Energy Storage
Energy storage works to store some form of energy now and use it to perform another operation later. Read the articles in this section to learn more about the importance of energy storage and its different applications.
Behind The Birth Of CODA Energy
Feb 12th
CODA Energy’s Senior Vice President Ed Solar talks about CODA Energy, the reason for its birth and its competitive advantage against competitive battery manufacturers.
How Axion Uses Their Energy Storage Technology To Make Money From PJM
Dec 26th
Tom Granville, CEO of Axion Power International, discusses the battery solutions that his company offers to customers and how Axion is taking advantage of a new FERC ruling to generate an additional revenue stream from the the grid.
A123 Systems to Supply Grid Battery System for 21-MW Hawaii Wind Farm
Dec 23rd
A123 Systems to supply Grid Battery System for 21-MW Hawaii wind farm
A123 Systems has agreed to supply an 11-MW Grid Battery System to Sempra Generation for the 21-MW Auwahi Wind project in Maui, Hawaii.
A123′s GBS storage system is designed to facilitate the smooth and efficient operation of the wind farm, helping Sempra Generation maintain the consistent delivery of clean, emission-free energy. In addition, A123′s Smart Grid Domain Controller will manage voltage regulation requirements for the project, leveraging the battery system and other assets including substation capacitor banks.
When fully operational, the Auwahi wind farm is expected to be capable of generating enough energy to power the equivalent of 10,000 homes. The wind project will supply power to Maui Electric Co. under a 20-year contract.
NextEra Energy unit raises $131M for three California wind projects
NextEra Energy Resources LLC subsidiary Golden Winds LLC has raised $131 million for three California wind farms with an aggregate capacity of 205.9 MW. Golden Winds has issued Class B membership interests to JPMorgan Capital Corp. in exchange for about $131 million at closing. In addition, Golden Winds expects additional $78 million capital contribution in early 2012.
Solar Thin Films to form new solar company
Solar Thin Films Inc. plans to form a wholly owned subsidiary that will seek to engage in the development and syndication of solar power projects. The subsidiary will be named Cenergy Inc. Forming a new solar development company is Solar Thin Films’ latest step in shifting its focus to the establishment, operation and management of solar farms, internationally.
Midwest Generation install additional pollution controls at Illinois power plants
Edison Mission Group subsidiary Midwest Generation has completed the installation of selective non-catalytic reduction systems at its fleet of Illinois power plants to reduce emissions of nitrogen oxides, which can contribute to the formation of smog.
The new controls will enable Midwest Generation to comply with both State of Illinois and U.S. Environmental Protection Agency limits for NOx, which are scheduled to take effect Jan. 1, 2012.
Data Center Consolidation and Efficient IT: Strategies to streamline and reduce wastage in your server estate
Oct 13th
Earlier this summer (July 2011) the US federal government announced plans to shut down 40 percent of its data centers over the next four years. With more than 2000 data centers, the Obama Administration realized that data center consolidation was part of a broader strategy to become more IT efficient and make substantial financial savings (predictions run into billions of dollars a year) through managing information technology.
Many large organizations today find themselves in the same boat, albeit on a smaller scale, where they are choosing to make economies of scale by running fewer data centers and reducing their overheads.
Over the past 20 years, the commoditization of computing in the datacenters has seen physical servers shrink in size- initially they took up the space of a room, which reduced to the size of a fridge to today’s ‘pizza box’. Added to this, for the past 40 years processing capacity has been doubling approximately every two years and this trend is expected to continue until at least 2020.
These factors of power density and increased processing capacity have contributed to the higher power and cooling demands in data centers. In fact the demand can become so focused on small areas jammed with compute resource that spare space becomes ‘dead’ as there’s no more available power. Data center utilization can stall and the irony is that it becomes cheaper to build a new data center to accommodate energy demands than to retrofit an old one to ‘unlock’ the space.
The route to virtualization and server rationalization
Server commoditization has led to a proliferation of standalone servers. The main reason why companies provisioned so many individual servers was that performance and capability could be compromised by running multiple applications on a single server. It also made maintenance easier since servers were relatively cheap when compared to monolithic mainframes.
As companies have grown either organically or through mergers and acquisitions so have their server estates. This server sprawl has led to inefficiencies in the use of data center resources, hence many companies have aimed to mitigate it through virtualization.
It is worth noting where costs can creep through use of virtualization. The standard specification of a server purchased to host virtual machines (VMs) is usually much higher than a standalone server. Hosting multiple virtualized servers requires more CPUs and significantly more memory both of which contribute to higher power requirements and heat output.
