Energy Storage is Injecting Itself into Utility Markets
Location: New York
Date: 2013-01-28
Now that Duke Energy is firing up a 36-megawatt energy
storage and power management system at its wind project in west
Texas, it is saying that such progress could lead to an increasing
amount of green energy. How realistic is this?
Energy storage systems not only harness power but also inject that
energy into the grid so that providers can more efficiently meet
their demands. With a focus on reducing harmful air emissions and on
increasing the use of cleaner energy, such systems are getting the
attention they deserve. And while some suppliers are now using the
technology, they readily acknowledge that prices must come down if
the tools are to proliferate.
“Battery storage is an important innovation to address the
variability of wind and solar energy generation,” says Duke
Energy Renewables President Greg Wolf. “Developing an expertise
in this advanced technology will enable us to expand the use of
renewable energy, better integrate it into the power grid and become
even more efficient at serving our customers.”
Duke is partnering with the U.S. Department of Energy, with each
contributing $22 million. The project, which revved up in December
2012, is in Notrees Windpower that is capable of generating 153
megawatts. It’s all part of the 2009 stimulus act.
The Notrees project “will demonstrate the capability of energy
storage to mitigate the variability of wind energy and to contribute
to the stability of the grid,” says Imre Gyuk, program manager at
the Energy Department.
According to the National
Alliance for Advanced Technology Batteries, 150,000 megawatts to
300,000 megawatts of installed energy capacity could get integrated
into the electrical grid. To get there, regulatory hurdles must fall
along with the cost of technology and grid interconnection. To that
end, it is suggesting that local ratepayers be able to recover their
investments. It is also saying that government should continue to
fund the research and development.
Meanwhile, a DNV Kema study is forecasting that if those storage
devices are given the right financial incentives then 2,000
megawatts to 4,000 megawatts of energy storage would be built over
five years. The study also says that the cost of the now-expensive
storage will fall.
Economies of Scale
To reach the size and scale that is needed to cut prices, the Electricity
Storage Association is advocating for tax and financial
incentives like the investment or production tax credits given to
wind and solar. It also wants to see energy storage included in the
Obama administration’s clean energy standards as well as in those
states with renewable portfolio standards.
“Energy storage costs now relative to what it may cost 20 years from
now is not a fair metric,” says Chris Shelton, president of AES
Energy Storage in Arlington, Va., who spoke earlier to this
writer. “If you use that as a basis, you may not get to the 20-year
end-state. There are opportunities to create value today and we are
pursuing those but, technically speaking, we need no additional
performance.”
Today, storage adds value to power systems because it can create
capacity. And that has the potential to allow utilities to defer
investment in expensive infrastructure. In the case of AES, an
independent power producer, it owns such storage assets and offers
them under contract. Altogether, it has 84 megawatts in operation
and construction and another 500 megawatts of near-term
development.
For example, it developed a 12 megawatt project in Chile that went
into service in 2009. There, the battery storage system AES uses
optimizes traditional fossil fuel generators. Batteries help meet
those requirements as well as back up unforeseen failures on the
grid. Meanwhile, AES is also deploying a 32-megawatt storage project
as part of a wind farm in West Virginia.
Meantime, Toronto Hydro is now helping to spearhead an energy
storage demonstration at a community center in New York. The goal is
to take what it learns and to then optimize the utility’s aging
electrical grid in Toronto.
The company says that its technology is like taking thousands of
cell phone batteries and putting them together so that the
enterprise will have a system capable of storing power and then
delivering that energy when it is needed. Unlike other technologies,Toronto
Hydro says that its batteries will be installed at the
customers’ premises, not at a remote, central site.
“An opportunity like this comes every 40 years,” says Ivano
Labricciosa, vice president of asset management for the utility.
“Toronto Hydro’s distribution grid is facing a number of challenges
and community energy storage can address some of these challenges
...”
Power producers are infatuated with energy storage, realizing that
it could be a game-changer. But they are readily acknowledging that
technical and financial barriers exist and that overcoming them is
paramount if the devices are to reach their potential.
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