According to a new study published by The Power Bureau, titled, “Cost and Benefit Analysis of Energy Storage Resource Deployment in Illinois,” a capacity shortage occurs when a regional power grid cannot meet peak electricity demand on the hottest summer days or the coldest winter nights.

The regional power grids that serve Illinois project capacity shortages to occur in the near term. For Illinois, this outlook indicates a lower level of system reliability and increased costs for Illinois consumers. While the study focuses on Illinois, it also has potential implications for other states, in that it provides guidelines for energy savings and reliability improvements that can be applied to other states.

The report noted that a program designed to support the deployment of 8,500 MW of energy storage resources in Illinois is projected to improve the reliability of energy supply for Illinois residents and businesses, provide Illinois consumers with $2.3 billion to $3.0 billion in utility cost savings, and ensure that the state can meet its 100 percent clean energy goals by 2050.

“To mitigate the negative impacts of capacity shortages in Illinois, legislation to support the deployment of energy storage resources in Illinois is under consideration,” said the report. The legislation proposes to provide incentives for the installation and operation of energy storage resources. These energy storage resources would serve to:

– collect electricity during periods of excess generation (e.g., “off-peak” hours during weekday evenings and early morning hours); and

– deliver that stored energy to the regional power system during period of high energy demand (e.g., “peak” hours during weekday daytime hours).

Additionally, to the extent that the legislation results in the acquisition of long-duration energy storage systems, energy can be stored for use across many hours or days, to help handle grid stress events that last for extended periods.

This study examines the implications of the proposed program that considered four threshold questions, and also provides its answers:

1 – How reliable is the Illinois power grid? The outlook for power grid reliability in Illinois is uniformly negative. Federal, regional, and state energy regulators all identify that capacity shortages will occur in Illinois.

2 – How can we improve Illinois power grid reliability? Achieving significant increases in new capacity resources in Illinois is the only approach to offsetting the eventual loss of existing capacity resources (e.g., retirements of fossil-fueled power plants) and continued growth in electricity demand (e.g., datacenter development, electrification, etc.).

3 – When would an energy storage resources program need to begin? Immediate action is required to allow existing transmission infrastructure at retiring power plants in Illinois to be repurposed to support the deployment of large volumes of energy storage resources before projected shortages occur prior to 2030.

4 – What are the consumer cost impacts of an energy storage program in Illinois? Illinois consumers would realize between a net reduction of $3.0 billion in utility bill savings because of deploying 8,500 ME of energy storage.

The study identifies that significant economic benefits would result from deploying at least 8,500 MW of energy storage resources in Illinois between 2030 and 2049.

The study also identifies significant general economic benefits would result from deploying at least 8,500 MW of energy storage resources in Illinois between 2030 and 2049:

– Avoided cost of power outages. Energy storage resource deployments to Illinois would reduce the probability of power outages from the current level of one to zero days every ten years to zero days every ten years. Between 2030 and 2049 the economic value of these avoided power outages in Illinois is projected to be $5.8 billion. These include:

– Reduced cost of emissions. Energy storage resources are projected to reduce the use of peaked power plants while increasing the utilization of new wind and solar resources to meet Illinois’ peak energy needs. This shift in resource use would reduce emissions from carbon-emitting power stations in Illinois between 2030 and 2049 with a value ranging from $531 million to $4.8 billion.

– Increased economic activity. Constructing and operating energy storage resources would increase employment in Illinois by 32,417 and 115,329 full-time equivalent years and support an increase of between $3.9 billion to $16.3 billion in value-added activity in Illinois.

“In sum, the proposed energy storage resource program would improve the reliability of the wholesale power supply that supports the Illinois economy while delivering material and ongoing net cost savings to Illinois consumers and economic benefits to the Illinois economy between 2030 and 2049,” said the report.