Recently, President Obama and the Environmental Protection Agency (EPA) announced the Clean Power Plan – a historic and important ruling intended to considerably reduce carbon emissions in the power sector. While the Clean Power Plan puts in place new standards for power plants and goals for each state to cut their carbon pollution, it is fairly open-ended in terms of the exact type of resources to be put in place to achieve these goals.
To fully realize the benefits of the plan, we need to take action by implementing the available technologies, like energy storage, that can help achieve these goals today. Energy storage is a flexible resource that can significantly offset carbon emissions, while enhancing system reliability and increasing system efficiency and resiliency.
Energy storage has significant potential within individual states as a resource that can ensure states achieve both their interim CO2 emissions performance rates between 2022 to 2029, and their final CO2 emission performance rates by 2030. Building blocks 2 and 3 of the Plan are based on increased generation from renewable energy resources and efficient natural gas plants, and reduced generation from coal-fired plants.
Energy storage facilitates this increased penetration of renewable energy, which can help adjust a CO2 emission rate by storing excess wind or solar energy and using it in times of increased demand. Storage technology can increase combined cycle plant capacity factors – and efficiency - by charging when these plants would have been ramped down, and discharging during peak demand periods to avoid using less efficient peaker plants.
Since the first grid-scale battery-based storage resources came on-line nearly eight years ago, storage has been used to provide a clean alternative for the electric grid’s most critical jobs. And more recently, we have seen storage recognized as a cost-competitive alternative to peaking power plants.
Energy Information Administration (EIA) data estimates we will need about 26,000 MW of peak capacity in the next two decades to meet demand. Energy storage can reliably meet this need, with low or zero-emissions. State and federal policies that encourage higher renewable generation in the grid will need to complement it with clean capacity like energy storage. This will allow consumers to reap the full environmental benefits of wind and solar energy without exposing them to curtailment risk.
Energy storage is also a proven resource. AES currently operates more than 170 MWs of energy storage resources around the world, including a 64 MW energy storage resource at our Laurel Mountain wind facility in West Virginia. This storage facility uniquely enables the wind farm to provide critical grid stability services with zero emissions, while competitively participating in the PJM electricity market. More broadly in PJM, energy storage is providing 40 percent of the effective regulation and doing so more efficiently than traditional resources.
Energy storage will help to usher in the next generation electric grid - an electric grid that is cleaner, more reliable and more resilient and can enable significant environmental benefits and consumer savings. For example, in PJM alone, AES’ energy storage resources are estimated to provide annual savings of approximately 60,000 tons of carbon and $20 million annually by providing ancillary services more efficiently than when provided by conventional generation.
The implementation of energy storage as a flexible approach to cutting carbon emissions is a critical next step in enabling individual states to meet their emissions reduction goals and increasing their utilization rates of efficient combined cycle plants. Deploying storage on a much larger scale provides a transformative solution for achieving compliance with the Clean Power Plan and meeting broader clean energy goals.
As the US and other countries seek to lower emissions from the power sector, we are excited about the potential of energy storage to lower overall emissions by integrating renewable generation and increasing the overall efficiency of existing generation.