One of the biggest trends in the U.S. utility sector is the accelerating rampdown and closure of coal-fired power generation plants. Forty-six coal-fired generating units at 25 electricity plants across 16 states will be closed over the next few years, according to a study cited in Cleantechnica. By the end of 2018, the plant closures will amount to a net capacity elimination of 16 gigawatts (GW), or approximately 5.7% of the total coal-fired US electricity generation capacity.
Another element at play in this trend is the decision by nearly all the utilities involved to not replace the closed-down coal plants with more coal, but instead to add new generation capacity based on cleaner, more economical sources, such as renewables (especially solar and wind) and natural gas. One of Inovateus “hometown” utilities (and customers), DTE, has announced that it plans to follow this strategy and shutter all of its coal plants by 2050 and replace them as necessary with a combination of renewables, storage and natural gas, both for reasons fiscal and environmental.
There’s another trend bubbling in the renewables sector that we’ve mentioned in a previous blog: the pairing of solar and storage in residential, commercial, industrial, and utility applications. Some attribute the interest in this trend to the “Elon Musk factor,” pointing to the launch of Tesla’s Powerwall residential battery system as well as the company’s Powerpack units for larger installations as the moment when the energy storage market became front-page news. While Elon deserves a lot of credit, the storage boom has attracted a wide range of major players, startups and investors—and a serious look from utilities and other interested parties, including Inovateus, which is now distributing Tesla’s solar products. As a result, we’ve seen a decided uptick in requests for proposal (RFPs) over the past few months that include storage as part of their plan.
Let’s take a look at the nexus of these two energy trends and think about how large-scale solar-plus-storage systems can be legitimate contenders to replace some of the coal plants being retired.
At a basic level, storage provides the opportunity to capture and dispatch solar energy for use when the sun is not shining. Early adopters of larger-scale commercial and utility systems are using the stored energy to meet peak demand in the early evening hours, offset high demand charges, regulate voltage on certain parts of the grid, reduce load and capacity charges, and improve overall power availability. But some planners are already looking at using intelligent, software-enabled solar-plus-storage systems, both centralized and distributed, as replacements for baseload generation facilities or as alternatives to combined-cycle natgas “peaker” plants.
A theoretical 100 MW solar power plant paired with an equivalent amount of onsite energy storage (let’s say, 100 MW/400 MWh) could be part of the coal-replacement strategy. Although a plant of this size falls below the average size of those previously mentioned coal plants being retired (~350 MW), a series of these clean energy systems could cover the generation requirements and be designed and built more quickly than other types of power plants and be located to maximize their usefulness to the grid. Storage capacity at this scale comes close to meeting the needs of the utility’s customers, especially during peak demand hours.
But don’t just take our word for it. A new study from our Midwestern neighbors at the Energy Transition Lab (ETL) at the University of Minnesota’s Institute on the Environment “finds that when environmental benefits are considered, combined energy storage and solar arrays can be a more cost-effective alternative in Minnesota—implementable today—to natural gas peaking plants, which are fired up only to meet peak demand.” Not only that, but the report notes that the widespread use of storage would reduce the need for utility transmission investments and make the grid more adaptable and reliable.
If you would like to discuss how the winning combination of solar and energy storage makes sense for your new large-scale power plant, give us a call.
By Nathan Vogel, VP of strategic research, Inovateus Solar
