Arizona is poised to join states that have adopted or are considering adopting energy storage goals for solar and wind in a possible move that’s expected to benefit large-battery makers such as Fluence.
The Arizona Corporation Commission is expected to vote in late February on whether to move forward with a proposed energy modernization plan calling for 3 gigawatts of energy storage by 2030, which, if adopted, could become the largest energy-storage mandate in the country. The plan also calls for 80 percent of the state’s electricity to be generated using renewables by 2050.
States are increasingly seeing energy storage as one of the ways they can modernize their electric power grids, helping utilities to reduce their reliance on natural gas and coal, more effectively use wind and solar power, and cut the need to run additional power plants during high demand.
Energy storage, often using large batteries, allows utilities to store electricity generated from wind, solar, and natural gas power plants when it’s not needed. Then it can be used, or dispatched, when power demand is high, often during hot summer afternoons when air conditioners are running at full blast.
California, New York, Oregon, and Massachusetts have adopted mandates for integrating energy storage onto their power grids. Arizona’s proposal would nearly double New York’s goal to build 1.5 gigawatts of energy storage by 2025.
Arizona’s proposed plan is part of a nationwide “drumbeat” toward modernizing the country’s electric grid using energy storage, Kelly Speakes-Backman, chief executive officer of the Energy Storage Association, told Bloomberg Environment Feb. 7.
If the commission votes to proceed with the plan, it will begin a public review process for it before considering final approval later this year, commission spokeswoman Holly Ward told Bloomberg Environment.
Opportunity for Battery Makers
Big battery manufacturers see the rising interest in energy storage as an opportunity.
Fluence, a joint venture formed in January between Siemens and the AES Corp., has two existing battery storage projects in Arizona with another under construction.
“Adopting the proposed plan and target would give a strong show of confidence by the commission to both utilities and the energy storage sector that storage should scale up in the state,” Ray Hohenstein, market applications director for Fluence, told Bloomberg Environment. “Given Arizona’s flexible peaking capacity needs, we could see them easily exceeding the 3 gigawatt target proposed here.”
The advantage of battery storage in Arizona and elsewhere is that it’s modular and mobile, he said.
“It can be resized and even moved over time as grid needs evolve,” he said. “Arizona utilities are already leading the way on storage modeling, and we’re optimistic that storage will continue to scale up there.”
Battery Storage Is Versatile
Utilities, like Tucson Electric Power, see energy storage as a way to make better use of renewables and recover more quickly from power outages or other disturbances on the grid, particularly as costs of large batteries continue to fall. Lithium-ion battery costs fell 80 percent between 2010 and 2017, according to Bloomberg data.
Joseph Barrios, spokesman for Tucson Electric Power, told Bloomberg Environment that the utility uses two 10-megawatt batteries that are designed to be faster than relying on power plants to compensate during disruptions.
“We are also looking at battery systems that can be charged by solar arrays, and once they’re charged, we’d deliver that power later in the day when demand is higher,” Barrios said.
The utility, which supports the goals of the commission’s plan, expects to use more big batteries as it uses more solar power, he said. Tucson Electric Power has signed an agreement to purchase power from a 100-megawatt solar power plant that, when built, will include a 30-megawatt battery-storage system, he said.
Arizona Public Service Co., the state’s largest utility, supports battery storage, and the commission’s plan is “a bold, challenging vision” for Arizona’s energy future, spokeswoman Anne DeGraw told Bloomberg Environment.
Not Just for Renewables
Storage is becoming attractive to utilities because it has uses beyond integrating renewables, including helping power companies overcome voltage and power distribution challenges, Ramteen Sioshansi, an associate engineering professor at Ohio State University and associate fellow at the Center for Automotive Research, told Bloomberg Environment.
“A lot of the driver is not 100 percent having to do with renewables,” he said. “The big thing is a lot of people think that storage and renewables are two things that go hand in hand, but I think there are a lot more things you can do with storage than charging a battery with a wind turbine or a solar panel.”
The combination of a rapid drop in battery costs and the range of uses of batteries on the power grid is sparking interest in battery storage nationwide, Jeremiah Johnson, an associate professor of sustainable energy systems and policy at North Carolina State University, told Bloomberg Environment. Johnson is involved in a state-initiated study of how energy storage can be used in North Carolina.
“We’re seeing a lot of states at least ask the question if they should be doing this,” particularly as a way to provide renewable power at times of peak electricity demand, he said.