Oncor Proposes Battery Storage for Texas Electricity Grid

Texas energy storagyTexas’s transmission and distribution utility, Oncor, which manages the largest power line network in Texas, has proposed an infrastructure upgrade plan to invest 5.2 billion dollars in a network of large storage batteries that will be connected to the power grid. The plan, which calls for the purchase and installation of up to 5 gigawatts’ worth of energy storage, is proposed by Oncor to be implemented in 2018.

How Can Batteries Enhance the Power Grid?

Power demand in Texas is uneven. Because most Texans power down when they go to sleep at night, demand drops considerably, and power plants can sit idle. During the day, demand increases so greatly that its potential to outstrip capacity–resulting in the occasional power outage–is an ongoing threat. Power generation is uneven, as well, as Texas gets a growing amount of its energy from alternative sources, like solar and wind power. It’s clean and green, but unfortunately these sources can be intermittent. Sometimes the sun shines and the wind blows, and sometimes, not so much.

With their ability to store a surplus of energy and then feed it back into the grid when necessary, utility-scale batteries can solve the problems of both intermittent supply and cyclical demand. Power plants can operate on a more smoothed-out schedule of 24 hours, instead of cranking frantically in the daytime and foundering listlessly at night. Solar arrays and wind farms, such as Duke Power’s Notrees wind farm, with its 36-megawatt battery facility, can store power generated at peak weather to help ease demand on the grid even in non-ideal conditions, such as those hot summer days with nary a breeze to alleviate a jump in air-conditioning use.

One of the main supporting factors behind Oncor’s push to get batteries into the grid is that the cost for the batteries is forecast to be lower by 2018 than previously projected. Electric car manufacturer Tesla, with whom Oncor is in talks, will be producing industrial-sized batteries at its new “Gigafactory” battery production facility in Nebraska, scheduled to open in 2017. A study conducted by The Brattle Group estimates that the lower outlay of costs, along with the ability to bring in revenue by renting storage space on the batteries and a reduction in power prices, would likely result in a savings for power customers of 34 cents per month off the average bill. Consumers would benefit both from a more consistent and reliable source of energy and a small reduction in their utility expenses.

Oncor is responsible for transmitting power to most North Texas including the Dallas and Fort Worth areas.

See Also: New Transmission Lines To Bring West Texas Wind To Dallas And Austin


Far From A Burdon, Electric Vehicles Will Assist The Grid

As electric vehicles have slowly began to transition to the mainstream, some have worried about their impact on the electric grid.  As more real world use data becomes available, it’s looking more and more like those concerns were over blown.  This leads to the next question, since EV’s are not quite the power grid burden we expected, can we somehow create a system that allows electric cars to benefit the larger power structure? This has become the next big endeavor for EV proponents, and up to this point, we are seeing a great deal of promise from emerging technologies.

The most promising of these is certainly vehicle to grid technology. Otherwise known as V2G, vehicle to grid presents a mechanism to meet key requirements of the electric power system by designating the EV’s to act as a form of demand response. When communicating with the power grid as an ancillary service, EV’s can provide frequency regulation by selling electricity through either delivering this power into the grid or throttling their charging rate. This can be looked at as a version of battery to grid power, but applied to vehicles.

In essence, when the grid requires more power to withstand a surge, that power will be tapped from EV’s, rather than traditional power plants. Considering that a car is parked, on average, 95% of the time, the flow of electricity to power lines could bring considerable value per car to utilities over the course of a year.

The key to realizing economic value from V2G is creating a symbiotic relationship with the larger power structure. Once the future smart grids are sophisticated enough to do this on a large scale basis, electric vehicles could help make the system even more reliable. Beyond ancillary services, the future of V2G also includes using the vehicles as a dispersed energy storage for intermittent, but renewable resources, such as wind and solar.

For this to happen though, EV batteries must improve, along with our centralized grid structure. V2G presents complications for the individual batteries, including degradation due to constant cycling, costs related to implementing bidirectional power flow capability (energy storage that can both feed and take power from the grid), metering issues, and complication related to energy guarantees The service life and reliability of batteries could be reduced under such strain, so drivers need an incentive to provide supplementary power to the grid.