If you virtualize 100 percent of your physical servers today then you will be running more operating system instances than you started with. The physical and environmental footprint has changed but you still need to monitor, patch, secure, backup and license the virtualized servers and now the host servers as well. Requirements such as high availability further increase infrastructure costs. Yet the publicity of energy and space savings has created a mindset that virtualized servers are cheap. Consolidation through virtualization therefore is only a partial answer to becoming more IT efficient.
Increasing your IT efficiency
Server rationalization should be part of a virtualization project and a business-as-usual process within a virtualized environment. New tools designed for IT efficiency help identify what is useful and when. This knowledge makes it easy to establish an on-going process to reclaim unused resources and avoid unnecessary expenditure.
Traditional tools designed for systems and operations management struggle to deliver reports on the useful work a server is doing. Often a report of how busy a CPU is over time is used to represent how much “usage” took place. Most servers are loaded with standard software that has to be on every corporate server – antivirus software, systems management, backup and event monitoring – so each server reports a specific amount of usage but they fail to reveal when or if that usage provided business value.
Although virtualization has clear benefits, including a reduction in energy consumption and floor space, to get the most out of virtualization you should be prepared to invest in tools which monitor efficiency, specifically the amount of useful work your IT assets are doing.
Software licensing inefficiency
The overprovisioning of servers in data centers is rife and has led to an inefficient use of hardware. Additionally, there’s software license waste through unused and partially used applications on organizations’ servers. Anecdotal evidence echoes analyst opinions that the total cost of licensing and running servers could be as much as 80-90% of total software spend.
Businesses buy billions of dollars of enterprise applications such as ERP, CRM and finance systems to name a few. This includes an enormous outlay on the cost of the infrastructure software that enables virtualization. Many of these applications have different and complex licensing rules. It is important to understand actual usage and whether, for example, a premium license could be replaced by a standard one or even cancelled if it’s not used.
There are many different models of licensing for example, per CPU, per RAM, per user. Sometimes this complexity is so complicated that organizations tend to overprovision as they can’t understand what they need to do. So no one truly understands how to be truly efficient or feels comfortable that they have exactly the right number of licenses and getting true business value.
Saving Your Server Estate
Your data center energy demands aren’t going to go away any time soon. In fact, they are going to continue to get more complex as inefficiencies abound in physical and virtual environments, resource usage, and software licenses. If you factor in the current trend of moving some of your business services to the cloud, you have an even more daunting landmine of potential misuse. It is time to take control of your server estate by implementing software that can help you efficiently consolidate your data centers and eliminate energy waste. The longer you wait, the more energy, time and money you will throw away.
Written by by Andy Hawkins, Product Manager at 1E.
Energy Storage: Applications and Developing Regulation
Jul 11th
The following article is the final part of a multi-part series.
B. Enacting Energy Storage Regulation
After investigating the operational characteristic of energy storage, regulators can begin the process of enacting energy storage regulation. Valuation and recovery mechanisms for traditional generation, transmission and distribution assets do not fully encompass the operational characteristics of energy storage systems. Therefore, regulators need to determine how to best define and treat energy storage. Specifically, regulators must decide on whether to integrate energy storage on an intended use (application) basis under current classification and recovery mechanisms or treat it as a separate asset class and enact recovery mechanisms based upon its own operational characteristics.
1. Enacting Federal Energy Storage Regulation:
In 2010, the Commission initiated a proceeding with the purpose of obtaining further comments from stakeholders on how to define and treat energy storage.[1] The Commission utilized the data it collected in previous proceedings and determined three jurisdictional applications for energy storage: 1) providing transmission support to unbundled transmission lines; 2) enhancing the value of generation (time-shifting generation from off-peak to peak time periods); and 3) providing ancillary services.[2] The Commission received comments in favor of both integrating energy storage under existing market and cost-of-service based recovery mechanisms, as well as defining and treating energy storage as its own unique asset class.
Generation and in some areas, ancillary service applications receive market compensation while transmission service applications receive compensation through transmission charges based on cost-of-service. Proponents for integration under the current system argue that energy storage should only grow as the technology matures and becomes a more efficient choice over traditional resources as measured by current standards. Proponents for the creation of a separate class argue that classifying energy storage in a separate class will more accurately compensate energy storage systems based on the operational efficiencies it provides when performing individual service applications. Furthermore, they argue that energy storage requires this treatment to encourage its growth in energy markets and transmission services.
The Federal Power Act requires the Commission to promote reliable and efficient transmission and generation of electricity by encouraging the deployment of technologies to increase the capacity and efficiency of existing transmission facilities.[3] Energy storage promotes both improved reliability and efficiency in the generation and transmission of electricity. Therefore, the Commission should enact regulation that further promotes the deployment of energy storage systems.
