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Could somebody enlighten me on the economics of energy storage? The local retail energy prices are approximately 10c/kWh year round, rain or shine. The price i
by nordify 11y ago
Could somebody enlighten me on the economics of energy storage?
The local retail energy prices are approximately 10c/kWh year round, rain or shine. The price is fixed, unless you buy a contract based on the spot market.
All the energy storage products I've heard about cost more or about the same per kWh just to store the energy. So even if the energy to charge the energy storage was free, it still would not make economic sense to store energy if you have grid power.
Am I missing something or is consumer energy storage only for off-grid applications?
- beat 11y agoSolar/wind are inconsistent, and their output doesn't map to consumption patterns. So a totally solar/wind grid would require massive overbuilding in order to provide sufficient power for peaks. By caching the surplus generated when supply exceeds demand, we can significantly reduce the overall supply footprint, by using the generated supply much more efficiently.
- nordify 11y agoBut why bother storing the solar/wind excess, if storage costs exceed traditional generation costs? For a purely economical perspective, it does not make sense.
- beat 11y agoBecause in the long run, storage costs will go down, and traditional generation costs will go up. At some point, there's a crossing where storage becomes cheaper. Much of that has to do with economies of scale and driving technological improvement with demand. Beyond that, there are externalized costs to continuing a system that depends on fossil fuels and complex/expensive nuclear plants. In a macro world, governments and public utilities should be taking the externalized costs into account.
- nordify 11y agoSo the answer to my question is that the economics of energy storage do not work, but may at some point of the future? I get both the technical and ecological argument, my point is that the economics to drive the change aren't here (yet).
- Retric 11y agoWe already do large scale grid storage. https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricity https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricit... Flywheels are also used for short term demand spikes. https://en.wikipedia.org/wiki/Flywheel_energy_storage https://en.wikipedia.org/wiki/Flywheel_energy_storage PS: This is one of those problems that seems a lot more important than it actually is. The current state of the art is fairly cheap and reasonably efficient. Going from 90% to 99% efficiency really does not change much and is a far harder problem.
- beat 11y agoPart of the problem is that natural gas and diesel peaking plants have historically been cheap enough that there hasn't been a demand for alternatives.
- nordify 11y agoHydro only works if you have geography on your side. Flywheels don't have the capacity to do utility scale demand shifting. So, excluding hydro, am I right in that the economics of energy storage do not work (yet)?
- Retric 11y agoYou can shift electricity 1,000 miles each way before losses stack up. So, geography is not really an issue. ED: Currently, ~4,300 mi is about the limit on economical power transmission. But, that's a long trip.
- 11y ago
- beat 11y agoConsider the time frame for this, as well. Radical alteration of the power grid will take at least a decade, probably multiple decades. Weaning it off coal, gas, and diesel is an enormous undertaking, even if it's technically feasible. Pilot programs now, even if they aren't immediately cost-effective, greatly reduce the risks of future change, when the cost equation is different. They'll shorten the timeline, reducing the long-term costs.
- fweespeech 11y ago> All the energy storage products I've heard about cost more or about the same per kWh just to store the energy. So even if the energy to charge the energy storage was free, it still would not make economic sense to store energy if you have grid power. 1) They are re-usable. Power generation [e.g. Solar Panels] to refill them is frequently inconsistent enough that you will need to go 12+ hours without power. Cycle through enough time and paying a multiple of grid power for energy storage that lasts years is worth it. 2) If I lose grid power [happens a couple times a year] I need backup power. EDIT: Iirc, I'm pretty sure Powerwall and such is ~$.30/kwh with generation included and I know I eat ~$.30/kwh for a certain level of usage. https://www.sce.com/wps/portal/home/residential/rates/Standard-Residential-Rate-Plan/!ut/p/b1/rVJNc4IwEP0reuCIWQkK9JZWq1Ct3x9wcQIEpIMBIa1tf32j40FnqtaZ5rTJvn15u_uQh5bI4_QjialIMk7T_d1rrhy7ReodXbMHLy0CZDYe9sz5pG6OdQlwJQAuHAKH-rrZIV17AnZn2NDBdowpGIasfzbQAnnIC7jIxRq5ZcBWQcYF42LFuALHWIGClUkoo4Sm8kIFKxUoBeUhLcLKSbKyz1XylPI9bR4kIXJpZDA99C3VDK1I1XHAVNr0dRUzC4dWEDVCPTi2cUXnjTE4t_qUH2hF_6kfS1lUrNWERxlankhXD6oP4zhjGhuaZJq3e4PHugamdgRYHWh3nYEETEcYbDyC1wkhGKB5BFxZiRQbp5l_WK9LuI9NqapgEStYUXsv5PNaiLx8UECB3W5Xi7MsTlktyDYK_FayzkqBludI5MqJGpdHhtHkzhVdJzTgbkLnD95O3rZbj0iH7p34Kbv8T4vmm9nGxF-q5zfH3e8eW6jUNwE30rha_QHQYU2W/dl4/d5/L2dBISEvZ0FBIS9nQSEh/ https://www.sce.com/wps/portal/home/residential/rates/Standa... http://www.forbes.com/sites/christopherhelman/2015/05/01/why-teslas-powerwall-is-just-another-toy-for-rich-green-people/#364d3e0f4879 http://www.forbes.com/sites/christopherhelman/2015/05/01/why... $.15/kwh during the day and $.30/kwh at night is actually comparable depending