CA electricity duel pits imports against mass battery storage

CA electricity duel pits imports against mass battery storage

Chino Hills tower, Katy Grimes photo

There's an old California saying, “Water runs uphill toward money.”

Now California also wants electrons to flow against the laws of economics and possibly local environmental standards and neighborhood values.

The California Public Utilities Commission finally has released a proposed policy that would require the state’s three largest electric utilities to start building storage facilities along their transmission lines.   This policy complies with Assembly Bill 2514, by Assemblywoman Nancy Skinner, D-Berkeley in 2010. It was signed into law by Gov. Arnold Schwarzenegger.

However, there's a cheaper way to do the same thing: Use the transmission grid as a storage system. But that isn’t being considered by the CPUC.

Skinner policy

The proposed policy of the Skinner bill would mandate the installation of 1,325 megawatts of storage capacity by the big three electric utilities: Pacific Gas and Electric, Southern California Edison and San Diego Gas and Electric; as well as by “electric service providers” to the commercial and industrial sectors, such as municipal electricity departments; and by “Community Choice Aggregators,” or electric cooperatives.

A megawatt can power about 1,000 homes for an instant.  A megawatt hour can power 1,000 homes for one hour.  Total installed in-state electric generation capacity in California from all sources is about 75,000 megawatts.

So the 1,325 megawatts of storage capacity Skinner's bill would mandate would be less than 2 percent of installed capacity. Media reports of “massive energy mandates” are overblown.

The cost of 2 percent of installed electric storage could be absorbed by the other 98 percent, together with tax incentives.

But the widespread adoption of current electricity storage technologies would be cost prohibitive.  A Sandia National Laboratories study in 2011 conducted for the U.S. Department of Energy reported the costs for energy storage ranged from a low of $5 per kilowatt hour for “compressed air energy storage” to a high of $10,000 per kilowatt hour for Supercapacitors. (A kilowatt hour is enough electricity to power your home for one hour).  By comparison, the average price of residential electricity in California is a fraction of that, 17.5 cents per kilowatt-hour.

The Sandia study additionally conducted a “present worth analysis” of the different storage technologies and concluded the costs ranged from $669 to  $1,409 per kilowatt-hour in cost for short-duration, frequent-discharge storage. (Compressed air and hydro storage were not analyzed.)

But this analysis is suspect because it was done for the Department of Energy and was based on questionable assumptions.  The methodology compared four hours of operation of several types of batteries to eight hours of operation of Compressed Air Energy Storage and Pumped Hydropower Storage, which are the two lowest-cost methods of storage.

Another drawback is that the cheapest storage technology, compressed air energy storage, requires the use of natural underground caverns along transmission lines to store pressurized air.  And to store energy for release to produce hydropower would require proximity to water reservoirs.  So what the CPUC is talking about is storage batteries located along transmission lines.


The target of the energy storage industry is to replace existing high-priced natural-gas “peaker plants” with even higher cost storage battery systems on the sole basis of zero air pollution. “Peaker” plants come on line only during times of “peak” electricity demand, but otherwise are not generating elecricity.

Peaker plants produce power during heat waves and cold snaps at high prices to offset the limited amount of hours during a year they can recover their costs.  A peaker plant can generate instantaneous power for about $0.49 per kilowatt-hour, according to storage industry sources.

                Cost and Performance of Assumptions of Energy Storage

Technology Energy Storage Subsystem Cost $/per kilowatt hour Round-trip Efficiency Natural Gas Peaker Plant Cost Per kilowatt hour
Supercapacitors $10,000 95% $0.49
Flywheels $1,600 95% $0.49
Vanadium batteries $600 65% $0.49
Lithium-ion batteries (large) $600 85% $0.49
Zinc-bromine batteries $400 70% $0.49
Sodium/sulphur batteries $350 75% $0.49
Advanced Lead-acid Batteries $330 80% $0.49
Lead-acid batteries with carbon-enhanced electrodes $330 75% $0.49
Pumped hydropower storage $75 85% $0.49
CAES (compressed air energy storage) $5 (70%)? $0.49
Average price of residential electricity in California 2013 $0.175 N/A $0.49
Use of transmission line as energy storage $0.01 to $0.04 93% $0.49
Source: Energy Storage Systems Cost Update: A Study for the DOE Energy Storage Systems Program, April 2011.

