Tag Archives: energy storage

Energy Storage: The New Cost Cutter – 10/6/16

Businesses and state governments are starting to embrace energy storage as a way to cut costs, increase efficiency, and meet regulatory mandates.

In Southern California, J.C. Penney has used lithium-ion batteries, made by Panasonic, to cut its electric bills in 6 stores by drawing power from the grid at night. By charging up at off-hours and using the stored energy during peak hours, Penney is avoids competing — and paying extra — for electricity needed to run AC units and avoids fees like demand charges. The batteries are expected to save each store at least $6,000 a year and Penney plans to install batteries at 3 additional stores this year and 14 more next year.

While still relatively expensive, energy storage installations in the form of lithium-ion battery packs has soared as costs have dropped dramatically. In 2015, more than 64.1 MW-hours of capacity were installed, up from 12.2 MW-hours in 2014, according to GTM Research. Installations are expected to reach 140 MW-hours in 2016.

Tesla Motors has played a major role in the drop in battery prices.

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Since batteries make up a large portion of the cost of an electric car, Tesla has been making aggressive moves to reduce the cost of its electric vehicles through economies of scale, including the opening of its Gigafactory in Nevada. The output of the battery factory is projected to be 35 GW-hours by 2018, equivalent to the entire world’s production in 2014 with battery costs cut as much as 50%.

Leveraging its successful opening of the factory, Tesla will supply 80 MW-hours of energy storage to Southern California Edison, the car maker said in a blog post on Thursday. The contract comes in the wake of a natural gas leak at Aliso Canyon that released thousands of tons of methane into the surrounding area. In the backlash from the incident, grid-storage projects are being fast-tracked.

“The storage is being procured in a record time frame,” months instead of years, according to Yayoi Sekine, a battery analyst at Bloomberg New Energy Finance.

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Providing further proof that states are taking an interest in energy storage, a study co-funded by the Massachusetts Department of Energy Resources (DOER) and Massachusetts Clean Energy Center (MassCEC)Massachusetts titled “State of Chargewas recently released.

The 200-page report lays out a road map for the state to expand energy storage deployment to save money, integrate intermittent power sources, and address climate change.

DOER will decide by the end of this year whether to establish an energy storage procurement mandate. In the case they do, Massachusetts would become the third state to create a storage mandate following California and Oregon.

The study focuses heavily on inefficiencies in the states electricity consumption citing two major issues including: the grid must be balanced by the ramping up and down of fossil fuel generators that only run 2-7% of the time and grid infrastructure issues resulting in “highly variable” electricity prices where the top 10% of hours during 2013-2015, on average, “accounted for 40 percent of annual electricity spend, over $3 billion.”

The study recommendations include grant and rebate programs, adding storage as an eligible technology within the existing incentive programs, and having the state clarify the regulatory treatment of utility storage.

FERC Energy Infrastructure Report and the Battery Boom – 5/12/16

According to the latest “Energy Infrastructure Update” report from the Federal Energy Regulatory Commission’s (FERC) Office of Energy Projects, renewable energy sources now account for 18.11% of total available installed generating capacity in the U.S. Broken down by source: hydro is the largest, 8.58%; followed by wind, 6.39%; biomass, 1.43%; solar, 1.38%; and geothermal, 0.33%.  The only sources with substantial (>100MW) new capacity for the first three months of the year were wind and solar, which is surprising given earlier forecasts by the EIA had natural gas additions estimated as much higher.

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Non-hydro renewable energy now exceeds conventional hydropower in capacity, as well as nuclear power (9.17%). Total available installed generating capacity made up by renewables in the U.S. grew to the 18.11% from 13.71% in a 2010 FERC report. Large additions scheduled for the next year are expected to bring that 18.11% above 20%.


In battery storage news, movement of Tesla Powerwall models aimed at residential customers is set to start ramping up. Falling costs of solar panels and batteries combined with net metering phase outs in some states are making battery storage more attractive. Tesla’s Gigafactory has managed to shatter expectations for battery costs through economies of scale; it has already produced thousands of Powerwalls at prices that analysts thought would take several more years to reach.

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Though Tesla’s market for residential batteries is strongest in Hawaii where electricity prices are high and solar panels are ubiquitous, the company expects its home battery branch to make billions selling to rural customers currently relying on diesel generators.

