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The influence of regional geophysical resource variability on the value of single- and multistorage technology portfolios

Anna X. Li, Edgar Virgüez, Jacqueline A. Dowling, Alicia Wongel, Dominic Covelli, Tyler H. Ruggles, Natasha Reich, Nathan S. Lewis, and Ken Caldeira · Environmental Science & Technology · 2024

Key finding. In every load-balancing region investigated, least-cost systems that included long-duration storage already had sufficient energy and power capacity to meet short-duration storage needs as well, so adding short-duration storage as a second technology did not markedly reduce total system cost.

A stacked bar chart of system cost contributions in dollars per kilowatt-hour, from 0 to 0.30, across five groups. Group A, wind and solar with no storage, is a single bar reaching 0.30. Group B, one storage technology, shows eight bars between about 0.08 and 0.13 depending on which technology is used, hydrogen lowest. Group C, lithium-ion plus one other, ranges from about 0.13 down to 0.08. Groups D and E, hydrogen plus one other and lithium-ion plus hydrogen plus one other, are six and six near-identical bars all close to 0.085.
The bars stop moving once long-duration storage is in the system. Adding a second or third storage technology alongside hydrogen (groups D and E) leaves system cost essentially where hydrogen alone had already put it — the long-duration option sized for seasonal balancing turns out to carry enough power capacity to cover the short-duration job as well. Figure 2 from Li et al. (2024), Environmental Science & Technology. Reproduced under CC BY 4.0. Extracted from the published PDF and resized for web display.

What question did this research address?

Storage technologies differ in what they cost per unit of energy capacity and per unit of power capacity, which suggests that a portfolio combining a cheap-energy technology with a cheap-power one should beat either alone.

This paper asked whether that intuition survives contact with a least-cost system model, and whether the answer depends on the geophysical resource of the region being supplied.

What did we find?

The analysis uses a stylized macro-scale model of least-cost electricity systems relying only on wind and solar, applied to the contiguous United States and to four geographically diverse load-balancing regions.

With only one storage technology deployed at current costs, hydrogen energy storage produced the lowest system costs for the contiguous United States, because its energy-capacity costs are the lowest of the technologies modelled.

Hypothetical alternative technologies beat hydrogen only at very low energy-capacity costs, but beat lithium-ion batteries at relatively high energy- and power-capacity costs — so the competitive threshold differs sharply depending on which incumbent is being displaced.

The portfolio result holds across all regions examined. Because long-duration storage sized for seasonal variation necessarily carries substantial power capacity as well, it covers the short-duration role as a by-product.

Why does it matter?

The finding cuts against a common assumption in storage planning. If a single long-duration technology covers both roles, then a portfolio approach adds complexity for little gain, and the case for deploying batteries alongside it must rest on something other than least-cost system design.

Testing across geographically diverse regions is what gives the conclusion weight. A result that held only for the national aggregate might be an artefact of averaging away regional resource variability; holding in each region separately makes it robust.

Citation

Anna X. Li, Edgar Virgüez, Jacqueline A. Dowling, Alicia Wongel, Dominic Covelli, Tyler H. Ruggles, Natasha Reich, Nathan S. Lewis, and Ken Caldeira (2024). The influence of regional geophysical resource variability on the value of single- and multistorage technology portfolios. Environmental Science & Technology.

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