An 80% renewable grid with enough flexibility to ensure reliability could cost the same by 2030 as a system that depends entirely on natural gas, the San Francisco-based Climate Policy Initiative concludes in a report released last week.
“If renewable generation and battery storage prices continue to fall in line with forecasts, meeting demand in each hour of a year with 80% of electricity coming from wind and solar could cost as little as $70 per megawatt-hour—even when accounting for required short-term reserves, flexibility, and backup generation,” energy finance consultant Brendan Pierpont writes for Greentech Media. “Finding cheap, reliable, and carbon-free ways to shift energy for long periods emerges as the key decarbonization challenge.”
Pierpont explains that any electricity system has flexibility needs “with time scales ranging from seconds to seasons, and a range of different technology options can be used to meet those needs.” A modern grid needs a response on a scale of seconds or minutes to balance “uncertain” renewables and demand forecasts. But those needs “could be accommodated cheaply using existing hydro generation (where it exists), fast-responding demand response, cheap batteries, or even smart solar and wind power plants.”
Daily imbalances that are currently met by fossil plants can increasingly be addressed through demand shifting and large-scale battery storage.
“Beyond a week, seasonal storage needs depend on regional demand and renewable resource profiles, and, critically, what mix of renewable resources the region has installed,” Pierpont writes. “For instance, a mix of 70% wind and 30% solar in Germany could meet 90% of demand on a daily basis, reducing the need for longer-term storage.”
But so far, he acknowledges, that long-term balance is a key challenge on the road to a decarbonized grid. “Consumers can’t go for a week without heating, cooling, or charging vehicles, and long-term storage technologies like hydrogen need cost and efficiency improvements,” he writes. “The default option for long-term storage is a familiar one: fuel-burning power plants that provide flexibility to today’s power systems. Finding cheap, reliable, and carbon-free ways to shift energy seasonally may be the final piece to the deep decarbonization puzzle.”
Pierpont suggests a suite of policy options to help fill the gap, including combining renewable resources to minimize long-term storage needs, trading renewable electricity across regions, using existing hydropower for seasonal storage where it’s available, making industrial demand seasonal, developing longer-term storage technologies, and relying on “flexible, dispatchable, carbon-free power plants to cover shortfall periods”, even if that means relying on nuclear or carbon capture and storage.
