Cleantech Market Intelligence
Matching Renewable Power, Worth Billions, to Load
The business case model in Navigant Research’s report, Energy Storage for Wind and Solar Integration (ESWS) answers three questions:
- How much energy from renewable plants is not taken by the grid (curtailed) or is affected by negative pricing?
- How much is this energy worth on the wholesale energy market at daily peak load?
- How much would it cost to deploy an energy storage system to prevent these losses?
Since the business case for ESWS applies to new installations and not older installations (which have been grandfathered in with lucrative FITs), this model uses cumulative installations for wind and solar starting in 2013 and extending to 2023. Currently there is a misalignment between variable energy production and consumption – in other words, power generated is sometimes not usable on the grid, or demand exists when the renewable resources are unavailable. The number of hours per day that are misaligned varies depending on the technology. The model also assumes that the amount of energy that is curtailed or otherwise not used when it is needed will decrease over time, as wind and solar forecasting technology improves during the next 10 years.
Wind presents the greatest challenge in terms of a misalignment between production and load (up to 4 hours daily), followed by distributed PV (up to 2 hours) and non-distributed solar (up to 1.25 hours).
Value at Peak Load of Variable Energy Curtailed by Technology, World Markets: 2013-2023
(Source: Navigant Research)
In 2013, Navigant Research anticipates that the ESWS market will be worth $143 million. At the same time, approximately 17,238 GWh of energy from variable generation assets will not be optimized to load – or more simply put, represent wind and solar power that is generated but not useable. If these resources were optimized to load, this energy would be worth more than $733 million globally. By 2023, Navigant Research estimates that of the cumulative 1,300 GW of variable generation that is anticipated to be installed between 2013 and 2023, there will be 567,053 GWh of misaligned generation to load.
Wholesale energy prices are forecast to increase between 1% and 9% over that period, depending on the region – this is the piece of the model that has the most uncertainty as there are so many economies that are poised to take off in the next few years and energy prices will likely soar in these markets. With these assumptions in mind, however, Navigant Research estimates that 567,053 GWh of output would be worth $30.4 billion in 2023. By comparison, the investment of energy storage to integrate wind and solar assets in 2023 is expected to reach $10.3 billion.