There is enormous market opportunity for grid-scale energy storage solutions on both the power supply and demand side, but historically low US natural gas prices appear to represent a headwind moderating widespread energy storage deployment.
Importantly, today’s quote comes from a GE representative whose company is a major manufacturer of “fast-reacting turbines,” and others contend energy storage technology offers benefits that can be difficult to value in today’s market.
“As far as grid-scale, I personally see that as further away,” he said. “There are some debates within our team, but I would argue the best storage is gas in the pipeline and fast-reacting turbines — and understanding when that renewable generation is going to fall off.” – Mark Wight, director of strategy, marketing and operations for GE Energy Ventures as reported by Greentech Media
One of the key utility-scale energy storage applications is for smoothing out distributed generation variability and intermittency, which can make the power grid unstable. Ultimately, it would be ideal to store wind energy, for example, generated overnight when power demand – and prices – are comparatively low, then supply that power back during peak demand periods when wholesale electricity prices are higher. Various technologies are currently being developed to best deliver that solution.
But until an affordable technology emerges that can be scaled to the grid level, utilities rely on peaker plants that quickly ramp up and down to smooth out intermittent power flows and match them to high-demand regions. With natural gas prices oscillating around $4 per million BTU, high-efficiency combined-cycle gas turbines are currently a preferred solution, despite high upfront capital costs.
As storage technology advances costs are expected to come down over the short to medium term. Should natural gas prices increase – as a result of demand growth, a price on carbon, or numerous other factors – the calculus used to decide whether to construct a new peaker plant or go with a storage solution could shift considerably in the coming years.
