In Michigan, we’re lucky to have one of the largest pumped storage facilities in the world. At the Ludington Pumped Storage facility, water is transported uphill when cheap excess electricity is available and allowed to flow back downhill through a turbine when electricity is needed. Despite its clear value to the grid and to the increased integration of renewables, the 1,872-megawatt facility took four years to build and is unlikely to be replicated.
Instead, the greatest expansion in energy storage over the last decade has been in batteries. Utility-scale battery storage capacity has soared over the past 10 or so years, from almost nothing before 2010 to nearly 1,000 megawatts today, driven in large part by lithium-ion battery storage, the price of which has fallen 85 percent since 2010. There has also been growth in the number of energy storage projects outside of lithium-ion batteries, such as compressed air energy storage and flywheel storage.
But despite the value of pumped storage in the state’s energy mix, Michigan has been slow to adopt these booming new energy storage technologies relative to the growth seen on the coasts.
This is unfortunate, because, as revealed by the Michigan Public Service Commission’s (MPSC) recent State Energy Assessment, Michigan’s energy system is not as resilient as it could be. Storage could help.
Michigan ranks near the bottom of all U.S. states in terms of electric reliability due in part to harsh summer thunderstorms and bouts of extreme winter freeze, but also due to aging infrastructure and outdated systems. Energy storage allows the grid to tap power at will and store power in times of excess and so represents a massive opportunity to shore up reliability and resiliency.
By shifting electric demand to off-peak times and keeping the grid stable, storage can serve as an alternative to old ways of upgrading the grid. Utilities may not need to charge ratepayers for as many distribution-level projects like new power lines or transformers because many of those projects may not be needed if energy storage is deployed appropriately. Several states have required utilities to analyze these “non-wires alternatives” before spending ratepayer dollars on large distribution grid upgrades.
The disparity between Michigan and other regions when it comes to energy storage can be explained in part by policy hurdles. The problem is multifaceted, involving state regulations and utilities as well as the wholesale market.
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