Companies Race to Develop Utility-Scale Power Storage

So the big question is: How do you bottle that power for air conditioners and other appliances that are busiest during the day?

There are many companies moving to fill the energy gap. Using federal loan guarantees and $4 billion in "smart grid" stimulus cash, they are working on utility-scale storage units that they hope will help balance intermittent renewable sources like wind and solar and let electric grid operators match power supplies with demand.

Among the leaders is a Massachusetts company that plans to use hundreds of "flywheels" to store 20 megawatts of electricity, enough to power 200 homes for a day. Beacon Power Corp. is working with a $43 million federal loan guarantee for its $69 million storage project in Stephentown, N.Y., which is scheduled to break ground by year's end.

The plant would store cheap "off peak" electricity in 2,500-pound flywheels that turn faster than the speed of sound. When the electricity prices rise -- or when winds die -- energy can be withdrawn from the wheels and sold to the grid at a premium rate.

"It will signal a dramatic shift to a cleaner, more sustainable method of providing frequency regulation on the grid," Beacon CEO Bill Capp told the GridWeek conference in Washington last week.

Utilities today use combinations of hydropower and natural gas to "firm up" intermittent power sources, but hydropower has spatial limitations and natural gas can be expensive and polluting. Yet the need for reliable backup power will grow as states require utilities to use more renewable energy and the cost of carbon-based power rises in the face of expected climate regulations.

"There's a natural affinity between storage and renewables," said Rich Kalisch, senior director of technology initiatives at Midwest Independent Transmission System Operator, which manages nearly 100,000 miles of transmission lines in 13 states.

The nonprofit group currently manages 6,600 megawatts of wind power -- about 4 percent of its total generation -- but has about 54,000 megawatts of wind projects in development. Operators warn that those projects could threaten reliability.

"We are very concerned," Kalisch said.

Demonstration projects

Still, recognizing a need for energy storage is one thing, but proving that storage technologies can work is another.

One of the largest U.S. demonstrations of battery-based storage uses sodium-sulfur, or NaS, batteries manufactured by Japan's NGK Insulators. American Electric Power Co. Inc. has installed 7 megawatts of the bus-sized batteries to ease congestion on its transmission lines, and it has an additional 4 megawatts under development.

Meanwhile, Xcel Energy Inc. is testing a 1-megawatt NaS battery to manage its wind power in Minnesota.

Beacon, a publicly traded company, has been researching and developing its flywheel design for about 10 years and is confident the technology is ready to be scaled up significantly.

The company applied this month for $47 million in DOE stimulus grants to build two more 20-megawatt plants, one in New York and another in the PJM Interconnection. Awards for the $615 million program are expected to be announced in November, the company said.

Capp said one of his company's challenges is proving the value of large-scale storage to investors without any projects to point to as examples. For that reason, he said, "the DOE loan guarantees and grants are perfectly timed."

In addition to flywheels, companies are looking to technologies like massive lithium-ion batteries and underground caverns of compressed air for grid-scale storage.

Southern California Edison Co. last month announced that it is asking for a $25 million stimulus grant to help Massachusetts-based A123Systems Inc. build the world's biggest lithium-ion battery.

A123's 32-megawatt-hour battery would be assembled using racks of smaller batteries at a substation in Southern California's Tehachapi Mountains. The battery would be used to counterbalance wind power sent from the mountains to the utility's customers in the west and south.

Tucson Electric Power Co. earlier this month said it is requesting $25 million in stimulus cash to help fund the "Bright Tucson" project, which would use a suite of energy storage systems including lithium-based batteries, underground compressed-air storage and demand response, in which utility customers act as a collective battery by allowing appliances to be remotely shut off when power demand peaks.

Room to grow

A wild card for the energy storage industry might be coming from Congress: requirements to curb greenhouse gas emissions. The House-passed climate and energy bill would attach a price to carbon-intensive electricity and call for a dramatic increase in the use of renewable energy. A Senate climate bill is expected to be released this week.

Meanwhile, states are moving ahead. Already, eight states have passed renewable standards that encourage energy storage, said Chris Hickman, senior vice president of Ice Energy, a Colorado maker of thermal storage units that shift consumption to off-peak hours.

But the industry has room to grow even if Congress fails to pass a climate bill, according to a report this month by GTM Research.

"One of the major pieces required to make the new smart grid effective is a buffer in the system that can store energy to balance the whole grid system," said John Kluza, the report's author.

The report found that "power oriented" energy storage -- used mainly to regulate short-term changes to grid frequency -- will grow quickly in the near to midterm but will be constrained in the long term by a limited market. In contrast, "energy oriented" storage -- in which energy use is shifted to other times of the day -- has a massive total market size and is only beginning to emerge.

In 2009, an estimated 147 megawatts of energy-oriented storage were developed, the report found. But in 2015, 1,321 megawatts are expected to be produced, with revenues of $1.98 billion.

The report forecasts overall market size to reach 85,000 megawatts in the United States and 450,000 megawatts worldwide.

Copyright 2009 E&E Publishing. All Rights Reserved.

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