Earlier this year the Federal Energy Regulatory Commission (FERC) earned our praise for two decisions. To the surprise of many observers, it firmly declined to implement an order from Energy Secretary Rick Perry to subsidize coal and nuclear generation (supposedly for ‘resilience,” but in reality to help a few large corporations), and it also ordered all states to adopt rules that allow storage to compete fairly with other energy services.
Storage is extremely valuable at many points on the electric grid, including “behind the meter” in homes and businesses, where in combination with solar and other clean technologies (or dirty ones, like gas-fueled generators) it can help people maintain power when the grid goes down. It also has another use, which, in combination with variable rates, will be increasingly important and can save everyone money and greatly reduce fossil fuel usage in the future. Utilities in the mid-Hudson region are just starting to experiment with variable rates, which charge customers more for using electricity more during so-called “peak” the hours when there is the greatest demand for electricity. At these times (evenings after work, and during hot days in summer or very cold days in winter), the electrical load spikes, and because the electrical grid always has to be ready meet the total demand, or it will fail, it has to keep a large amount of storage capacity in reserve—mostly in the form of fossil fuel generators that can “ramp up” quickly whenever they are needed. The 100-MW lithium ion battery system built by Tesla in Australia, which functioned perfectly to meet the demand when it was turned on in December 2017, is an example of how this works. One commentator estimated that it saved its owner $800,000 over two days when a coal generator failed.
Utility-scale storage can be interconnected by itself or In combination with renewables to mitigate the need for fossil-fuel-based “peaker” plants. Storage can also draw power from the batteries in electric vehicles once sophisticated timing systems are implemented. All this should one day bring huge savings for all electricity users, and greatly reduce the need for fossil-fuel-driven generating plants whose purpose is only to be able to ramp up quickly as needed. Batteries can do that too, and they don’t create greenhouse gases.