The energy dynamic around renewables is changing so quickly in Colorado that Zach Pierce, a senior campaign representative for the Sierra Club, can hardly keep up with it. “I feel like we’re having to rewrite the talking points on the drawing board every month in Colorado,” he said.
In December, the state’s largest utility — Xcel Energy — released a short report summarizing the responses to the solicitation it had issued to power suppliers for bids to bring new sources of electricity to the grid. The utility received 430 bids, and 350 of those were for renewable energy projects.
That was remarkable on its own, but what surprised people even more were the bids for projects that added battery storage to the mix. They were cheaper than anyone expected.
“It’s a testament to how quickly the market is changing,” Pierce said.
Changing attitudes
For years, renewable energy advocates have pushed utilities and regulators to consider adding battery storage to their electrical generation portfolios for flexibility and to reduce intermittency problems that come with solar and wind. Until recently, it wasn’t considered a realistic option: Batteries were expensive and largely untested by utilities, and risk-averse regulators mostly let grid managers ignore them in their bids, statements and long-term planning documents.
Analysts say that’s starting to change as batteries come down in price, as momentum builds behind renewables and as renewables create a natural market for storage. Utilities increasingly look at batteries as a tool for leveling out power available over the course of the day and for replacing bulky and expensive peaking power plants that have high costs but only occasionally run at or near full capacity to meet peak demand (in the Southwest, this might be one hot day in the summer when everyone has their air conditioning turned up).
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