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Mandalay Homes, based in Arizona, recently introduced the iON Series, a set of smart energy features that includes an extremely tight, well-insulated building shell, high-efficiency heating and cooling system, and on-site solar with battery storage.
“In the past, we have guaranteed four things in our energy-efficiency package,” says Geoff Ferrell, Mandalay’s chief technology officer. “Our homes achieve a Home Energy (HERS) Index of 50 or less along with three third-party certifications: Indoor Air Quality Plus, Energy Star and Zero Energy Ready Home. With the iON Series we have increased our commitment to clean energy and improved value to the customers.”
Starting with a foundation of its low HERS rating and its three third-party certifications, the iON Series integrates optimized energy collection, storage, and management to build zero energy homes in a way that supports grid integrity.
The ‘duck curve’ is a threat to net-metering
Arizona’s utilities and homeowners have invested heavily in grid-connected solar resources — enough to create an imbalance between electricity demand and supply. This so-called “duck curve” results because daily peak demand occurs in the late afternoon and evening when most people return home and crank up the air-conditioners. However, peak energy production from solar electric panels occurs closer to midday. Until recently, the electric grid has been unable to store the excess electricity from renewable sources for when it’s needed most.
This imbalance has been used by some grid operators to threaten the future of grid-tied, net-metered, zero energy homes. Some utilities may attempt to solve the duck curve challenge by creating rate structures and interconnection requirements that make net metering disadvantageous to zero energy home owners.
Several obvious solutions to the duck curve fall to grid operators themselves, including developing battery storage, pumped hydro, microgrids, time-of-use rates and demand management. While some of these solutions will take time and money to implement, time-of-use rates and demand management are low-cost and easy-to-implement strategies which require builder participation.
An elegant solution
Mandalay Homes and Arizona Public Service (APS) have partnered to address this issue at the neighborhood level. Every Mandalay home in their three newest communities will include the all-electric iON Series features: a HERS Index of around 30 which includes the addition of a six-panel (2 kW) solar array, and a 10 kWh Sonnen Eco 10 energy storage system. Beyond just a battery, the Sonnen system can be programmed for a number of intelligent energy management functions, including grid integration in a way that helps eliminate the duck curve.
APS has introduced an innovative time-of-use and demand management strategy and works with Mandalay Homes to implement it. As part of their Mandalay home purchase contract, buyers agree to an APS rate program that charges them only 4.75 cents per kWh for all their purchased electricity during off-peak times, a much lower rate than the national average of about 12 cents per kWh.
The catch is that customers may not use grid electricity during the peak hours of 3 to 8 p.m. This is where the Sonnen battery system comes in. It stores enough electricity to keep everything running — all the space heating, cooling, water heating, lights, and appliances — during these hours when the home is not drawing power from the grid.
Solar energy from the 2-kW array is used primarily to charge the batteries. The Sonnen system also locks out grid power from 3 to 8 pm. Because the home’s high-performance envelope and high-efficiency equipment keeps energy use so low, energy stored in the relatively small on-site battery is sufficient for this period.
Ferrell projects that homeowners in these communities will spend as little as $12 per month for energy, plus about $18 per month for the standard APS service charge and taxes. While some observers may not see these as true zero energy homes, the electricity supplied via the APS grid is clean and renewable. This hybrid approach offers an extremely cost-effective path that is beneficial for the electric utility, affordable for homebuyers, and profitable for the builder.
This type of partnership between Mandalay and APS based on APS’s new electricity rate schedule is available to others in APS territory. It would be great to see other developers and builders follow Mandalay’s example to benefit both utilities and consumers. The Mandalay APS approach may well become a model for use in other utility service areas where there is high solar production and the duck curve is becoming a threat to the expansion of net-metered, grid-tied, solar-powered homes.
Performance optimized buildings are the starting point
“Before we can go with solar and batteries, we need to optimize the home,” says Ferrell. Mandalay’s standard approach is based on climate-appropriate building science. Over the course of several years, Mandalay has evolved a long list of high-performance energy features culminating in the new iON Series with a HERS Index of 50 or less before the application of solar.
This level of performance puts the home firmly in the zero energy ready category where affordable renewable energy can be added to supply all the energy needed by the home.
To achieve this rating, Mandalay uses a set of proven energy-efficiency features:
- Spray foam insulation: Walls cavities are filled with open-cell spray foam. While the insulating value is about the same as fiberglass batt insulation, foam does a far better job of filling all the nooks and crannies that batt insulation can leave open.
- Conditioned attic: Open-cell spray foam is also applied to the underside of the roof sheathing. This brings the entire attic into the building’s conditioned envelope.
