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ESA (Energy Storage Association)

  

The ESA is the national trade association and the leading voice for the energy storage industry. ESA represents electric utilities, independent power producers, project developers, manufacturers, integrators, component, suppliers, and system support service companies, to accelerate the widespread use of competitive and reliable energy storage systems. In November 2017, the ESA published "35x25, A VISION FOR ENERGY STORAGE", we cite highlights from thier White Paper in the Sections below. You may also view the complete report by viewing their website, link: https://app.monstercampaigns.com/c/xjb6r1w0khcggbtth5w3/

TODAY’S GRID: A DISRUPTED NETWORK

The U.S. electric grid and the work of its utilities, municipals, and cooperatives are the engineering achievement of the 20th century. It is fundamental to society, and transforms the lives of every consumer.


Although planning and investment in the electric power sector have evolved over the last century, the U.S. continues to rely almost entirely on large, centralized power plants and a one-way power flow. Until recently, the services provided by available grid assets were largely similar. This meant that decision-making could be entirely based on least-cost planning, as every choice had essentially the same value and outcome.


Planning today favors longer time horizons, since assets typically take several years to build and are constructed to last for decades. Once put in the ground and interconnected to the grid, these large, centralized assets have a limited ability to adapt to changing needs. Also, because electricity is instantaneous and a perishable good, the entire energy network is scaled up to address predictable and infrequent peaks in demand.


This system design is vulnerable to disruptions of all types, and is ineffective at adapting to any rapid change in network conditions. This means ratepayers are obligated to pay for a system that is overbuilt and overburdened with underutilized assets that will take decades to pay off.


These inefficiencies and vulnerabilities are inherent to any real-time, centralized network that lacks meaningful flexibility and storage capacity. In contrast, every other network critical to our daily lives, whether it be transportation, natural gas, food supply, or data, is underpinned by robust supplies and significant capacity to store the end product.


Critical networks typically have storage capacity on the order of at least 10% of daily demand1. However, it is estimated that North America’s power grid has capacity equal to about 20 minutes of of daily demand2. Compared to other networks, this is insufficient to meet today’s needs, and is woefully unprepared for the evolving demands of the future such as increased demand for reliability and resilience, electrification of our economy, and a changing mix of generation resources.


Electrification puts the grid at the nexus of these networks. The electrification of transportation, data centers, HVAC, communications, industry, and manufacturing means each of these interconnected networks will become more reliant on the electricity grid to function properly. This significant uptick in demand will underpin the role of the centralized grid, but it will also expose these segments of our economy to increasingly expensive disruptions to the grid.


Today’s inflexible electric grid requires consistency in supply and demand to be efficient and reliable, and any disruption—from a minor variation in frequency or spike in demand to a system-wide blackout—comes with a significant and escalating cost. This fundamental weakness is a problem for today’s system needs, and is entirely untenable for future demands.


The most common type of system disruption on the grid is supply and demand imbalance largely driven by seasonal and daily weather. The resulting variations in demand are addressed by mediating supply by ramping a sluggish power plant up or down, or by deploying faster responding peaking plants. Ramping a thermal power plant means lower economic, fuel, and emissions efficiency and shortens the lifespan of the asset. In particular, peaking plants can have utilization as low as 5%-7% of their capacity3, resulting in millions of dollars of stranded capacity and value.


Critical networks typically have storage capacity on the order of at least 10% of daily demand1. However, it is estimated that North America’s power grid has capacity equal to about 20 minutes of of daily demand2. Compared to other networks, this is insufficient to meet today’s needs, and is woefully unprepared for the evolving demands of the future such as increased demand for reliability and resilience, electrification of our economy, and a changing mix of generation resources.


Over building power plants causes added costs. Because it is easier to ramp down than turn on a new fossil power plant, the grid is consistently over- generating from all sources to ensure that demand is met. Increasing solar penetration depresses mid-day power prices, shrinking the value of baseload power plants. Stronger wind energy production at night often outpaces system demands, leading to negative wholesale energy prices in competitive markets.


Tens of thousands of megawatt-hours of renewable energy from solar, wind, and hydro are curtailed every year, wasting this emissions-free local energy. These oversupply issues exist because the grid is incapable of storing electricity or dynamically adapting to align supply and demand.


Even with abundant energy supplies, the grid is still straining to meet peak demands, disrupting both planning and operations. Demand peaks represent the largest inefficiency in our system planning today, and each transmission line, distribution wire, and substation must be sized and ready for the peak at any time. The top 10% of demand can account for more than 40% of the total system costs4.


Every disruption, oversupply incident, and rise in peak demand increases the cost of delivering power for consumers, whether caused by an imbalance in supply and demand, extreme weather a physical disruption, or a cyber threat.


Energy storage is critical to addressing these vulnerabilities, and is the building block of a disruption- proof grid.


THE CLIMBING COST OF DISRUPTIONS

Disruptions impact the electricity network every day, but most small deviations can be mitigated quickly. Each of those disruptions comes with a cost though, and in total, across all sectors, the impact resulting from power outages, surges, and spikes on the grid is estimated to already cost more than $150 billion to the U.S. economy every year and rising5.


One of the drivers of this increasing expense is a technology-driven concentration of value happening throughout our economy. A computer that used to fill a room now fits in a pocket, and similarly the value and capability of that pocket-sized computer has grown exponentially. Data and electricity networks are already inextricably linked, and this concentration of value contributes significant cost to any disruptions.


Grid outages impose costs to generators, operators and consumers. To understand the impact of grid outages, analysts calculate the value of lost load (VOLL); in effect, how much it costs to go without power for a period of time. For a homeowner, the economic cost may seem minimal, but the cost to quality of life is high: medication and food refrigeration, shelter and access to water are among those critical losses. For commercial and industrial (C&I) buildings, the VOLL is more quantifiable on an economic basis: estimated to be as much as $20,000 per megawatt- hour on average6.


For data centers and server farms in particular— the backbone of the Internet and fundamental to modern banking, communications, and transportation networks— that cost is even higher, and continues to increase year over year. A recent report by Talari Networks surveyed more than 400 IT professionals. They combined this research with a separate cost-of-downtime study by IHS Markit and put the current cost of loss of power at a data center at more than $9,000 a minute ($540,000 per hour) and rising, with larger installations losing millions of dollars an  hour7.


Businesses and individuals are more and more reliant on these data centers, moving immense amounts of data to remote servers. As enhanced connectivity drives increases in computing capability and economic value in the same footprint, every server that loses power will only have a greater economic cost to it—rippling even further throughout society.


The higher VOLL extends to almost all commercial enterprises. Grocers lose perishable products, stores are unable to sell their wares, and credit card systems lose capability to process payments at data centers and points of sale.


Automated smart buildings, the high-power requirements of ultra-high definition video, virtual reality interfaces, and fully-enabled cloud computing—all of these advances will further concentrate financial risk as a corollary to increases in computing power.


The same escalation can also be observed in the electrification and digitization of industrial and transportation networks. A fully automated and electrified manufacturing hub brings with it exacting power standards and a fleet of high-tech robots dependent upon a stable and reliable source of power. The expansion in electrified mass transit and increasing adoption of electric vehicles (EVs) means that a system outage in any part of the transportation network will impact more individuals than ever before.


The value of every kilowatt-hour delivered is steadily rising, and with it, the cost of disruption. As the electric grid increasingly plays a critical role at the center of multiple electrified networks, the cost, impact, and frequency of power disruptions will play a critical role across the entire U.S. economy.