Bullet Points: The Power of Storage - A 21st Century Energy Revolution

•  Alessandro Volta inventing the battery.  The battery developed eventually into the lead acid battery, and this lead acid battery has been with us for 150 years, basically in unchanged form.
• The electric grid consists of generation, transmission and a load but no storage – increasingly a reliability threat. 
• If you have a complex system and it’s stressed and unbuffered, it is inherently unstable and vulnerable to collapse. 

• Generation and load have to be balanced at all times; if you have no buffering between them, instability results.  Energy storage is precisely what can match variable generation to variable load. 
• Transmission links generation and consumer in space; storage links generation and consumer in time. 
• Energy storage provides energy when it’s needed; basic transmission provides energy where it is needed. 
• In the U.S. we have about 2.5 percent storage capacity in the form of pumped hydro.  In Europe, storage capacity is 10 percent.  In Japan it’s 15 percent of stored energy.  Which country has the most outages?  Less buffering = more outages. (U.S.)
• Drivers of the modern grid are the digitization of society and ecological concern and growth in energy consumption.  Energy storage can help with all of those drivers.
• We have uninterrupted power sources and power quality.  The time scale there is a second to 15 minutes.  We have bridging power – minutes to an hour.  And finally we have true energy management, which is two to eight hours diurnal and so on.  These are three different realms of storage that we have to consider. 
• A study at Lawrence Berkeley Laboratory found the cost of outages to U.S. industry is about $79 billion annually.  That’s approximately one-third of the total cost of U.S. electricity.
• It’s not how long the power is out; it’s the downtime.  If you have a plastics extrusion plant, for example, which is totally controlled digitally, and there is an outage of only a few cycles or a decrease of 30 percent in the voltage, everything stops and it will take you eight hours to get it back to work again.  That’s why it’s so expensive. 
• 10 megawatt-sized batteries can provide 30 seconds of throughput.  And after that, diesel generators can take over.  A regular stack of batteries can make the transition with no discernable glitch whatsoever.  It’s a smooth transition.  You can’t really do that with a diesel generator alone.
• People who worry about outages like to talk in terms of nines and industry would really like to have nine nines of reliability.  That equates to one outage a year. 
• A utility can only provide about three nines, and every other nine would double the cost, so there is a limit to the amount of reliability that a utility can provide, and from then on it’s the job of storage and other technologies to provide the seamless continuity of power supply.
• The world’s most powerful battery is a 40 megawatt nickel-cadmium battery located in Fairbanks, Alaska.  All the power generation is in Anchorage and some of the load is in Fairbanks.  Instead of building power generation in Fairbanks, a cheaper solution was to build a big battery. In 2006, it responded to 82 events, preventing 311,000 member outages and resulted in a return on investment in three years. 
• The sinusoidal frequency of grid-based power generation drifts up and down throughout the day, so you have to bring this frequency back to the standard 60 hertz traditionally using fossil fuel generators that require about five minutes or so to slowly rev up or slow down their production. 
• The solution was fast-acting storage through two contracts using 100 flywheels as the storage medium, following signals from the independent system operator to inject energy or take energy out of the grid instantaneously. 
• Instantaneous power generation results in two or more times greater efficiency as fossil fuel based power generation, with a 70-80% reduction in the carbon footprint.
• The same thing is possible with batteries.  Two one-megawatt units by ultra-nano were put online in the PGM territory – one of the ISO’s – and two A123 batteries running in California now are test cases for a full-fledged application.
• At the same time, the flywheels, there are two megawatt systems in Massachusetts and one megawatt is ready to be installed either at AEP, American Electric Power, or New York State.
• FERC urged the independent system operators to prepare a market to generate tariffs, market rules, control algorithms and signals to open the market to technologies other than fossil fuel generation. 
• So those are the steps that are necessary, and at the moment the ISOs are slowly working their way towards actually creating that market, in order to use fast energy storage for their frequency regulation. 
• California is going to be phasing out 40 fossil fuel plants which are being used for providing frequency regulation at this time. 
• There is something called the load duration curve.  It’s sort of a lying down “S,” where a small number of hours is at near-peak generation or near-peak transmission.  Then at the other end we are underutilizing our generation and transmission systems. 
• Now, if we could put the low end into storage – in other words, there are times when generation is vastly underutilized – if we could run the generation at a slightly higher level, put it into storage and then use that storage during peak periods, we could level out this load duration curve and increase the acid utilization appreciably. 
• And because it’s a steep curve up there, if you only do 5 percent of the hours in terms of storage, you can lower your peak by 25 percent.  You don’t have to store everything; you just apply storage at crucial times.
• A bus station in Long Island is responsible for refueling 220 buses with natural gas, and this gas needs to be compressed.  They store electricity all night and run the compressor in the daytime only out of stored energy.  That takes some of the pressure off Long Island Power and eliminates the need for a night shift.
• Another example is a one-megawatt sodium sulfur battery system that can hold four to six hours of full-load storage.  You can’t do that with a lead acid battery in general, if you run it at full power. 
• Without an effective storage system, either you have brownouts for some of the users, or blackouts, or you build a new station in order to double the capacity to make it cost-effective, and it will take a long time for that capacity to actually be met.
