FORESIGHT Climate & Energy 05
The dangers of pursuing electricity storage
Danger lies in the misguided belief that transitioning to a green energy economy depends on storing more electricity for powering homes, businesses and the rest of the modern society than in the age of fossil fuel. Pursuing storage at any cost risks a rush to create markets that make storage of electricity profitable, whether or not it is needed.
Yet that is what governments are doing. Public money is being poured into developing and implementing “storage solutions,” not in response to demand from power system operators, who are successfully integrating large volumes of variable solar and wind capacity without storage, but to demand from storage providers. Demand is also coming from households and businesses who fear rising electricity bills unless they take matters into their own hands.
Despite these demands, it is not the task of governments to pursue the uptake of technologies, through direct support or by market regulation, when doing so is to the detriment of the common good. Storing electricity will always cost more than using it directly. The more electricity that is stored, the greater its overall cost, both to society as a whole and to the individual solar-storage home or business.
If the transition to renewable energy was dependent on massive uptake of electricity storage technologies, these would be an unavoidable cost. But it is not. Countries furthest ahead in successfully transitioning to renewable energy are managing the variability of wind and solar supply without adding the cost of unnecessary storage. This summer wind met 75% of demand for several weeks in western Denmark, where all large central power stations were inactive for 19 days in June. Dutch researchers, in a recent review of more than 60 studies, conclude that in power systems with up to 95% renewable supply, the need for electricity storage is no more than 1.5% of annual demand.
Instead of focusing on leveraging storage into power markets, battery storage in particular, governments should be reducing the need for it by investing in robustly interconnected power networks over wider areas. The less storage, the cheaper the overall cost of supply. Creating markets that widen the spread between the wholesale price of electricity and its sales price might make storage profitable, but it is the customer who pays more in the long run. They should not overpay for an essential service, or feel, or feel driven to invest in home supply. The narrower price spread, the lower the total cost.
Acting on belief that storing electricity and “firming supply” from variable renewables is essential for reliable power delivery is no substitute for rigorous examination of the case for storage. When markets struggle to unearth a value proposition for investment in a product, it is high time governments asked themselves why that might be so. Only when the value of storage is greater than its cost does investing in it make economic sense.
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