POWER May 2020 - 42

RENEWABLE ENERGY
salt plant at Crescent Dunes, Nevada,
is no longer operational and has serious
technical and financial problems.
Hydrogen and fuel cell systems could
benefit from new water electrolysis technology.
Compressed air energy storage
is complex and costly. Little work is currently
underway on regenerative stove
technology, although it has been successfully
demonstrated in the steel industry.
In the short term, storage options are
limited. However, in the long term, there
is still time for utilities to identify and
support research and development into
more economic and reliable storage solutions.
Regulatory agencies must also
consider the reliability and economic
impact of the storage technologies they
permit onto the grid.
A major consideration regarding storage
is who pays for it: the utility adding
the renewable energy, the transmission
operator, or the customer (who could be
required to have on-site storage technology
at their home or business). Of
course, the customer ultimately pays
in all cases, but the details are a critical
decision for regulatory agencies, so it is
important to know how much storage is
needed and its cost.
The Complexity of Renewable
Energy Generation and Storage
Decision-Making
The utility's investment decision as to
the type of renewable energy and storage
technology to incorporate into the
grid must consider both economics and
reliability. Similarly, ISOs/RTOs and regulatory
agencies must have assurance
that the renewable energy and storage
technologies that they approve provide
the reliability society expects.
An example of the complexity involved
in determining the size of a renewable
energy and storage facility is
shown in Figure 5. Seven scenarios are
shown, ranging from all solar to all wind
with five solar-wind mixes in between.
In each case, the sizes are calculated to
meet a maximum daily load of 200 MW
under a 25% RPS requirement in an area
with 20-mph maximum wind speed, one
cloudy day out of every three days, and
utilizing a Li-ion battery storage system.
It can be seen that considerably greater
storage is needed for the all-solar scenario
than for the all-wind scenario. Of
significance, it also shows that sizes are
minimized whenever a mix of solar and
wind is possible.
Financial analysis requires consideration
of capital, operating, and maintenance
costs, and expected life of the
facility. In this example, the initial capital
cost is calculated using $1 million/MW
for solar, $1.75 million/MW for wind,
and $175,000/MWh for Li-ion storage.
However, this protocol is only the first
step in making the most economic
renewable energy decision. A more
detailed analysis would be necessary
incorporating specific equipment and
location dynamics.
Total capital investment for the seven
scenarios is shown in Figure 6. Because
of the higher capital investment cost
of wind compared to solar, the analysis
indicates that capital investment decreases
with increased use of solar and
is minimum for a mix of solar and wind.
However, in many parts of the country
the option for wind farm usage is limited
by the absence of adequate sustained
wind. Another factor to be considered in
decision making is that the land necessary
for solar is at least three times that
for wind.
Storage operating characteristics can
impact costs meaningfully. For example,
if a storage technology with lower
charging and discharging efficiency, and
greater parasitic power loss, replaces
the Li-ion batteries for the same conditions
as Figure 5, a significant increase
in the necessary size of both the generation
and storage equipment is shown by
the model to be required. Accordingly,
the capital investments are significantly
higher when a less efficient storage
technology is employed.
Sound Models Are Vital to Success
Power companies must make renewable
energy and energy storage decisions
that they have not previously
faced, and many may not have the internal
resources to provide the necessary
guidance. Questions that must be
answered include:
■ What size solar, wind, or solar-wind
mix is needed to meet applicable RPS
requirements?
■ What size and type of storage technology
is necessary in conjunction with the
solar, wind, or solar-wind combination?
5. This chart shows seven different solar and wind power capacity mix scenarios from 0 MW
solar to 0 MW wind designed to accommodate a 200-MW maximum daily load under a 25% RPS
requirement with a lithium-ion battery storage system installed. Source: The Ledgemont Group
■ As energy storage systems evolve,
what technologies are most economic
and reliable in the short term and midterm,
and what are likely to be available
in the future?
Accurate information is necessary to
6. This chart shows a simplified economic analysis of seven different solar and wind power
capacity mix scenarios from 0 MW solar to 0 MW wind designed to accommodate a 200-MW
maximum daily load under a 25% RPS requirement with a lithium-ion battery storage system
installed. Source: The Ledgemont Group
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make good decisions. The protocol used
in this analysis shows that the size of required
storage and the impact of weather
are much greater than most power
companies currently estimate. Time and
money spent in the planning phase will
benefit companies as they make choices
for the future. ■
-Jagdish C. Agarwal, PhD and
Richard A. Giberti, PhD are founding
partners of The Ledgemont Group LLC.
POWER | May 2020

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POWER May 2020

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