Is this distributed storage practical at first glance?
A too-long back-of-the-envelope look.
While technology will certainly mature, the cost of Lithium ion battery storage is about $300/KWH. Just for illustration, let's say the battery is installed in my Nissan Leaf and that it will last 8 years if the local power company takes out and replaces 6 KWH from the battery every day (at 2KVA for 3 hours). At this rate, I'd need to be paid $225 per year by my power company just for the wear and tear on the battery. Of course, they'd also be using the electricity I put into it, but I'm asuming they'd replace that for free, so I wouldn't expect to be paid. However, the inconvenience of not being able to use my car to it's max range as often, the hassle of replacing the battery earlier than I would otherwise need to, etc would certainly mean I and other customers would ask more than this price for use of our battery capacity, so let's consider that a very rock-bottom price.
How does this compare to building new capacity that would be used just for surge requirements? Again, as a back-of-the-envelope exercise, here's
a report of a new coal-fired plant that, as of 2008, was to be built in Wisconsin. It had a cost of approx $1.2 billion and would produce 300 megawatts (or 300,000 KW, or the equivalent electrical capacity of 150,000 Nissan Leaf owners selling their power back at 2 KVA rate ). If we assume a life of 40 years and that 6% interest is paid on the money, then the cost of buying the electrical capacity of that coal plant is $80M per year.
What would it cost to pay Leaf owners for the same capacity? 150,000 owners x $225 each per year = $33.7 million dollars per year.
So--maybe this can work. There's lots of room for the numbers to change considerably (how much will Leaf owners demand for the inconvenience, what's the value of the coal plant to the company as a regular revenue-producing facility running at lower capacity, what are the losses from making/storing/discharging/recharging a battery vs. producing the power once when needed, how much does all that smart grid technology cost, what's the personnel cost to the power company in dealing with 150,000 tiny "partners", is this route really cheaper for the power company than just buying their own chemical/flywheel/compressed gas/raised water storage?, etc). But I'll grant GfG that it does appear plausible at first glance that a financial case can be made for this distributed storage.