Can Batteries Bolster Texas Grid?
June 19, 2021  Utility Dive:  As the grid operator for most of Texas warns of a high-demand summer that could strain electricity supply, a new analysis finds that the state is one of the countrys top markets for new energy storage development. An S&P Global Market Intelligence analysis finds that Texas could have as much as 1,400 MW of battery storage available by September of this year, eight times more than was online the year before. That storage capacity could help improve reliability ahead of a summer with unusually high demand. Already, ERCOT asked residents to conserve electricity this week during a heat wave because of tight grid conditions. The challenges of the Texas grid were on display in February when a winter storm led to the loss of almost half of ERCOTs generation, leaving millions without power for days. In May, the North American Electric Reliability Corp. (NERC) warned that Texas faces an elevated risk of energy emergencies this summer due to high heat or potential long periods of low wind production. Although ERCOT itself said that it expects to have sufficient generation to meet peak loads, it did outline three extreme scenarios that could lead to blackouts, including extended hot weather that spikes demand, thermal generator outages or a shortage in generation from wind and solar. The grid operator is expecting record-breaking demand this summer, but ERCOT had a 15.7% reserve margin, slightly below preferred levels, at the beginning of the summer. Although the grid set a June record for electricity demand on Monday with 69,943 MW, ERCOT says the reliability of the grid remains strong. One of the pretty clear lessons learned from Texas power challenges this year is that renewable power is outperforming other forms of generation when the grid is under stress, said Gregory Wetstone, president and CEO of the American Council on Renewable Energy. According to S&P, there are nearly a dozen storage projects ranging from 50 MW to larger than 200 MW scheduled to start up this summer, headlined by the 203 MW Crossett Power Battery Storage system in Crane County. ERCOT expects that battery storage on the system could rise from 225 MW at the end of 2020 to 1,771 MW at the end of 2021 and 3,008 MW in 2022. Developers have announced large-scale projects expected to come online in 2022, like a pair of 100 MW battery storage facilities announced by Wrtsil Energy a month after the February cold snap. North Carolina-based FlexGen is one of the largest storage installers in the state, claiming to be responsible for more than three-quarters of the storage there by megawatts. Yann Brandt, FlexGen Chief Financial Officer, said ERCOTs market is attractive for developers looking to engage in energy arbitrage, but value of storage as an ancillary resource has risen as Texas faces more extreme weather events. Its a unique situation where youre able to maximize revenue when the market needs it because youre providing a valuable service, Brandt said. I hope grid operators and planners start viewing energy storage as part of the planning process and not try to plug it into a generation-first power market.  S&P Global:  If the plans of developers and utilities pan out, total installed utility-scale energy storage capacity in the U.S., not including conventional pumped hydroelectric storage, could jump roughly 185%, to 5,582 MW, through August from a year prior, according to S&P Global Market Intelligence data. This summers storage surge, consisting mostly of four-hour lithium-ion battery systems designed to discharge during critical periods of peak demand, is centered in California and Texas, the countrys two largest states by population and economic output, respectively. Along with market reforms, improved planning and energy conservation, these large storage systems could help both states, which have arguably the nations most fragile electric systems, ride through the summer turbulence with few of the sorts of widespread outages that have plagued them in the past 12 months. California, which in recent years has struggled with blackouts related to wildfires, in August 2020 experienced two rounds of rotating outages amid a regional heatwave. Now the California ISO, the states primary transmission grid operator, is battling with other southwestern states also thin on reserves over access to resources needed to keep the lights on this summer. Texas, meanwhile, saw its primary power grid, managed by the Electric Reliability Council Of Texas Inc., severely buckle under the weight of a rare Arctic blast in February, leaving millions of residents without electricity for days. The state could be in for another rocky ride this summer, the North American Electric Reliability Corp. said in its summer 2021 assessment. California could have more than 2,800 MW of largely four-hour lithium-ion battery storage at its disposal before September, nearly five times as much as a year before, while Texas could have about 1,400 MW, roughly eight times more, S&P Global data show. Combined, the two states account for three-quarters of the total installed nonhydro energy storage resources slated to come online by the end of August.