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Austin Energy: Storage is the next hurdle to Austin’s renewable energy plan

Friday, October 19, 2018 by Jessi Devenyns

The big conundrum facing energy utilities today is how to balance supply and demand for every second of every day. Although there are debates around the subject, the answer, albeit simple, seems to lie with storage.

In the Austin Energy Resource, Generation and Climate Protection Plan there is a section that outlines the utility’s commitment to achieving 30 megawatts of local thermal storage by 2027, and a minimum of 10 megawatts of electric storage by 2025. According to Khalil Shalabi, AE’s vice president of strategy, technology and markets, this all begins with storage studies and pilot projects like the Sustainable and Holistic Integration of Energy Storage and Solar PV program, also known as SHINES.

At the Oct. 15 meeting of the Electric Utility Commission, Shalabi noted that already the city utility is studying “the technical and economic feasibility of emerging technologies, including dispatchable renewable energy technologies, battery storage, compressed air energy storage, aggregated demand response, and Vehicle-to-Grid” per the Climate Generation and Protection Plan as well as working toward developing a storage road map based on the findings from the SHINES project.

“When you look at storage capacity … there’s really not much. It’s truly an emerging technology,” explained Shalabi. Current storage capacity can keep less than 10 percent of total U.S. electric production and only about 1 percent of total renewable energy production. Today, the prevalent form of storage is pumped hydro, which makes up 94 percent of the storage capacity in the U.S. But emerging on the horizon are thermal storage and battery storage, which is what Austin Energy is looking to for the future. Already Austin Energy owns 18 megawatts of thermal storage, and, thanks to the SHINES project, by the end of the year the city will have 3.19 megawatts of battery storage.

Battery storage, in particular, is an attractive option because of its modularity – as a technology, it is as appropriate in your garage charging your car as it is out in the vast expanses of West Texas. It is also an ideal investment for Austin Energy because of the rapidly declining costs of the technology. The World Energy Council released a report in 2016 that estimated that energy storage costs could fall by as much as 70 percent by 2030.

The one major drawback of battery technology is its disposability. Commissioner Erik Funkhouser asked, “What happens after the usable life cycle?” He pointed out that after their useful life, batteries tend to corrode and require proper disposal. Currently, Austin Energy depends on the vendor to correctly dispose of the batteries that are used by the utility. However, Shalabi said that “we’ll have to develop (a disposal system) if we do own a lot of lithium-ion.”

Still, Shalabi explained that as an investment, batteries are sure to become a larger part of the Austin Energy storage portfolio in the near future. When the utility sent out its annual request for project proposals, the response primarily contained projects that included lithium-ion batteries.

“We saw some pretty good pricing,” said Shalabi. However, “We’re likely going to pass this time, but the technology and the pricing is getting compelling.” Currently, Austin Energy is only contracting for energy generation and not yet coupling those contracts with storage. However, according to Shalabi, because the utility has built out an infrastructure that is “at the leading edge at the types of technologies,” when storage contracts do become a part of the purchase agreements, “that’s going to really allow us to take advantage of an asset like battery storage.” This storage he emphasizes will be one of the keys for Austin Energy to fulfill its goal of achieving 55 percent renewable energy by 2025.

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