Electricity Storage and Transmission are naturally complementary, and more of
both will be needed. But given limited time and resources, where should
those of us who want to see as much renewable electricity on the grid as soon as
possible concentrate our efforts? The choice is not immediately clear.
Dennis Ray, ED of Power Systems Engineering Research Center (PSERC)
quoted [pdf, p.11] as saying “Regardless of contractual arrangements that are
subject to environmental regulation, the ultimate dispatch pattern that will
determine the actual emissions is largely dependent on transmission constraints
and reliability considerations.”
Horses for Courses
At a basic level, the preference of transmission over storage will depend on
your goals. For those interested in energy self-sufficiency and
distributed generation, improved transmission runs contrary to their goals.
The related goal of energy security can cut both ways: while a more
integrated national grid might be more vulnerable to large scale blackouts, its
greater size would make it less vulnerable to disturbances caused by the loss of
any one source of generation. Since transmission can either cause or
prevent blackouts, a smarter, more fault tolerant grid seems a better way to
combat blackouts than a less connected, more Balkanized grid.
When it comes to goals of increasing the penetration of renewable energy into
the grid, electricity storage will likely be essential at high levels of
penetration, and new transmission is essential to bring electricity from areas
where renewable resources are plentiful to where they are plentiful to
population and load centers.
Leaving aside necessary new transmission to bring renewable electricity to
market, and electricity storage which will likely be necessary to reach high
degrees of grid penetration for renewable electricity, there is considerable
scope for both electricity storage and a more robust national grid to make it
cheaper and easier to allow quick renewable electricity integration.
Unfortunately, comparing transmission and storage is very much apples
and oranges. Storage, in essence, takes electricity produced now
and stores if for use later (transfer in time), while transmission takes electricity
produced here to where it's needed there (transfer in space).
The relative value of transferring electricity in time and in space depends on
the relative price of electricity here and now, to the price of electricity
used there and then, as well as the cost in losses from the transfer.
In the balkanized North American grid, we have both daily fluctuation in
price and wide geographical price differences, as well as differences in price
fluctuations in timing. These variations will make storage relatively more
valuable in a location which is far from other parts of the grid, and which sees
high daily variation in electricity prices due to variable supply
and/or load. A common example of this is that it is often cheaper to build a
completely off-grid home if the home is more than a half mile from existing
In contrast, the low cost of connecting to grid service means that no one is
envisioning building off-grid homes where electricity service already exists. Note
that policymakers are talking about Net Zero Energy Homes (i.e. homes which both
import and export electricity from the grid,) not true Zero Energy Homes, which
would supply all their own energy all the time.
In a 2005
study "Improving the Value of Wind Generation through Back-up
Generation and Storage" from the California Energy Commission (CEC Study)
evaluating the use of storage to allow wind to operate as a firm resource found
that "even under fairly optimistic assumptions, the energy storage approach
is unlikely to perform as well as operating under an Intermittent
Resources." If the economics of wind cannot be improved through the
direct use of storage, a more robust transmission system will have to achieve
benefits at significantly lower costs in order to improve wind economics.
A Simple Example
In order to directly compare the benefits of transmission and storage amid
all these variables, I start with a simplified example where the two are more or
less comparable. Traveling from West to East is in many ways analogous to
traveling forward in time as you cross into new time zones. It's always an
hour later in New York than it is in Chicago.
Let's assume then that we have a single transmission line connecting two
similar areas of the grid, where the marginal costs of electricity have
identical patterns throughout the day, but located in time zones an hour apart.
Sending electricity from West to East would then have the same economic
value as storing the electricity for an hour in the Western grid, and releasing
it an hour later. Sending electricity from East to West would have the same
economic value as discharging the same amount of electricity from storage, and
then re-charging an hour later.
If, for simplicity, we assume that the electricity storage and transmission
line have the same capacity, then the transmission line can operate similarly to
electricity storage with capacity large enough to charge or discharge discharging
continuously for two hours. The two-hour capacity is necessary to
compensate for the ability of the transmission line to move power into the past
(East to West) as well as the future (West to East)
Still Apples and Oranges?
Some readers may protest that electricity storage has the advantage of
charging when electricity costs are low (usually at night), and not discharging
until prices peak (usually in the afternoon or evening.) This actually
makes less difference than might be expected, because the transmission line can
be operating continuously, and the sum of one-hour differences in price will
equal the difference between the peak price and the price in the overnight
trough. In other words, transmission makes up for the smaller price
differentials with increased volume of electricity transferred.
