Thanks, GRA. It's a very good article. The bottom line seems to be that utilities are running out of weapons with which to fight against the movement from centralized electricity generation to distributed, renewable generation:
McKinsey wrote:Although it has been helpful for solar, NEM also has put utilities under pressure. It reduces demand because consumers make their own energy; that increases rates for the rest, as there are fewer bill payors to cover the fixed investment in the grid, which still provides backup reliability for the solar customers. The solar customers are paying for their own energy but not paying for the full reliability of being connected to the grid. The utilities’ response has been to design rates that reduce the incentive to install solar by moving to time-of-use pricing structures, implementing demand charges, or trying to reduce how much they pay customers for the electricity they produce that is exported to the grid.
However, in a low-cost storage environment, these rate structures are unlikely to be effective at mitigating load losses. This is because adding storage allows customers to shift solar generation away from exports to cover more of their own electricity needs; as a result, they continue to receive close to the full retail value of their solar generation. This presents a risk for widespread partial grid defection, in which customers choose to stay connected to the grid in order to have access to 24/7 reliability, but generate 80 to 90 percent of their own energy and use storage to optimize their solar for their own consumption.
But I think the article underestimates the role that BEVs will serve regarding energy storage. The only acknowledge BEVs as increasing the Li-ion battery volumes and thereby reducing costs:
McKinsey wrote:Major players in Asia, Europe, and the United States are all scaling up lithium-ion manufacturing to serve EV and other power applications. No surprise, then, that battery-pack costs are down to less than $230 per kilowatt-hour in 2016, compared with almost $1,000 per kilowatt-hour in 2010.
What they fail to acknowledge is that BEVs will represent a SUBSTANTIAL percentage of all battery storage in the world for the foreseeable future. They also will represent an ever-increasing load on the system. As such, their behavior on the grid will have to be considered in order to understand the impact of storage on the overall grid.