Tiny now, like a pebble, Colorado’s lithium-ion battery storage is about to get very, very big. What other pieces of the emission-free electric puzzle are needed?
The 13,500 solar modules sandwiched by hills of sagebrush, pinyon and juniper near Glenwood Springs are eye-catching. It was the four shipping containers of lithium-ion batteries, capable of five megawatts of storage, that would briefly set a new record for Colorado.
Battery storage is coming to Colorado. This project narrowly eclipses Colorado’s previous record set four years ago. By late next spring, Xcel Energy’s projected 275 megawatts of battery capacity in Pueblo and Adams County will eclipse that record 5 megawatts. More will come after that.
We need storage to complement the intermittency of renewables, but also because it makes economic sense. This transition to an energy system with fewer emissions has so far slowed or stopped the rising cost of electricity prices. If only we could be so lucky with organic food.
Storage capacity in Colorado will increase significantly over the next five years. Imagine driving Interstate 70 through the Great Plains to Denver. In the western suburbs of the city, the highway rises slightly. In this battery storage analogy, we’re still in the suburbs. Immediately ahead of you is the steep climb to Floyd Hill with plenty of uphill beyond.
Mike Kruger, general manager of the Colorado Solar and Storage Association, a trade organization, rejects this analogy. Instead of an uphill struggle, he describes a downhill slide. Lithium-ion storage will expand, he explained, due to rapidly falling costs paralleling those of solar panels a decade earlier.
According to him, we are about to descend from Loveland Pass.
“Imagine the smallest thing you can think of,” Kruger said during a Colorado Renewable Energy Society webinar. “It’s storage in Colorado today. Now think about the most important thing you can think of. This will be energy storage in the future.
All of Colorado’s major utilities provide significant storage, but in somewhat different ways. Platte River Power Authority recently received 31 bids for various carbon-free generation and storage proposals in and near the four communities it serves in northern Colorado. For example, Estes Park, whose frightened residents had to flee in 2020 as two megafires approached, could need both storage and solar panels if power deliveries were disrupted.
The threat of wildfires also figures in solar and storage on the Colorado Mountain College campus near Glenwood Springs. In the event of a power outage outside, students may shelter in place.
Colorado Springs Utilities, the state’s fourth-largest utility, is soliciting bids for batteries with 400 megawatt-hours of storage to become operational in 2024. Utilities spokesman Steve Berry predicts growing importance of storage on battery as the technology becomes more cost effective, efficient and reliable.
“Battery storage will help us better manage the intermittent characteristics of renewables, but it will also provide greater grid resilience, help insulate customers from market volatility, and help us modernize our grid for emerging technologies” , did he declare.
We’re also starting — just beginning — to see batteries in homes and businesses. In a program called Power+, Holy Cross Energy (HCE) helped place batteries in 68 homes and businesses. Supply chain issues still have 122 on the waiting list. He does this in part to learn how to take advantage of those batteries to meet peak demands, such as when snow cannons in Aspen and Vail turn on when temperatures drop on November evenings.
Now come the state and federal programs that Kruger describes as a “truly amazing confluence of incentives” via tax refunds. A new Colorado law will provide an income tax credit equal to 10% of the purchase price of storage systems purchased in 2023 and 2024. The systems are also exempt from sales tax. The federal Inflation Reduction Act provides an even bigger tax incentive of 30%.
Xcel customers will be eligible for additional incentives next year: $500 per kilowatt of storage up to 50% of battery cost and $800 per kilowatt for revenue-eligible customers (up to 75% of battery cost). battery).
Battery supply remains tight, but manufacturing capacity is increasing and prices are expected to fall. Globally, capacity grew by a third last year to 600 gigawatt hours of manufacturing capacity. Wood Mackenzie, a consultant, reports that 3,000 gigawatt hours are planned or under construction.
In “The Big Fix,” Aspen-raised Hal Harvey and co-author Justin Gillis describe how, historically, the scaling up of industrial processes has driven down the prices of everything from Model Ts to computer chips. They call it “the learning curve”. The most recent examples are wind and then solar.
Cheaper lithium-ion batteries alone won’t help HCE and other utilities meet their 100% emissions-free electricity goals by 2030. We also need more energy-efficient storage. long term. Options include molten salt, hydrogen and pumped-storage hydro, the latter technology used in Colorado since the 1950s that remains the largest “battery” in the state. Nuclear and geothermal are other options. Everything will take time to unfold; probably a decade.
For now, it’s time to charge the batteries.
by Allen Best
Allen Best publishes Big Pivots, an e-journal from which this was taken. See BigPivots.com.