- Ducts inside: The entire heating and cooling system is inside the conditioned envelope. In single-story plans, the furnace and ducts run through the conditioned attic space created by insulating the roof sheathing with spray foam. In two-story plans, additional ductwork for the first level runs through the intermediate floor that is framed with open web floor trusses.
- Slab-edge insulation: High-density (3.0 lbs/cu. ft.), closed-cell spray foam insulation covers the edge of the slab-on-grade foundation both above and below grade. Because the 3-pound foam is so strong and durable, the portion exposed above grade can simply be painted, with no need for additional protection from sunlight or physical damage.
- Aerobarrier: The newest addition to Mandalay’s energy suite is a new air sealing system that is relatively inexpensive, highly effective, and consistent. Aerobarrier injects an airborne aerosol mist into the building as it is being pressurized with a blower door. The mist-laden air pushes out of the building through cracks and openings. The aerosol sealant accumulates and eventually fills the openings. The process takes about four hours per house. Installers monitor progress and stop when the home reaches the desired level of airtightness. Mandalay homes now average 0.7 air changes per hour (ACH50).
- Ventilation: Highly consistent airtightness allows mechanical equipment to be sized properly. Energy-recovery ventilators are selected to deliver the appropriate amount of whole-house ventilation, while quiet bath fans and range hoods provide spot ventilation.
- Equipment sizing: Heat pump capacity is reduced with confidence that occupant comfort will not suffer on extreme days. Mandalay saves roughly $800 per home through optimization and a heat pump that is ½ ton smaller.
Consistency in the construction process
Production builders strive for consistency and save money by shaving expenses wherever possible. To this end, Mandalay created an in-house Performance Team. These two employees have three jobs: installing the high-density spray foam slab-edge insulation, implementing the Aerobarrier sealing equipment, and mounting solar panels on the roof. Mandalay saves money by bringing these specialized tasks in-house rather than hiring outside contractors.
This post originally appeared at the Zero Energy Project and is republished here with permission.
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39 Comments
It would be interesting to know the installed costs for the PV system, the 10 kWh Sonnen Eco 10 energy storage system and a ROI analysis vs the "normal" APS charges.
Mandalay Homes are typically between 1500-2500 sf, and with HERS40-50 should have low energy bills to start with, so I really would like to learn how cost effective is to spend an extra $20k+ on an already energy efficient home.
> Mandalay homes now average 0.7 air changes per hour (ACH50).
I expect that this is soon after treatment with Aerobarrier. I'd like to know how they perform after years of joint movement.
Since both PV solar and energy storage are more cost effective at utility scale, the above design typically only makes sense due to market distortions. On the other hand, thermal storage (tank of water or ice) may make sense at the point of use.
“Mandalay saves roughly $800 per home through optimization and a heat pump that is ½ ton smaller.”
This statement is so clearly false it make me question every word in the in the article.
It looks like the storage saves the customer $24 per month. It would be a poor return on investment if the storage costs $20K each.
How long is the warranty on the battery?
Walta
The Sonnen Eco 10 energy storage system warranty is 10 years. Their price for a 5kWh is around $10k, a 15kWH is around $23k, so I would guess a 10kWh is around $17k?, plus the cost of a 2kWh PV, plus installation. Even if a $24k system gets 30% tax credit, that leave $17k. I would calculate an EE small house to have annually average energy bills between $50-75 a month. In my quickly calculated way, I get over 20+ years ROI.
I'm not trying to be a contrarian, on the contrary, I've designed ZERHs exclusively for quite a while now, and I haven't figure out how to bring down the cost that makes economic sense. 1/10 of my clients go ahead and install the PV systems, and much less than that, install batteries. I do really want to know the way to make it work.
When installing and selling tens or hundreds of identical PV + storage all in close proximity the costs of those systems are half or less what it costs retail for a one-off installation.
In Germany or Australia in locations where the volumes are high and the permitting streamlined, even in quantity one the costs are about half what it is on average in the US. I'm pretty sure in volume Mandalay can hit or beat the average German or Australian quantity one retail price.
I know the scale of economy plays here, but I'll be surprised if they pay half, still, if they can bring the ROI from 25 years to 12-15, it may make sense. I know the economics are dependent where you live. In CA, the Self-Generation Incentive Program (SGIP), a true net metering available in most parts and cheap installation prices compared to other states (ie, TX), help bring the costs way down, maybe AZ is following CA. Other states are negotiating same issues, but for most of us, its still a high rope to climb.
The problem is that this solution is "clever" and not simple or deep. They've managed economies of scale only on the front end and not on the back end, i.e. when the batteries have to be replaced. Those batteries are still expensive and after 10 years of use they will have to be replaced at great expense. Also, it is a complex system that requires regulation and communication with the home on a house by house level. More things to go wrong.