On the other hand, the value of transmission deriving from different prices
between locales are assumed to be negligible in this example. A look at a map of average electricity
prices in the United States
shows that most East-West transmission lines across time zones will also
benefit from highly significant differences in average electricity prices.
Since my example completely ignores these differences, my simple example is
likely to greatly underestimate the value of transmission relative to
What Does it Cost?
to the Electricity Storage Association, the best storage technologies
other than pumped hydropower (which I exclude from this analysis because new
pumped hydropower developments are severely limited due to environmental and
water rights issues) can store electricity for an incremental cost of about 2-5
cents per kilowatt-hour.
In contrast, Wikipedia puts the cost of "[l]ong-distance
transmission of electricity (thousands of miles) [at] US$ 0.005 to 0.02 per
kilowatt-hour." A one time-zone transmission line needs to be long enough to cover 15 degrees
of longitude. This is slightly over 1000 miles at the equator, but gets smaller as
you move to higher latitudes. In the United States, this varies between
approximately 800 and 900 miles. The shorter distance should put the cost
of transmission at the low end of the range above, or 0.5 cents per kWh, or
about a quarter to a fifth the cost of storage.
In my simple example, the cost of transmission per kWh will have to be
increased to compensate for the greater number of kWh transferred, since a
storage system would likely only be cycled once per day (for two hours of charge
or discharge), while the transmission system will be operating whenever the
hour-to-hour price differentials are high enough to make up for line losses.
A look at hourly
prices for electricity in Ontario for December 3rd (the day I am writing
this) show that prices are rising or falling significantly about 16 hours a day,
meaning we expect the transmission line to handle about 8 times as many kWh as
the electricity storage. Hence the incremental costs for transmission may
need to be increased from the above estimates to reflect the greater incremental
costs due to line losses. However, all the "cents per kWh"
numbers above contain assumptions about frequency of usage to allocate capital, maintenance,
and electricity losses between kWh used. Storage technology for grid
stabilization is most likely assumed to cycle approximately once per day, while this
paper uses the assumption that a transmission line will be operated at 65%
capacity, similar to the line in my example. Therefore, if the cost for
transmission needs to be scaled up to reflect the higher usage, it should likely
be increased by a factor significantly below 8, and perhaps not at all.
Taking this together, the value of the ability of the transmission line to
act like electricity storage should be between 1 and 4 cents per kWh, still
slightly below the 2 to 5 cents per kWh for most storage technologies. If
we assume that there are any significant other benefits to transmission (such as
increased diversification of power supplies and the ability to buy low and sell
high between different regions, as discussed above), electricity transmission
becomes the clear winner where it can be built.
Clearly, my comparison for a trans-time-zone transmission line and
electricity storage is still far too simple to capture the full benefits of
either technology. However, in an age when storage
technologies are still mostly experimental while transmission technologies
are well-established, it seems clear to me that our first efforts should be to
capture those large-scale gains we can with a robust national grid. With
President-Elect Obama promising "green" infrastructure
to jumpstart the economy, neglecting electricity
transmission would be a tragic mistake.
What's Stopping Us?
To a believer in free markets, it's probably quite surprising that such large
economic opportunities exist. Similar to the untapped
opportunities in energy efficiency, market barriers have crippled the
national electric grid. The most obvious barriers are those of people
who object to how they look. Because of the need for long, contiguous
corridors, negotiation with individual landowners has delayed many projects for
years. For many large projects, the power of eminent
domain is essential. This is why T.
Boone Pickens combined his wind plan with plans for a water pipeline from the Ogallala
Aquifer. In Texas, water projects have eminent domain, while
electricity projects do not.
There are also significant regulatory barriers. Electricity
deregulation in many states meant that utilities often had
no incentive to invest in new transmission infrastructure[pdf].
Furthermore, electricity planning is done state-by-state and region by region,
with the North America carved up into nine independent regions.
Currently these problems are only being addressed on a state and regional
basis. A robust national grid will require all these problems to be
addressed at a national level. One approach might be for Congress to
create a national transmission planning authority with the right of eminent
domain, or the right to use the right of ways along the interstate highways
Is that too much to hope?