Over two thirds of the energy consumed in US homes, businesses, and industry is delivered in the form of either electricity or natural gas. Over the past several years there has become a growing interest in technologies to store these energy forms both to facilitate the increased use of intermittent, renewable energy sources, like solar and wind, and to increase energy resiliency in the face of global energy disruptions and natural disasters and storms, such as hurricanes, fires, and extreme weather events (e.g., the Texas freeze of 2021).
The technologies and costs of storing either electricity or natural gas are very different. And these differences will shape the roles that each electricity and natural gas play in achieving our dual goals of decarbonizing our energy system with renewables at the same time we seek to increase energy supply resiliency.
The primary way that electrical energy is stored today is in batteries and, indeed, grid-scale battery systems have become less expensive in the recent past. According to the US Energy Information Agency (EIA) such storage systems have fallen from over $2000/kwh in 2015 to just under $600/kwh in 2019 (latest data); however, there are concerns that this rapid decline will not continue, and, indeed, could reverse, due to shortages of key materials. We will ignore this uncertainty for this discussion. In addition to batteries, electricity can be indirectly stored on the grid via pumped storage facilities that pump water up to reservoir at a higher elevation then release the water to run through turbines to a reservoir at a lower elevation. Such systems can be economically attractive but are severely limited in scalability due to siting and environmental limitations. Other approaches, such as compressed air storage and lifting large weights and recovering the potential energy, are being investigated but have not yet proven to be more cost effective than batteries.
Using the same EIA data source, there was 1,688 MWH of battery storage capacity in the US at the end of 2019. In that year, total electricity production in the US was 4,128 TWH. Combining these numbers shows that in 2019, about 0.00004% of annual electricity production could today be stored in grid-system batteries. The EIA forecasts that the battery storage capacity will increase by 10X, or to a level of about 0.0004% of annual electricity production, by 2023.
The scale of these numbers illustrates that the main use of battery storage systems is to compensate for the short-term changes that can occur when variable solar and wind power sources are added to the grid. Longer term, seasonal storage is not practical with today’s technologies.
In contrast to battery storage of electricity, natural gas storage is currently practiced, both in the US and overseas, on a relatively large-scale basis primarily by utilizing naturally occurring storage reservoirs, such as impervious salt caverns, aquifers, and depleted natural gas fields. Relying on natural geologic features means that a facility to store natural gas costs between $5 million to $6 million per billion cubic feet. On an energy equivalence with electricity, this corresponds to about $0.02/kwh for the storage facility.
According to the EIA, US storage capacity for natural gas was 9.26 trillion SCF. In that year, EIA reports the consumption of natural gas was 30.28 trillion SCF. In other words, in 2021, just over 30% of annual consumption of natural gas was available from storage resources. Referring to the difference in cost to store a unit of energy as electricity versus storing that unit in the form of natural gas ($600/kwh vs $0.02/kwh) explains why natural gas is the medium of choice to store large volume of energy for long (e.g., months) duration.
This large difference in the cost of the “storage vessel” also explains why there is such strong interest in producing gaseous fuels, like hydrogen and e-methane, from renewable wind and solar sources. The cost of long-term storage of gases can be so much lower than the cost of “storing electrons” in batteries that the additional cost to produce these gases, even from renewable electricity, might be justified. This is the goal of many inventors and researchers.
Of course, there is more to this storage puzzle because natural gas and electricity do not exist in isolation in our energy system. Because electricity is so often produced by burning natural gas in a power plant (or, for example, reacting natural gas in a fuel cell) stored natural gas also helps manage the unpredictable variations in solar and wind supply to the grid, while it also ensures a seasonal fuel to compensate for lower solar production during the winter. It also ensures a reliable supply of fuel to thousands of standby generators in critical applications, such as hospitals, water plants, and communication facilities throughout the country in the event to natural disasters.
In order for our country to continue to gain all these benefits from natural gas, it is essential that we maintain an extensive and safe infrastructure of natural gas storage, transmission, and distribution. Without these assets It will not be possible to achieve our energy decarbonization and resiliency goals.
Jeff is the Technical Advisor/Co-founder of Onboard Dynamics. He is an experienced entrepreneur, having founded or co-founded two companies in the energy and software industries before co-founding Onboard Dynamics.