This month’s Ask a Scientist column takes a look at how the revolution in energy storage technology has the potential to wean the United States off fossil fuel-powered electricity and—if implemented correctly—lower residential electric bills, strengthen resilience to power outages, and clean up the air in communities where dirty power plants are located.
Energy storage has been called the “holy grail” for expanding wind and solar capacity. Thanks in large part to state standards requiring utilities to increase their use of renewables combined with dramatically falling costs of renewable technologies, renewable electricity generation has nearly doubled over the last decade, and close to 90 percent of that expansion has come from wind and solar, which jumped more than five-fold. Last April, wind, solar, and hydroelectric power produced more electricity than coal in a single month for the first time.
Jeremy Richardson, senior energy analyst in the Climate and Energy program at the Union of Concerned Scientists.
Ratcheting up state renewable requirements, however, can go only so far without more storage capacity to accommodate wind and solar variability. Today’s grid-scale batteries can hold about four hours’ worth of renewable energy before they need recharging, enabling them to replace some fossil fuel-powered peaking plants. Utility companies turn on these “peakers” for several hours when demand for electricity spikes, for example when a heat wave boosts air conditioning use. Most U.S. peaking capacity is currently generated by natural gas, but a 2018 study concluded that lithium-ion batteries, which are now 73 percent cheaper than they were just six years ago, could replace natural gas peakers across the country by the end of the next decade.
The big question is how best to design policies to deploy storage projects, particularly when considering the needs of communities that have borne the brunt of fossil fuel pollution. Jeremy Richardson, a senior energy analyst in the UCS Climate and Energy Program, addressed that issue in a policy brief titled How to Ensure Energy Storage Policies Are Equitable, which he posted in late November. Just after he published it, I ran some questions by him to provide a synopsis of his findings.
EN: Your new policy brief makes the case that policymakers should deploy energy storage to help underserved communities directly. In other words, these policies—as you say in the title of your paper—should be equitable. What does it mean to be equitable, and which communities are you talking about?
JR: UCS is committed to amplifying the voices of people and communities that have been left out of the decisionmaking process. So, when we thought about what we could add to the conversation about energy storage, we brought together a set of diverse stakeholders—including community representatives—for a conference last December to hear their perspectives and concerns. That meeting led to a set of consensus principles that nearly all attending organizations support.
Hopefully this policy brief will help policymakers who want to encourage energy storage and achieve equitable outcomes at the same time. It defines equity broadly to include frontline communities—the neighborhoods that will experience climate change impacts first and where residents have limited resources to adapt or move; fenceline communities, which are located next to power plants or other polluting industrial facilities; and dislocated workers—the folks working at fossil fuel-fired plants who will lose their jobs when those facilities close. The brief describes how storage policies can help all three groups if designed with foresight.
EN: Right, those frontline communities are more likely to be near polluting facilities of all kinds, including peakers. Most peakers today burn natural gas, which not only contributes to climate change, but also emits traditional “criteria” air pollutants, including nitrogen oxides, which cause respiratory problems and are a key component of particulate matter and ozone. Some peakers still run on coal or even diesel fuel, which are even dirtier. Is it as simple as replacing peakers with battery storage units to protect these communities? How would that work? Who would pay for that?
JR: Yes, it will make sense to replace some peakers with battery storage. But it will take a case-by-case evaluation based on local resource needs and economic considerations and should include input from all stakeholders. Policymakers are going to have to consider energy storage’s ability to cut pollution and provide additional grid services when they weigh options for providing peak power.
How replacement works will depend on a power plant’s ownership structure. If a facility is state-regulated, its owner would presumably want to get the state utility commission to approve replacing a peaker with storage first. Then it could pass along the costs or savings to ratepayers. If the plant is a merchant generator that sells its power on the open market and is not guaranteed a rate of return, the owner’s decision about replacement would be driven by market economics. In either case, state legislators should promote investments in underserved communities by providing the appropriate guidance to regulators or offering project developers additional incentives.
Two other points: Storage can help integrate more renewables into the grid and eventually squeeze out old, dirty fossil fuel-fired power plants. In that case, it’s important for policymakers to provide direct assistance to workers at those plants who lose their jobs. Second, storage doesn’t have to be sited precisely in the communities where shuttered peaker plants were located. They could be installed elsewhere. Those communities will benefit from the switch from a peaker to storage, regardless.
EN: Twenty-nine states and the District of Columbia currently have renewable electricity standards, but only four states—California, New Jersey, New York and Oregon—have energy storage procurement targets, and only two of them—California and New York—have established energy policies that address equity issues.
If you were the governor of a state, what key policies would you promote to ensure that utilities in your state replace peakers with energy storage and communities that have suffered the most from industrial pollution get a fair shake?
JR: The policy brief recommends ways that the federal government, states and municipalities can prioritize underserved communities when deploying energy storage. In states where procurement targets are politically possible, it makes sense for legislators to specify the percentage of that target that must be met by projects that directly benefit underserved communities. In states where public officials may be more comfortable providing incentives for developing storage rather than requiring utilities to install it, the brief describes a variety of options, including grants and tax incentives, that can help offset the additional cost of financing projects in underserved communities.
Two things are critically important when developing any kind of storage policy. First, policymakers should learn from what other states have done, both successes and failures. And, second, public officials need to make sure there is a robust stakeholder process that gives community groups and underserved community representatives an opportunity to play a significant role in formulating policy.
EN: Finally, what are some of the community organizations represented at your December 2018 stakeholder conference doing to make this happen?
JR: The contributions by the community groups and environmental justice organizations at that conference were invaluable, and we are especially thankful for their guidance on storage policy design principles. One group, Renewable Energy Partners, is setting up a training center in a predominantly African-American community in north Minneapolis, and another participant, the New York City Environmental Justice Alliance, referenced the principles in their public comments on proposed local storage projects. It is our hope that this new policy brief will help advance the work of groups like them across the country.