The Value of Energy Storage and its Ability to Fight Climate Change THE WILSON CENTER

The Value of Energy Storage and its Ability to Fight Climate Change

By Catalina Delgado, Mariana Jimenez, and Montserrat Ramiro

Mérida, Yucatán.

April 17, 2020.

Editor / mexicodigital

WILSON CENTER PROJECTS

Changes in the Power Sector and Their Impact on Energy Systems and Climate Change.

FULL BIOGRAPHY

Montserrat was appointed Commissioner by the Mexican Senate on September 18, 2014 for a five-year period. In 2017 she became Chair of the OECD’s Network of Economic Regulators.

She stepped down in January 2019 from both responsibilities. She holds a degree in Economics from the Instituto Tecnológico Autónomo de México.

She also has a master’s degree in Economics from the University College London, where she specialized in Environmental Economics and Natural Resources. Additionally, she has a graduate diploma in Finance and Corporate Social Responsibility from Harvard University. She is an Eisenhower Fellow. Mrs. Ramiro has nearly 20 years of experience in the energy industry and environmental sector.

She started to serve in the public sector at the Ministry of Environment and Natural Resources. Subsequently, she worked as a consultant on topics related to energy and environment, both in Mexico and in the United States.

Between 2005 and 2013, she served in several areas of Petróleos Mexicanos (PEMEX), and the subsidiary PMI Group. From 2013 to 2014, she worked as Director of Energy at the Mexican Institute for Competitiveness, IMCO.

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1. WhyEnergyStorage? According to the World Economic Forum’s Global Risk Report 2018, extreme weather events are as big a threat to the global economy as weapons of mass destruction, albeit more likely to happen [1].
2. Last year’s hurricanes, Harvey, Irma, and Maria, were tangible evidence of that. Although weather is a complex phenomenon, there is substantial evidence that increasing levels of Greenhouse Gases (GHG) in the atmosphere will raise the Earth’s temperature, disturbing normal climate patterns. Scientific consensus states that going 2°C above pre-industrial levels could lead to more frequent and stronger weather events, jeopardizing our livelihood [2].
3. Countries around the world are thus working to prevent this scenario through a set of climate mitigation and adaptation efforts defined in the Paris Agreement approved on the 21st Conference of the Parties (COP21) held in 2015, and ratified one year later by 176 countries [3]. Given that the energy sector accounts for almost two-thirds of the world’s total anthropogenic GHG emissions [4], all mitigation strategies include at least one action aiming at the decarbonization of the electrical grid.
4. Decarbonization efforts in the field of electricity rely on two pillars: energy efficiency and renewable energies. While it was unthinkable decades ago, renewable energies are now the third-largest contributor to the world’s power generation, amounting to 22.8 percent of the global power generation, just 0.1 percent below natural gas-based technologies. Hydropower is the most used renewable energy source; however, solar photovoltaic (PV) and wind are the fastest growing technologies with average annual rates of 45.5 percent and 24.0 percent, respectively, both in comparison with 1990 levels [5].
5. Although their net contribution to the global electricity matrix is quite low yet, dropping costs and favorable policies will likely increase their share in the near future. This is a desirable outcome for most countries, but there are compelling concerns on the potential impact of renewable integration on the reliability and security of electricity systems, as wind and solar are variable renewable energies (VRE) subject to natural forces, and therefore intermittent.
6. Such characteristics pose additional challenges to grid operators, as they need to balance supply and demand in real time while operating the system at certain established parameters.
7. Failing on this task can lead to variations in the quality of power supply, partial or total blackouts. In traditional systems, grid operators change the output of conventional power plants to meet the variable –but highly predictable– fluctuations in demand. In liberalized markets, this task is supported by ancillary services, mostly provided by synchronous generation units. However, in a system with higherlevels of VRE, more flexibility isrequired, increasing the need for more responsive ancillary services. Paradoxically, a larger share of VRE usually means that less conventional facilities will come online further reducing the supply of those services, given that wind and solar power plants are not able to supply them themselves (at least not to the same extent).