• The solution was put a mobile storage unit –the battery – and provide an extra megawatt.  And so at peak, the substation is fed out of the storage and the corresponding energy goes into storage during the nighttime.  This system has been operational for four years and will continue into the fifth year of operation.
• AEP has committed themselves to about a thousand megawatts of storage by the end of the next decade.  Other utilities, like Duke, for example, First Energy, Xcel are following the lead and they’re putting in their own storage units for similar reasons.
• Some of these stations are there for reliability.  There are regions that suffer from frequent blackouts due to, well, lightening, for example.  By having a battery and by using smart grid technology, they can reconfigure the local grid and island the whole grid and run the entire local area on battery power for four hours.  Meanwhile the grid will be fixed and everything will be as normal. 
• Renewable dispatch, smoothing, ramping and peak-shifting is being prompted by aggressive renewable standards.  California has a considerable renewable portfolio standard.
• Renewable sources are, by and large, intermittent, which means sometimes they are there, sometimes they are not there, and you can help it by forecasting. 
• Intermittency is there on three different levels.  First of all there is the fast flutter.  This looks very much like what we have already seen when we were looking at frequency regulation, but this is an actual measured voltage outside a wind farm.  It doesn’t matter whether the flutter comes from the load or from the generation.  It looks the same way and you can fix it by fast storage.
• The next thing is wind ramps.  Wind ramps are nasty because the wind either picks up very fast or it goes down very fast.  Although geographic diversity helps, geographic diversity does not solve it entirely.  Wind ramps in the Bonneville Power area also occur in various different locations. 
• In many places like California and Texas, the wind is anti-correlated.  It blows at night and doesn’t blow during the daytime, which is exactly the opposite to the load.
• A wind ramp in Texas dropped about 1,400 megawatts in 10-30 minutes and it was relatively unforeseen, and the only way they could keep the whole ERCOT system from collapsing is by massive load-shedding – by massive voluntary load-shedding by industrial customers.
• In Texas and in quite a number of other places as well, there is negative pricing in the off-peak periods.  And, as an example, in March of ’08 there were 933 negative pricing intervals during – these intervals are 15 minutes and the price was below zero, when you have to pay to put your energy on the grid - that’s 38 percent of the intervals. 
• A colleague who lives in Chicago is on time-of-day pricing, where at night they will pay him to take electricity off the grid.
• For 20 percent renewables in California, the need for regulation will double, so there is an increasing market there.  Extra regulation can and should be handled by fast storage, and also by demand response. 
• Pumped hydro is a good technology for ramping and diurnal anti-correlation.  Basically it’s a hydroelectric plant, where you pump energy uphill when you have extra energy, and then when you need it you just let it run downhill and run your turbines.
• We have about 20 gigawatt in the United States.  That’s our 2.5 percent energy storage.  The European Union has about 32 gigawatt.  15 to 30 gigawatt of new pumped hydro is being proposed in the United States. 
• The Japanese have a facility of 34 megawatts with seven hours of storage in the daytime – no more intermittency. 
• Community energy storage can store about two hours’ power alongside the transformers located in each neighborhood to service the four houses or five houses that are connected to each storage unit.  It could guarantee two hours of running during outages and would also provide a tremendous resource to the utilities for regulation, for wind ramping or whatever. 
• And then of course there are also bigger options like compressed air energy storage.  Essentially with compressed air energy storage you have a big cavity, and when you have extra power – at night, say, or when the wind blows – you compress air into big cavities. 
• During peak times you let the air out under pressure and it replaces the compressor in a turbine.  The pre-compressed air replaces the compressor and you end up with a much more efficient compressor during peak periods.
• Only two of compressed air energy storage systems are operational in the world.  One of them is in Germany and one is in Alabama.  They’ve been running between 50 and 30 years very well.
• Within the next five years we may see at least three new compressed air energy storage units being built, and this is because of our drivers and because the economics is beginning to be advantageous again.
• There is $200 million of funding for storage demonstration projects, which means the whole storage scene is going to be a magnitude bigger than what it is now. 
• Energy storage is a transformative technology.  Once adopted, it will induce a paradigm shift and the energy business will never be the same again. 
• From a regulatory standpoint there is at least two elements of storage that have the potential to transform the way we regulate electric markets:  energy has to be produced and consumed at the same instant, and storage will be placed closer to where load is located. 
• The less we have of kind of a central station network model and the more we move to a model where we have energy sources as close to where load is, the more we’ll mitigate those network externalities and the more we’ll simplify the regulation of those markets.
• FERC must ensure that regulatory barriers in place will not stop these commercially viable technologies from participating in wholesale electric markets.
• Storage technologies are often interconnected on a distribution system.  FERC does not have a lot of jurisdiction on the distribution system, and as a result we quickly get into issues of state versus federal jurisdiction as we address getting storage into wholesale markets.
• Storage technologies can offer benefits, a lot of small benefits, over the entire breadth of the electric system, so at the distribution level, at the transmission level.
• The electric industry is unbundled into component parts of generation, transmission and distribution, and so rebundling the value can sometimes be difficult, and as a result sometimes prevent storage technologies that would be cumulatively beneficial from getting to market.
• As renewable energy becomes a bigger component of the electric market, there is going to be an increasing call for very high-quality ancillary services, these frequency regulation services.