2. Enacting State Energy Storage Regulation:
Effective state energy storage policy must clearly prioritize energy storage based on its potential value in each state’s distribution markets. Public utility commissions should define energy storage as a separate asset class based upon its value in local distribution markets. As public utility commissions better understand the value of energy storage, they can begin establishing energy storage targets and procurement standards. Establishing procurement standards will increase utility investment in energy storage systems. Public utility commissions can promote further growth in energy storage by: 1) including energy storage standards and requirements in renewable portfolios and generation projects; 2) integrating energy storage in demand response, net metering, distributed generation and electric aggregation regulation; and 3) removing barriers for utilities to recover costs on eligible energy storage systems through retail electric rates.
a) Promoting Energy Storage through Renewable Portfolios and Generation Projects
Energy storage adds value to renewable generation projects and mitigates the added stress it places on transmission and distribution systems. Incorporating energy storage policy within policy on renewable energy embraces the complementary relationship of energy storage to renewable generation. Including policy on energy storage within renewable portfolio standards and renewable generation regulation will promote investment in both renewable energy and storage systems.
Public utility commissions should streamline applicable generation and transmission siting regulations for energy storage facilities. Energy storage facilities have lower costs and fewer adverse environmental impacts than traditional generation and transmission resources. Therefore, public utility commissions should not apply the same regulatory oversight and review towards energy storage facilities as used for traditional generation or transmission resources. Streamlining siting regulation will reduce regulatory delay and increase speed in deployment for storage systems.
b) Promoting Storage Growth through Inclusion in Demand Response, Net Metering, Distributed Generation
and Aggregation Regulation
Incorporating energy storage in demand response, net metering, distributed generation and aggregation regulation will promote increased use of consumer based energy storage systems. The versatility of energy storage systems allows some consumer based systems to provide some distribution support applications. Therefore, state public utility commissions should distinguish energy storage from other resources in these categories and value it based upon its operational characteristics for both consumer and distribution support applications. Furthermore, including energy storage into these categories will better prepare both public utility commissions and utilities for potential regulatory issues as automobile batteries develop into viable storage options.
Public utilities should also remove barriers preventing the aggregation of end-user storage by third parties for the use of distribution system support. Removing potential barriers will allow energy storage providers and aggregators to experiment with possible business models that would increase deployment of consumer based systems by increasing the value of a consumer’s storage system. Increased aggregation of consumer storage for distribution support services will improve distribution system reliability and efficiency.
c) Promoting Storage Growth through Retail Rate Recovery
Removing restrictions on utilities from owning and recovering costs of energy storage systems will promote utility investment in energy storage. Public utility commissions should utilize federal proceedings as guidance on developing appropriate standards of accounting for storage systems. Increased deployment of energy storage systems throughout the distribution system will improve reliability, reduce the size of unexpected blackouts and lower distribution costs. Distributed storage will also allow utilities to better adapt to the increasing consumer utilization of intermittent renewable resources (i.e., solar panels and wind turbines). Public utility commissions may also create further incentives for utility investment by allowing accelerated deprecation of energy storage equipment in retail electric rates.
[1] Rate, Accounting, and Financial Reporting for New Electric Storage Technologies, Docket No. AD10-13.
[2] The commission also sought comments on the potential for contract storage service.
[3] 16 U.S.C. § 824s.
Written by Robert Clifford. Robert is a Boston-based attorney who represents clients before the Federal Energy Regulatory Commission and state public utility commissions.
Energy Storage: Applications and Developing Regulation
Jul 11th
The following article is part 5 of a multi-part series.
III. Enacting Energy Storage Regulation
The absence of appropriate energy storage regulation is the foremost barrier preventing the development and interconnection of new energy storage systems into the electric grid. Current regulation fails to accurately characterize the value of energy storage and financially compensate providers based on a storage system’s unique operational characteristics (i.e., performance benefits and costs). The absence of appropriate regulation creates uncertainty (for both energy storage providers and utilities) regarding appropriate business models and commercial applications for energy storage systems.
Regulators must enact regulation that clarifies lingering uncertainty over the treatment of energy storage and define energy storage based on its unique operational characteristics for each application it performs. To accomplish this, regulators must first increase their awareness of energy storage by investigating the operational characteristics of energy storage applications within the dynamics of the relevant jurisdictional market (.i.e., federal or state). As regulators obtain data on energy storage applications, they can properly prioritize it in the generation, transmission and distribution planning processes. As a result, regulation will provide the necessary incentives for energy storage providers and utilities to continue investing in the development and interconnection of energy storage systems.
