The economic and reliability impacts of grid-scale storage in a high penetration renewable energy system

As variable renewable energy generation in Texas increases over the next decade, flexibility and system inertia needs are likely to increase. Although natural gas peakers and combined cycle plants have met these demands in the past, grid-scale energy storage might be able to provide similar benefits. We compare the capacity for different energy storage technologies to provide grid inertia to maintain grid reliability and meet peak energy demand with a linearly-relaxed unit commitment and dispatch model of the Electric Reliability Council of Texas (ERCOT) grid that features fifteen transmission zones and sub-hourly intervals (i.e. 15 minutes). In this model, three energy storage technologies-Lithium-ion batteries, flywheels, and compressed air energy storage-are represented with different storage durations, ramp rates, and costs. Single-zone, 1 GW penetrations of each energy storage technology were modeled with a renewable energy penetration greater than 50% to identify the transmission zones where energy storage might have the greatest impact on the total cost of energy generation. Then, scenarios with 10 GW of energy storage either divided across the five transmission zones or concentrated in one zone at a time were modeled to analyze the impact of energy storage on inertia prices (reliability support) and total system costs (flexibility support) at scale. Energy storage built in transmission zones with high penetrations of variable renewable energy generation brought about the greatest reductions in system costs, so the 10 GW of storage were divided between five storage zones-transmission zones where building energy storage was most favorable-according to each zone's economic impact. Our model showed that compressed air energy storage generated the lowest average inertia price and produced the lowest system costs. With deep penetrations of gridscale energy storage, new peakers built in transmission zones where energy storage was added might become stranded assets in a high renewable energy future. In conclusion, compressed air energy storage systems most effectively supported the grid's system inertia while simultaneously meeting the grid's flexibility needs. Therefore, grid-scale energy storage offers a low-carbon solution to the variability of renewable energy generation.