A Texas company, Oncor Electric Delivery Co., recently commissioned a study that looked into deploying 3 to 5 gigawatts of energy storage for the grid in Texas. The cost of deployment could reach $2 billion but the study found that deploying energy storage would provide a net benefit for consumers by reducing energy costs while increasing grid reliability and making the grid more solar and renewable energy-friendly.
"The Value of Distributed Electricity Storage in Texas: Proposed Policy for Enabling Grid-Integrated Storage Investments," is authored by Judy Chang, Johannes Pfeifenberger, Kathleen Spees, and Matthew Davis. "Considering both the impact on electricity bills and improved reliability of grid-integrated storage, the customer benefits would significantly exceed costs," lead author Chang said.
Oncor, a transmission and distribution service provider (TDSP) in Texas, recently contracted with The Brattle Group to investigate the use of grid-tied energy storage in Texas. They found that grid-integrated electricity storage could be deployed cost-effectively and provide substantial net benefits to Texas’ ERCOT power system. Texas, which has an electric grid system throughout most of the state that is independent from other states, would offer an interesting test case for deploying energy storage on a large-scale.
The company already is discussing using Tesla Motors batteries for such a system, according to Bloomberg. Such a partnership could also result in a partnership that could bring large-scale battery manufacturing to Texas. After all, San Antonio, Texas utility CPS Energy was able to lure PV manufacturing to the region with a contract for 400 megawatts of solar panel projects in the region. The grid-storage project could be more than 10 times bigger in terms energy storage deployment.
The report estimated that the cost of energy storage would be $350 kilowatts per hour. At that rate it found that 3 to 5 gigawatts of energy storage would be the most cost-effective. Such a system would deliver four primary benefits including avoided distribution outages, deferred transmission and distribution (T&D) investment, avoided new generation or demand-side capacity investments, and electricity production cost savings, according to The Brattle Group.
But Chang cautioned that the benefits will only be realized if deployed in certain ways. “An efficient scale of storage deployment would not be reached if deployed by merchant developers who rely solely on participation in the wholesale market, or by retail customers who use it solely for back-up power, or by wires companies who deploy it solely for capturing T&D benefits. These entities, independently and separately, will not be able to capture the full value of the storage to viably support the magnitude of investment that could be cost-effective for ERCOT,” Chang said.
The study also showed that Texas’ regulatory framework would have to allow investors to: “Capture the combined values of storage from the wholesale market, the T&D systems, and customer outage reduction. Thus, the authors recommend a regulatory framework that would involve allowing the transmission and distribution companies to deploy the electricity storage on the distribution system and ‘auction off’ to independent third parties the rights to use the storage facilities for participation in the wholesale market,” Brattle said. Such conditions would require changes in Texas’ regulatory framework.Tweet