A. Awareness of Energy Storage Benefits:
The operational characteristics of energy storage systems differ from traditional resources used to perform the same service application. Therefore, the current valuation system of traditional resources may not always be applicable when determining the value of energy storage systems. Thus, regulators must first investigate the operational characteristics of energy storage to fully understand and define its value.
1. Federal Proceedings on Energy Storage:
The Federal Energy Regulatory Commission (“Commission”) and state public utility commissions regulate the electric industry. The Commission oversees the interstate transmission of electricity including the operation of wholesale electric markets and interstate transmission lines. The Commission also oversees Independent System Operators (“ISOs”) and Regional Transmission Operators (“RTOs”). ISOs and RTOs are independent organizations that operate regional electric markets and monitor regional reliability. The Commission approves the market rules and practices of each ISO, RTO and other jurisdictional entities performing similar functions. The Commission often conducts proceedings on new developments in the electric industry to facilitate the development of its own regulation and to provide some reference and guidance for state public utility commissions.
In 2007, the Commission reemphasized the need for unbiased transmission access for all resources.[1] The Commission allowed storage providers to participate in wholesale electric markets (including ancillary markets) and offer transmission services. The decision also marked the beginning of the Commission’s investigation into the operational characteristics of energy storage. From 2008 through the present, the Commission gathered data on energy storage systems through numerous proceedings involving the creation of a few energy storage pilot programs and small-scale commercial applications offered by ISOs. However, antiquated market rules still prevent energy storage providers from fully participating in wholesale electric markets. The Commission recently initiated proceedings to remove barriers in market rules that prevent energy storage systems from providing frequency regulation.[2] The Commission also includes discussion on energy storage as subtopics in proceedings on the integration of renewable resources[3] and demand response[4].
2. State Proceedings on Energy Storage:
The lack of state public utility commission awareness of the operational characteristics and applications of energy storage remains the largest barrier to entry for storage in electric distribution markets. State public utility commissions oversee the retail distribution of electricity within each state. Public utility commissions regulate retail electric rate tariffs, distributed generation, aggregation of retail load, competitive electric suppliers, demand management, net metering and generation and transmission facility siting. Public utility commissions also influence development in state energy policy such as renewable energy portfolios and regional carbon reduction programs.
The collective benefits of end-user, electric utility and potential third party storage applications underscore the importance for states to take a collective approach on energy storage rather than by piecemeal regulation. In September 2010, California became the first state to enact legislation for the purpose of fully investigating potential energy storage applications, economic value and procurement standards in an effort to develop appropriate energy storage regulation.[5] State policymakers should follow California’s precedent and enact legislation requiring public utility commissions to further investigate the unique characteristics of energy storage in their respective electric distribution markets and develop regulation that properly prioritizes energy storage in state energy policy.
[1] Preventing Undue Discrimination and Preference in Transmission Service, Order No. 890, FERC Stats. & Regs. ¶ 31,241, order on reh’g, Order No. 890-A, FERC Stats. & Regs. ¶ 31,261 (2007), order on reh’g, Order No. 890-B, 123 FERC ¶ 61,299 (2008), order on reh’g, Order No. 890-C, 126 FERC ¶ 61,228 (2009); and Wholesale Competition in Regions with Organized Electric Markets, 125 FERC ¶ 61,071(2008) Order on Rehearing, 128 FERC ¶ 61,059 (2009).
[2] Frequency Regulation Compensation in Organized Wholesale Power Markets, Docket No. AD10-11.
[3] Integration of Variable Energy Resources, Docket No. RM10-11-000; Frequency Response Metrics to Assess Requirements for Reliable Integration of Variable Renewable Generation, Docket No. AD11-8.
[4] Demand Response Compensation in Organized Markets, Docket No. RM10-17.
[5] Assembly Bill (AB) 2514 – Skinner, Stats. 2010 – ch. 469.
Written by Robert Clifford. Robert is a Boston-based attorney who represents clients before the Federal Energy Regulatory Commission and state public utility commissions.
Energy Storage: Applications and Developing Regulation
Jul 5th
The following article is part 4 of a multi-part series.
II. Types of Energy Storage Systems
Throughout the next decade an increasing number of energy storage systems will mature and become commercially viable. Currently, pumped-hydro storage systems provide more than 127,000 MW of worldwide storage capacity while compressed air energy storage systems, battery technologies, and flywheels provide less than 860 MW of installed storage capacity.[1] Each storage system is unique in both its storage technology and operational characteristics including the ability to perform multiple energy services.
