Battery Storage Giving Businesses a Break

February 8, 2016 By Ken Silverstein

train-tracksBattery storage is helping utilities do their jobs. And by extension, it will — in time — help energy managers. Just off the lot: a 8.75 megawatt project that captures and reuses energy created by braking subway cars along two subway lines.

It’s now one of the nation’s largest customer-sited battery storage networks that will assist the Southeastern Pennsylvania Transportation Authority (SEPTA) in reducing its operating costs, ensuring energy resiliency and supporting the stability of the electric grid — a project owned and funded by Constellation Energy, a unit of Exelon Corp. In this case, SEPTA will finance the deal through a 20-year services agreement with Constellation.

“If I lose power, I want to be able to use the battery for some period of time for some process,” says Gary Fromer, senior vice president of distributed energy for Constellation, in an interview with Energy Manager Today. “The battery is supplying constant high quality power to something very sensitive,” which is oftentimes businesses that can ill-afford even a momentary loss of power such as hospitals or data centers, he adds.

When most people think of energy storage, they envision a system whereby power is siphoned off the grid at night, harnessed in a device, and then released during the day when the demand for electricity peaks. That’s the ultimate goal — and one that could become even more compelling as battery prices drop.

A more immediate application, though, is to use the batteries to infuse the grid with electrons when the switches trip and the lights would otherwise flicker out.

Battery storage operators can detect any changes in “frequency” as a result of “power surges,” They can then immediately respond, even before a grid operator. Hence, a problem has been averted and in many regions, the battery operator is paid the same as a traditional generator that would deliver electrons.

For example, let’s say factory defers its consumption under a demand response program: Batteries would be able to store the energy and then release that at the point in time when it would become cheaper to use that electricity. But that battery would run for a finite period, say 90 minutes, notes Fromer, at which point the factory would go back to getting its power from the grid. In this example, the battery is charged up in the evening.

When businesses choose a battery, they are considering such factors as the how long they need the battery to perform and how long they need to be able to charge the battery, Fromer explains. Still, cost remains an issue:

It can take more than 10 years to get a return on investment, adds Jay Whitacre, an engineering professor at Carnegie Mellon University in Pittsburgh, in a previous interview with this reporter. For it to be cost effective, he says that electricity should be delivered at around 10 cents per kilowatt-hour over the lifetime of the system. And right now, the “levelized cost” — the cost of continuous operations — of battery production is between 15 cents and 30 cents a kilowatt-hour.

To get that price point, he adds that energy storage needs to serve multiple functions. In other words, stabilizing the grid to maintain frequency is a start. But the technology will have to develop to the point where renewables can be stored and then released — all to keep electricity flowing for long periods of time. Otherwise, utilities or businesses won’t spend a ton of money installing the devices.

But Whitacre predicts that prices will continue falling as more green energy comes on to the market and if other states follow California’s lead, which is to mandate the use of energy storage. In the utility world, Duke Energy and Southern California Edison are operating two of the biggest such projects in the United States, both of which received some assistance of the U.S. Department of Energy.

California regulators are requiring their incumbent utilities to provide 1,325 megawatts of energy storage by 2020. In the case of one of those utilities, Southern California Edison, its Tehachapi Energy Storage Project is now located on a wind farm about 10 miles north of Los Angeles. Altogether, that demo is projected to generate 8 megawatts for four full hours, which equates to 32 megawatt-hours. It uses lithium-ion batteries.

As for Constellation and its new project, well, Fromer says that it will advance the ball even further. And as more research goes into the technologies, the pace will only accelerate, albeit at a slower speed than what the developers would like.

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