Battery Storage Systems Will Help You Stay Cool This Summer
Before we know it, summer will be here…
Along with its sweltering temperatures and high humidity. And that means hundreds of millions of air conditioning systems will power up across the U.S.
That will send seasonal electricity use surging. To meet those demands, utilities and independent power producers must fire up more than 1,000 natural gas-fired peaker power plants.
As their name indicates, peaker plants run only during periods of very high demand. Peak demand periods are infrequent, and that’s a good thing. Peaker plants cost a fortune to start up and run.
Therefore, the power they make costs a lot too. That’s why utilities don’t use them unless they absolutely have to.
These plants are also generally inefficient. And they emit large amounts of greenhouse gases when running.
As a result, utilities are increasingly retiring them and replacing them with lithium-ion battery storage systems.
Just a few years ago, those systems were too expensive to install and run. But today, that’s no longer the case.
The contest is over. And battery storage has won.
Batteries Are Better
The cost of electricity produced by battery storage systems has dropped 50% in just the last two years.
They’re faster, more flexible and 30% cheaper than even the best gas turbines. Battery storage has rapidly become the choice of peak energy generation.
This is even more apparent in the results of a study on the levelized cost of electricity from Australia’s Clean Energy Council. The levelized cost of electricity measures the lifetime cost of an energy source divided by its lifetime electricity production.
The study considered three sources: a 250-megawatt gas peaker plant, a 250-megawatt two-hour battery plant and a 250-megawatt four-hour battery plant.
It found that the levelized cost of electricity delivered by the two-hour and four-hour batteries were 17% and 30% less, respectively, than that of the gas peaker plant.
Even the best gas peaker plants can take 15 to 30 minutes to respond to an urgent call for power. In order to avoid blackouts, utilities must run them longer than needed.
This increases costs and reduces efficiency. But none of that is true for battery plants.
A battery peaker plant can respond to a request for power in a few milliseconds. That’s faster than the blink of an eye!
And when we’re talking about preventing a blackout, all those milliseconds matter. Many automatic grid switches will trip out after just two cycles of alternating current power (the standard power that comes out of our outlets).
Here in the U.S., our alternating current power runs at a frequency of 60 hertz. Two cycles last roughly 33.3 milliseconds.
This time frame is nearly instantaneous, at least as far as our eyes are concerned. But to the power grid, that’s a lifetime.
If power were to stay off longer than two cycles and/or the grid voltage were to drop below a certain level, it would set off a chain of negative events.
First, substations would shut down to lighten the grid load. Then, generators would start to trip off. Entire regions of the country could be left powerless.
It’s a different story when batteries back up the grid. Humans can’t perceive that a drop in power has even happened.
Control circuitry detects a problem within that critical two-cycle window. It then instantly brings the battery plant online, averting a potential power disaster.
Because of their response time, battery backup plants make our electric grids far more reliable. And now that they’re less expensive than gas peaker plants, it’s no wonder U.S. utilities are spending record amounts of money to fund them.
Full Steam Ahead
In 2020, the global energy storage market was more than 27 gigawatt-hours. This market is expected to explode 27-fold by 2030 to 729 gigawatt-hours of battery storage. That’s adding 70 gigawatt-hours of capacity a year.
Plus, a lot of money is being funneled into this sector.
Last year, about $5.4 billion was pumped into new battery storage projects globally. Today, utilities have invested an estimated $22 billion in battery storage. By 2025, the global cumulative investment in battery storage could hit $86 billion.
Despite the recent sell-off in technology stocks, battery storage projects are going full steam ahead.
Investors who take advantage of the sell-off to invest in battery materials stocks could find themselves richly rewarded in a few years’ time.