• The barriers seem to fall into three general categories:
  • The first category I kind of think of is storage getting through the door.  There seems to be some difficulty developing transmission planning and market models that can capture the full value of storage. 
  •  A second category of barriers is that even in those situations where we can measure or estimate the value of storage, storage developers are having a difficult time capturing the full value of a storage investment.
  • Storage developers feel like they’re facing costs that aren’t comparable to what a central station generation developer would face.

• FERC Order 890 that mandated regional planning.  Regional planning tends to take place at relatively high voltages and storage technologies tend to be interconnected at relatively low voltages.  The level of granularity tends not to be small enough to see where storage would be valuable. 
• It takes a concerted effort to get everyone in the same room to get the data shared and to look for these spots to identify basically sweet spots where these technologies could be useful and be interconnected.
• For storage, it’s possible that you will be valuable as a storage facility to defer some transmission, but to fully be kind of a cost-benefit winner, you would have to defer that transmission and provide some service, for instance provide some of the fast regulation services to the wholesale market.

• At the federal level, FERC does not allow a facility to be both transmission facility and a facility that can enter into the wholesale markets to provide ancillary services.  And so the way we have unbundled and done accounting prevents the accumulation of these benefits.
• FERC provides regulation service, so conceptualizing what we would pay storage for that extra-fast regulation service is a different paradigm.
• FERC has a small interconnection standard and process, but states don’t have a similar process.
• Innovative products are coming to market and requiring changes to how centralized or organized markets operate, and there is a fairly lengthy process that has to take place for any change to market rules to be enacted.
• The Energy Bill of 2007 and the American Recovery and Reinvestment Act of 2009 have been enacted.  The Energy Act of 2007 provides clean air credits for rechargeable batteries in electric vehicles.  It also created a title called the United States Energy Storage Competitiveness Act of 2007, which authorized $300 million each year in funding for research and development and demonstration projects through 2018. 
• The Storage Technology of Renewable and Green Energy Act of 2009 is for the efficient use of intermittent renewable and for for the efficient use of the electric grid to handle the impacts of peak loads.  The other pieces of legislation talk about energy storage as a technology that go along with transmission generation and distribution, but this is the only bill that really recognizes storage for the benefits it provides. 
• Senator Wyden introduced a bill in May to provide an investment tax credit for storage projects.  The bill addresses two major energy management applications of storage systems.  So the major feature of the bill is that it provides an investment tax credit for the deployment of energy storage systems, and there’s a 20-percent investment tax credit for systems connected to the nation’s electric grid. 
• Many public utilities and co-ops could take advantage of clean renewable energy bonds, or CREBs, which will allow them to finance projects through this mechanism.
• Then there is 30-percent energy tax credit for storage systems that are used on site, so individual homeowners could apply the credit to a storage system they might use with solar panels or microturbines that they might have.
• Homeowners can also apply the credit to smart grid equipment that might be used for the charging and discharging of electric vehicles. 
• Commercial and industrial establishments can use the 30-percent tax credit to help finance other energy storage projects they might have, either provided by themselves or maybe provided by a third party.
• The storage bill is technology-neutral, allowing for the storage of all forms of energy, from electricity and chemical to kinetic and mechanical.
• The energy taken from the storage system does not have to be in the form of electricity – although, of course if it’s grid-connected it would be – but it could also be heat, cold or mechanical energy as well. 
• The stimulus bill provides a 30-percent investment tax credit for what they call advanced energy facilities, but in terms of storage, these are limited to fuel cells or energy storage systems that are used in electric vehicles.

• The Waxman-Markey bill discusses carbon sequestration and storage, which of course is not energy storage, but there are five aspects of energy storage in the bill:
  • Some of the funding to the states for renewable energy and energy efficiency to be used for electricity storage. 
  • Reducing peak electricity demand through the use of a smart grid, including energy storage devices. 
  • Storage is mentioned as an option to be used in transmission planning under the Federal Power Act as part of the demand side management of electricity,
  • Research funding into clean energy technology, and storage is included in the definition of clean energy technology.
  • A revolving loan program for clean energy manufacturing, which includes storage.

• Coming out of the Senate Energy and Natural Resources Committee is the ACELA bill that has a few provisions for energy storage.  It gives consideration to energy storage on demand-side management and distributed generation and so on for transmission siting.
• ACELA directs the secretary of Energy to report to Congress in two years with some recommendations to ensure the effective and timely development of energy storage and demand response and distributed generation and energy efficiency. 

There are a few other provisions in the bill that mentioned pumped hydro and water storage in vehicle storage systems to improve the efficiency of the electric grid

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