had blown, and 186 billion standard cubic feet of stored natural gas began gushing from its opening into the atmosphere. Four months and five billion cubic feet of natural gas later, Southern California Gas Company was able to plug the hole with cement.

That leak created two large problems. First, the methane gas released produced a heat-trapping effect equivalent to the annual exhaust of 600,000 automobiles. That stinks, but our kids can deal with that one. The second and more immediate problem is that the leak drained a lot of natural gas, further destabilizing California’s already unsteady electrical grid. The entire storage facility—the fourth largest natural gas storage in the country—had to be shut down, sparking serious concerns about the availability of natural gas to power peaker plants. These are plants that turn on when demand for energy is greater than the baseload supply delivered by nuclear and other large volume sources, like when everyone in LA turns on their AC units on a summer afternoon. If we can’t use peaker plants, then blackouts occur when power demand exceeds supply.

California Installs 80 MW of Battery Storage Capacity

Well aware of this potential, California regulators acted to reduce the likelihood of peak demand blackouts in a remarkably innovative way. Climate regulations, and even simply the price of land, heavily restrict new natural gas peakers in California. So, instead of constructing new gas facilities, the state offered contracts to three companies for utility scale battery storage facilities. Within 6 months after receiving the contract, Tesla had 20 megawatts of battery storage installed and online. Two other companies, San Diego Gas & Electric, and AltaGas, have partnered with AES Energy Storage and Greensmith Energy Partners, respectively, to deliver two more battery storage facilities in the coming months. Combined, they hold 80 megawatts of stored power. Each megawatt can power about 5,000 home computer systems. California intends to greatly expand this capacity over the next five years.

This is a big deal. It’s the largest, quickest installation of utility scale battery storage that has ever happened. It is also a demonstration of capability and effectiveness in a technology that is moving towards more widespread implementation. While none of these companies have released financial details, the execution of the project shows that battery storage can be built at a realistic cost. As such, it paves the way for future battery storage implementations.

That’s not to say that across the nation, everybody will suddenly shift to building battery storage instead of natural gas plants. Depending on location and local regulations, natural gas is still generally cheaper per megawatt hour than battery storage. However, it does indicate that under the right conditions, battery storage is competitive and effective. At the very least, it’s an option. In many cases, companies with the right strategy can already turn a profit on battery storage. As new technologies develop and companies gain experience with the technology, costs will continuously decrease, making battery storage an even more attractive option and opening up the door for expansion.

Battery Storage Enables Renewable Energy Usage

As battery storage becomes more widespread, renewable energies such as solar, wind, and tidal (a form of hydropower) can be harnessed more effectively and potentially transform the way we get our power on a mass scale. Currently, one of the greatest issues with renewable energy generation is the inherent intermittency of the energy they can produce. It stands to reason—you can’t generate solar energy when the sun isn’t shining, nor can you generate wind energy when the wind isn’t blowing. Without storage facilities, energy transmission is nearly instantaneous. That means that any extra energy a photovoltaic farm produces at 3pm cannot be used to turn on your television when you turn the game show on after dinner. So while renewable energy can take some of the load off during daytime hours or during windy conditions, it cannot be depended on to meet the demands of U.S. energy consumption.

A few non-battery storage solutions do exist. They’re cheap and they’re great, but they have limits. The most effective is pumped hydropower, in which a small amount of electricity is expended pumping water into reservoirs that can be released to turn turbines as demand merits. This doesn’t work in the desert, making it an unsuitable solution for large parts of the U.S.

Batteries are more expensive, but they work anywhere, regardless of climate or landscape. With large scale battery storage, the extra energy produced by wind and solar isn’t lost, and can be fed back into the grid during times of peak demand. Essentially, renewable energy can then fill the same function as natural gas plants, which are also expensive to run and are only turned on during times of peak demand. Batteries are the missing link that transform renewable energy from something nice to think about to something directly useful.

Renewable Energy Delivers Long Term Benefits

Why is it a good thing to replace natural gas with renewable energy? This goes back to the first problem created by the Aliso Canyon methane leak. Natural gas, though certainly cleaner than coal or oil, still releases heat-trapping gasses into the environment. These gases trap the sun’s energy in the atmosphere and create climatic changes, such as the melting of the polar ice caps, larger and more frequent hurricanes, and larger and more frequent wildfires. Solar and wind energy do not do this.

Also, eventually the world’s deposits of natural gas will be exhausted. Even before they’re exhausted, they’ll require ever more destructive means of extraction. By contrast, the sun won’t burn out for another 5 billion years, and by then we’ll have bigger problems, or no problems at all. The wind will keep on blowing as long as there’s air and differences in temperature. Natural gas works well for now; it isn’t the worst thing in the world. But in the long term, the country and the world will benefit from energy produced instead by renewable sources. Utility scale battery storage is essential towards the development of a clean energy future.

All this is very nice, but what does it have to do with you? Not much, right now. The battery installations in California will not materially affect your energy bill next month. However, as the technology develops and becomes used in more locations, such as the four megawatt installation recently built in Rutland, Vermont, it will begin to alter the price you pay for energy at times of peak demand.

Should you wish to aid the process, the simplest way to do so is by purchasing Renewable Energy Credits from a third party energy supplier like Liberty Power. These credits guarantee your energy will be produced by renewable sources. Your investment helps renewable energy producers, easing the development of new renewable energy plants. It also demonstrates public interest in renewable energy technology, and thereby the linked development of battery storage facilities. This will influence industry leaders and politicians to invest in further renewable and battery development. To learn more about switching to renewable energy credits, contact Liberty Power today.


Photo Credit: Joey Kyber

Liberty Power Editorial Team
The Editorial Team at Liberty Power is a swashbuckling group of passionate and creative Energy experts bringing you the hottest topics on exciting market trends, booming products and services, and the latest news in the industry.
April 27, 2017