The argument against renewable energy is that it is inconsistent—wind power only works when the wind is blowing, and solar panels only generate electricity during the day. That’s where grid storage comes into play, storing the energy when it is produced and giving it back whenever it is needed.
Prices are dropping
For a long time, the cost of battery storage of renewable energy was considered prohibitive. Indeed, a decade ago, the price per kilowatt-hour (kWh) of lithium-ion battery storage was around $1,200. Today, thanks to a huge push to develop cheaper and more powerful lithium-ion batteries for use in electric vehicles (EVs), that cost has dropped to between $150 and $200 per kWh, and by 2025 it could be under $100/kWh.
A 2019 report by the Rocky Mountain Institute (RMI) noted that “As more and more investment in batteries takes place, costs continue to go down and the devices and systems they are deployed in becoming more sophisticated through innovation.” Added to that, RMI said, “Self-reinforcing feedback loops are created as favorable public policies, R&D funding, more manufacturing capacity and economies of scale link together.”
The past few years have shown a significant shift away from coal and to natural gas for grid-scale electricity generation. While natural gas is cleaner than coal, thanks to an extensive nationwide boom in hydraulic fracturing (fracking), it is also cheaper. The Energy Information Administration (EIA) Short-Term Energy Outlook Supplement: Summer 2020 Electricity Industry Outlook predicted during the summer of this year (2020), 17% of electricity generation would come from coal (down from 24% in the summer of 2019), 44% would come from natural gas (compared to 41% last summer), and 11% would come from solar and wind (up from 9%). Nuclear generation remains about 20% of the total.
According to a 2020 report by RMI however, over the past two years, some power companies are beginning a drastic shift away from new gas and have started a steep rise in renewable energy projects. According to RMI, “…investors finance projects based on expected returns in the competitive market—not based on expectations of cost recovery allowed by regulators of monopoly, vertically-integrated utilities. In other words, this trend represents the shifts in internal risk and reward calculus among investors in highly competitive markets, and reflects a market-based, consensus view of the underlying economic value of different power sources.”