Florida is on to something that Texas may want to start looking into. There is current legislation (HB 1133) going through the Florida State House to create a pilot solar + battery storage program to improve the resilience of critical infrastructure. It’s a small pilot, only about $10 million dollars, but it is focused on determining the feasibility of providing solar + battery storage to provide backup power at hospitals, emergency shelters and emergency response units. The systems must provide at least 24 hours of backup power to the site’s electrical load or at least five hours of average daily use.
Florida is realizing, along with some other states on the east and west coast that more options must be made available for emergency backup power. Diesel and gas generators are not a great option, due to fuel supply issues, air pollution and the uncertainty as to whether they will work when called upon. What this Floridian effort is doing is helping to identify better alternatives to standard practices that can improve the resilience of its power infrastructure, particularly critical assets.
Solar + Battery Storage Market
Florida is not alone. Several states are way ahead. California, Hawaii and New York have been the leaders in solar + battery storage deployment to improve resilience. Systems are largely being installed for back-up power, as well as to reduce demand charges and overall power costs.
The installation of solar + battery storage is growing. A GTM research report finds that in Q2 2017 saw 443 systems installed, about 32 MW. The report shows a significant increase in deployment over the next several years. Approximately 7,000 MWh projected to be deployed in 2022.
The Old Way to Do Things…
Traditionally for commercial, as well as some residential buildings, the backup power option is for diesel or natural gas-fired generation. These systems typically only run when there is a power outage and sit idle at other times.
Some of the commercial users of these systems have become a bit more sophisticated and use these backup generators to provide ancillary services to the electric power market, but that is not common and takes a level of sophistication and effort that is typically not available. (The exception is Enchanted Rock. They are a good example of how to take advantage of price signals in the ERCOT power market to make backup generation profitable for the vendor and the end-user.)
There are several concerns for diesel and natural gas generators. Backup natural gas and diesel systems are reliant on an offsite fuel supply that may become vulnerable during a natural disaster event and not always available or easily supplied. Diesel systems must keep a significant amount of fuel on site which is very expensive and may not be easy to refill during or after a disaster. Diesel and natural gas delivery systems are known to shut down during major disasters, as well. The reason is that both systems are highly reliant on power to operate pumps, compressor stations, etc. If those systems go down, there is a risk to delivery. Flooding, wildfires, and earthquakes also can wreak havoc on the delivery infrastructure. Finally, air quality concerns limit the operation of these generators. Depending on your location, air permits may only allow these systems to run a certain number of hours a year.
Fuel prices have a tendency to spike and remain high during and after events until fuel supplies are back online. This is currently being realized in the Northeast with the significant spike in natural gas prices due to soaring demand for building heating. A similar spike was experienced during the Northeast US Polar Vortex in 2014. The 2014 Polar Vortex led the DOE request of FERC to subsidize fuel secure supplies such as coal and nuclear power. Not sure if that is a great idea. Other than the request distorting power markets, coal is not that fuel secure. Coal piles froze during the polar vortex and we watched Hurricane Harvey turn the coal supply at the Texas WA Parish Plant into a coal slurry. They had to switch to gas.
The benefit of diesel or natural gas generator is largely the upfront cost. According to an NREL study, the cost to install a 5 kW solar + battery storage system is about $7.8 per watt. In contrast, the cost for a similar size natural gas turbine is about $0.89 per watt. Kind of hard to make that pencil out looking at first costs. The high costs for the solar + battery storage system are largely due to the cost of the battery, about $10,000 for a 5 kW system according to the NREL study, as well as a good bit of cost for the labor and the balance of system components. Fortunately, the costs for solar + battery storage continue to decline significantly with some projections seeing the cost decline by approximately 70% over the next 15 years.
New Way of Doing Things?
The upfront costs, at least for the next few years, is a big hurdle for solar + battery storage systems to overcome. However, the resilience benefits can be pretty significant. The benefit of the solar + battery storage system is that everything to operate the system is on-site. There are not fuel supply constraints, nor are their fueling requirements during the life of the system. This is a significant benefit if your solar + battery storage system is replacing a diesel generator option and even a natural gas-fueled option.
As stated earlier California, Hawaii and New York have taken the lead in this solar +battery storage effort. The east and west coast continue to be early adopters and first movers in trying out innovative power systems. San Francisco has developed the Solar+Storage for Resilience initiative (SSR) which is in place to develop a roadmap for San Francisco and the nation to determine the best path forward in deploying solar + storage systems to improve storm preparedness of critical infrastructure. They recently launched a solar + storage resilience calculator called SolarResilient. This calculator is to help building owners find the appropriate sized solar + battery storage system for their needs. The National Renewable Energy Lab (NREL) also has developed a tool for commercial building operator and owners to determine the economic feasibility and the appropriate size for solar + battery storage systems at their site. The system is called REopt.
Another example of a City actively pursuing solar + battery storage for resilience is Salt Lake City, Utah. SLC is part of the DOE Solar Market Pathways initiative. This initiative has supported SLC to set goals and begin deploying solar + battery storage systems for emergency preparedness of critical facilities. It includes integrating solar + battery storage into healthcare facilities, as well as work with the private sector to put together emergency preparedness plans. This project is also developing a 10-year deployment plan for the entire state.
These are just a couple of examples. A great opportunity exists to expand our critical infrastructure resilience options. DOE, through its Solar Market Pathways program, is providing free technical assistance to build resilience with solar + storage systems. The program focuses specifically on how to integrate resilient solar into emergency management plans.
Time is Right for Texas to Consider its Options.
The State of Texas and Houston, particularly, have witnessed increasing numbers of power outages in recent years. Two million people lost power with Hurricane Harvey. Fortunately, much of the power was restored fairly quickly. Hurricane Ike knocked the power out for 7.5 million people, 95% of CenterPoint’s Texas territory and that was only a Category 2 hurricane at landfall.
I realize that it is a bit sacrilegious to suggest other backup power alternatives other than natural gas. However, natural gas systems have their vulnerabilities. It is in our best interest to ensure we have available all viable options to ensure the long-term resilience of our communities. Solar + Battery storage looks to be one of the better options. It may not be a bad idea during this interim session, as the State thinks about ways to recover from Harvey and improve resilience to conduct a study of solar + battery storage options. We may then have something we can act on in the 2019 session that will lead to improved resilience of our communities.