I think it might make more sense if legislative and regulatory agencies got involved so that at the end of those batteries useful life the neighborhoods didn't become islanded when individual homeowners balked at re-upping to new batteries. Back end costs could be significantly reduced if batteries were located in one location for a large neighborhood. Also, a stationary heavy battery makes sense then and can be made cheaper than lithium ion batteries once economies of scale are introduced.
You can't ignore the back end costs just because you have a shiny new house whose original expense for the batteries is cheap.
>"Those batteries are still expensive and after 10 years of use they will have to be replaced at great expense."
After 10 years use that "great expense" is likely to be about 1/4-1/3 of what the replacement cost would be in 2019. The actual recent history learning curve on battery cost is faster than was estimated back in 2015 :
http://rameznaam.com/wp-content/uploads/2015/10/How-Cheap-Can-Lithium-Ion-Batteries-Get-Energy-Storage.jpg
So if it costs $17K today for an Eco 10 (full retail qty 1 pricing), the replacement is likely to cost less than $5K (all-in), and could be less than $4K.
For reference on the competition, a 13.5 kwh rated for 5kw peak draw Tesla Powerwall 2.0 + inverter/charger costs between $10K-16K, fully installed right now, Q1 2o19. Only at the high end of that range is it comparable to the 10kwh Eco 10 + inverter. The battery alone is less than $8K. It'll be less than half that in 10 years. If Tesla had the contract with Mandalay you can bet it would be in the $10K range, not $16K range.
Best estimate on battery replacement cost in only 10 years: $4K, give or take. That's not nothing, but it's not $16K.
In this type of application they should go more than 10 years on average- it's not like an EV battery that sees very high bursty-cycles and deeper discharges, though I'm sure some number of homeowners are talented enough to (ab)use them enough to wear them out within the warranty period and get them replaced under warranty.
Dana, I respect your opinions but you didn't address my argument with "facts"
that are more than speculation about future prices. You can't cherry pick the lowering of prices with one technology without opining about parallel discounted prices on other battery technology. That's not an honest argument but more of a "facile" argument. They actually are both speculations and should be avoided but if you do offer speculations about future prices then those speculation have to be consistent, which yours aren't. A closed mind to another way of doing things will use those one side speculations.
Also, it is just a fact that the utility price break is based on a collective agreement for the whole tract of homes. That will be unenforceable in the future if you don't require every home owner to pay to replace those batteries at the retail cost.
Say you do force them to buy those batteries and a new technology comes along. And say those batteries only make sense at the neighborhood level because they are big and heavy, but dirt cheap. Again, you are allowing me to use this argument because of your own argument that it won't be a hardship for the individual homeowner to buy new batteries. in the future.
You can easily see that this system does not allow easy transition to new technology because batteries have to replaced at the individual home and cannot be replaced in one large location. These homeowners certainly won't be happy when they see other neighborhoods get the benefit of those new and better battery technology that is already available at the neighborhood and larger scales.
In just a few years time the homeowners will feel locked into a Betamax technology in an era when there is solid state memory.
>"It looks like the storage saves the customer $24 per month."
When all the purchased electricity is at less than half the fixed rate retail price, how does that only add up to $24/month?
The article suggests that the bills will be about $30/month. I doubt the typical code min house in Arizona would only be using ($30 + $24=) $54/month.
>"It would be a poor return on investment if the storage costs $20K each."
Sure, and it would be a great investment if the alternative were burning $100 bills in a biomass power generator to make electricity during peak hours it would be a great investment at $20K each.
Thing is, it doesn't cost anywhere near $20K, just as we don't need be burning Franklins to generate power during the lockout hours.
The Sonnen Eco 10 can be purchased at full retail from third parties for about $16-17K even in quantity one. (The retail price of the Eco 5 is about $5K, the Eco 15 about $23K, purchased in quantity one through solar installers.) Buying them in tens or even hundreds (housing development quantities), wholesale-direct from Sonnen it's probably around $10K for the Eco 10.
And the price of storage is still falling on a double-digit percentage cost reduction "learning curve" with each doubling of production. It's a high growth market too- behind-the meter storage in the US is doubling about every year, in Australia it is MORE than doubling year on year, though the world market for this class of storage may "only" be doubling every 18 months or so. As the technology gets cheaper the market expands, which will also lower the production and thus the price. It's on a virtuous cycle at this point.
"An Elegant Solution" for Mandalay homeowners maybe but not for every other rate payer, including those who already have solar installations. I don't see the benefits to other rate payers who must subsidize Mandalay homeowners' electric bills by 60%. What's in it for them? Mandalay stays off-grid for 5 hours per day? What are they putting back into the grid that benefits the other rate payers?