The real world unit cost to store electricity in private industry is about $201 to $707 per kilowatt-hour (in 1995 dollars).  The Electric Storage Industry Association reportedly states that energy storage costs have dropped to 2 to 5 cents per kilowatt-hour, a drop of 99.994 percent below what Sandia Labs reports.

However, a 2003 study conducted for the California Energy Commission, “Improving the Value of Wind Generation Through Backup Generation and Storage,” concluded, “Even under fairly optimistic assumptions, the energy storage approach is unlikely to perform as well as operating under intermittent resources.”

Transmission-line storage

Not shown in the two studies cited above is what it would cost to use transmission lines as an alternative energy storage system.  Tom Konrad, PhD, compared electric storage and transmission as alternative energy storage systems.  He concluded that using the energy grid as a storage system would only cost about 1 to 4 cents per kilowatt-hour.

In addition, he said, the cost to operate a transmission line is only $0.005 to $0.02 per kilowatt-hour.  For shorter transmission line, such as 400 to 500 miles between California and Arizona, the cost should fall toward the lower end of the range.

Konrad’s analysis is based on sending electricity across time zones. Currently, Southern California gets much of its electricity from imported power from coal-fired power plants in Utah in the Mountain Time Zone.  And with the shut down of the San Onofre Nuclear Plant, Southern California is getting more imported power from Arizona, also in the Mountain Time Zone.

As Konrad described it, “Sending electricity from East to West would have the same economic value as discharging the same amount of electricity from storage, and then recharging it an hour later.” Additionally, transmitting electricity from East to West will benefit from advantageous price differences for California:

                                           Average Price Differential Across Time Zone

Arizona Utah California
Time Zone Mountain Mountain Pacific
Average Retail Price of Electricity June 2013 – Residential $12.18 $10.83 $17.50
Source: U.S. Energy Information Administration, Electric Power Monthly, June 2013.

Imported power and storage

It can be concluded from Konrad’s analysis that imported power is good for California because it coincidentally has the same effect as a storage system.  If renewable energy is going to penetrate beyond the existing 33 percent share of power in California’s energy system, electricity storage is going to be essential.  But that is not on the probable time horizon.

Media reports that “tax credits can do for storage what they did for wind farms,” and the claims by energy industry consultants that the implementation of AB2514 “is the moment we all have been waiting for,” are overblown and premature.  A cost-effective technology for electricity storage is not available and may never be available on a large scale.  Targeting the replacement of peaker plants with storage battery systems is not within reach either.

Typically, peaker plants are tucked in inconspicuous or remote locations.

By contrast, to reduce transmission line costs, storage battery systems would likely comprise unsightly, high-priced storage battery plants closely packed in series along urban transmission line corridors.

'At any cost'

As mentioned at the beginning of this article, AB2514's premise is energy storage “at any cost.” If that's the case, then the high cost of battery storage doesn't matter. Then electrons will flow to the highest-cost solution without much regard for cheaper existing alternatives or “downstream” environmental and safety impacts to local communities.

New higher capacity Redox Flow Batteries are potentially suited to balance out fluctuations of electricity from solar and wind power plants.  But they store electrical energy in chemical compounds, which are liquid electrolytes that are charged in small reaction chambers.

As Underwriter Laboratories has warned, the new, large car batteries for electric vehicles pose potential health hazards. The same would occur should large storage batteries be used for electricity-grid storage.

Public reaction

How the public and local public safety officials will react to batteries erected close to residential neighborhoods hasn’t been disclosed or tested yet.  Will the California Occupational and Safety Administration require such battery plants to be marked “explosion hazard”? The energy storage industry is going to have to do a better job at full disclosure if it is going to expand batteries in California.

The environmental community and homeowners will likely have a say in any intrusion of electric battery storage facilities into urban areas. Just in June, as's Katy Grimes reported, residents in Chino Hills defeated Southern California Edison electric transmission towers that were being erected near their homes.

Residential neighborhoods across California should be expected to oppose similar projects involving large storage batteries.


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