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Renewables, IT and storage can help grid reliability: panelists

Highlights

Enhance reliability, efficiency in remote places

Battery prices down 85% since 2010

Houston — While some may think renewable resources only make the grid less reliable and secure, experts at a conference in Texas said the diversity that renewables bring to the fuel mix can combine with information technology and energy storage to cost-effectively enhance grid reliability and security.

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One of the speakers of a Texas Renewable Energy Industries Association GridNext panel discussion on Thursday titled "How Renewable Energy & Smart Technology Make the Grid more Secure and Reliable" was Wayne Callendar, zero emissions resource manager at CPS Energy, municipal gas and power utility in San Antonio, where the GridNext conference occurred.

Callender quipped that when he mentioned the title to one of his colleagues who operates the system, that person responded, "Good luck with that."

At CPS Energy, Callender manages about 1,059 MW of nameplate wind capacity and about 496 MW of nameplate utility-scale solar capacity, but CPS Energy also has natural gas, coal and nuclear capacity.

"Diversity has served CPS Energy so well for so many years," Callender said, adding that the muni is working to deploy a distributed energy resource management system in order to engage the city's behind-the-meter capacity in ensuring utility reliability and efficiency.

"I think the key thing is not really telling people how to use their power, to make sure all of these things are talking to each other," Callender said, which can help optimize the network's performance. "We have more than 100 MW of residential solar out there. It's just growing more and more. The world is becoming that much more complex."

EXTREME CONDITIONS

Renewables' contribution in remote locations is a key benefit for another panelist, Dean Tuel, global vice president for sales in the area of microgrids and energy storage solutions at Aggreko, the Glasgow, Scotland-based supplier of temporary power generation and temperature control equipment.

For example, Rio Tinto's Diavik Diamond Mine in Canada's Northwest Territories relies upon diesel fuel to generate power, and that fuel is only deliverable in bulk in winter over icey roads, which are becoming more treacherous as climate change shortens Canadian winters, Tuel said.

Therefore, Aggreko is working on as much as 10 MW of wind generation, in combination with battery storage, to cut fuel costs by 5 to 10%, Tuel said.

Similarly, US military bases on islands require fuel for conventional generation, and establishing battery storage and renewables helps their reliability, Tuel said, "because that customer or load at that location has a need for reliability that succeeds 99.9% of the time."

Battery prices have steadily fallen over the past several years, Tuel said.

BATTERY PRICES

On Wednesday, panel moderator Peter Kelly-Detwiler cited a Bloomberg New Energy Finance report asserting that the volume-weighted average price of lithium-ion batteries dropped by about 85% between 2010 and 2018.

However, the federal investment tax credit for mating battery storage with renewables is the main driver for battery storage projects now, said Judy McElroy, CEO of Austin, Texas-based Fractal Energy Storage Consultants.

"At this point, everything is a hybrid resource," she said, in which storage is paired with wind or solar resources.

If a battery gets at least 75% of its energy from a renewable resource, it is eligible for a 30% ITC, McElroy said. "Anything that can shave capital cost from a project can increase the internal rate of return," she said.

However, she cautioned against using firms that may lack proven experience in safely deploying battery storage but offer significantly lower initial costs.

"Just this past year, South Korea had 23 battery fires," McElroy said. "Safety goes hand in hand with reliability. Putting the systems in properly, having that supervision, certification ... and testing is incredibly important."

-- Mark Watson, markham.watson@spglobal.com

-- Edited by Joe Fisher, newsdesk@spglobal.com