How Energy Storage Helps Integrate Renewables

Posted on October 24th, 2012 by

Mark Hardin, of Xtreme Power, discusses how his company’s battery storage technologies helps the intermittent issues of renewable energy and the utility grid.


Full Transcript:


Mark Hardin: My name is Mark Hardin, I’m the director of product marketing at Xtreme Power. Xtreme Power makes power management and energy storage systems. To date, we’ve focused on grid scale; meaning Megawatt or multi-Megawatt but we’ve also looked at smaller Kilowatt scale type of products. One of the blessings and  the curses; I think, of energy storage, is that it has all these cool solutions for various problems. To date, Xtreme Power is really focused on helping solve some of the problems of integrating renewables on the grid at a large-scale. Renewables are naturally intermittent; and on smaller grids, that can cause stability issues. Energy storage has some capabilities, fast response, accurate power delivery that can help with those issues. Other problems though, at the utility level; just balancing the grid whether it’s with the renewables or without, is certainly something we are looking into to help with grid stability issues. And then, even more in the commercial industrial space; providing back-up power, being able to reduce energy bills that are seen from time-of-use charges, tariffs or even peak demand charges. Demand response is another industry that has picked-up very quickly. But to participate in demand response, you have to reduce the amount of load or energy you are consuming. But in energy storage system, you could participate in demand response and when you do, you could discharge from the storage system to maintain your operation as it was going before and still collect the revenues associated with demand response. So, there is a lot of different solutions. To date, we focus largely on the renewable and the utility space. Right now, there’s two big markets for energy storage where it really works today; and it’s, as I have mentioned, renewal integration on smaller island grids that have very expensive electricity. We, initially, had a lot of success in the islands of Hawaii; where they’ve got abundant wind and sun – and they want to use it – but, that can cause some issues on the grid. And so, storage helps solve some of those problems. We are seeing new markets such as in Puerto Rico and other smaller islands pop-up to have very similar opportunities, so we are certainly going after those. We are a believer in that; as the penetration of renewables grows on the Mainland, in ten years from now, we will see some of those similar problems where we will be able to attack them then. The second large area, is in balancing the natural intermittency of the grid. Supply and demand has to always be  equal; and to date, there’s  some certain (inaudible  02:41-02:42) services that help manage that variability. Storage has certain capabilities that can do that better than what’s traditionally been the solution – such as thermal assets. In fact, the Federal Energy Regulatory Commission fairly recently passed some regulatory rules that will help incentivize fast acting resources, such as storage and other technologies to do just that. So, that is where we are going today. Today, we’ve grown very rapidly. We have had a couple of successful early installations that really prove that grid scale storage is here and commercially viable – and works (and it’s not a science project anymore). And that really allowed us to get some of the early projects early in the industry. And now that the competition has increased, but at the same time, so are the opportunities. So, I think you will see us continue our growth – maybe not at the rapid pace that we’ve had for the last two years – but certainly get more installations, larger installations outside of just Hawaii. Seeing some of the mainland, California is a growing market so we really have to expand in the mainland U.S. and possibly South East Asia. One thing we’ve realized in the last twelve months is that, no single-battery technology really can meet all the different needs and solutions, as I have mentioned earlier, in this industry. And we also noted that even though we do manufacture our own batteries, our real core competency – if you look at the knowledge and the skill set of the people here in Austin and in Kyle – is around system controls. Integrating all these very complicated pieces of equipment together to work harmoniously. And so, for that reason; we’ve fairly recently said, “You know what?  We’re going to go integrate someone else’s battery”. And if that battery meets the need of the customer, we will take that battery and we will make a system using that battery – it does not have to be ours. And that sort of shift in business strategy… recently, we announced a partnership with General Electric using their Durathon Technology, and that was sort of the genesis of that; and we hope to be forging additional types of commercial relationships with large-scale battery suppliers. As long as their battery capabilities meet the application, that really allows us to meet the needs of the customers most effectively – I think, gives Xtreme Power a better advantage in the industry. As I mentioned earlier, one of the “knocks” against renewables; if someone is going to “knock” them, is that they are intermittent; and you can’t necessarily generate on-demand. Some of these longer duration types of battery technologies allow you to truly store that energy; and even if it’s the sun or the wind that is creating energy, not in coincident with the highest demand; you can store it up, shift it and then just discharge it when demand is highest, when prices are highest. And you can “firm” the intermittency so that the output of what was before, a fairly uncontrollable resource, now looks more like the output of a thermal generation plant. Now, is that to say it is going to run all day and all night like a gas plant? – No.  But it certainly gives it a competitive edge against a renewable asset without storage paired with it. I think one of the most important things (from a regulatory perspective) that you can do, is create market rules and regulatory policies that help incentivize things like renewable portfolio standards. That, combined with solutions; such as energy storage and other new technologies continuing to drive innovation. . . I think is what’s needed. It’s a combination of both. It is not going to be solved only through policy and grants and  incentives, it is not going to be purely based on technology revolution – they are going to have to help each other out. Hopefully, someday, we are all at par with the standard of generation that is created today by thermal generation. I geek-out on this stuff is the short answer. It’s so cool, I think  any one of us who has worked for a start-up – which Xtreme (Power) is quickly moving out of that “nomenclature” – but that in itself is as dynamic, fun environment. It’s changing every day. It’s challenging. The difference is that, we’re the start-up company in the start-up industry. You know, it’s paving the way for this new technology. I was telling someone earlier, “It’s a little bit like working for a computer company in the late 70’s”, where people see this thing is cool but they don’t necessarily see that it has to be around. And now, here we are today;  we’ve all got  computers in our pockets, and  being part of that – “revolution” is a strong word – but I think, over the last eighteen months;  we have really seen in storage, it’s no longer “if”, it is “when”. So, being a part of that (even if I went to another start-up); I’d take myself out of that opportunity, it wouldn’t be nearly this fun. And so, the short answer is; it is challenging, it is fun, it is exciting and I could not be anywhere else.


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