What's in it for the other ratepayers is a lower peak generation & distribution cost that would otherwise be integrated into their fixed rate pricing. To call that a 60% subsidy is just plain wrong.
Wholesale peak electricity pricing is usually several times the average residential retail cost. The cost of upgrading the distribution grid to be able to add a whole housing division is not trivial either. This stuff adds up!
Were the PV output simply net metered and delivered to the grid at the same time that it is produced will eventually add more cost to the grid, since it requires the distribution grid and transmission grid operators to manage back feeding of excess power onto the grid. With the storage between the distributed PV and grid it avoids forcing management of excess production during the mid-day, and lowers the ramp to peak grid load, since these homes are drawn zero watts during those periods. This isn't a TOTAL cure for the duck curve, but it's a very good start. It lowers the amount of generationg & hardware & storage the utility or transmission grid operator needs to capitalize to manage the duck curve.
"Wholesale peak electricity pricing is usually several times the average residential retail cost."
And then there are the occasional days, like this past Labor Day, when wholesale power costs in New England hit $2.70 ( not a misprint) per kwh. Getting those peaks down is a big win for everyone who doesn't own the least efficient speaker plants.
Dana stated,
"The article suggests that the bills will be about $30/month. I doubt the typical code min house in Arizona would only be using ($30 + $24=) $54/month."
Living in Arizona for 15 years, in code minimum homes, nobody is paying $54 a month for electricity for a 1,500+ square foot home. In the spring - fall, in the Phoenix areas, electric bills of $200+ per month are the norm. Northern Arizona climates (zones 4-5) don't see as hot of a summer but still a $54 a month bill would be tough to find in a code minimum home. I now live in a custom home that is above code minimum. It's 100% electric and my electric bills range from $40 - $75 from summer to winter. Utilizing heat pumps for house heat, hot water heat and dryer.
So I 100% agree with Dana, no way code minimum homes are seeing $54 a month electric bills. It's much higher. Highest monthly bill I had in Phx was $350 and the lowest was maybe around $70 with 70F daytime temps in winter.
In response to Eric #12...
Ignoring technology learning curves is just silly. Renewable power developers and their investors don't ignore it, and build it in to their financial models. If they didn't factor in the learning and assumed a project slated to be built in 3 years or 5 years had last year's cost structure they would not win a single bid. The same is true for storage.
A reduction by only half in 10 years time would be on the CONSERVATIVE end for battery costs, and assuming that it would be the current $8K price (battery alone) in 10 years would be insane.
>"You can't cherry pick the lowering of prices with one technology without opining about parallel discounted prices on other battery technology."
Yes, some other battery technology may even undercut Sonnen's Li ion pricing in 10 years, so?
>"Also, it is just a fact that the utility price break is based on a collective agreement for the whole tract of homes. That will be unenforceable in the future if you don't require every home owner to pay to replace those batteries at the retail cost."
The savings benefit to the other ratepayers would already have been covered within the warranty period even if an individual Mandalay homeowners opted out when their own battery died (post-warranty). Since we don't really have the full terms of the contract in front of us we don't really know if replacement post-warranty is a requirement. Don't assume that "...it is just a fact..." when said fact is not in evidence. Whatever the deal is it's available only to the buyers in the development, but we don't know what, if any time horizons are built into the deal. I'm pretty sure it's not 4.75 cents/kwh forever, for as long as the battery & PV are still operating, or some other factor. Most people would want to know if they'd still be locked out of the grid for the peak hours periods even after the PV or battery craps out- there must be terms in there, but we don' t know what they are.
>"Again, you are allowing me to use this argument because of your own argument that it won't be a hardship for the individual homeowner to buy new batteries. in the future."
I never made the argument that replacing the battery wouldn't be a hardship, only that the magnitude of that hardship in 10 years is in all likelihood going to be dramatically less than what it would be if it had to be replaced in 2019. $4K is still a significant chunk of change, but it's not $8K (battery replacement only, 2019 pricing) and it's not $16K (full 2019 retail installation of battery, inverter and controls.) But we don't really know that they would be required replace it at end of life, as asserted.
Is anyone factoring inflation into their projected ROI's?
I am. Technology is generally not affected by inflation. Something that is technological in nature is most affected by the labor required to produce it and to the price of the raw elements that comprise it. If it is built from a limited planetary supply of the raw chemical supply then it won't scale well and will eventually inflate the price compared to other equivalent technological solutions.
If two embodiments of a similar technology require different amounts of labor then that will affect prices greatly. I think it would cost a lot less in labor to build a larger battery at a centralized location than a lot of batteries located at residence level. The maintenance and upgrading would be simplified and lowered in cost for labor for big installations. Labor will always be the biggest predictable cause of inflation.
