August 15, 2018

Enabling Energy Storage to Reduce Greenhouse Gas Emissions

Energy storage is an enabling technology. At its most simple, energy storage enables electricity to be saved for use at a later time, when and where it is most needed. This creates efficiencies and capabilities for the electric grid—including the ability to reduce greenhouse gas (GHG) emissions. Increasing storage deployment will enable new and broader opportunities for a cleaner supply mix, as well as enable the better use of existing generation. In addition, storage increases the capacity of the grid to integrate more clean and distributed energy resources.

So, as storage increases the flexibility of the electric system, it fosters an efficient, resilient, sustainable and affordable energy system that enhances any supply mix. Grid operators and electric customers are taking advantage of the flexibility of energy storage to make electric service more efficient and affordable, to increase electric service reliability and resilience, and to integrate renewable resources that reduce GHG emissions.

To reduce these harmful emissions, we need market and regulatory reforms that take advantage of storage’s full potential. While there are several paths to pursue, the most direct is to revise market structures and regulatory constructs so as to internalize the cost of emissions. Doing so incentivizes operators of all resources, including storage, to decreases GHG emissions in the electric system overall.

Absent such market reforms, which often need coordination and cooperation of an entire region, policymakers and regulators are envisioning other ways to reach a similar end point. Ideas include initiatives to increase cleanliness of peak electricity deliveries, enacting building codes and standards that increase flexibility of demand, and more.

Whether through direct price signals or through specific policy initiatives, one thing remains constant:  storage resources can bring about the desired outcome– a cleaner overall supply mix. To suggest otherwise misconstrues what energy storage is and is not. Storage is a resource that transcends traditional silos of thinking, in that storage technologies serve generating, transmission, and distribution functions – sometimes at the same time. Storage is not, however, a generation resource in and of itself. Put simply: storage does not create electricity. Rather, it decouples the time when you need electricity from the time it is created and its end use.  A storage device reflects the emissions and price signals of the grid in which it operates. As the emissions mix of the grid becomes cleaner, with more renewable energy enabled by storage deployments, storage resources will reflect the emissions profile of a cleaner mix as well, particularly when price signals incorporate GHGs.

A number of studies (here, here, and here for example) raise concerns that energy storage increases GHG emissions by boosting overall electric consumption, as some energy is lost in the process of re-delivering the stored energy for use (known as “round-trip losses”). Other studies (here, here, and here for example) claim that storage may charge from more GHG-intensive sources than the resources it displaces, such as charging off-peak from coal and then delivering electricity on-peak in place of natural gas. In both cases, creating a price signal via wholesale markets, rate designs, or specific legislative and regulatory policies for storage to charge coincident with zero-GHG generation, or to reduce charging at hours coincident with high-GHG generation, will minimize or even avoid this problem (as illustrated in this study). Further, even a modest increase in wind and solar installations can offset GHGs that are attributable to these impacts (as illustrated in this study).

As the resource mix continues to evolve, storage helps integrate more variable wind and solar power—both utility-scale and distributed. The availability of storage maintains reliability of the grid under increasing shares of renewables and enables mid-merit thermal generators to run more efficiently as net loads become “peakier.” Moreover, storage increases the capacity factor of renewables at higher shares of generation by avoiding curtailments, further reducing GHG pollution.

Bottom line: addressing GHGs from storage means sending appropriate price signals and reducing GHGs from the overall supply mix—and storage helps that supply mix evolve more easily and reliably.

To lower overall emissions, policymakers should note that energy storage provides the greatest contribution to GHG reduction strategies when it is sited most optimally. Next in this series on storage and GHG reductions, we examine how co-locating storage with renewables differs from standalone storage deployments. (The answer will surprise you!)

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