The topic that really caught my interest this year was energy storage. It has been in the news a good deal lately, particularly since the recent launch of Tesla's new home and commercial energy storage products. In fact, Tesla's Chief Technology Officer spoke on the first morning of the conference. Much of his talk (very large file) focused on Tesla's expectations for the cost of storage to decline sharply as electric vehicles (EVs) and non-vehicle battery applications grow. Whether battery costs can drop as quickly as those for solar photovoltaic (PV) cells or not, storage is likely to become a more important factor in energy markets in the years ahead.
One of the most interesting presentations I saw examined a provocative aspect of this question. Michael Kline of The Brattle Group, which consults extensively on electricity, took a detailed look at whether rooftop PV and home energy storage might become sufficiently attractive that a large number of consumers would employ the combination to enable them to disconnect from the power grid entirely. That would be an extremely appealing idea for a lot of people. The author of a book I received from the publisher a few years ago referred to it as a movement.
Most people by now appear to understand that solar panels alone can't make a household independent of the grid. The daily and seasonal incidence of sunlight aligns imperfectly with the peaks and troughs of typical home electricity demand. This is why "net metering", under which PV owners sell excess power to their local utility--effectively using the grid as a free battery--has become contentious in some markets.
In a true off-grid scenario, net metering would be unavailable. Onsite storage would thus be necessary to shift in time the kilowatt-hours of energy produced from a home PV array. However, a standalone PV + storage system must be sized to deliver enough instantaneous peak power to handle periodic high-load events like the startup of air conditioners and other devices. Another presenter on the same panel had a nifty chart demonstrating how wide those variations can be, with multiple spikes each day averaging above 12 kilowatts (kW)--several times the output of a typical rooftop PV array.
Brattle's off-grid model included PV and storage optimized to "meet load in every hour given a battery with 3 days of storage (at average load levels)." That is the equivalent of multiple Tesla "Powerwall" units and would only be practical with the kind of drastic cost reductions Mr. Kline assumed by 2025: PV at $1.50/W and storage at $100/kWh, installed. That equates to around a third of last year's average US residential PV installation and 1/7th the estimated installed cost of Tesla's offering.
Mr. Kline framed this exercise as a "stress test", not just of the off-grid proposition but of the future of the electric power grid. If many millions of customers were to "cut the cord" for electricity as others have for wireline telephone service, even a "smart" power grid would become much less important and might shrink over time. That same logic should extend to the power generators supplying the grid. If most consumers went off-grid, the value of even the most flexible generation on the grid, which today is often provided by natural gas turbines, would fall, as would demand for the fuel on which they run.
In Brattle's assessment, despite the assumption of very cheap PV and storage, that prospect seems remote. For the three markets analyzed (California, Texas and Westchester County, NY) the levelized cost of energy (LCOE) for the off-grid configuration modeled was significantly more expensive than the EIA's projected cost of electricity in those markets in 2025. In fact, for consumers in California and Texas, as well as in all cases of the parallel commercial customer analysis Brattle performed, PV + storage would be expected to cost a multiple of retail electricity prices.
As Mr. Kline explained, under more realistic assumptions the comparison was likely to be even worse for off-grid options. However, his conclusion that , "going off-grid...is unlikely to be the least expensive option for most consumers" does not mean that some consumers would not choose to do so, anyway. To them, a premium of 10-20 cents per kWh might seem like a small price to pay for personal energy independence. Yet at that price, it is hard to envision it would become a mass-market choice.
Mr. Kline made a point of reminding his audience that Brattle's analysis did not mean that distributed energy would not be competitive in the future, or that it could not provide valuable services to customers and to the grid. Importantly, the figures he presented underlined the continued value of the power grid to customers, even in a future in which large quantities of PV and storage are deployed. As he put it, "Distributed energy is a complement to the grid, not a substitute for it."
By extension, flexible generating assets like fast-reacting gas turbines should also continue to provide significant value, especially during those seasons when daily solar input is low, and in locations where average sun exposure is generally much weaker than in the US Southwest and other prime solar resource regions. As appealing as the idea might be to some, storage seems unlikely to make either the grid or any class of generating technologies obsolete for the foreseeable future.