A major expansion of battery storage may be the most economical and environmentally beneficial way for Illinois to maintain grid reliability as it phases out fossil fuel generation, a new study finds. The analysis was commissioned by the Clean Grid Alliance and solar organizations as state lawmakers consider proposed incentives for private developers to build battery storage. Mark Pruitt, former head of the Illinois Power Agency and author of the study, stated that batteries will be a more realistic path forward than a massive buildout of new generation and transmission infrastructure.
Historical studies have shown that Illinois has faced challenges in maintaining grid reliability, especially during peak demand periods. Previous efforts to build new generation projects often encounter economic and regulatory hurdles, resulting in a low completion rate for planned projects. Comparing this with the current proposal, the focus on battery storage presents a more feasible and cost-effective solution to address the state’s energy needs.
Legislative Measures Proposed
The proposed legislation, SB 3959 and HB 5856, would require the Illinois Power Agency to procure energy storage capacity for deployment by utilities ComEd and Ameren. Payments would be based on the difference between energy market prices and the costs of charging batteries off-peak, ensuring that storage remains profitable. As market prices for power increase, incentives would decrease accordingly. This approach aims to bridge the gap between the cost of battery technology and its market value.
The bills, introduced at the end of the legislature’s spring session, seek to amend existing energy law to include energy storage incentives alongside those for nuclear and renewable energy. The study highlighted that Illinois will need at least 8,500 new megawatts of capacity and possibly as much as 15,000 new megawatts between 2030 and 2049, driven in part by the growth of data centers in the state.
Economic and Environmental Benefits
Pruitt’s study found that if 8,500 MW of energy storage were deployed between 2030 and 2049, Illinois customers could see up to $3 billion in savings compared to increased capacity costs without new storage. The savings would result from lower market prices in capacity auctions and avoided investments in new transmission and generation infrastructure.
The study also suggested that macro-level economic benefits could range from $11 billion to $28 billion, with potential blackouts avoided, reduced fossil fuel emissions, and job creation. Pruitt noted that the incentives proposed in the legislation would cost $6.4 billion to customers, but the storage would result in $9.4 billion in savings, leading to a net gain of $3 billion over the period.
Andrew Linhares, Central Region senior manager for the Solar Energy Industry Association, emphasized the reliability of battery storage when paired with solar energy. He stated that combining these resources provides a cheap and reliable energy solution, which is crucial for reducing costs and creating economic opportunities.
The study’s findings suggest that expanding battery storage is a viable and beneficial strategy for Illinois as it transitions away from fossil fuel generation. By focusing on battery storage, Illinois can address its capacity shortfalls, leverage economic benefits, and contribute to environmental sustainability. Lawmakers will need to consider the long-term benefits and challenges associated with this approach to ensure a reliable and cost-effective energy future for the state.
