It’s been a tumultuous and transformative year on the grid edge.
On the technology side of things, we’ve seen continued progress – and some stumbles – on the part of utilities, energy companies and third-party providers working to integrate distributed resources.
On the policy side of things, the Trump administration’s efforts to bail out the coal industry have failed to overcome the realities of ever-cheaper renewable energy. Meanwhile, states like California, New York, Hawaii, Arizona, and many others are upping their commitment to a low-carbon future.
This bigger-picture view was summed up neatly at our Wood Mackenzie Power & Renewables conference in November, where Prajit Ghosh, head of global strategy, pointed out that solar, wind and energy storage are on a cost decline path that puts them in position to knock not just coal and nuclear power, but potentially natural gas-fired generation as well. That’s already happening in California, where retiring nuclear plants and proposed new natural gas plants are being replaced by combinations of solar, energy storage, demand response and energy efficiency. But even in Texas, North Carolina, and the fracking gas-rich territory of mid-Atlantic grid operator PJM, “a lot of gas is being replaced by renewables. It’s a reasonable question to ask: Are we already in this new paradigm where solar, storage and wind are the default choice?”
Utility requests for proposals that incorporate more energy storage with renewables are proving out this prediction, according to Ravi Manghani, energy storage research director for Wood Mackenzie Power & Renewables. This year has seen solar-plus-storage systems coming in at merely a $6 to $7 per megawatt-hour premium over their solar-only competition, and over the next five years, falling battery prices and continued federal investment tax credit (ITC) support for battery-backed solar will drive down costs to ranges that are directly competitive with natural gas, he said.
Source: Greentech Media