Purchasing and Negotiation Training

Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

A November post  discussed the technologies of storing electric energy.   With 26.4 million people, Texas is twice the population of 40 years ago.  Just in 2013, 1.3 million people migrated to Texas, a population greater than that of eight individual states.  Such growth creates voracious demands for infrastructure, most notably transportation, water, and electric energy.  While the public sector addresses the first two, private industry is working on electricity. 

The rationale 

As a strategy to meet the demand, Oncor, the state’s largest transmission operator has placed a bet on batteries.   Oncor announced a $2 billion investment to store electricity in batteries utilizing thousands of batteries ranging from closet to kitchen sized batteries starting in 2018.  Interestingly, these batteries will be dispersed over North and West Texas locations like shopping malls, housing developments, and manufacturing sites. 

Two problems associated with batteries are short term storage and frequent replacement after frequent charge/discharge cycles.  However, these detriments may be minor in the long run.  Certainly, the reliability of electric batteries is much greater than that of solar and wind which are weather dependent.  The plan is to store the lower cost electricity generated at night, when demand is low, to store in batteries.  The next day, when demand is high, energy would first be discharged from the batteries, thus reducing the demand on the grid.   

With Tesla,  the electric car company, now jumping into utility scale batteries, Oncor believes that the price will fall and reliability  will rise with the use of batteries. 

Oncor proposes to install 5,000 megawatts of batteries, a claimed equivalent of four nuclear plants with a capacity of 81,999 megawatts.  According to the University of Texas at Austin Energy Institute, “   we use our power plants 24 percent of the time.  They run really hard during the day and sit idle at night.  That’s a trillion dollars of power plants sitting idle.”  That is stunning, is it not?  Could better and more high tech batteries save so much money in terms of generation, fuels, and the environment?  

Daunting problems 

With favorable physics, engineering and economics, what could possibly be a problem?  In this case, the problems are legal and legislative.  Under deregulation in the early 2000s, energy producers must operate separately from transmission companies, such as Oncor.  Batteries are considered power generation because they discharge electricity.   

Power generators see batteries as a threat that would result in the closure of some plants.  For the most part, these plants are old and inefficient, and only operate when demand challenges capacity, such as furnace hot Texas summer days.   

Let’s get behind the battery solution to our energy needs.