Because of the cost premiums related to electric vehicle ownership and power systems interaction, lower EV operational expenses will be a major market driver for innovation and growth. Fortunately, with the gains we are making in energy storage tech, this will likely become less of an issue when V2G reaches the point where it becomes a viable, widescale option.

Electric vehicles are expected to make up close to 7% of all global automobile sales by 2020 (an estimated 6.6 million units sold in that year alone), so the future of EV is bright. Vehicle-to-grid is not only an important supplement to this growth, it is essential.

Along with the ability for technology to provide very fast regulation, it also contributes to environmental protection, system reliability, and oil independence. EV, combined with V2G technology, can provide a more seamless transition to the emerging sustainable energy economy, and by doing so, greatly increasing energy security benefits for the entire population.

See Also: Texas Clean Energy Coalition Report Provides Incentive For Renewable Energy
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Will Texas Switch To A Capacity Market For Electricity?

Texas electricity officials are considering a switch to a “capacity market” as a way to solve the state’s pending supply and demand imbalance.  Under a capacity market, producers of electricity are paid just to build power plants and make the supply available to the grid. 

This would be a change from the current system where electricity producers are paid only when they sell the electricity they generate.  The price the producers receive for their electricity is mostly a function of the available supply and demand for electricity in the real-time marketplace. 

When electricity becomes scarce relative to the current demand, prices spike to many times higher than normal.  It is the prices paid during these brief moments of scarcity that make up most of the profit realized by electricity producers. 

In other words, the current system creates an environment where producers are most profitable when the grid is running right on the edge of having enough power to meet demand. 

The state likes to have excess capacity (called reserve margin) as a safety cushion in case demand jumps or supply is unexpectedly lost.  The problem with this is that building power plants requires a lot of money.  Power producers don’t like to invest large sums of money to build power plants that might set idle and not generate revenue.

Under the capacity market plan the retail electric companies would pay a fee to the Electric Reliability Council of Texas (ERCOT) which would use the money collected to pay generators for building new plants that would add to the reserve margin.   Though on paper the extra fees are paid by the retail electric providers, the money would ultimately come from end users who would pay higher electricity bills to fund the scheme.

Not surprisingly, the idea of a capacity market is backed wholeheartedly by Texas’ two largest producers of electricity; NRG and Luminant. The politics of the situation are made sticker by the fact that the largest generators of electricity in Texas are part of corporate families that also include the largest electricity retailers in the state.  Luminant for example, is owned by the same company that also owns TXU.  Critics contend that this would give such companies an unfair advantage in a capacity market structure.  

Pro & Cons of a Capacity Market in Texas

Pro: Capacity – If the scheme works as proposed it would help alleviate the capacity concerns in Texas.  That is, in fact, exactly what it is designed to do.  It would seek to anticipate future demand for electricity and essentially prefund the future construction of power plants to meet the need.

Pro: Higher electricity rates – While to the consumer higher rates in a con not a pro, the desired outcome for planners is higher rates.  Like the recent increase in the wholesale electricity rate cap, a capacity market would be another way of moving money from consumers to electricity producers.  Many people believe this is necessary in order to incentivize new investment in power plants and ensure enough capacity in the future.  Once you buy this premise, everything else is just a matter of finding the least painful and politically viable way to move money from the consumer to the producer.

Con: Less Competition – Retail electric providers are still feeling the sting of the recent move to increase the cap on wholesale electric rates.  It’s reasonable for them to fear that a move to a capacity market would squeeze them further, increase volatility in the market and increase their costs of hedging in the financial markets.  There is also the concern that it would impart an unfair advantage to the large retail providers who are affiliated with power producers.  All of this could result in fewer electric companies in the market place and less choice to Texas consumers.

Con: Higher Rates – While planners may feel the need for Texans to pay more for their electricity in one form or another, consumers are, understandably, not happy with that notion.   A report by one consulting group predicted that the base rates of electricity could fall in a capacity market.  However, the fixed fees paid to fund the capacity market would more than offset the decrease in base rate.  This would result in a slightly increased total cost of electricity for consumers.

