Energy storage brings old plant back to life

Rakesh Sharma | Dec 18, 2015    

The installation of a 2-MW battery-based energy storage system at a retired coal plant in New Richmond, Ohio, is being billed as a sign of the growing potential of repurposing shuttered sites for grid-scale energy storage. 

In addition to being completed in record time - about four months - the Duke Energy project, which provides frequency regulation services to the Northeastern PJM market, is also seen as a way for Duke to make money on a plant it was ready to mothball.

The system at the old W.C. Beckjord plant is designed to instantaneously absorb excess energy from the grid and release it in seconds, as opposed to a power plant that could take 10 minutes or more to ramp up. 

"These are the big leagues," said Matt Roberts, executive director at the Energy Storage Association. "There are no tax credits associated with these projects and they are being justified on their own merits."

While he declined comment on specific cost implications of the project, Phil Grigsby, senior VP for Commercial Transmission at Duke Energy, said the utility went ahead with the project because it saw "a commercial opportunity to monetize" its operations in New Richmond. 

"If these (energy storage) systems become more developed and other applications that we don't even foresee ... follow, then costs will continue to come down and use of energy storage for reliability or arbitrage may come to bear," Grigsby said.

When it was closed last year, the New Richmond facility comprised a mix of coal- and oil-fired power plants and generated 1.43-GW in power capacity. But, Grigsby said, the plant had become uneconomical. In the end, the utility opted to close the plant. 

However, certain assets, such as a substation, were reused in its new life. LG Chem supplied the lithium-ion batteries used in the project and Parker Hannifin provided a 2-MW conversion inverter. 

San Francisco-based Greensmith Energy provided its GEMS software platform, playing the pivotal role of interconnecting different parts of the project. According to John Jung, CEO of Greensmith, the GEMS platform "orchestrates" the entire system of systems, including batteries, inverters, HVAC and sensors. "Maximizing an energy storage system's frequency regulation score while minimizing battery degradation throughout the system's life is no trivial task," Jung said.    

A growing market

How many more such projects might arise remains to be seen, though the potential seems good. According to a recent report by the Energy Storage Association and Greentech Media, the U.S. deployed 60.3 MWH of energy storage in the third quarter of 2015. That figure is double the amount deployed last year. In total, this year's deployment of energy storage is on track to exceed 192 MW, representing a three-fold increase from last year's figures. "The growth curve for energy storage systems is beginning to resemble a hockey stick progression," said Roberts. He said the current set of projects represented only "2% of what we'll see in the future."  

A majority of these deployments have taken place in the Northeastern PJM market. However, utility-scale energy storage has also begun to appear in proposal requests and grid planning in other states, such as Georgia and Vermont.     

In part, that's because regulators in recent years have created new incentives that reward utilities for finding ways to boost reliability without having to spend more. At the same time, battery prices have been falling. 

Also, development of sophisticated software platforms has dramatically reduced deployment time and costs for such projects. "A dollar spent on control software, such as GEMS, delivers more of a boost in system performance, longevity and ROI than a dollar spent on hardware, including batteries," said Jung.   

Finally, utilities are learning from their own past or others' experiences. For example, Duke Energy opted for lithium-ion batteries (instead of lead-acid batteries) at the New Richmond project based on its experience with the latter at a past project. 

That said, the quantity and volume of such projects are still not substantial enough to make a difference to the overall market.  

"The battery industry needs to transition from small pilots to larger and broader commercial deployments," said Jung. 

Grigsby said the potential for profits from such projects depends on rates at different times of the day. "The pricing is different during the day in different markets and that makes a difference to the number of hours that you can monetize," he said. "We have not found a project (in other markets) that makes sense yet."

Now that the project is done, Duke Energy will operate a total of 4-MWs of energy storage at Beckjord, where a separate 2-MW battery system already exists. Duke Energy also owns and operates a 36-MW energy storage system at its Notrees Windpower Project in Texas.

According to research firm IHS, Duke Energy owns nearly 15 percent of the grid-connected, battery-based energy storage capacity in the U.S.