Expanding battery storage of electricity could be a boon to Iowa’s economy, adding up to 595 full-time jobs and a $24 million boost to the economy, a state agency reports.
The Iowa Economic Development Authority on Dec. 16 released an analysis of energy storage possibilities as part of the follow-up the Iowa Energy Plan in 2016. Synapse Energy Economics of Cambridge, Massachusetts and Slipstream LLC of Madison, Wisconsin helped with the analysis.
The focus was on battery storage because it is one of the most promising technologies for Iowa and could match well with wind and solar, IEDA reported. In fact, if Iowa could capture the wind energy now lost because of limits in the grid system, that would boost revenues for wind-turbine owners by $25.6 million a year, according to the report.
The consultants estimated Iowa could store 1 to 2 gigawatts of energy in the next 15 years. That would depend on prices continuing to drop and some help from state policymakers.
“Currently, the battery storage supply chain in Iowa is rather limited,” IEDA reported. “The state economic impacts of a growing battery storage industry are estimated to be limited, but positive. The report finds that net job impacts ranging from 298 to 595 full-time equivalent jobs and state gross domestic product impacts from $13 million to $24 million per year.”
The industry could be a much bigger boost if batteries are used to augment wind and solar energy use in Iowa, the report authors noted.
Making battery storage work financially in Iowa is complicated by a confusing regulatory climate and challenges in lining up multiple energy producers with the grid system’s own limitations, the report said. Also, “the high upfront cost to battery energy storage serves as a barrier to installations.”
Many sources told the consultants that currently using batteries as a backup power source is not as economical as using fuel-powered generators. Iowa’s low energy prices actually work against the math in justifying storage expenses, consultants said.
Still, battery storage could be attractive in Iowa in the long term, the state found. “Perhaps one of the most important roles energy storage can play in Iowa is to support the expansion of renewable energy generation,” the state reported. “Battery energy storage systems can help manage the variable production of wind and solar generation.”
The U.S. Energy Information Administration last summer reported that the cost of utility-scale battery storage dropped nearly 70% between 2015 and 2018. MidAmerican Energy has a pilot project in Knoxville. Alliant Energy has a battery storage system at its Marshalltown solar garden next to its power plant.