As renewables like wind and solar approach 30 per cent grid penetration, operators will need to increase the flexibility of their grids using natural gas generation, manage up to 2 per cent of their peak loads with automated demand response (AutoDR), and employ energy storage for at least 0.5 per cent of the annual electricity generated to avoid renewables curtailment and outages, according to Lux Research.
On days of the year with the largest supply and demand discrepancy, the storage requirement will jump to 5.2 per cent of installed capacity and 1.9 per cent of daily consumption in order to fully meet demand.
Lux Research examined daily supply and demand curves in different climate regimes over the course of a year for scenarios with wind and solar penetration up to 50 per cent of grid capacity to identify the lowest cost technology options required to manage intermittency. Among their findings:
- AutoDR offers the cheapest option. Among all technologies to manage intermittency, AutoDR has the lowest levelized cost of electricity (LCOE) at $0.016/kWh. However, it cannot manage more than 2 per cent of the peak generation at 30 per cent renewables.
- Price volatility dims natural gas option. Electricity generated from natural gas can address large, long-lasting supply fluctuations better than AutoDR, even though its LCOE is 3.7 to 5 times higher. At historically low gas prices, however, doubling the natural gas capacity in a mixed grid can facilitate the integration of wind and solar by offering increased supply flexibility for grid operators, cutting the storage requirement by 60 per cent for 50 per cent renewable energy penetration.
- Wind and solar growth drives storage demand. In a grid with 1 GW of peak demand, consuming 168 GWh per year, with a typical generation mix and demand profile, 59 MWh of storage capacity is required with 10 per cent wind and solar while 1,323 MWh of storage is required with 30 per cent renewables, and 1,751 MWh of storage is required with 50 per cent renewables.
The report, titled “Cloudy with a Chance of Energy: Evaluating Technologies to Manage Grid Intermittency,” is part of the Lux Research Grid Storage Intelligence service.
About Lux Research
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