Chapter 9C Energy Storage Development in the U.S.

• Jurisdiction: United States

Chapter 9C Energy Storage Development in the U.S.

Rebecca Holt Johnson rPlus Energies Salt Lake City, UT

REBECCA H. JOHNSON is Senior Counsel with rPlus Energies, LLC, a utility scale solar, wind, and pumped storage hydro developer based in Salt Lake City, Utah. Prior to joining rPlus, Becky worked in private practice with Lear & Lear, PLLC, followed by Dorsey & Whitney, LLP. She graduated from St. Lawrence University in Canton, New York, with a Bachelor of Arts in Economics and received her Juris Doctorate, with a Certificate in Natural Resources and Environmental Law, from the University of Utah, in Salt Lake City, Utah. She currently chairs the Energy, Natural Resources, and Environmental Law section of the Utah Bar.

Over the past twenty years, the U.S. has experienced significant growth in energy generation from renewable sources as the country transitions away from the use of coal, natural gas, and nuclear facilities.¹ This growth is expected to continue in response to market demands and to meet state and federal renewable energy and decarbonization goals.² An important key to the long-term successful integration of renewable energy into the grid system will be the incorporation of energy storage. As a result, there has been growing interest and investment in the development and permitting of energy storage projects throughout the U.S.

The purpose of this paper is to provide an overview of energy storage development in the U.S., including the need for storage, commercially available storage options, and the permitting process, followed by a discussion of challenges, and opportunities, for energy storage development, and concluding with a description of the White Pine Pumped Storage Project to illustrate the development and permitting of a utility scale storage project.

I. An Overview of Energy Storage Development in the U.S.

A. The Role of Energy Storage in the Energy Transition

Energy storage allows excess generation to be stored and then discharged to balance out supply and demand within a grid system. It provides generation, transmission, and distribution services necessary to ensure a flexible, resilient, and reliable grid. With the growth in power generation from intermittent and renewable sources, such as wind and solar, there is a corresponding need for energy storage to match up timing of the supply from these sources with consumer demands. Moreover, as renewable sources are steadily replacing nuclear, coal, and natural gas facilities, energy storage is playing a vital role in providing generating capacity and ancillary services historically provided by these facilities.

Most of the growth in renewable energy generation is from variable and intermittent sources, such as wind and solar.³ Unlike traditional fossil fuel sources, power generation from wind and solar varies with weather conditions, is interrupted at certain times in our daily cycles, and cannot be readily dispatched to match changes in electricity demand. As a result, generation from wind and solar is often out of balance with the energy needs of a transmission system at any

[9C-1]

given time throughout the day. Energy storage is therefore needed to provide grid balancing services by storing excess energy when generation from wind and solar exceeds demand and release the stored energy to produce electricity when demand exceeds the generation from wind and solar.

Energy storage is also needed to replace the capacity and ancillary services provided by traditional coal, natural gas, and nuclear facilities. These facilities are being steadily retired due to the growth in more cost-effective renewable generation from wind and solar, changing market conditions, stricter environmental rules, and efforts to meet state and federal decarbonization goals.⁴ Historically, these facilities have provided baseload, immediate load, and peaking capacity, as well as inertia (spinning reserves) for frequency and voltage control, ramp up and ramp down capabilities, and reliable backup in the event of grid failure or to restore generation following a blackout (blackstart). As coal, natural gas, and nuclear facilities are retired, energy storage with its combination of dispatchable load and energy is needed to make up for the loss of the services provided by these facilities to ensure a reliable and regulated flow of electricity within a transmission and distribution system.

To meet the energy storage requirements necessary to support the energy transition, the U.S. will need both short-duration and long-duration energy storage.⁵ Short-duration storage technologies are typically compact with high energy densities. They are often co-located with a wind or solar facility to provide frequency regulation specific to the generation from the facility. They have fewer siting restrictions so can be flexibly used and scaled for a variety of applications. Long-duration storage technologies typically have a much lower energy density and therefore tend to have larger footprints with specific siting requirements. This type of storage is used to balance supply and demand across the utility grid as well as to provide operating reserves and ancillary services to ensure grid stability.

