The Grid We Have. It’s hot in Texas and across the Southeast but ERCOT is likely to break records over the next few days and nearly hit 80GW of demand yesterday with less than 10% capacity reserves. Resilience is earned through robust price signals within the market that enable investments to be made in order to ensure the lights turn on when you hit that switch. During Winter Storm Uri, demand hovered in the 60GW range. It came down to the reliability of the generation that remained available plus decreased access to energy for consumers. Back to today, 5GW of reserve isn’t going to make a reliable grid. Going forward we need more price signals from regulators in order to turn up the reserve as the demand grows and grow it will. I’ll make a bet that we see a 100GW demand within 5 years.
What Could Be Possible. The easiest thing for any grid operator would be to expand the price signals, i.e. markets, for technologies that exist in the 21st century. Let’s start with energy storage, these technologies can do much more than what the current markets ask an asset to do. For example, short term grid resilience dispatches to power plants are much better served by storage. Storage can also turn solar plants much more intelligent, imagine if offtakers allows solar PPA generators to add an amendment to make the solar generation dispatchable. The second powerful tool for grid reliability would be to create a real market for dispatching home demand and smart home devices. This will be more of a must have when cars become EVs in every driveway. If a real virtual power plant market were priced by operators, real flexibility would become available.
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- Energy Storage News: Greece launches first 400MW tranche of energy storage grant auctions
Opinion
Best, Yann