>"Technology is generally not affected by inflation."
Sure it is- newer technology on a learning curve is highly DElationary. eg: the cost GIGAbyte of computer dynamic memory is cheaper than it cost per MEGAbyte 20 years ago, more than a 1000x reduction in price in two decades.
>"Something that is technological in nature is most affected by the labor required to produce it and to the price of the raw elements that comprise it. "
That's the description of a fairly mature technology, not a rapidly evolving technology ramping up into higher volume production year on year. The amount of material and it takes for a kwh of storage in 2019 is substantially less than what it took in 2009, and more than an order of magnitude less that it took in 1999.
The battery techology cost curve is comparable to what PV has enjoyed for the past 4-5 decades. Compare the cost inflation of PV to that of the more mature energy sources.
http://rameznaam.com/wp-content/uploads/2014/10/Welcome-to-the-Terrordome.png
Notice the gas & oil fracking boom in this curve? :-) It's very clearly in there, along with the oil price spikes of the 1970s and early 2000s, but kind of irrelevant relative to the trajectory of the cost of solar, which is still falling in price along it's traditional learning curve. Batteries happen to be on a similar trajectory right now, but they don't need to be on quite that steep a curve to say that batteries in 10 years will be substantially cheaper than they are today.
I wasn't referring to the prices of the equipment, but the costs for energy. Those typically follow inflation to the best of my knowledge. When we talk about the cost of the storage and array vs the cost of the energy they save over the years, the price of the energy isn't going to remain the same throughout the life of the equipment. It'll increase at a rate close to inflation which will decrease the ROI.
Buried the lead?
The duck curve is a real issue. Personally, I don't think this is a great approach, I think utility scale solar and battery make more sense and will eventually rule the day (along with utility scale wind, pumped storage, etc).
However, the big deal to me is a production builder with 0.7 ACH 50 leakage. Even if the leakage doubles after ten years of movement, that's still better than just about every house out there now, including expensive custom houses.
Utility scale batteries are made of the same size cells as residential scale batteries. So the economies of scale in batteries aren't as dramatic as they are in combustion plants, where a bigger turbine actually gets you higher efficiency than a smaller turbine. There are still advantages, but they aren't that great. And if you have central storage and solar, you still need to send the full afternoon peak through the distribution system. This helps avoid that.
An analysis I think would be really interesting would be to compare the costs of different storage strategies to make it through the off-grid time. There's probably some combination of batteries, a better envelope, more thermal mass throughout the house, and a tank of chilled water that gives the lowest cost.
Well, actually flow batteries or liquid metal batteries, are different in size from other batteries. I had hoped people had actually looked at the youtube video I posted in the other thread describing liquid metal battery technology. It's hard to carry on an argument or discussion if one always has to reset to the default argument that doesn't incorporate new information.
I didn't get explicit about the example in my mind because then I would probably have been accused of being a Johnny-one-note. However, just because it has not yet been done yet doesn't mean that having utility scale implementation doesn't have advantages. It is much lower cost in labor to maintain and change over to new types of batteries that are more advanced or has more energy per dollar spent than lithium ion if one is doing it at very large scales than at residential scale. I'm really surprised that isn't obvious.
Also, when I said technology isn't subject to inflation I meant it in the way inflation is usually meant i.e. "rises in costs". Of course technology gets cheaper and that's how I meant it And newer implementations of technology gets cheaper faster than older technology. That's why I do not think it is wise to implement batteries at residential level- at least not in the long run.
For future reference here is the link again: https://www.youtube.com/watch?v=pDxegcZqx_8&t=35s
The counter argument to this is that a decentralized grid is more efficient and resilient. I can't watch the video at work, but IIRC from the last time I watched it, flow batteries won't work for small scale applications. They'd be good for what your suggesting, centralized storage, and lithium based batteries will be good for residential applications. So, why couldn't both work together?
Actually the video refers to liquid metal batteries. And you're right about info in that video only having them working at neighborhood level and above. The issue of implementing batteries at that scale and above is a combination of reasons, not just applying to that type of battery. The main one is that the duck curve requires more battery back up and it becomes more urgent the higher level of green intermittent energy sources come on line. If one actually believes green house gases are quickly reaching a level of no return - one has to answer that individually - then grid batteries introduced quickly at large scales will be required. It is not so much a matter of not being able to do residential AND larger scale implementations simultaneously but which way would ramp up faster.
Ambri's liquid metal battery technology has a fairly short time horizon to get their cost under Li-ion technology. By the time electric vehicles ramp up to serious production the cost of new Li-ion will be substantially lower than it is now, and shortly thereafter the supply of used EV batteries suitable for home power or grid batteries will mushroom. Nissan already has an established business in Europe selling "second life" Leaf batteries in pre-packaged grid-battery and behind the meter battery packs.
