Raising the Grade of the U.S. Electrical Grid

Convergent Energy and Power, a provider of battery storage systems, is updating the US electrical grid to withstand climate change and sustain widespread electrification

By Alannah Nathan, SFS ‘24 & Common Home Editor

Spurred by soaring electric vehicle usage, increased living standards, and the rapid expansion of wind, solar, and hydrogen, global electricity consumption is projected to triple by 2050. In the United States specifically, power demand is estimated to increase by 30% over the next 30 years. 

The current state of the U.S. power grid is grossly ill-equipped to withstand such an increase in demand. 

In 2021, the American Society of Civil Engineers (ASCE) gave the energy infrastructure system an embarrassingly low grade of C-. The shortfalls of the power grid stem from two key factors. 

The first factor contributing to the low mark is the age of the U.S. grid. About 70% of the grid is over 25 years old. The aging power grid makes it all the more vulnerable to extreme weather-events – hurricanes, floods, wildfires, freezes – which in turn result in power outages. Blackouts are estimated to cost the U.S. economy between $28 billion and $169 billion annually. Already cited as the predominant cause of power outages, extreme weather-related events will put the grid at further risk as climate change intensifies.

Secondly, despite being the backbone of modern society and a cornerstone of the economy, the grid is massively underfunded. Grid Forward, a non-profit organization that brings together utilities, regulators, advocates, and others to modernize the grid, estimates that the U.S. will face a $208 billion grid investment shortfall by 2029 and a $338 billion shortfall by 2029. 

Together, the aging underfunded grid falls short of the demands of a new energy future. The centralized power grid is antithetical to newer, smarter, and cleaner technologies. It’s been designed to meet energy demand for the peak hour on the peak day of the year, meaning that it’s overbuilt by 50%. The electricity grids operate as a real-time systems with few storage systems in place. This means there is little room for error: supply must always meet demand to avoid blackouts. 

The lack of energy storage solutions is especially problematic when it comes to meeting the needs of a renewable future. In 2020, renewables – solar, wind, biomass, geothermal, and hydropower – made up the largest share of new generating capacity. Yet renewables are inherently intermittent. Unlike a coal-fired power plant which can be switched on or off as power demands vary, there’s no switch to make the wind blow or the sun shine. 

Though no one-stop solution to updating the U.S. power grid, energy storage is the linchpin to modernizing the energy grid. From both a climate and infrastructure point of view, energy storage promises to mitigate the intermittent nature of renewable energy and pave the way for more zero-emission electricity sources such as hydrogen.

As the CEO of energy storage solutions provider Convergent Energy and Power, Georgetown alumnus Johannes Rittershausen is working to advance the solution.

Rittershausen’s passion for energy began when he enrolled in a former ExxonMobil executive’s class on energy security at Georgetown’s School of Foreign Service. He then spent the next five years at Southern California Edison, one of the largest electric utilities in the U.S.. Fascinated by the emerging technology, Rittershausen began working with energy storage in 2008. Rittershausen then co-founded Convergent Energy and Power in 2011. 

Convergent builds, owns, and operates both standalone energy storage infrastructure and hybrid-renewable storage solutions. As a leading provider of North American energy storage solutions, Convergent has over $500M in invested or committed projects in operation or under development. 

Energy storage systems allow for businesses to avoid peak pricing, storing electricity power at strategic times for later use. Convergent’s MW-scale energy storage projects can save businesses up to 40% off their electricity bills and defer multimillion-dollar upgrades for utilities. 

In an interview with Common Home, Rittershausen noted that to date, the largest perceived barrier to energy storage adoption is cost. While cost may have been a valid barrier when Rittershausen first founded Convergent in 2011 – back when energy storage solutions cost tenfold what they do today – cost should no longer be considered a barrier. 

The real remaining barriers, argued Rittershausen, are customer, regulator, and financiers’ education on energy storage and willingness to adopt the systems. Like with the introduction of any new technology, the uptake of energy storage systems depends on a certain level of willingness from users. 

Supply crunches could also pose a tangible threat to the uptake of battery storage. Lithium carbonate, cobalt, and nickel – key raw materials for the production of batteries – are sharply increasing in demand. Moreover, the reserves of these crucial raw materials are concentrated in just a few countries, including China, the Democratic Republic of Congo, and Brazil where environmental and social practices are questionable.

Despite gaps in battery storage consumer education and supply crunches, the recent landmark passing of the Inflation Reduction Act (IRA), has massively positive implications for the future of energy storage. Following the passage of the IRA, and the 30% investment tax credit for standalone energy storage, Convergent is able to increase the value of its systems, benefitting both customers and the business at large. The tax credit can increase beyond 30% with various bonuses, including those tied to developing projects in low-income communities or using US-made products. Prior to the passage of the IRA, energy storage was only eligible for the investment tax credit when paired with solar, also known as solar-plus-storage. This legislation opens up an entire new market and opportunity for Convergent and the future of the energy storage industry. 

Beyond including energy storage as a standalone asset in tax credit schemes, the IRA also promises a level of certainty that can often mean the difference between a customer willing and unwilling to invest in energy storage. In the past, clean energy tax credits had to be renewed relatively frequently, creating built-in risk. With the IRA policy, clean energy tax credits are backed with the certainty of a 10-year timeline. Together, the IRA has boosted the energy storage market immensely. 

With energy storage technology, the grid is no longer tied to using energy at its exact moment of production promising an updated, smarter, and cleaner power grid.  With the proper education, willingness, and funding, the future of the U.S. electricity grid is bright.