Last week in Pricing PV Energy, I discussed how solar photovoltaic, aka PV, aka rooftop solar, will not take down utilities or the grid. The premise of that was once net metering policy pays PV owners what their electrons are worth in real time, the cost effectiveness will be capped, likely at some number considered to be not cost effective by most people. This week I pulled out a good old article, not to be confused with good ol boy, from Fortnightly, which describes other reasons death of the grid is overblown hype.
As with most things, to have a rooted understanding of something, it is best to trace back to the big picture. The grid we have, as I like to call it, was started with large central power plants, like water and sewer plants as discussed last week. It reminds me of the old days before my time when every little town had the general store, barber, bar, post office, and church. In Wisconsin, only homes outnumber bars, unless we count the bars in homes as bars. If you follow geography, you can identify Wisconsin on the map purely by the ratio of bars to grocery stores as shown.
Ok. Here ends that trivia.
Backup Power Strategy
The first utilities served their customers, and when the plant went down, the customers lost power. Then utilities started interconnecting such that rather than having twice the capacity, with half sitting idle most of the time for backup, sharing utilities only need half their capacity when sharing with another utility of equal size. The same concept applies to boilers and chillers in buildings. Modular, plants with multiple units, require less idle capacity as backup in case one unit fails.
Progressing, larger interconnections were developed to optimize cost and minimize prices for consumers. Fortnightly uses the example of swapping power in opposite directions for opposite seasons. For example, when it is mild in the southwestern winter, they have much lower demand than peak summer cooling days. They can use their excess capacity to sell power to their northern neighbors who have winter peaks. Flow reverses in the summer.
Like energy efficiency, we have life cycle cost of kWh produced, depending on plant type. Coal and nuclear plants have expensive first cost but cheap operating costs. These provide our base loads and operate near capacity at all times. Nuclear power plants in the US set a record for capacity factor in 2014. In 2014, the nuclear capacity factor was almost 92%. This trend is shown in the chart. Clearly, as the construction of nuclear plants has stalled since the 1980s, they are being utilized more and more. They will become more important, and we will need them more as coal is phased out.
For short bursts of power needs we primarily use natural gas peaker plants. These are essentially jet engines connected to a generator. They operate at poor efficiency (20-30%), unlike their combined cycle cousins which can generate electricity near 60% efficiency.
It is worth noting here that the Clean Power Plan calls for “redispatching” natural gas units to higher utilization. From a dispatchable resource perspective, combined cycle plants are much more similar to a coal or nuclear plant than a natural gas peaker plant. They cannot respond to rapid spikes in demand, such as when the sun sets on a sea of PV. Therefore, it seems the need for peaker plants will not change.
The Stakes of 99.97%
Loss of power in modern society becomes financially devastating very quickly. As a result, we have a reliability standard of only 1 day of outage every 10 years, or 99.97%. If it weren’t for the high reliability requirement, electricity would be much cheaper and renewables much more attractive.
Batteries are a tiny piece of the possible peaker need to cover the 99.97% requirement. The reason is batteries do not generate power. Extra power generation is needed to charge batteries when excess capacity is available. The DOE’s goal is to achieve a battery cost of 20 cents per kWh levelized cost per cycle and $1750 per kW; power generation, not included. I computed the cost of electricity stored and discharged from the Tesla Powerwall to be in the same neighborhood once all-in costs are incorporated.
But more critically, batteries have finite energy supply and they are done. Compared to a gas-turbine generator, this gets much more expensive and uncertain. The generator can run indefinitely while the battery, like this mini monster Southern California Edison is purchasing, has very limited range. It’s huge relative to batteries but tiny compared to alternative generators. It will supply 100 MW for four hours, before the lights go out.
The alternative to battery storage and renewables is renewables and transmission lines; i.e., the grid. While we are at it, we can interconnect conventional generation to piggyback on these transmission systems. Therefore, I see the grid with minor help from batteries, as the winner in the low-carbon sweepstakes.
Batteries are good for short bursts of power and grid stability. There is no doubt about that. It is like the uninterruptible power supply for our servers. The purpose of the power supply is not to keep our servers and network running for a day, but to allow for an orderly powering down of the system. Don’t ask me what happens if otherwise the plug was pulled on a network server.
 Capacity factor is the actual energy produced divided by what could be produced if all assets operated at 100% capacity all the time.