For reasons that are unclear, the blogosphere was buzzing this week with references to a study published last August by Stanford’s Global Climate and Energy Project. The study calculated the overall energetic cost (i.e., the total amount of fuel and electricity required to build and operate a system) and the energy return on energy investment (EROI) (i.e., the ratio of energy delivered to the total lifetime energetic cost of a system) of pairing electrical energy storage (EES) systems with wind and solar electricity generation systems. The study sought to calculate whether, on the basis of energetic cost only, it is better to curtail energy produced by wind and solar systems at times when electricity production exceeds demand or to store that electricity for future use.
The somewhat surprising conclusion of the study is that while it might make sense to use batteries to store electricity produced by solar systems, it makes no sense to use batteries to store excess electricity produced by wind systems. The study looked at the total energetic costs of solar systems and wind systems. The study concluded (at my substantial risk of oversimplification) that because the energetic cost of producing 1 MW of electricity by wind generation was lower than the energetic cost of storing and reusing 1 MW of electricity by means of a battery EES system, it made greater sense to curtail an excess MW of electricity than to store it. Because electricity generated by solar systems has a substantially higher energetic cost than that generated by wind, the study came largely to the opposite conclusion with respect to storing excess electricity generated by solar arrays.
The study went out of its way to emphasize that it looked at the energetic costs of storage only. It did not consider or calculate other benefits of electricity storage, such as electricity market economics, insuring reliable power supplies to critical infrastructure, ancillary benefits to power grid operation and application in disaster relief and war zone scenarios.
But the study does purport to create a new theoretical framework for quantifying how storage affects net energy ratios. In a widely reported quote, lead author Charles Barnhart summarized the study’s conclusion saying “You wouldn’t spend a $100 on a safe to store a $10 watch.”
Not so fast, Charles. The problem with the Stanford study is that it assigns an energetic value to the 1 MW of excess electricity based upon the historic energetic costs of the system that produced it. That is why the study assigns a higher energetic cost to 1 MW of electricity generated by solar than to 1 MW of electricity generated by wind.
But at the moment of decision, at the time one must decide whether to curtail or to store, historic costs are irrelevant. Historic costs are sunk costs and, for purposes of making going forward decisions, must, like all sunk costs, be disregarded. What matters for purposes of energetic calculation is: what is the energetic cost of replacing the 1 MW of electricity you have elected to curtail with 1 MW of new generation (plus the costs of wheeling that new generation to load)?
A better energetic analysis of pairing electricity storage with renewable energy would compare the energetic costs of battery EES systems with the energetic cost of peaker plants and their related additional infrastructure that will be required to replace electricity curtailed from renewable energy generators. That analysis should inform the decision whether to store or curtail, not the sunk, historic energetic costs of the renewable energy generator. In fact, this analysis has been done by the State of California and the result was the California Public Utilities Commission’s electricity storage mandate based on AB2514.
The simple answer to Charles Barnhart’s proposition, that you wouldn’t spend a $100 on a safe to store a $10 watch, is: yes you would—if the $10 watch costs $200 to replace. That is the analysis that California has done and that other jurisdictions in the United States and around the world are doing. And that is why pairing electricity storage with all forms of renewable energy makes good sense on an energetic basis.
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