Improved Rules Of Thumb
Some general patterns emerged from the simulation project discussed in the last two posts, though I haven’t yet ventured far from the PNM scenario. (I have started to run simulations with Los Angeles as the source of demand data, the Alta Wind Energy Center at Tehachapi Pass for wind data, and an arbitrary spot in the Mojave Desert for solar data; early results aren’t showing any major departures from the outcomes of the Capitan/PNM study.)
To generalize: if you have places near a demand area where there are high levels of wind and solar potential, and can build large farms to capture these, then the most economical solution for 60% carbon reduction will most likely not include storage. As the percentage of decarbonization increases beyond 60%, storage becomes an increasingly cost-effective part of the solution. At 85% carbon reduction, storage is probably desirable; at 90% and above, the most cost-effective solution will almost certainly include storage. Achieving 95% to 100% carbon reduction may not be feasible at all without a significant storage component.
For places that don’t have high-quality wind and/or solar, the trade-offs will be different, and storage may start to make sense earlier in the carbon reduction process. But I haven’t simulated such conditions yet, and there’s no point in guessing. (I’m well aware that there’s a body of existing research around questions like these, and that I should invest more time in searching that literature.)
At the difficult, but desirable case of 100% elimination of carbon-emitting fossil fuels, the news from modeling is better than I expected. A system of wind + solar + storage can reach 100% at a cost that is significant, but not astronomical. An extra fly in the ointment for this goal is that I’ve only modeled one year, and if we ran the same simulated system over multiple years, there would certainly be some shortfalls. (That’s been the conclusion of other studies, like this one.) But in the big picture, what to do about a once-in-a-decade weather event is a problem we would love to have, compared to the present, when we continue to spew enormous amounts of carbon into the atmosphere every single day.
The day might come when something like hydrogen will be a cheaper way to get that last 5%, but in the meantime, it’s good to know that we can get there with just wind, solar, and EPS. By the way, if anyone is concerned that storage will compete with other potential uses for excess solar and wind power, such as electrolyzing water to make hydrogen, or charging vehicle batteries, there’s no need to worry: even in the storage-heavy, 100% carbon-free scenarios I’ve modeled, a tremendous amount of solar and wind power is still curtailed (approximately as much as the grid actually consumes), so there is plenty of scope for finding additional real-time uses for that power.
New Mexico’s Energy Future?
The simulation project began as an attempt to quantitatively answer the question, “How much storage do we need?” That question has been answered now, for one particular customer and set of assumptions (some of which, I freely admit, are educated guesses). If those assumptions are reasonably correct, we can supply PNM (most of New Mexico’s population) with carbon-free electricity using about $7 billion worth of wind turbines, $6.5 billion worth of solar panels, and $2.8 billion worth of encapsulated pumped storage. This would allow New Mexico to fulfill the mandates of the state’s 2019 ETA (Energy Transition Act), which stipulates a 50% renewable grid by 2030, and 100% by 2045.
The amount of storage in this scenario, 50 gigawatt-hours, is probably larger than anyone analyzing the problem has contemplated. Even the less expensive solution I examined, which achieved an 89% renewable grid at a system cost of $9.3 billion, required 22 gigawatt-hours of storage. To satisfy this with lithium-ion batteries, at the cost per kilowatt-hour of the Hornsdale facility mentioned earlier, would cost $13 billion for storage, versus a modeled $1.32 billion for EPS.
I have no particular knowledge of how PNM and the state plan to meet the requirements of the ETA without breaking the bank. Getting to 50% renewables by 2030, according to my simulation, is straightforwardly achievable by spending the next 10 years building solar and wind farms, and making no attempt to add storage at a scale that would matter.
That leaves 15 additional years to reach 100% carbon elimination. I would speculate that the PNM and state planners hope (not entirely unreasonably) that either lithium-ion batteries will become drastically cheaper by then, or that some new, less expensive form of energy storage will become available.
The ETA and similar laws, of course, are meant to support a larger goal, which is to slow the rate of global heating. On that front, a 2018 report from the IPCC (summarized here) says (quoting from the link):
“As expected, the report doesn’t pull any punches: Staying at or below 1.5°C requires slashing global greenhouse gas emissions 45 percent below 2010 levels by 2030 and reaching net zero by 2050.”
At first glance, New Mexico’s ETA seems to align itself well enough with this statement, by calling for 50% renewables by 2030 and 100% by 2045. The catch, though, is that the New Mexico law is only about the state’s electrical grid; but the IPCC report is talking about greenhouse gas emissions from all sources. And the grid accounts for only a fraction of those emissions—32% in 2019 for the U.S., according to this EIA article. (Furthermore, decarbonizing the grid is widely regarded as an easier challenge than eliminating the emissions from the other sectors.)
So in fact, if New Mexico meets its ETA goals on time, without other initiatives of even greater size, the state will still be pushing the world toward more catastrophic global heating, not less.
In order to plan to meet the IPCC goal, we need to assume a couple of other things. First, growth of PNM’s consumption for current uses absolutely must stop, and begin to reverse. This means examining every watt currently consumed, and doing more with less. Second, somewhat paradoxically, we will have to increase PNM electrical generation a great deal, because we must start to make progress on reducing carbon emissions from the 68% of our energy consumption that’s currently not coming from the grid. One obvious example is transportation—we have to phase out gasoline and diesel fuel in that sector, which probably means a lot more electric vehicles, whose batteries will be charged by the grid. Another example is space heating, a heavy user of natural gas—that will have to be reduced by a combination of improved energy efficiency, and use of heat pumps, which will be powered by the grid as well.
Assuming we do start tackling those challenges (soon enough to matter), it will mean the grid needs to produce much more power than it does now, without itself emitting carbon. We will need even more solar panels, more wind farms, and more storage, all built incrementally, as fast as possible, starting as soon as possible. Solar and wind can already be built incrementally and quickly. EPS, with its reliance on familiar technologies and materials, can bring those same qualities to storage.
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