Texas is carving out a leadership position in adopting large-scale battery storage as battery prices fall, technology improves and electricity demand grows, potentially paving the way for renewable power to dominate the state’s energy mix.
The amount of storage on the state’s power grid is still small — just 100 megawatts in a system with a generating capacity of nearly 80,000 megawatts — but is expected to more than triple to about 360 megawatts in 2020 and grow even faster in coming years. The state’s grid manager, meanwhile, is considering proposals to develop some 7,200 megawatts of large-scale battery storage within the next five years or so, exceeding the amount of natural gas generation in the pipeline.
“It’s a stunning development,” said Sam Huntington, an analyst specializing in battery storage for the global consulting firm IHS Markit, “and nothing anyone would have predicted a couple years ago.”
While only a fraction of proposed generation projects typically get built, Huntington said the flood of battery proposals indicates where the market is headed. Texas, meanwhile, has become one of the leaders in grid-scale storage, in part because it can design policies without waiting for the Federal Energy Regulatory Commission, where a contentious rule-making process for deploying batteries on the grid is underway. The Texas power grid, which is not interconnected with other state systems, does not fall under FERC’s jurisdiction.
In Texas, which ranks fourth among states in installed battery capacity, regulators are wrestling with broad, first-time issues such as how to treat energy resources that both draw and generate power and more mundane interconnection concerns of how to effectively and efficiently link batteries from wind farms, solar farms and stand-alone storage units to the grid. At the same time, the opportunity that energy storage provides is driving the value of renewables higher.
Wind energy, for example, generates vast amounts of power at night, when winds in West Texas are at their strongest, but electricity consumption — and prices — are at their lowest. Batteries would allow wind generators to store that power and sell it in the afternoon hours, when demand and prices are at their peak.
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