All of electricity production requires surplus, we run our systems at a fraction of full capacity because that's the only sane way to design a system that has zero storage.
As storage gets deployed more and more, we will be able to increase the capacity factor of all the more expensive parts, like transmission and distribution.
Already, T&D is a huge cost of our electricity, something like 6-8 cents of the average 13 cents/kWh in the US, with the rest being generation costs. As solar and wind plunge below our current costs, to 1-2 cents/kWh, T&D becomes a much larger cost center, and only storage has the potential to undercut that.
T&D is sized to peak draw, which is many many many multiples of average draw. Storage close to the meter solves all that, and drastically reduces the cost of T&D. If we are at 5-15 cents/kWh right now for lithium ion storage, it's going to be 2-6 cents in 10-15 years, faster than we could get the first new nuclear reactor online if we started building today.
While I agree that underused storage does have higher cost, we will likely have a plethora of cheaper storage options in the future that only work at lower usage rates than daily discharge, and those can fill in the other parts of the cost/discharge frequency need.
Any guesses what those storage technologies capable of scaling to TWh levels will be?
Also, before wind/solar the grid was built to a small factor over the expected peak. Aka maybe 120% of yearly peak which also compensated for downtime and repairs.
These renewable overbuilds are probably 3x-10x in capacity because it is not unusual for say a wind farm to be producing at single digit percentages of its nameplate capacity. In order to be in those lower overbuild ratios though you need ever larger amounts of storage. So it is an ugly curve, and one that will be in competition with carbon sources in many places due to politics, or simply economics.
And production capacity is continuing to scale exponentially. Other estimates for 2030 production are much higher than the 4TWh/year in that article, I've heard 20-30 TWh/year from others with serious skin in the game.
Plus, there are plenty of other battery chemistries that are closer to production than, say, SMRs, like the much-hyped Form energy's iron air batteries. And that battery cost and discharge rate were designed around current electricity market economics from the very start.
As you point out, there's a tradeoff between overbuild of renewables and storage; with more renewables overbuild there's less need for storage. And with more storage there's less need for renewables overbuild.
If you overbuild renewables 10x, it's simply 10x the cost, plus you have lots of zero-marginal-cost energy nearly all the time.
And I think that this total system cost is probably the Best way to look at the cost, rather than cost/kWh decreasing as more is added. We as a society pay the total cost, not a marginal $/kWh price.
I only see hydrogen or synthfuel production being any meaningful 'storage'. The rest is crazy expensive and doesn't scale well: pumped hydro, compressed air, flywheels, batteries.