A. Pumped Hydro
Pumped Hydro facilities are the most mature energy storage system. Pumped Hydro facilities consist of two adjacent reservoirs situated at different altitudes. During periods of lower priced electricity, water pumps remove water from the lower reservoir to the higher reservoir. During higher priced electric periods, water releases from the higher reservoir passing through hydraulic turbines that generate electricity, on its way down to the lower reservoir. Pumped Hydro’s potential for high power ratings (up to 4 GW) and long discharge durations (measured in hours) allow it to provide generation storage applications.
B. Compressed Air Energy Storage
Compressed air energy storage (“CAES”) systems store air underground (in caves or aquifers) or aboveground (in pipes or containers) and discharge the stored air through a combustion turbine generator creating electricity.[2] Underground CAES systems have the potential for high power ratings (over 400 MW) and long discharge durations (measured in hours) that allow it to provide generation storage applications. Currently, aboveground CAES systems are still in development. Aboveground systems will provide CAES storage on a much smaller-scale (between 1 to 15 MW) and will target transmission and distribution support applications.[3]
C. Batteries:
Battery storage systems utilize a large-scale rechargeable battery operating under the same basic principles as an automobile battery. Electrochemical batteries typically consist of two electrodes (anode and cathode) separated by an electrolyte material.[4] A chemical reaction occurs when ions from the anode interact with ions from the cathode.[5] The reaction creates an electric current. Battery storage systems utilize different technologies including: 1) lead-acid; 2) advanced lead-acid; 3) sodium-sulfur (NaS); 4) sodium nickel chloride (); and 5) lithium-ion (Li-ion).
Flow-cell batteries provide another form of battery storage. Flow-cell batteries store electrolytes in a separate container from the battery cell.[6] Electrolyte containers pump electrolytes into the battery cell to create an electrochemical reaction, which then charges the battery.[7] Adding more electrolyte tanks will increase output and discharge duration. Currently, vanadium redox batteries are the most mature flow-cell battery system.[8]
Battery storage systems are one of the most versatile energy storage systems. Battery systems provide a wide range in power output (for both large and small scale applications), application specific output durations, portability, quick response time and dependability. The versatile operational performance of each battery technology allows it to provide end-user, generation, ancillary services, and transmission and distribution support storage applications.
D. Flywheels
Flywheels convert electric energy from the grid into kinetic energy through the acceleration of a rotor (flywheel) around a metal shaft. The flywheel decelerates to discharge stored energy into the grid. Flywheels are capable of rapidly discharging its stored energy and are therefore, ideal for ancillary service applications that require a rapid response to automated control signals (e.g., frequency response). Individual flywheels range in size from 150 kW to 1 MW and are capable of being interconnected to form large scale flywheel facilities ranging in size up to 20 MW.
E. Ultracapacitors
Ultracapacitor storage systems consist of two oppositely charged metal plates separated by an insulator. Ultracapacitors store energy by increasing the electric charge accumulation on the plates and discharges energy by releasing charge accumulation off the plates.[9] Ultracapacitor storage systems range in power ratings up to 15 MW. Ultracapacitors quick response time allows onsite systems to provide electric power during brief power interruptions. Advanced ultracapacitors provide even faster response time and are therefore, suitable for transmission and distribution applications such as voltage stability. [10] However, the cost of ultracapacitors may limit it to niche markets.[11]
F. Superconducting Magnetic Energy Storage
Superconducting magnetic energy storage (“SMES”) systems store energy in a magnetic field created by the flow of a direct current in a coil of a cryogenically cooled superconducting wire. The system stores energy by increasing current through the wire and discharges energy by decreasing the current flow.[12] SMES systems range in power ratings up to 10 MW. SMES systems discharge power almost instantaneously and are therefore, ideal for responses to brief occurrences of poor power quality. Utilities may use larger SMES systems for distribution network reliability and switching purposes.
G. Thermal Energy
Thermal energy systems most commonly store electricity through the use of cold thermal storage in water or ice tanks to reduce A/C compressor load during peak time periods.[13] Ice-based thermal energy storage systems store energy by creating ice at night during off-peak hours and use the ice to create cool liquid that supplements AC compressor load during peak hours. Both end-users and electric utilities can utilize thermal storage systems. End-users can lower energy costs without sacrificing equipment performance by offsetting compressor load during peak time periods. Utilities can utilize thermal storage systems as a distributed energy storage resource to provide distribution system support.
[1] Electricity Energy Storage Technology Options: A White Paper Primer on Applications, Costs and Benefits, Prepared by Electric Power Research Institute, Rastler. D (Principal Investigator), December 2010.