Flow batteries have different characteristics than liquid metal or Li-ion. They are far better at bulk-storage than they are for ancillary grid services such as voltage & frequency stabilization. There is a good argument for having a mix of storage technology.
But storage is still the MOST expensive means of managing the duck curve. At the other end of the expense scale, demand response (dispatchable load) is orders of magnitude cheaper, and still a barely-tapped resource. FERC Orders 745 and 841 have opened the door to distributed/aggregated demand response and distributed storage being allowed to bid into the wholesale markets, but there is still more regulatory work to be done there:
https://www.utilitydive.com/news/congressional-democrats-push-ferc-to-act-on-aggregated-ders/548170/
Dana, I understand what you are saying because you've been saying this a long time. However you still haven't convinced me with your argument because it is a circular argument. The main reason to go to intermittent renewable resources like wind and solar to avoid green house gas emissions. Yes, I understand that many times wind and solar is producing too much energy for the current load. That is unavoidable and gets worse the more of it comes on line. But the solution isn't just to either shut them down temporarily or to create a dispatchable load like a water heater.
The whole point is to move away from fossil fuels. Even in the states using the most renewable resources as a percentage I don't think they are close to 100% renewable. The whole point of excess renewable energy at a specific point in the day (something that is unavoidable if you are doing it right) is to save that energy at the peak and then use it later when its really needed - like the example given in the article in Arizona between 4 and 8 pm when air conditioning comes on full blast. (Trans-seasonal storage is something else again that electrical batteries aren't equipped for.)
Exactly how are you going to do that by your solution of either turning on a water heater to use up the excess power, or by turning off the power coming from the solar because you don't need it before people come home from work? How's that going to work? You keep saying it and it just keeps not making sense to me. Whether it is currently expensive or not batteries are required for the grid for time shifting of intermittent power sources. They just are.
Of course the simplest and cheapest answer of all is to put one's head in the sand and stop all buildout of intermittent renewable resources. Just ignore AGW. If price is everything then that's what your argument leads to. I just don't get why you don't see the necessity of grid level electrical batteries. You are a very smart person. You should be able to see that if one is eventually to get to a grid powered by intermittent renewable resources. I think you are doing a disservice to individuals here who tend to trust you on this because of your vast knowledge in other areas. You are just wrong on this.
I should add that your suggestion of curtailment or dispatchable loads should only ever come into play after the renewable energy sources are supplying close to 100% of the seasonal power requirement. Otherwise you are wasting usable energy. We are nowhere close to that.
Curtailment isn't necessary if there is llarge amounts of dispatchable load (like smart EV chargers) until over half the power is being sourced by variable output renewables, but well before 100% some amount of curtailment will happen. This isn't a disaster- as the cost of renewables continues to fall, the cost of curtailment falls with it. When the cost of curtailment is less than the cost of storage it makes better financial sense to curtail rather than more storage.
Dispatchable load has a great benefit even at very low renewables penetration, taking bite out the capacity factors of fast-ramping peakers, providing voltage and frequency regulation, and in some instance even reducing the spinning reserves requirements. With out demand response both the NY-ISO and PJM regions would have had to build out a LOT of peaker capacity over the past decade.
FERC Order 745 requiring that demand response be allowed to bid into capacity markets was only blessed by the US Supreme Court three years ago, and the grid operators have been slow off the mark to implement that. In the ISO New England region the first demand response market was only kicked off in June of last year. The potential for aggregated distributed demand response is quite high, and still largely untapped.
In the more mature PJM region demand response market there are aggregators willing to pay to have some control over your electric water heater, with that response being bid into both the ancillary services (voltage & frequency) and capacity markets, treating the aggregate load like a "virtual peaking powerplant". Aggregate
control of existing water heaters are a heluva lot cheaper means of providing those services than any battery or fossil-burner solution. If the Ambri solution is eventually going to be "dirt cheap", water heaters (and other dispatchable loads) are already "cheaper than dirt cheap", and will continue to be:
https://www.greentechmedia.com/articles/read/report-smart-water-heaters-could-pay-back-200-per-year-in-grid-services#gs.egZmoCh6
I think we are not going to have a meeting of the minds. Your logic just doesn't compute. But I'll let you have the last word with the understanding that I don't agree at all. I just think you have totally gotten lost in the weeds and have gone off the path.
