A recent report from MN Solar Pathways, while looking into how Minnesota can achieve its ambitious renewable energy goals (including 25% by 2025) has found a number of interesting conclusions. Some of these outcomes include:

Solar and wind can combine to serve 70% of the state's electrical demand by 2050

Using flexible generation in limited amounts supports high renewable penetration

Shifting of key flexible loads may decrease generation costs

Most notably from an energy management perspective, though, was the conclusion that "Additional capacity coupled with energy curtailment is considerably less expensive than, and a viable alternative to, long-term or seasonal storage in a high renewable future."

The crux of this point was that the costs of solar and wind generation are decreasing at such a rate that curtailing them during times when production outpaces demand would actually be more cost-effective than using that excess production to charge large-scale energy storage. Rather than continuing to build out energy storage, there's an optimal spot where storage + wind + solar would all combine to minimize generation cost (shown in the figure below).

Those behind the report were quick to highlight that this "is not to discount storage, storage is still important." But the fact remains that there's a balancing act to play to optimize how renewables + storage fit into the entire grid system, and the nuanced finding is that proper energy management does not just rely upon more and more energy storage, but rather a balanced renewables + storage mix. Put another way, it's not economically valuable to try and build up so much storage as to avoid all curtailment, but it's better to acknowledge that some level of curtailment might be not only necessary but optimal.

Some of the troubles with this idea, though, include the fact that financing projects in the renewable sector in a way that acknowledges they are intentionally being overbuilt is incompatible with how projects are typically financed today.

Another counter point I've seen brought up is that this type of analysis oversimplifies a bit. It's true that on a day-to-day basis, only 2-3 hours of energy storage would be needed in any given day to achieve optimal peak shaving, but what about over longer periods? For example, larger energy storage systems can help to save excess solar produced in summer months to alleviate demand in winter months.

So, as with most issues, the truth probably lies somewhere in the middle and is sensitive to the individual nature of regional characteristics (climate, demand structure, utility set up, etc.).

Where do you see the balance between energy storage and renewable generation playing out in the energy management space? Is curtailment ever a good idea? Are there better ways to deal with excess production? Please let me know in the comments!