See Also: Nation’s Largest Power Producer Continues To Say No On New Texas Power Plants
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Data Shows Electric Vehicles Could Strain Electricity Grid

Home EV Charging StationReal world data taken from a Texas community shows that the habits of electric vehicle owners could pose a challenge for electricity providers.  The data collected is part of an ongoing study being conducted by Pecan Street, Inc. a research group based in Austin.  Pecan Street is seeking to understand how people will really manage their electric vehicles in the wild and to test the assumptions that have been made about how, when, and how often people will recharge their EV batteries.

To do this the company installed instruments to track the way people use their electricity within a planned community in Austin called Mueller.  The Mueller community makes a perfect test lab to study such things because it is a planned community built around a renewable energy and sustainability ethos.   The community is built from the start to maximize sustainability and incorporate smart grid technology and energy management systems.  Not surprisingly it has one of the highest concentrations of electric vehicle owners in the world.  Specifically, the Chevy Volt seems to be the car of choice in Mueller, with a few Nissan Leafs sprinkled in.

The study shows that, absent any incentive to do otherwise, people will default to the behavior that’s easiest and most convenient for them.  That means when they come home from work in the evenings they plug their cars in so that they will be charged and ready to go for the next morning.  The problem is that everyone, more or less, does this at the same time.  This also happens to correspond to the timeslot that is already a peak electricity usage time of day.  In Texas this is when air conditioners are working hardest.  It’s also when people are turning on televisions, dishwashers, washing machines, etc…

All of this simultaneous demand for electricity taxes the grid’s ability to produce enough power all at once to meet demand.  Not only does this make it more difficult for electric companies to keep up, but it also makes electricity rates go up because providers have to bring more expensive electricity into the mix.

Electricity is at it’s cheapest just a few hours later around midnight but people aren’t waiting until midnight to plug in their cars.   One important thing to note about the Mueller usage data is that there is no time based pricing currently in place.  This means no incentive for consumers to change their behavior.  It’s possible that by pricing their electricity more in line with the actual wholesale price of electricity throughout the day people would shift their car charging to later in the evening when electricity rates might fall substantially.

The sample size for the study is quite small but so far the result have be in line with expectation about when people will charge their electric vehicles.  If electric vehicle usage continues to expand, it could case more growing pains for the Texas electricity grid that is already expected struggle with meeting peak demand for power over the next few years. 

See Also: Electric Vehicle Cost Comparison
See Also: Keep A Close Eye On Electricity Supply In Texas This Summer
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Help May Be On The Way For Texas’ Power Grid

TXU ProblemsAs most Texans know, Mother Nature can be severe at times. February 2011 was brutally cold, and ERCOT had to resort to rolling blackouts across the state for several days because our electricity production capabilities were not able to keep up with demand. That same year had an extremely hot summer, and rolling blackouts were narrowly avoided, though we had to purchase power from several states and even from Mexico in order to keep the lights on.

Texas is unique to all of the other lower 48 states in that we have our own power grid. The rest of the continous states receive their power from two electric grids, one for the eastern half of the US and one for the western half.

Up to this point, Texas has tried to stay independent from the other two grids in order to avoid federal oversight. Although we currently have a few lines connecting outside the state, Texas may soon have to increase its cross-border connections in order to avoid future blackouts.

One proposal that is currently on the table is called Tres Amigas, and would cost an estimated $2 billion. The plan would allow a New Mexico facility to connect to all three power grids of the lower 48 states, though the Texas connection would be added after the connection of the eastern and western grids.

Another proposal, the Southern Cross, would also cost about $2 billion and it would include a trasmission line that could move electricity from the Tennessee Valley Authority to East Texas and Mississippi.

Other ideas are currently being batted around, but clearly something needs to be done. As it currently stands, Texas can only bring in enough electricity from outside the state to handle 1.5% of our peak demand. Although we certainly do not want more federal regulators overseeing our every move, we have to take steps to make sure we don’t have to endure rolling blackouts every time Mother Nature reminds us of her power.