Eric: I've been doing some the math on this (and studying the math on this from those making careers of it) for well over a decade now. Today's grid ain' t your momma's grid, and tomorrows grid won't look anything like what's going on right now. Dispatchable loads are a LOT more flexible and useful than they appear at first blush. The utilitydive.com and greentechmedia.com and reneweconomy.com all have a fair amount of reasonably accessible stuff on it in their archives, without having to dive into the more hard-corps academic stuff.
In the past 20 years white papers from the Rocky Mountain Institute's electricity group have also been proven prescient, or even too conservative, in the case of estimating battery cost declines, and renewables learning curves. Most of the reports downloadable from this page are pretty accessible:
https://www.rmi.org/our-work/electricity/
Eric: Even though this now classic 2012 piece has laughably high 2030 capital cost assumptions it's still worth a read:
https://ac.els-cdn.com/S0378775312014759/1-s2.0-S0378775312014759-main.pdf?_tid=2c5a291f-498b-4bd2-9374-9c026ee1a548&acdnat=1550095548_5f6337b0944dfca5f3d13884e0b059a0
For example, in Table 2: The projected capital cost in 2030 per kw of $2848/kw for solar is about 3x what it actually cost in 2018. Their projected 2030 cost for utility scale solar is pretty the 2018 cost of small-scale solar. I don't think PV pricing is going to triple over the next 12 years, but it's likely to continue falling from where it is now.
So their costs of renewables and storage are both overstated, but their conclusions (starting on p.69) are still valid:
"We find that 90% of hours are covered most cost-effectively by
a system that generates from renewables 180% the electrical energy
needed by load, and 99.9% of hours are covered by generating
almost 290% of need. Only 9-72 h of storage were required to cover
99.9% of hours of load over four years. So much excess generation of
renewables is a new idea, but it is not problematic or inefficient, any
more than it is problematic to build a thermal power plant
requiring fuel input at 250% of the electrical output, as we do today.
At 2008 technology costs, 30% of hours is the lowest-cost mix
we evaluated. At expected 2030 technology costs, the cost minimum is
90% of hours met entirely by renewables. And 99.9%\ of hours, while not
the cost-minimum, is lower in cost than today’s total cost of electricity"
Their assumption that EV battery capacity costs in 2030 would be only reduced by a bit more than half from the 2008 costs, whereas EV battery costs have already fallen by about 3/4 between 2008 and 2018, ( well before 2030.)
So depending on the where the actual price points shake out curtailment is cheaper than storage, and conversely. But it still doesn't take more than 72 hours of storage to hit 99.9% if we're overbuilding renewables by 3x, and even at the very high projected cost of either storage or renewables it's cheaper overall than 2008-2012 electricity costs.
Already the projected cost of PV is 1/3 the number used in their analysis, but storage is about 1/2 the projected 2030 cost That is going to affect the renewables penetration levels that is the lowest-cost in 2030, or even right now. (Renewables penetration of something way more than 30% would be the lowest cost electricity inflection point today in their analysis, given just how cheap this stuff has become.)
But storage vs. curtailment isn't the only axis.
What wasn't considered in that paper was the degree of demand management, the amount of flexible load could be dispatched on/off or time shifted at extremely low cost without actual storage (in either EV batteries or grid batteries). Since those earlier studies the PJM region has seen substantial growth in demand response capacity for managing variable grid load and variable output renewables, and that approach is really still in it's infancy there, pre-natal in most of North America, but definitely coming. The more demand response there is, the less curtailment is necessary and the more it eats into the economics of storage, since storage costs quite a bit more than simply shifting when the load is taking power in response to when variable output power is approaching (or already in) overflow mode.
There are lots of moving targets here, and nobody expect the transition to hit the lowest cost mix inflection point of renewables & storage mix as it rolls out, but the long term trend is still electricity price deflation BECAUSE OF (rather than in spite of) higher penetration of variable renewable generations sources, along with a modest amounts of storage. Much LOWER amounts of storage is needed than would seem likely to the armchair observer working it out on a napkin.
It looks like Sonnen has found a VERY deep pocket buyer to back their home battery roll out worldwide, which should accelerate the cost reduction rate in home-scale storage systems like the systems they're providing to Mandalay Homes:
https://www.greentechmedia.com/articles/read/oil-supermajor-shell-acquires-sonnen-for-home-battery-expansion#gs.jiJQyk9s
It's good to see bigger players going after this market!
From the linked article, "Similarly, Sonnen’s efforts to aggregate power from thousands of homes and wield it as a grid resource could likely grow with the expertise of Shell’s trading desk."
Sonnen is already bundling their residential batteries in Germany and selling the capacity effectively as grid-scale storage. This bundling of distributed storage is a serious game-changer. Utilities will pay for the use of your own private storage through reduced power rates. The Mandalay approach is a crude example, with no "smart grid" controls - just a predetermined blackout period of a few hours a day. Even so, that's worth enough for the utility to give customers a 2/3 discount on the rest of their purchased power.
