Editor’s note: This op-ed is by David Hallquist, CEO of Vermont Electric Cooperative.
At Vermont Electric Cooperative, we are closely watching activity in Montpelier as legislators work to establish renewable energy goals for the future. At VEC, we sit at the intersection where policy meets the ratepayer and we are concerned that legislators are overlooking limitations of today’s electric grid. A very real issue is that the grid is not designed to handle large amounts of wind and solar without cost-effective battery storage to address the intermittent nature of these resources. Establishing aggressive goals for the adoption of such resources may have unintended financial and environmental consequences.
To understand this better, imagine Vermont’s power portfolio of the future. Current legislative proposals would limit non-renewable energy sources like natural gas or nuclear power to 20 percent. Vermont’s new Hydro-Québec contract would add about 25 percent to the mix, which is about a quarter less than the current contract. Biomass, a continuous generation and renewable energy source, could add about 15 percent to the portfolio, but woody biomass generation is limited by availability of low-grade wood. The remaining 40 percent of power needed would most likely come from ridgeline wind and solar – the intermittent renewables.
As higher renewable energy goals are achieved, the electric grid will interconnect with an unprecedented level of these intermittent wind and solar resources. Unlike power generators that provide a steady flow of electricity, such as Hydro-Québec, nuclear or natural gas plants, intermittent generation sources aren’t always available when needed. Conversely, there are times when electricity demand is low and surplus power from these sources will be wasted due to the lack of a storage mechanism, like a battery, to save the unused power.
Concerns are emerging that the grid may not run reliably with significant levels of intermittent power (around 20 percent or more), unless there is a way to store electricity so that it can be used at times when it is needed.
And, therein lies the rub. Cost-effective energy storage solutions do not exist today, nor are they seen on the near horizon. If we move to adopt high levels of renewable energy before cost-effective energy storage options become available, Vermonters may face significantly higher electric rates and unintended environmental consequences like excessive levels of ridgeline wind development.
VEC is not alone in recognizing the importance of understanding energy storage issues when developing renewable energy standards. In early February, the United States Department of Energy announced the establishment of the Batteries and Storage Innovation Hub to accelerate research and development in the transportation sector and electric grid. Project funding of $120 million over a five-year period underscores just how critical it is to develop effective energy storage solutions. While there are many programs available today to fund renewable energy production, far fewer exist to encourage the development of energy storage.
If existing battery technology was used to store excess intermittent power today, VEC estimates that the cost for these sources of energy would increase by an additional 23 cents per kilowatt hour (kWh) of energy stored. A power portfolio incorporating high levels of wind and solar, as described above, could cause the typical residential monthly cost for 500 kWh of electricity to rise from about $80 to a level between $120 and $155 due to the high costs of energy storage.
Transitioning to a greener power portfolio is a complex and important challenge for many reasons. Overlooking the implications of technology limitations may result in unintended consequences. It is critical that policy makers include the expertise and knowledge of Vermont’s electric utilities in the conversation as new legislation is developed. The risks are too high to Vermonters to create policy based on the hope that an energy storage solution will emerge in the nick of time.
VEC recommends the following:
• Reassess the timeline and pace for adoption of renewable energy considering today’s lack of cost effective energy storage solutions;
• Utilize non-renewable energy sources like natural gas or nuclear energy more fully as transition fuels as we move to a greener portfolio;
• Encourage development of storage solutions, including use of electric vehicles, as battery storage mechanisms;
• Establish 20+ year Blue Ribbon Panel of Vermont’s leading energy experts to advise and support the implementation of sound energy policy.
When it comes to energy, there are few easy answers. Vermont Electric Cooperative is committed to sharing our knowledge and expertise with fellow Vermonters as we move to a greener portfolio. Please keep abreast of energy issues and share your thoughts with your representatives in Montpelier and Washington.
