Today, I attended an informative webinar on the combination of solar and storage, hosted by Renewable Energy World and presented by a team from DNV GL. The presentation clearly outlined the broad range of ways in which renewables (in this case, specifically solar) and the up-and-coming large scale storage technologies add up to more than the sum of their parts. In other words:
- The right combination of
- Energy needs
- Resources and
- Produces substantial additive
- Revenue opportunities
- Energy (thus cost) savings) and
- Ancillary benefits
- The user behind the meter, at all scales
- The distribution system and
- The utility and grid at large
As a strategic energy management consultant, that got me thinking about what really needs to come together for energy producers and consumers to leverage these benefits, beyond the obvious trifecta of market-ready technology, market-driven demand, and capital. I see the emergence of a new, energy-centric triple bottom line: efficiency, renewables, and storage.
We all know in our hearts that energy efficiency should come first. At least looking at what hasn’t been accomplished yet and prioritizing those project that could truly benefit cash flow should always come before any other capital investments. But, in the face of expiring incentives, newly commercialized technologies, and—let’s face it—the drive to keep up with the “Jones,” and Googles and Apples and Nikes—energy efficiency can readily lose out to flashy renewables investments and, now, will start having to compete with surprisingly flashy storage investments, too.
But, energy developers and managers should take a deep breath. By helping their clients—whether end users or utilities—to step back and look at the bigger picture, these advisers can make clear the benefits of installing key efficiency upgrades first. If incentive deadlines are breathing down their necks (and, when aren’t they), the efficiency upgrades could be installed simultaneously and perhaps even folded into the financing.
Why take the integrated approach? Because, doing the efficiency now always means that
- a smaller system can be installed, saving capital and on-going O&M costs or
- the same size system as originally planned can be installed (with incentive-based restrictions in some cases), allowing for even bigger savings and/or revenue opportunities down the road.
Plus, the cheapest energy is the energy that is never used. This impact compounds positively in the books over time, so doing efficiency right first is far more effective then getting around to it later.
The folks at DNV GL made a compelling case for looking at whether renewables combined with storage makes sense in any given situation. I would extend their argument to a broader spectrum of renewables:
- Electricity Generation
- Solar PV: this is the obvious choice in many situations, where the insolation (irradiance), rooftop or land space plus room for storage all work well. Rate structures are another factor to consider.
- Wind: in some cases, wind may be a better resource to combine with storage than PV. For example, some northern Indian Nations are finding that wind is their best resource and storage would be a huge benefit on their sparsely populated lands. Solar PV could play an import distributed role.
- Hydro: in the Rocky Mountain West and other specific locations—again, particularly those with far-flung rural-industrial demand pockets, there is enormous potential for small and micro hydro power, waiting to be unleashed through the recent streamlining of FERC permitting. Combining storage with these vast resources would be hugely beneficial to small communities and isolated business that are often negatively impacted by extreme weather.
- Renewable Heating and Cooling. The principles of energy production and storage don’t stop with electricity generation and demand. In fact, although not support by a vast grid structure and far more localized, distributed or district-level heating and cooling by renewables is, fundamentally a far simpler proposition. Solar thermal and ground source heating and cooling systems typically have storage as a matter of course (in the form of tanks or ground sinks) and the very act of cooling—when included in the system—stores energy for later use as heat. If heating and cooling costs—whether for space conditioning, domestic water, commercial hot water or industrial processes—are as great or greater than other electricity costs (excluding those for heating and cooling), these technologies should be seriously considered in the efficiency–renewables–storage evaluation.
- Transportation. Just like renewable heating and cooling, we need to remember that our transportation uses of energy do not just need to be fueled by gasoline and diesel. Does it makes sense to install vehicle charging stations and increase the size of the PV system? Can the use and charging cycles for such vehicles fit into the picture? Do efficiencies gained or renewable heating systems mean that natural gas contracts could be better fulfilled through deployment of natural gas vehicles (alternative rather than renewable, unless biogas)? Thinking about the transportation variable in your client’s home or business may just add the missing puzzle piece that makes everything fit.
As this market heats up, it is clear that, over the next 5-10 years, these systems will become a standard part of the planning for energy systems more broadly, just as they were 30 years ago, as pointed out by DNV GL’s Terry Schuyler (I remember those days, too).
Much like solar PV, lithium ion batteries (LIBs) are today’s popular technology. The market for this technology will continue to grow and it has many clear applications. However, there are many energy storage technologies—from other battery chemistries to pumped hydro to fly wheels and more—and it is important to consider the purpose of the storage, the location (and, hence, resources) and energy applications. As the market develops, specific technologies will likely be mapped to specific applications, locations, and settings (e.g., residential vs. industrial). Those who are conducting rigorous investigations of the options today will be helping to define the best and most standard practices in the years to come.
The Energy Planning Triple Bottom Line
It is clear that, as we move into the second half of this decade, that wrapping efficiency, renewables, and storage into every level of energy planning will become the norm. As storage technologies are more rapidly commercialized, it will become impossible to adequately develop energy strategies without an integrated view of how all three of these disciplines work together to initially partner with and eventually replace conventional energy resources. Further, energy development financing will increasingly require this integrated approach, as private financing demands the “sum is the greater the the parts” benefits of integration and developers seek to patchwork federal programs such as those provided by USDA and state initiatives such as the CoPAC program in Colorado. Those who adopt this triple bottom line of energy planning today will see a competitive advantage tomorrow.