New Study Demonstrates Critical Need for a Substantial Energy Storage Program to Meet Future Energy Demands in Illinois

Without rapid investments in clean energy storage, Illinois consumers will pay up to $30 more per month for energy, and the state will face energy shortfalls and a higher risk of blackouts, according to a newly released study.

The study, “Cost and Benefit Analysis of Energy Storage Resource Deployment in Illinois,” found that deploying at least 8,500 MW of clean energy storage would provide $3 billion in consumer cost savings, save $7.3 billion in blackout-related costs through increased grid reliability, and generate up to $16.3 billion in economic activity in Illinois by 2050.

The study emphasizes the urgent need for new policies that would dramatically accelerate the deployment of energy storage in Illinois. “Renewable energy storage is a key component to ensure grid reliability and reach clean energy targets,” said Mark Pruitt, author of the study, an associate professor at Northwestern University, and former Director for the Illinois Power Agency. Pruitt continued, “Without a legislative solution soon, the regional power grids that serve Illinois are projected to experience capacity shortages and increased consumer costs, who could see electricity bills rise as much as $30 more per month without adequate storage.”

Now is the time for Illinois to plan for the future and ensure a reliable power grid amidst the transition to clean energy as federal, regional, and state energy regulators project that Illinois will face an energy capacity shortfall as early as 2030 if a clean energy storage program is not implemented soon. Such a program would not only increase the state’s grid reliability, but also provide high-quality, family-supporting careers, protect consumers from rising energy costs, meet the state’s clean energy goals, and ensure that Illinois remains an attractive destination for business investment, especially from energy-intensive industries like data centers, artificial intelligence companies, and manufacturing.

The study finds that battery energy storage is the most cost-effective, timely, and attainable long-term solution. The nationally lauded and successful Climate and Equitable Jobs Act (CEJA) of 2021 supercharged the clean energy industries in Illinois and established a sturdy foundation to expand upon. Pending legislation (HB5856 and SB3959) will complement CEJA by incentivizing the installation and operation of energy storage resources, implementing a Virtual Power Plant (VPP) Program that will be necessary to improve the energy grid’s reliability, protecting consumers from rising energy prices, boosting the state’s economy, and ensuring that Illinois meets the clean energy mandates established by CEJA.

Key highlights of the study include:

Avoided cost of power outages. Battery energy storage will reduce the expected probability of power outages, saving a projected $5.8 billion for Illinois consumers between 2030-2049.

Reduced cost of emissions. Battery energy storage resources are projected to reduce the use of fossil fuel power plants while increasing the co-generation benefits of new wind and solar resources to meet Illinois’ peak energy needs. This will reduce emissions negative externality costs by $531 million to $4.8 billion in Illinois between 2030 and 2049.

Increased economic activity. Constructing and operating battery energy storage projects will 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 statewide. The total macro-economic benefits for the state are projected to be between $11.8 billion and $28.4 billion.

The study also provides answers to critical questions on the proposed program:

How reliable is the Illinois power grid? Federal, regional, and state energy regulators all identify future capacity shortages within Illinois. There is an emerging consensus that both retirements and business growth are revealing the limits of the current electricity grid.

How can we improve Illinois’ power grid reliability? Planning for increases in new clean, affordable, and reliable capacity resources in Illinois is the most cost-effective way to offset the eventual retirement of fossil fuel plants at the same time new business growth drives demand upward.

When would a battery energy storage program need to begin? Large energy projects require years to plan, permit, and build, and customer-sited storage can be deployed immediately with positive legislation. Immediate action is required to begin the process of getting battery energy storage projects online before projected shortages occur prior to 2030, and storage will provide immediate solutions to energy grid resiliency and rate relief to all energy customers in Illinois.

What are the consumer cost impacts of an energy storage program in Illinois? Under this plan, Illinois consumers will realize a net reduction of $3 billion in utility bill projected costs as a result of deploying 8,500 MW of energy storage statewide. Based on current estimates, the average single-family utility account served by Ameren Illinois would realize an average cost savings of $7/month over 20 years and the average ComEd single family residential account would realize an average cost savings of $4/month.

Pruitt’s study empirically affirms that Illinois needs to act now and proactively plan for additional battery energy storage capacity, but it’s not the first report with similar findings.

In August 2022, the results of PJM Interconnection’s “Illinois Generation Retirement Study” concluded that CEJA-related generator retirements “create the need to import a substantial amount of remote replacement power to serve load.” To solve this problem, increasing storage capacity would be the fastest and most reliable solution to increasing the capacity of dispatchable energy resources throughout the state.

Illinois is a clean energy leader, having passed CEJA and other reforms to encourage the growth of clean, affordable, and reliable energy. Building on this solid foundation by focusing on newer innovative energy solutions, like battery energy storage, will solidify Illinois’ national clean energy leadership, sending a clear signal that Illinois is open for clean energy business and will do it equitably, reliably, and affordably for many years to come.

To view the full report, click here.

Advanced Energy United | https://advancedenergyunited.org/

American Clean Power | cleanpower.org

Clean Grid Association | cleangridalliance.org

Coalition for Community Solar Access | https://www.communitysolaraccess.org

Illinois Solar Energy and Storage Association | http://www.illinoissolar.org

Solar Energy Industries Association | www.seia.org