February 14, 2017
Stephen Sproul, Advisor
In 1894, civilization faced a pollution crisis. The London Times newspaper predicted... “In 50 years, every street in London will be buried under nine feet of horse manure.” This became known as the ‘Great Horse Manure Crisis of 1894’. The terrible situation was debated in 1898, at the world’s first international urban planning conference in New York, but no solution could be found. It seemed urban civilization was doomed.
By 1912, this seemingly insurmountable problem had been resolved; in cities all around the globe, horses had been replaced by motorized vehicles. This was possible because Henry Ford developed a process for building motor cars at affordable prices.
Today, civilization faces a pollution crisis; combatting climate change. This will require transitioning to a power system supplied primarily by clean energy sources. Within the context of the conventional power system we have today, this also seems like an insurmountable task, and will require a similar step-change in affordable technology.
Energy storage systems (ESS) are now becoming affordable for various applications in the power network. The array of technical services ESS can provide also serve well to integrate intermittent renewable generation. Many reports focus on these technical aspects, but ESS can also provide additional flexibility to effectively plan and manage the power system, particularly in this transitional period, where a level of uncertainty exists. ESS are the right tool at the right time for complementing existing planning and management practices by providing necessary added flexibility. This flexibility offered by ESS is summarized by three S’s:
Shiftable – Certain ESS provide the opportunity to be relocated as required. This is a new concept for transmission and distribution electrical infrastructure, but helpful when dealing with unclear forecasts and changes in policy, technology and behavior within the energy system. Utilities are required to make investment decisions that depend on certain market conditions. When these conditions change, some investments can become stranded, potentially burdening rate-payers into the future. At the rate of change occurring in the industry, what is an appropriate planning lifespan?
Developers are considering aspects of ESS flexibility today, such as how AES took advantage of the “mobility and scalability inherent in battery-based grid resources” for their 40 MW energy storage project in Ohio.
Swift – Many ESS can be permitted and constructed quicker than conventional solutions. This is discussed in a forthcoming CESA Whitepaper, which highlights examples of both medium and large scale ESS that have been realized in relatively short time frames. This makes some ESS solutions highly agile in responding to sudden grid needs and can assist in deferring major investment decisions until uncertainty in forecasts decreases.
Scalable – Some ESS provide the opportunity to have resources online incrementally. This aspect can reduce upfront capital costs. Conventional utility solutions are typically only cost-effective when initially oversized to match their long lifespan, resulting in a high upfront capital cost and low average utilization. In some cases, it may be prudent to pursue a more targeted investment and provide benefit through the time-value of money. The modularity of many ESS allow existing systems to be modified to include more energy, or additional ESS to be deployed in parallel to provide more power.
ESS are becoming affordable at just the right time for the power industry and offer the flexibility required to transition to the future energy system cost effectively. These three S’s, Shiftable, Swift and Scalable offer mechanisms to reduce investment risk at a time of rapid change. Stay tuned for CESA’s upcoming Whitepaper with detailed examples of ESS providing these benefits.
Just over a century ago, an affordable technology modernized transportation and allowed an insurmountable pollution crisis to be resolved. It is time for history to repeat itself.