Make these batteries truly dispatchable and add EV's with their batteries into the mix, and grid-scale storage begins to look easy. All that's left is politics, regulations, and ROI. OK, maybe not so easy, but certainly not pie-in-the-sky impossible.
I agree with what Peter seems to be implying. The economics and coordination of storage capacity with the needs of the grid is better done in close cooperation with the grid operators. This means battery installations that the grid operators have access to is very desirable. 10 years average life of a battery really is a limiting factor at the consumer level. Not so much at the commercial and utility scales. Again the labor required to maintain and replace the batteries during that 10 year period can be significantly reduced the more batteries are located in larger accessible points. It is also much cheaper to modify if changes in technologies or standards apply. I suspect Dana doesn't agree. (Or won't admit to agreeing)
I should add that this principle of aggregating storage isn't incompatible with using EV storage at the household level. EVs are by their nature used for transportation so are suitable for residences. They can also be used for grid support when not used. I still think its just force of habit from that use of EVs to think dedicated grid storage should also be at the residence level. It doesn't make sense to me to off load dedicated storage to the consumer given the current short lifespan of batteries.
Eric,
I disagree that the lifespan of the current crop of batteries is only 10 years. That is yet to be seen, but these batteries don't get the abuse (fast charging, deep discharge, extreme temperatures) that EV batteries get. And, if the capacity drops below 80%, you've still got capacity - just not as much. Maintenance is nearly non-existent, and replacement is simple with wall-hung units. Yes, maintenance is less efficient overall than with utility-scale installations where there is constant maintenance and spot replacement.
But there is also a big advantage to installing batteries in residences, and that is off-grid resilience. With a wall-hung battery and the right switching equipment, you can use your personal wind or solar power to power your house during a power failure. For many homeowners, that's valuable enough to play the game.
In my region, we lost power for over a week three years in a row. Many homeowners spent in excess of $10k, some over $30k for standby generators that have sat there doing nothing for 6 years now. If they had spent that $10k-$30k on PV panels and batteries, they could have been saving signficiant $$ on their electric bills and had the ability to limp (or cruise) through power failures. That psychological benefit has real value.
One of the buzzwords in post-hurricane rebuilding is Microgrids and their potential for local resilience. With my personal Nanogrid, I can pretty much ignore what the grid operators are doing (or not doing) to keep the lights on after disasters.
Grid batteries don't see the deep cycling and massive currents that even the same batteries used in an EV would see in normal use. Some in-situ measurements on 2-way power transfers from EVs see low, no, or even negative degradation of the EV battery. And that's just one range of battery type. There is no reason to believe flow batteries will only last 10 years.
The investment bankers have tried pretty hard to track the lifecycle cost of grid batteries as well as 2-way power flows on EV batteries, and it's pretty much good news, with a strong learning curve in effect. For a taste of how they are looking at it, see:
https://www.lazard.com/media/450774/lazards-levelized-cost-of-storage-version-40-vfinal.pdf
Mind you, we're only into the frost on the tip of the iceberg on grid battery production volumes, and with a typical manufacturing learning curve this pricing will plummet as volumes hit the levels envisioned in the PJM lowest-cost electricity analysis published in 2012, and real world pricing is already below that study's projections for 2030.
I see your point and hadn't considered a situation like yours where you had extended periods in three different years of no electricity. Are you in the country with few nearby neighbors? I think in your situation I would feel exactly the way you do about wanting my own personal backup storage.
What I worry about is the increasing effects of global warming. The question is how to most quickly and efficiently ramp up intermittent renewable resources and integrate it into the grid to slow global warming. It's clear that there is more than one solution to get storage access to do that. You should have personal battery backup for your situation and the grid should integrate your storage ability and pay you for using it to level the output from intermittent renewables. Why would anyone, especially me, want to deny you that ability?
But it is a fact that in many parts of the country grid operators would like to use your situation to minimize their own cost to make the grid more resilient and green. They would like to use your situation to convince gullible consumers in more urban areas that THEY need personal backup, and convince them to shoulder most of the cost.
It's a fact in more urban and suburban areas it just doesn't make sense to go that route. It will slow down the integration of battery backup into the grid tremendously. And it will also be much more expensive to add that capacity to go the route of individual installations. The problem is that I already see a political alignment of propaganda that seeks to convince everyone to believe they need their own personal backup, when in actuality it is only a relatively few people like yourself that actually do. It will be much cheaper for the grid operators to convince people to do that and purchase their own battery backup. People tend to be gullible if they don't hear all sides. The grid operators have their own motivations that don't always serve the greater good.
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