Solar energy encourages markets to evolve

Adrienne SorensenAugust 17, 2018 1401 0

Solar energy encourages markets to evolve 

Renewable energy for electricity has been utilized for quite some time; mostly at a pilot or limited scale. Markets must evolve so renewables energy can display their full potential for consumers. Concerns of how to fully utilize renewable energy is still under discussion. The growing pains are discussed below. 

The grids peak capacity 

The grid’s need to ensure sufficient peak capacity  is good for batteries since peak periods are rare but need quick response from flexible resources. A battery mitigates peak generation needs while being more regularly cycled to serve another value stream. This value-stacking decreases the price to consumers of meeting peak requirements. For instance, in California, state officials canceled plans for a 262-megawatt gas peaker after discovering that a energy storage, mixed with some solar and demand response gives the same technical capabilities and is more economical.  Both California and Washington have issued orders mandating utilities to integrate energy storage to complete peak demand.

Capacity markets are huge

Energy storage has yet to gain popularity for wholesale capacity markets in which grid operators procure resources to ensure adequate future power supply. The capacity markets are enormous. If energy storage were to gain 10 percent share, this would open up an estimate of 30 gigawatts of demand for batteries. This is about 50 times total capacity. Energy storage can participate in capacity markets   but is  barred due to  market rules. 

FERC regulates the wholesale market operators, took steps toward fixing this problem by issuing a notice of proposed rulemaking (NOPR) that mandates system operators to redesign their rules to account for new resources. Energy storage   need eligibility to compete.

U.S. utilities spend over $40 billion yearly to upgrade  transmission and distribution systems. Some upgrades are necessary while others could be cost-effectively avoided with non-wires alternatives (NWAs). These are non-traditional utility investments to substitute a typical upgrade in combination of demand flexibility, distributed generation and energy storage. If a non-wires alternative give the same service to the grid at a lower cost than a traditional T&D investment, it should be adopted.The NWA market is held back by regulators and utilities. Also, distributed energy is restricted from showcasing its true value.

Electric vehicles is helpful for the electric grid depending how the vehicle batteries are charged and discharged. Without proper incentives, it’ll increase system peak demand, which brings costly new infrastructure and increase emissions. With smart time-of-use EV electricity rates, customers can be incentivized to charge their vehicles when power is cheap and abundant. This avoids  overgeneration and curtailment when renewables grow, and to mitigate the ramp requirement to fulfill evening peak.

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