battery storage

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[Editor’s Note: California is anything but energy nirvana. Its battery storage dreams are proving to be a nightmare, which is why the Biden folks attracted to it, of course.]

California has been shuttering its coal, nuclear, and natural gas plants and building solar and wind farms to meet electricity demand and to replace shuttered units. When the state finds it has insufficient generating capacity to meet demand, however, it imports electricity from neighboring states. (Imports currently supply one-fourth of California’s electricity.) But, in the summer of 2020, a heat wave resulted in California needing to use rolling blackouts because neighboring states had insufficient power to bail them out.

The Tehachapi Energy Storage Project is a lithium-ion battery-based grid energy storage system at the Monolith Substation of Southern California Edison in Tehachapi, California. It only stores enough power to theoretically serve between 1,600 and 2,400 homes for a measly four hours. It cost $50 million and California has 14 million homes. Therefore, at 2,000 homes, it would take 7,000 of these facilities at a capital cost of $350 billion to power the state for four hours. It would take 42,000 of these facilities at a capital cost of $2.1 trillion to power the Golden State for a day, not to mention the extraordinary cost of wind and solar and the operation and maintenance of the storage facility. And, to ensure energy availability for more than a day, California would still need all those coal, natural gas and nuclear plants as backup. Get the picture?

To solve the problem, California bought batteries to store excess wind and solar power to be used when the wind is not blowing and the sun is not shining. This past Labor Day weekend shortly after that addition was made, battery modules at the facility overheated, scorching battery racks and melting wires, and placing the storage facility offline at a time when California could be threatened by rolling blackouts. To ensure reliability, the state took the precaution of installing five “temporary” natural gas plants so it hopefully wouldn’t have to “steal” power. Earlier in the summer, California’s electric grid operator “stole” electricity that Arizona utilities had purchased and that was in transit from Oregon through California.

California residents and businesses are now experiencing average electricity prices that are the second highest in the nation, after Hawaii. Its average monthly electricity prices for all sectors have been over 20 cents per kilowatt hour for several months this year, according to the Energy Information Administration. Its July 2021 average electricity price was 20.93 cents per kilowatt hour. In 2020, California’s electricity prices jumped by 7.5 percent, making it the biggest price increase of any state in the country that year and nearly seven times the increase that was seen in the United States as a whole. According to data from the Energy Information Administration, the all-sector price of electricity in California last year jumped to 18.15 cents per kilowatt-hour, which means that Californians paid about 70 percent more for their electricity than the U.S. average all-sector rate of 10.66 cents per kilowatt hour.

Why is California seeing such high prices when wind and solar power are supposed to be so cheap? Wind and solar power are intermittent technologies that need back-up power in the form of traditional coal, nuclear and gas technologies or storage batteries. The costs of the back-up power are not added to the cost of wind and solar power when comparing them to traditional technologies. Originally, those imposed costs were not added because it was felt that there was enough back-up power from natural gas and coal to provide for reliability for moderate amounts of intermittent generation.

But, as the rolling black-outs in California indicate, if the coal and natural gas power is not there, then the reliability of the system can be in jeopardy, especially as the amount of inherently intermittent generation climbs. While California is adding battery back-up power now, those costs were not added to the cost of wind and solar power when the determination was made to transition to an all renewable system.

According the Energy Information Administration (EIA), battery storage costs $1,165 per kilowatt or $121.84 per megawatt hour—more than the cost of any generating technology that the EIA considers, even offshore wind, which the agency estimates at $115 per megawatt hour. And batteries do not produce electricity, they merely store it. It still needs to first be generated by a technology.

California leads the nation in battery storage capacity. As of June 2021, the Energy Information Administration reported that the United States had 2,380 megawatts of battery storage capacity with California having more than the other 9 states combined at 1,438 megawatts. California’s Moss Landing, which is the largest battery storage facility in the world has a total of 400 megawatts, is about the size of three football fields with large concrete boxes housing endless racks of lithium-ion batteries that can run for up to four hours on a charge. About 75 percent of Moss Landing’s total capacity still remains offline with, “no timeline on return.” Texas, which has 343 megawatts of battery storage, the second most in the country, added storage capacity after its blackouts in February 2021 when a cold spell hit the state and generation from its wind units dropped precipitously.

There are a number of issues regarding building enough storage battery capacity to make the grid reliable with wind and solar power. Setting aside the engineering problems of building enough industrial scale capacity to safely and efficiently provide the back-up power needed, there is the scale issue regarding the enormous quantity of batteries that would be required to maintain reliability and the difficulties involved in obtaining sufficient critical minerals to build as many batteries as needed.

A transitioned California would need about 100 Moss Landings, costing over $45 billion at EIA cost assumptions, to make it through a power drought of just several days. If the sunlight/wind drought lasted just one more day, California would need to have another $11 billion in batteries on hand as well as the excess generation capacity to charge them. And since none of the batteries being built or planned today will last for the several-decade lifespan of normal grid equipment, those batteries will need replacement, raising the total investment well above $100 billion.

Batteries are extremely material-intensive. A single electric car battery weighing 1,000 pounds requires extracting and processing some 500,000 pounds of materials. That is an enormous amount of critical materials—such as lithium, copper, nickel, graphite, rare earths and cobalt—that would need to be extracted from the earth. Wind turbines and solar arrays need these critical minerals as well. In rough terms, it requires the energy equivalent of about 100 barrels of oil to fabricate a quantity of batteries that can store a single barrel of oil-equivalent energy. Further, the United States is dependent on imports – many of them from China—for most of these critical minerals.

Of the 35 mineral commodities identified as critical by the Department of Interior, the United States lacks any domestic production of 14 and is more than 50 percent import-reliant for 31. This import dependence is a problem because it can put supply chains and U.S. companies at risk, particularly when China dominates the world’s mineral supply chains. For example, the United States imports about 80 percent of its rare earth requirements from China, compared to a high of 23 percent of imported oil from the Middle East in 2001.

Conclusion

President Biden is listening to the wrong advisors if he believes he can make the electric grid carbon free by 2035 and maintain the reliability Americans have taken for granted. Without natural gas and coal generating technologies providing back-up power, the quantity and cost of battery storage would be enormous. As California is demonstrating with its transition to renewable energy, battery storage is required, reliability is not guaranteed and the costs are enormous and paid by ratepayers. Biden’s plan will skyrocket electricity rates for American homeowners and businesses, reduce electric grid reliability and make the United States dependent on China for critical minerals.

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