[2] Ibid. [1].
[3] Ibid. [1].
[4] Energy Storage: The Missing Link in the Electricity Value Chain. Energy Storage Council. May 2002.
[5] Ibid. [4].
[6] Eyer, J.M., & Corey, G. Energy Storage for the Electricity Grid: Benefits and Market Potential Assessment. SANDIA National Laboratories Report # SAND2010-0815. February 2010.
[7] Ibid. [6].
[8] Zinc-bromine (Zn/Br) flow-cell systems are in the primary stages of field deployment and demonstration testing. Fe/Cr and Zn/Air flow cell systems are still undergoing further research and development. Ibid. [1].
[9] Electric Energy Storage: An Assessment of Potential Barriers and Opportunities. California Public Utilities Commission, Policy and Planning Division Staff White Paper. July 2010.
[10] Ibid. [9].
[11] Isser, S. Energy Storage White Paper, Submitted to the Renewable Technologies Working Group, ERCOT. November 2009 (updated January 2010).
[12] Ibid. [9].
[13] Consumer based thermal energy storage systems can also be heat based systems that reduce the load of heating equipment during peak time periods.
Written by Robert Clifford. Robert is a Boston-based attorney who represents clients before the Federal Energy Regulatory Commission and state public utility commissions.
Energy Storage: Applications and Developing Regulation
Jun 27th
The following article is part 3 of a multi-part series.
D. Generation Storage
Energy storage allows generation resources to operate with greater efficiency and complements the integration of renewable generation resources into the grid. Storage systems also provide a clean and efficient alternative to traditional peaking facilities.
1. Electric Energy time-shift:
Electric energy time-shift involves purchasing and storing electricity from wholesale markets during lower cost time periods and discharging the stored energy for resale in wholesale markets when prices are high. Generation resources can also use stored energy to offset its need to purchase electricity from higher priced wholesale markets.[1] Energy time-shifting is similar to energy cost management. However, cost savings depend upon wholesale markets as opposed to retail electric tariffs.
2. Additional Peak Capacity:
Energy storage systems can provide a clean and efficient alternative over traditional generation resources supplying peaking capacity. Peaking facilities provide additional reserve capacity during periods when load peaks. These facilities typically operate at around 50% capacity resulting in diminished plant efficiency. However, energy storage providers can configure storage systems to provide optimal peaking efficiency as needed for the relevant peak load.
3. Renewable Integration:
Energy storage systems complement the deployment of renewable generation. Renewable resources are both difficult to forecast and have intermittent output, resulting in the production of low value electricity, lack of firm capacity needed to bid into energy markets and an increasing reliance on ancillary services necessary to maintain system-wide reliability. Energy storage systems add value to renewable generation and provide improved ancillary service efficiency necessary to support the integration of intermittent power sources.
Renewable resources often produce energy during off-peak times when energy is both lower in demand and price. These occurrences create inefficiency for both the generation owner and energy markets. Energy storage systems mitigate this problem by allowing renewable generation to bid stored off-peak energy into peak energy markets. This prevents waste of off-peak production, provides increased value for renewable generation by increasing capacity bids in peak markets, and also improves wholesale market efficiency by increasing the amount of lower cost energy bids.
The intermittent output of renewable resources may prevent resource owners from bidding into energy markets. In many cases, energy providers must guarantee to supply the amount of capacity it bids into energy markets or it will be subject to financial penalties. Many renewable generation resources cannot meet the guarantee (i.e., firm) requirements because of the systems intermittent power output. However, renewable generation can use the capacity of an energy storage system to meet firm output requirements. The capability of an energy storage system to provide renewable generation with the ability to meet firm requirements and bid into energy markets adds economic value to renewable generation.
The intermittent output of renewable resources increases the occurrence of disturbances that threaten system-wide reliability. For example, photovoltaic cells cannot control the occurrence of clouds and wind turbines cannot control the occurrence, duration or strength of wind gust. The rapid response and discharge times of storage systems provide the necessary improvements in ancillary services needed to mitigate the added stress that such disturbances place upon transmission systems.
[1] Energy Storage: The Missing Link in the Electricity Value Chain. Energy Storage Council. May 2002.
Written by Robert Clifford. Robert is a Boston-based attorney who represents clients before the Federal Energy Regulatory Commission and state public utility commissions.
Energy Storage: Applications and Developing Regulation
Jun 21st
The following article is part 2 of a multi-part series.
