California is leading the nation’s transition from fossil fuels and nukes to renewable fuels, mostly solar power. The Golden State’s aggressive investment in solar energy has created such a glut of daytime electricity that solar wholesale prices literally drops to zero and such a shortage during the night that real-time prices surge as high as $1,000 per megawatt hour. Regulators and utilities are learning how to cope with these problems through battery storage, grid modernization and energy conservation.
Hopefully, Virginia utilities and regulators are paying close attention as the Old Dominion defines its own approach to renewable energy. On the one hand, by going slowly, Virginia can learn from California’s mistakes and work-arounds. On the other, Virginia’s cautious approach to solar risks allowing other states crack the code first on how to generate reliable, lower-cost and green power, thus converting the price and quality of electricity from a competitive advantage to a disadvantage.
In 2016 the average cost of electricity in Virginia was 8.88 cents per kilowatt hour, according to the U.S. Energy Information Administration. In California, the cost was 14.88 cents per kilowatt hour, 40% higher.
California is spending billions of dollars in giant test project in which the entire state economy is the subject. The great challenge with solar, as oft alluded to in Bacon’s Rebellion, is coping with intermittent nature of generation. Last month, notes the Wall Street Journal, Sempra Energy flipped the switch on a bank of 400,000 lithium-ion batteries installed by Virginia-based AES Corp. The batteries will smooth out power flows in San Diego’s solar-intensive electric grid. Meanwhile, Tesla, Inc., is supplying batteries to a Los Angeles-area network tied together in a microgrid of 100 office buildings and industrial properties. Reports the Journal:
When [Edison International] needs more electricity on its system, the batteries would be able to deliver 360 megawatt hours of extra power to the buildings and the grid, enough to power 20,000 homes for a day, on short notice. At other times, the batteries would help firms hosting the arrays to cut their utility bills.
Clearly, strategies exist for overcoming the variable and daylight-only production of solar panels. The big question is how much the batteries cost. And that tends to be a ticklish subject. As the WSJ noted regarding the Tesla/Edison International project in Los Angeles, “The companies declined to say how much the project would cost.”
Broadly speaking, battery storage has two different uses. One is fine-tuning the electric grid, a function that exploits the ability of batteries to respond instantaneously to micro-fluctuations in voltage and frequency. The other is storing electric power until it is needed at a different time. In this second use, batteries compete with natural-gas peaker plants, which are essentially jet turbines that sit idle until needed. Unlike conventional power plants that ramp up and down slowly, gas peakers and batteries can respond quickly to changes in demand.
Stored power from lithium-ion batteries can do the work of a natural-gas peaker plant at an average cost of between $284 and $581 a megawatt-hour, according to a December report by Lazard Ltd. In contrast, electricity from a new gas peaker plant costs between $155 and $227 a megawatt-hour, according to Lazard.
(By comparison, the average retail price of electricity in Virginia is about $89 per megawatt hour.)
Clearly, lithium-ion batteries are far too expensive at present to use on a large scale in Virginia as a peaking resource. But solar advocates hold out the hope that battery storage will decline in cost. Is that realistic?
The lithium-ion battery chemistry may be reaching the limits of its potential, reports Fortune magazine in an article published yesterday. “The biggest proof may be in the spate of explosions now plaguing smartphone makers from Samsung to Apple, in part thanks to li-ons’ tendency to grow dendrites, metal strands that can cause short circuits.”
John Goodenough, a co-inventor of the lithium-ion battery, claims to have developed a solid-state battery that replaces lithium with sodium, which, in theory, can hold three times more energy, charge quickly, and never explode. Commercialization of the technology is years away, however, warns Fortune. By way of comparison, Lithium ion batteries took a decade to move from the laboratory to the marketplace.
When it comes to reducing CO2 emissions, Californians seem willing to pay any price. That approach will not sell politically in Virginia. But California is more than a Land of Fruits and Nuts. It has some of the most brilliant scientists, engineers and technologists in the world. If green power can be made economically competitive with fossil fuels and nuclear, California will figure it out. We Virginians should not necessarily emulate its example, but we should be paying attention.
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