Over the next few decades, advancement in tools that range from clean energy itself (wind, solar, nuclear) to the mechanisms used to finance installment (Energy as a Service, Blockchain) will rapidly transform the energy economy. With six to seven technological breakthroughs in one sector of the economy—each with an influence akin to the introduction of smartphones—the impact will be colossal.
Energy storage that utilizes batteries makes the list of monumental innovations both because of its application flexibility and recent dramatic decrease in cost. Battery storage will become an economic reality to more than just those on the coasts with high utility rates. It becomes even more viable for Arkansas as investor-owned utilities and electric cooperatives shift costs away from consumption rates and towards higher demand charges. If a federal investment tax credit, similar to that of solar, is applied to this technology, the opportunity will only accelerate.
In Arkansas, individual businesses and utilities are deploying batteries as peak shaving and energy arbitrage tools to limit the purchase of power during hours of peak costs. Batteries now make financial sense for commercial-scale private/public sector clients in our region because of their specific rate tariffs. As battery costs continue to drop, the tool can be further utilized in our existing solar inventory to enhance its value and grid support functions.
Net-zero energy buildings are another indicator of the rapid evolution of the energy sector as they were not viable even three years ago. Now, with examples like Entegrity’s headquarters in Little Rock and new Fayetteville office coming online in Summer 2021, they are becoming an economic reality. Going net-zero allows developers to create an additional revenue stream; they can provide utilities as part of their monthly rate while renters still pay less for energy than they would in a traditional development.
While not quite en vogue yet, electric vehicle (EV) batteries will soon become another exciting venture as bi-directional charging capabilities will allow EVs to run off renewables. With this improvement, the electric grid will be able to call on the thousands of electric vehicles (soon to be millions) as an energy reserve during crises—a feature that would have been useful during the 20-degrees-below-zero cold snaps that proved dangerously detrimental to the grid. This creation of small, interconnected micro-grids strengthens grid health by sharing power resources to support areas stressed from growing energy consumption. As our infrastructure ages, the U.S. sorely needs this type of grid resilience to transition to a smarter grid.
The economic development impact of batteries in the United States will be layered. Not only will storage benefit end-users in sectors like manufacturing, agriculture, and healthcare, U.S. companies are set to manufacture the products themselves. Unlike solar modules, the U.S. is well-positioned to be a leader in battery storage manufacturing. Many of the raw materials for battery production are native to the U.S., making the logistics and supply chain of production more straightforward than other nations.
While Tesla is spearheading development with multiple Giga factories around the country, Arkansas has opportunity to break into the market. Lithium brine is a critical supply chain component to battery storage, and Standard Lithium in south Arkansas is sitting on one of the largest lithium brine reserves in the U.S. As demand for batteries grows, the state will continue to see examples of battery storage that enhances the resilience of our aging grid infrastructure and better the bottom line of Arkansas businesses.
All of this activity centers around just one of the transformative technologies that will bring new and exciting ventures for the Arkansas workforce and enterprises in the energy sector.