B. Transmission and Distribution System Support
The increased utilization of energy storage systems for transmission and distribution support will lead to improved reliability and efficiency in the delivery of electricity. Transmission and distribution systems have dynamic characteristics (i.e., capacity and load) at each location within the system. The versatility and range in operational performance of energy storage systems allows for its deployment throughout the transmission and distribution system. Specifically, energy storage can provide: 1) transmission and distribution stability; 2) transmission congestion relief; 3) transmission or distribution equipment upgrade deferral; and 4) provide onsite substation power[1]. Electric utilities may also utilize distributed energy storage systems to provide distribution system support services.
1. Transmission/Distribution Stability:
Energy storage systems connected to transmission and distribution systems improve stability and performance by counteracting voltage dips and other similar events that disrupt the flow of electricity over transmission lines. [2] Improved transmission line reliability increases load carrying capacity, which in turn improves efficiency by reducing congestion relief and the need for further investment in transmission expansion.
2. Transmission Congestion Relief:
Transmission congestion decreases system efficiency and increases electric prices through congestion charges or locational marginal pricing. It occurs when peak load requires more electricity than the transmission systems can provide. Furthermore, congestion drives the increased need and associated costs of transmission system expansion. Energy storage systems that are deployed downstream from the transmission congestion point can alleviate congestion and thus, mitigate upwards pressure on electric prices and defer and/or eliminate the need for further transmission expansion.
3. Transmission/Distribution Upgrade Deferral:
Incremental increases in capacity provided by energy storage systems defer the need for utility investment in transmission and distribution system upgrades. Specifically, utilities can deploy stationary or transportable energy storage systems to defer upgrades in equipment and improve power restoration times.[3] Stationary distribution deferral allows a two to four year delay of new equipment and lines where load growth is low and capital expenditures are high.[4] Transportable distribution deferral allows utilities to place transportable storage systems in areas of need to improve power restoration times and outage mitigation.[5] Energy storage systems also extend the life of existing transmission and distribution equipment by reducing the load demand on the equipment. By extending the life of existing transmission and distribution equipment, energy storage technologies improve asset utilization, reduce utility investment risk on large equipment, free capital and reduce overall transmission and distribution costs to ratepayers.
4. Distributed Energy Storage:
Distributed energy storage is an emerging transmission and distribution support application. The application involves electric utilities controlling and aggregating small scale energy storage systems located on the utility side of the meter to provide large scale distribution support.[6] Utilities remotely manage the charge and discharge of each storage system to support grid peak loads and backup power.[7]
C. Ancillary Services
Ancillary services are necessary to maintain the reliable transmission of electricity. Storage systems that provide ancillary service mitigate system disturbances in voltage, momentary fluctuations in load[8], frequency[9], energy imbalance[10] and unexpected generation outage[11]. Each disturbance provides a constant threat to the reliable delivery of electricity throughout the bulk electric system.
The operational characteristics of some energy storage systems make them an ideal resource for ancillary service. Storage systems performing ancillary service applications provide faster response times to automated control signals over traditional generation resources. Faster response times can result in a reduction of resources needed to perform adequate service.[12] This, in turn, improves efficiency across all energy markets by freeing traditional generation resources to perform more operationally efficient services such as capacity service.
[1] Energy storage systems installed onsite at substations provide an efficient means to power switching components, communication and control equipment while not being energized by the grid.
[2] Energy storage systems can also provide other transmission stability applications such as damping, sub-synchronous resonance damping and under-frequency load shedding reduction. Ibid. [3].
[3] Electricity Energy Storage Technology Options: A White Paper Primer on Applications, Costs and Benefits, Prepared by Electric Power Research Institute, Rastler. D (Principal Investigator), December 2010.
[4] Ibid. [10].
[5] Ibid. [10].
[6] Ibid. [10].
[7] Ibid. [10].
[8] Regulation service corrects momentary fluctuations in load in a control area by supplying extra generating capacity.
[9] Frequency Response maintains the primary frequency (60Hz).
[10] Energy imbalance service supplies an hourly imbalance between transmission energy supply and load being served in a control area. This service corrects any imbalance over an hour between scheduled delivery of energy and the actual load that the energy serves.
[11] Contingency reserve service provides power during unexpected generation outages. Reserve service requires two different response times. Spinning reserve must respond instantaneously to unplanned outages. Non-spinning or supplemental reserves typically have 10 minutes or longer to respond. Discharge time varies upon load dynamics and market rules.
[12] Makarov, Y.V., Ma, J., Lu, S., & Nguyen, T.B. Assessing the value of Regulation Resources Based on Their Time Response Characteristics. Pacific Northwest National Laboratory, PNNL 17632, June 2008.
