Is Energy Storage Ready for Prime Time?
Is energy storage too nascent and too expensive for wide scale deployment? Some power suppliers don’t think so but add that if the technology can be included in state and federal incentives, developers could more rapidly ramp up.
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 greener energy that is sometimes unavailable, 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.
“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., in a phone interview. “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, which must maintain a certain reserve. Batteries help meet those requirements as well as back up unforeseen failures on the grid -- something that has happened 120 times since 2009. Meanwhile, AES is also deploying a 32-megawatt storage project as part of a wind farm in West Virginia.
According to the Electric Power Research Institute, the total U.S. energy storage market could grow as big as 14 giga-watts of capacity. To get there, the price of such systems installed must fall to about $700-$750 kilowatts per hour. Depending on the required duration of storage, the costs can be three times that amount today.
Next Level
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 renewable portfolio standards that are now set at the state level.
“We need those pieces to get to the next level,” says Shelton, a board member of the trade association. “Those credits and standards are already in place and we should have a level playing field for technologies that have similar benefits.”
Shelton is upbeat about the future of energy storage. It’s not an experiment. It’s a profit-making enterprise. With the amount of money that is being invested -- particularly on the automotive side that wants to usurp market from gasoline-powered vehicles -- costs will drop. Those advances will then cross boundaries and enable storage on the grid to meet more needs like serving peak demand, he adds, noting that in the next few years the number of projects will escalate.
Consider Celgard, a Charlotte, NC-based maker of a critical component of lithium-ion batteries for the automotive sector: The company, which is expanding production and hiring at least 200 workers, received a visit from President Obama in April 2010 along with a $49 million grant from the U.S. Department of Energy.
In an in-person interview with this reporter, President Mitch Pulwer said that the technology is effective now. But he adds that the governmental assistance is needed for the advanced battery industry to ratchet up production and enable a supply chain, all of which will help reduce prices for batteries -- a tool that also has powerful applications for the utility industry.
Indeed, the demand for electrical power is expected to grow. With that comes the need to be more reliable as well as cleaner. As such, storage is a method by which to firm up both traditional as well as renewables plants if they should falter.
“The challenge with the grid is that the load is not uniform,” says Gary Rackliffe, vice president of smart grids North America for ABB Inc., in a talk with this writer at the Energy Inc. conference in Charlotte. “Energy storage balances those demands and addresses the issue of variability.”
Some power producers are committed to the cause, saying that energy storage is working today. But they are also saying that its future promise is even greater and that it could reshape the utility sector if prices fall.
EnergyBiz Insider has been named Honorable Mention for Best Online Column by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists.
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Comments
Quantium Theory!!?
Dear Anonymous,
Re: “Quantium Theory” – Comment May 13, 2011 – 8:41 AM
May I suggest that, when posting criticism of others’ contributions, could you please identify the recipient of your critique, as clearly and unequivocally as possible? Feedback is critically important to many of us and should always be welcome with open arms. So, let us collectively do as much as we possibly can to maintain this communications medium alive and well. Have a nice day!
Sincerely,
Alan E. Belcher.
the other kind of storage is ready
Pumped storage and CAES can do it for $60 to $125 / kWh of storage capital cost. Just not as modular as batteries.
Quantium Theory!!?
I am so not-impressed.
Does the writter understand that Li is used because it is light (and Li is an actnide, not a rare earth)? Other metals work fine, but add weight to the battery. Does the writter understand that quantium theory explains the 2 to 3 Ev of energy from each ion in a conventional battery?
I need more than a few fancy words to be impressed.
Primary advantage may effectively be regulation & spinning resrv
With the present cost of energy storage, the primary advantages might be in frequency regulation and short duration spinning reserve. Energy storage has an advantage in regulation service in being able to respond virtually instantaneously to stabilize frequency. It also has the advantage of being able to supply instantaneous power in the event of a sudden loss of generation. If the storage capacity is enough, it will allow time to bring peaking gas turbines up to pick up the load. The advantage is that the electric service region does not need to keep gas turbines or other fossil-fired assets operating at inefficient part load settings.
Based on the recent addition of storage to a Texas wind farm owned by Duke Energy, it appears battery based energy storage costs $1000 to $1225 per KWh of energy storage capacity. That is a serious chunk of change. Their true value depends upon how much fuel (and emissions) they can save for spinning reserve applications and how much stability they can add to the grid through regulation services.
Not Quite Ready
California has been conducting a series of workshops on storage, and one of the interesting things to come out of these workshops is a difference of opinion on the value of scaling up production. Vendors think scale will reduce costs. Researchers are not so sure. The cost-value gap for many applications is still too large, so enormous subsidies will be required.
I'd rather see vendors participate in demonstration-scale projects that focus on cost reductions. This approach is likely to be much less costly than throwing barrels of money around in the hope manufacturing economies of scale will lead to cost reductions. I'm not convinced that's going to happen.
Jack Ellis, Tahoe City, CA
Revolutionary New Battery Storage
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