Electricity produced by storage-plus-renewables plants is now cheaper in some US states than natural gas, with utilities driving adoption of the technology, finds a new report from Navigant Research.
According to the report – ‘How Utilities Can Look Beyond Natural Gas with Cost-Effective Solar Plus Storage’ – energy storage is being developed with renewable resources at prices that compete with combined cycle gas plants.
The report tracks the North American market for utility-scale storage-plus-renewables adoption and power purchase agreement (PPA) prices.
Navigant senior research analyst Alex Eller said: “In 2018, storage-plus made its first shift from the validation and first-mover adopters to diffuse adoption led by utilities.
“The accurate valuing and positioning of storage-plus by utilities will continue to drive the market in coming years as storage-plus PPAs are already competitive with the levelised cost of energy for combined cycle natural gas in parts of the US.”
According to the study’s findings storage-plus PPA prices are expected to continue to fall as adoption of this technology expands.
“Regulators and utilities must push for all-resource solicitations to take advantage of this price disruption and meet aggressive renewable portfolio standard targets in the process,” advised the report.
It also said that by utilities must invest in sophisticated modelling tools to measure the value of storage-plus to the grid, while regulators should “continue to foster” supportive environments for utilities to innovate, such as valuing non-economic benefits of storage-plus, such as water intensity.
Utility Hawaiian Electric said solar-plus-storage out competes electricity produced by fossil fuel power stations for providing dispatchable power.
According to the results of a tender announced a few months back, comprising 1048MWh of batteries, contract prices ranged from $0.08-0.12 per kilowatt-hour, compared with electricity from fossil plant on the islands of Hawaii islands costing around $0.15 per kilowatt-hour.