Written by Robert Clifford. Robert is a Boston-based attorney who represents clients before the Federal Energy Regulatory Commission and state public utility commissions.
Energy Storage: Applications and Developing Regulation
Jun 6th
The following article is part 1 of a multi-part series.
Energy storage systems convert electricity into chemical, kinetic, thermal or potential energy until needed, whereupon it is then converted back into electricity. Energy storage systems are capable of providing both large and small scale energy service. End-Users, distribution, transmission and generation providers can utilize energy storage systems to perform various energy service applications. As new energy storage technology matures and becomes commercially viable, the need for regulators to enact appropriate energy storage regulation heightens.
Regulation will provide clarity for energy storage providers and utilities in developing appropriate business models and uses for energy storage systems. Regulators must investigate energy storage applications and enact regulations that reflect its unique operational characteristics (i.e., performance benefits and costs). Similar to the effects that gas storage had on the gas industry, energy storage can further advance the goals of improved reliability and efficiency sought by the restructuring of the electric industry.[1]
I. Energy Storage Applications
Energy storage systems can perform energy service applications at the generation, transmission and distribution levels of electricity delivery. The versatility of some energy storage technologies allows one storage system to perform multiple applications at each level. Energy storage systems promote efficient use of generation resources in energy markets, improve efficiency and reliability in ancillary services that are vital to the integration of renewable generation projects, improve reliability in transmission and distribution systems and provide a clean alternative to traditional generation and transmission resources.
There are four categories of energy storage applications: 1) end-user; 2) transmission and distribution support; 3) ancillary services; and 4) generation storage.
A. End-User:
End-user energy storage systems allow the consumer to manage electricity costs, and improve reliability and power quality. Furthermore, storage systems may potentially add value to consumer installed renewable power systems such as photovoltaic systems and wind turbines by time-shifting energy stored during less expensive time periods for use during more expensive time periods. Storage systems may also play an integral part in developing potential energy service applications for integrated automobile batteries.
1. Energy Cost Management (Demand Charge Management):
Energy cost management allows consumers to lower their electricity demand (load) during peak time periods in an effort to reduce energy costs.[2] Similarly, by reducing load during applicable demand charge time periods, consumers avoid demand charges. Energy storage systems store energy during off-peak time periods when energy prices are low and release energy during peak time periods when energy prices are high. The consumer experiences a cost savings in the amount of displaced peak consumption. For example, if peak rates are .15¢ /kWh and off-peak rates are .5¢ /kWh, the result would be a savings of .10¢ /kWh for any reduction in peak load displaced by energy stored at off-peak times. The cost savings will vary depending upon the utility’s rate tariff.
2. Electric Service Reliability & Electric Service Power Quality:
Energy storage systems can provide improved electric reliability and power quality to commercial consumers. Energy storage systems installed onsite provide improved electric reliability by discharging stored electricity during brief moments of power loss. During brief power outages, energy storage systems allow consumers to properly shutdown equipment, maintain power, and provide power while transitioning to onsite generation.[3]
Power quality refers to the concept of powering and grounding sensitive electronic equipment in a manner that is adequate for the proper operation of equipment.[4] The occurrence of variations in voltage magnitude[5], primary frequency (60Hz), harmonics[6] and brief interruptions of service indicate poor power quality.[7] Poor power quality increases stress on consumer equipment resulting in a reduction in performance and potential equipment failure. Onsite energy storage systems offer reliable protection for facilities or equipment that are highly susceptible to poor power quality.
[1] Derived from an interview with Joseph Desmond, Ice Energy, April 2011.
[2] This practice is often referred to as peak-shaving.
[3] Eyer, J.M., & Corey, G. Energy Storage for the Electricity Grid: Benefits and Market Potential Assessment. SANDIA National Laboratories Report # SAND2010-0815. February 2010.
[4] Kueck, J.D., Kirby,B.J., Overholt, P.N., & Markel, L.C. Measurement Practice for Reliability and Power Quality: A Toolkit of Reliability Measurement Practices. Prepared by Oak Ridge National Laboratory, Managed by UT-BATTELLE, LLC, Prepared for the US Department of Energy. Oak Ridge National Laboratory Report # ORNL/TM-2004/91. June 2004.
[5] Sudden increases or decreases or long-term sags in voltage.
[6] Harmonics are currents or voltages that differ from the primary frequency. Harmonics reduce performance by placing greater stress on consumer equipment, which may lead to equipment failure.
[7] Ibid. [3].
Written by Robert Clifford. Robert is a Boston-based attorney who represents clients before the Federal Energy Regulatory Commission and state public utility commissions.
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