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How ahead-of-schedule energy storage adoption could help Nevada avoid blackouts, electric supply issues

Riley Snyder
Riley Snyder
EnergyIndy Explainers

Nevada and other states’ increasing reliance on and plans to adopt more and more renewable energy have a slight problem: The sun eventually has to go down.

The intermittent nature of solar energy and other renewable resources isn’t exactly a big secret; but it nonetheless has come under renewed scrutiny in other states, namely California, amid the “unprecedented” strain on the Western U.S. electric grid earlier this month caused calls for voluntary power cutbacks in Nevada and several other Western states.

NV Energy CEO Doug Cannon said in an interview two weeks ago that the call to reduce power consumption was not tied to a greater reliance on renewable energy; it was instead a capacity problem, with not enough generation to meet expected demand.

But there’s a positive sign; combined under-construction and pending storage projects will see NV Energy surpass a 1,000 megawatt energy storage goal seven years ahead of schedule.

Still, as the state continues to move toward a greater reliance on renewable energy — including a gradual ramp up to a 50 percent Renewable Portfolio Standard by 2030 — renewable energy advocates say the state needs to take proactive steps now to avoid future resource adequacy issues -- i.e. blackouts or brownouts. 

“It's a race, and if we don't act now on starting all of these transmission projects that have been proposed, and we don't continue to keep our foot on the gas when it comes to storage and renewable energy, we will fall behind,” Democratic Sen. Chris Brooks, an advocate for expanded renewable energy, said in an interview. “And we won't be able to seize those opportunities and it will cost not only our state in lost opportunity, it will cost our state in more expensive power.”

Storage targets

The solution most often identified for dealing with the unique nature of solar energy is battery storage, a way to capture excess produced energy and use it later during periods of peak demand.

In Nevada, that process started in 2017, when lawmakers passed legislation requiring the state’s Public Utilities Commission to determine if expanded electric storage and battery systems were in the public interest, and if so, to set (nonbinding) storage targets for NV Energy to reach.

The PUC finished those regulations in 2019, setting a gradually increasing scale of storage targets topping out at 1,000 megawatts by the end of 2030.

Though the storage target is nonbinding, NV Energy is nonetheless on track to exceed that storage goal by the end of 2023.

Representatives from the utility company told members of the interim Legislative Committee on Energy a week ago that between previously approved and currently pending battery storage projects, the utility would bring on more than 1,028 megawatts of battery capacity by 2024.

That expanded capacity could help the utility deal with periods of unexpected high demand such as the rare request for volunarity power cutbacks made last week by NV Energy because of supply constraints on the grid.

“The addition of the thousand megawatts of battery capacity could be used over the peak,” NV Energy Portfolio Analytics manager Roger Halbakken said during the Monday meeting. “I believe it would have had a positive impact to reduce what we saw as a scarcity issue in both Nevada and the Western states.”

With the goal already likely to be surpassed (three of the battery storage projects are still pending PUC approval), Brooks said that it likely wasn’t necessary for lawmakers to create new policies calling for more storage adoption. The demand is already there.

“Regardless of if we had those goals in place or not, and if we have any future goals or mandates or not, solar with storage has now become the most cost effective way to deliver energy in those peak hours,” he said. “And so I think we're going to see, with or without policy guidance, we're going to see quite a bit more solar with storage adopted over the years to come.”

Solar problems and new solutions

Any discussion about the growth of solar energy usually returns to conversations about how to solve the “duck curve” — a commonly used graph charting the difference between electricity demand and available solar energy throughout the day.

Electric demand is relatively predictable — there’s a small uptick in the morning when people get ready for work, and a spike in the evening when people return home, turn on lights, televisions and other electric appliances. But solar power is intermittent — producing the most electricity during the middle of the day, while trailing off in the evening as the sun goes down.

That curve resembles a duck — and represents the challenge facing utilities and grid operators in adding more intermittent renewable resources to the power supply. Not only is it an issue of meeting higher demand in the evenings, but excess production during the day also comes with challenges; California has paid other states to take excess renewable power during the day to avoid overloading the state’s electric grid.

The most common solution brought up to address the “duck curve” is battery storage. In theory, it addresses both problems -- capturing excess “oversupply” during the day, and then releasing it during peak demand hours in the evening.

Storing electricity for later use is not a new concept. The most popular form of energy storage in the United States comes from pumped-storage hydropower, a technology developed in the 1920s that uses gravity and water power to “store” power.

But thanks in part to the declining cost of lithium ion batteries, the cost of battery systems has dropped dramatically over the past decade — a 76 percent decrease between 2012 and 2019

That price reduction has helped NV Energy in requesting battery storage operations be included in the utility’s most recent power purchase agreements with utility-scale solar projects.

Six of the last nine power purchase agreements between NV Energy and solar contractors included battery projects, with another three solar and battery projects included in the utility’s recent request for a $2 billion statewide transmission upgrade

Only two other states have battery storage capacity above 1,000 megawatts (as of March 2019), but several states have set more ambitious goals or mandates to significantly raise their storage capacity throughout the next decade.

So far, all of those battery projects have been linked to expanded utility-scale solar projects. But Mark Tourangeau, an employee of a company called Able Grid Solutions, told lawmakers that the future of expanded energy storage may be in moving the batteries away from the power plants and closer to homes and businesses.

Tourangeau’s company develops stand-alone batteries with locational flexibility — i.e., not directly connected to another power plant. The benefits of standalone storage, he said, would allow intermittent solar and wind energy resources to be collected and used during periods of high demand — a potential alternative to carbon-heavy peaking power plants that only run during periods of high electric demand.

“So in the evenings, you have a lot of peakers that will start up, there's significant emissions from the startup and the ongoing operations of those, and the best systems can replace those peaking units to replace that,” he said.

Tourangeau also suggested that lawmakers expand a renewable energy tax credit program to cover storage facilities, saying storage facilities are a highly capital intensive investment that can cost up to $100 million. Standalone battery storage facilities are generally pricier than those co-located with solar generation facilities, which allow sharing of overhead, interconnection, installation and other capital costs.

Home and business storage incentives not used

But storage incentive programs designed for residential and commercial customers have fared much worse. NV Energy offers sizable incentives — up to $3,000 for residential and $50,000 for commercial customers — for installation of integrated energy storage systems in homes of businesses, but the program has seen relatively little use.

Since the program launched in 2018, the utility has paid out a little more than $630,000 in incentives across nearly 260 applications, all for residential or small business customers. That’s just a fraction of the $10 million for energy storage investments the Public Utilities Commission initially required NV Energy to set aside for the program in 2018 (the commission actually fined NV Energy $100,000 last year for failing to set aside the incentive dollars).

NV Energy’s Halbakken said there were several reasons for the lack of interest; small scale battery storage is fairly expensive and has a higher maintenance cost and reduced lifespan as compared to rooftop solar units. Plus, the state’s net metering program for rooftop solar makes it more economical for people to send power back to the grid than to store it for themselves.

Brooks, who sponsored the 2017 net metering bill, said it was similar to issues with rooftop versus utility scale solar; utility-scale solar is just more effective, but policy makers have decided to incentivize rooftop solar given intense public demand. He called the issue a “work in progress,” but said a solution wouldn’t require amending current law on net metering.

“I don't see it as an either/or,” he said. “I think that it's an economic decision that the regulator needs to make when they're determining the rate impact on all Nevadans, as far as these decisions are made.”


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