on usage. If you don't want to do generation, you can arbitage rates at $.15/kwh storage + $.14/kwh charge from grid: https://www.sce.com/wps/portal/home/residential/rates/Time-Of-Use-Residential-Rate-Plans/!ut/p/b1/pVTLdpswEP0VZ8FSZkCARHfyCSUQO46N8zAbHwmETY8NBGic9usrJ-5pnNavRiuN5urO42qkx_qjHhf8OZ_zNi8LvtzYsTMLg0tm-JYZDKMbAsyIvIE_6mOPWQowVQDYsxh8uH99yYDdjW_79D4y6NjSH_RYj5OirdqFPm0SOUvKopVFO5OFBtu9BrVs8lTtcr5UBm9ls3OGqiUvNkRVkqf61ObcoYJmiBtYIosKA3GiTGqkibCkjYU0tokfyGyTuEF9dhVEEPi3tgVBSCZAiHJ_Jdv7BwBHGheeECD_9vQUM9WfTR9eWv3xjAa9dXYnxJiYKsS91x_2DBOouQW4PnhX4VABJiMMAR7BTcQYBnC2gEPqHqtClTlfluL1KU1ZITCd63EtM1nLuvu9VseLtq2aLxposF6vu_OynC9lNylXGvzryqJsVB92kfpUaUH2a4n16M_j4BmRVipcRFM3QxZOJOKOsBCWLk7dJLNTKzlCSOBswvDYHHxSbQ2alhcpr9POO2dn4-u8DsdbRXuEGoL1viKXk9RUbwUlNqj5STJVkck5sl3ucMMxUgHkI-HQ9gGCnudfD3oTcMf2fxLunZgdEU-a8MOEIzibMDzhM_yciH_9adXqbkXxjxzFwhl72aC1hV09_5xkqwfEBQX822IXF78AZ75_pQ!!/dl4/d5/L2dBISEvZ0FBIS9nQSEh/ https://www.sce.com/wps/portal/home/residential/rates/Time-O...
- nordify 11y ago
- mikeash 11y agoNot all places are like this. Some places have variable time-of-use rates with high premiums at peak times and large discounts at times of extreme low demand. For example, rates with Southern California Edison can be as high as 45 cents/kWh and as low as 11 cents/kWh. If you can charge up a storage system at times of low demand and then use it at times of high demand, you could save a lot of money. The bigger use is probably industrial applications, though. Commercial users can get hit with huge surcharges if they draw a lot of power, for example, so users which only draw huge amounts of power briefly could save a lot of money by using storage to smooth that out. The utilities themselves can end up paying extremely high rates for extra capacity at peak time, so if they can use storage to eliminate that need it can save them a lot of money.
- amelius 11y ago> If you can charge up a storage system at times of low demand and then use it at times of high demand, you could save a lot of money. In a sufficiently advanced energy market, you could actually make money.
- nordify 11y ago> Not all places are like this. Is there a reason why all places couldn't be like this? Wouldn't a well run and properly regulated power grid solve these problems?
- mikeash 11y agoDemand inherently varies at different times of day and different times of the year. Given variable demand, variable pricing is expected. Fixed prices are basically a leftover from when technology didn't support sophisticated metering for time-of-use pricing, and sticks around because people prefer simplicity in pricing.
- nordify 11y agoFor the sake of the argument, let's accept the premise that variable demand requires variable pricing. Is there a technical reason price differentials have to be so large in California? In an efficient market, even with variable prices, would the differences be so extreme and would peak demand prices still exceed the cost of storage?
- dragontamer 11y ago> The local retail energy prices are approximately 10c/kWh year round, rain or shine. The price is fixed, unless you buy a contract based on the spot market. Chances are, you live close to the Bath County Pumped Storage Station. https://en.wikipedia.org/wiki/Bath_County_Pumped_Storage_Station https://en.wikipedia.org/wiki/Bath_County_Pumped_Storage_Sta... Its because of these big infrastructure projects that your region has cheap energy all year (and all day) round. In areas like California, big infrastructure projects have been shuttered, and they have 41c / kWhr prices in the day, and 10c at night. Other locations in the US have their own energy storage public-infrastructure projects that stabilize the grid. But some states (Hawaii or California) have... issues.
- nordify 11y agoSo energy storage is a technical solution to market failure?
- dragontamer 11y agoEnergy Storage allows energy arbitrage. If a big utility company buys 10c "night time" energy and sells it at 20cs during the day, then they make money, and help fix the 40c daytime prices across California. And unlike the decentralized "Powerwall" solutions, the poor will benefit from the big utility company performing energy arbitrage. (A poor family cannot afford a Tesla Powerwall to perform energy arbitrage for themselves. They rely on a larger, market actor to perform it on their behalf). Basically, you don't notice it in your region because a big utility company is already doing this, which stabilizes prices for your region. The default state of the world however... is that electricity is cheap at night and expensive during the day. The various energy-storage projects in America exist to smooth out the day/night discrepancies.
- nordify 11y agoI get the arbitration angle, but doesn't it purely depend on there being a market failure, i.e. failure to match production to demand and/or grid failure to transfer power between demand imbalance regions? Wouldn't the better long term solution be to fix the market failure?
- Sonthun 11y agoIn addition to the comments above about solar/wind inconsistency, it is also a lot cheaper to run baseload power plants constantly rather than to ramp peaker plants up and down. So, if they can store the baseload power and then tap it later the total cost of electricity will come down. Plus, storage makes it easier to level the grid to make output match demand.
- nordify 11y agoIs storing power cheaper than using peaker plants? That is, is storing power at scales required to replace peaker plants economically viable?