B. Commercially Available Storage Technologies

Two of the most common forms of proven and commercially available energy storage options are Battery Energy Storage Systems (BESS) using lithium ion (li-ion) technology and pumped storage hydropower (PSH).⁶ Some thermal storage options are proven and available, but in the interest of brevity will not be describe here. There are numerous other storage options in development, but these technologies have not yet been commercially proven so at this point have limited widespread application.⁷ For purposes of this paper, we have therefore limited our discussion to lithium ion battery technology and pumped storage hydro.

[9C-2]

1. Lithium-Ion Batteries

Lithium-ion batteries are an electrochemical form of energy storage. During discharge, lithium ions migrate internally from the negative electrode to the positive electrode while electrons move in the same direction through an external circuit to power the device that the battery is connected to. During charge, the process is reversed as voltage is supplied by an external power source into the battery. Li-ion batteries have high-densities with a compact footprint with minimal maintenance requirements, making it attractive for a variety of applications.⁸ They have a round-trip efficiency (being the percentage of electricity that it put into storage that is later retrieved) that ranges from 86% to 88%, subject to degradation over the life of the battery.⁹ Li-on batteries can have up to several thousand full charge/discharge cycles, with a life cycle in the range of five to twenty.¹⁰

Li-on batteries are a mature technology that have been used commercially since the 1990's. Since 2010 li-on batteries have accounted for over 90% of utility-scale battery storage additions in the U.S due to of improved technology, more developed supply chains, and steady decreases in costs.¹¹ Li-on batteries are often co-located with a wind or solar facility to provide frequency regulation but have more recently been applied to provide peaking capacity.¹² Although li-ion battery systems increasingly have broad range of power and energy storage capacities, they are currently most competitive on a capital cost basis for short duration applications of up to four hours.¹³

2. Pumped Storage Hydropower

Pumped storage hydropower is a mechanical form of energy storage that uses gravity and water to store energy and generate electricity. A PSH facility moves water between two reservoirs at different elevations, either pumping upward to store energy, or generating electricity with downward flow, depending on the immediate needs of the transmission system with which it is interconnected. There are two main types of PSH facilities, open-loop and closed-loop. In an open-loop facility there is an ongoing hydrologic connection to a natural waterway, with one or both reservoirs being part of a natural water body. A closed-loop facility utilizes man-made reservoirs situated at locations other than natural waterways. Surface water or groundwater is only for the purposes of initial fill and of the periodic recharge needed for project operation.

[9C-3]

There are specific siting requirements for a successful pumped storage project. These requirements include a sufficient vertical drop (head) between the reservoirs, topography that is conducive to building dams, embankments, and reservoirs cost-effectively, a nearby water source for reservoir fill, transmission interconnection availability, and geology that supports the engineering and long-term operation of underground facilities and reservoirs. In addition, the ability to mitigate potential environmental impacts and land use conflicts should also be considered in site selection. Closed-loop systems will have greater siting flexibility since they are not located within a natural waterway, and therefore the environmental impacts tend to be lower and more manageable than for an open-loop system.¹⁴

PSH facilities have substantial storage and generation capacities. Power capacities are typically in the range from hundreds of megawatts (MW) to several gigawatts (GW) with energy capacities in the range of several gigawatt-hours (GWh). The energy capacity from the reservoirs can hold enough water to allow for eight to twelve hours of discharge, with roundtrip efficiencies that range from 65% to 80%.¹⁵ The useful lifetime expectancy of a PSH facility can be as long as one-hundred years, only requiring occasional machinery upgrades after construction. Taking the life span of a PSH project into account, and notwithstanding the large upfront capital required, PSH is one of the most cost-effective solutions for long-duration energy storage.¹⁶

PSH has been used in the U.S. and throughout the world since the...