Some utilities are working with Tesla directly and all are doing their own part to test battery storage as part of the power grid. Many of the initial installations of Powerwalls were through utility programs meant to test energy storage as an option for peaker replacement and alternative to load shedding. Many managers hope that the addition of flexible energy storage will costs associated with inconsistent energy flows from renewables and more conventional problems associated with aging power grid infrastructure.

Energy Storage: Batteries – 3/28/16

Improved technology, falling costs, and problems associated with intermittent renewable energy are setting the stage for an energy storage renaissance.

Tesla and other companies like it are driving down costs of batteries far faster than analysts had predicted thanks to greater than expected cost reductions via economies of scale and learning-by-doing. According to a paper on Nature.com,  cost estimates for EV Lithium-ion battery packs declined by ~14% annually between 2007 and 2014, a decline from $1,000 per kWh to about $410 per kWh. The resulting increase in storage capacity has been dramatic: Bloomberg New Energy Finance has projected near exponential growth for capacity over the next five years.

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Power grids are strained by intermittent energy sources like wind and solar, as well as normal fluctuations in power demand.

Battery storage offers a attractive solution to both. Battery storage of wind and solar power would smooth out the differences between energy production and consumption that would otherwise require supplementation with more conventional base load power plants. As a result, the difference between the cost of electricity during peak production times of heavy sun or wind and off-peak production time would shrink significantly; it would effectively level-out costs and eliminate expenses associated with the mismatch.

Grids using conventional power sources would benefit from energy storage for largely the same reasons as renewables. Electric grid operators typically rely on fast-start natural gas power plants for the extra electricity needed during peak demand times though they must pay significantly more to do so. Battery systems are therefore best used in grid systems with relatively consistent periods of near-peak demand lasting a few hours a day. Estimated battery costs must come down by about $100 to $300 per kilowatt hour, dependent on the region in question, to be economically viable without subsidies and other incentives.

If the regional power grids of the United States were more connected and modernized, then there would not be such high demand for storage solutions. Batteries offer an increasingly cost-effective solution to many of the problems facing electrical grids, such as years of under-investment and the complexity of a network made up of independently owned and operated power plants and transmission lines, but they are not the only solution. Infrastructural overhauls like the Plains & Eastern Clean Line project approved by the Energy Department, proposed to carry 4,000 megawatts of power from the wind-rich Oklahoma panhandle through Arkansas and into Tennessee, offer a more conventional approach.

Grids, Batteries, and Electricity Storage – 3/10/16

Of the obstacles to renewable energy adoption, integration into existing power grids is probably the most challenging and important. Plummeting costs of generation and government mandates on the use of intermittent power sources like wind and solar are forcing utilities to learn a new set of tricks since many have only ever dealt with base-load plants using nuclear or coal fuels.  In many ways, competition with renewable energy has disrupted the utilities sector for the better by promoting efficiency and innovation.

Unfortunately, the solar industry’s growth has accelerated so much over just the last five years that friction between new and existing interests in the energy sector are sparking new conflicts. Utilities were once relatively content with net metering programs that compensated solar system owners for their excess electricity generation on the basis of avoided cost – the cost the utility would have incurred had it supplied the power itself or obtained it from another source. Having a small portion of households on solar reduced demand during peak hours without much effort. In turn, extra money earned off of the PV systems made the case for buying one significantly more compelling.

Nowadays, enough customers are installing on-site solar panels that utilities are finally feeling threatened by the reduction in revenues. Pushing back against the rising tide of renewables, utilities argue for less generous compensation and increased connection fees saying that ratepayers with solar systems are renting less electricity from the utility and thus not paying their fair share for overall maintenance. Whether or not utilities can win their legislative battles remains to be seen but if hard costs of solar systems keep falling at double digit rates, then the war will be won by distributed generation.

In the search for alternatives to costly and contentious integration with the power grid, battery systems and minigrids are prime candidates.

Battery systems make it possible to store excess energy during peak PV generation times for usage during the night, meaning lower electricity bills without worrying about net metering rates changing. According to Bloomberg, the U.S. has about 580 MW of energy storage installed now, up from 80 megawatts in 2008, with utilities accounting for 85% of total capacity installed. The boom in battery installations may have only just begun as costs are set to fall significantly as mass production brings further economies of scale. Of course, batteries have their own set of novel legal questions.

Mini-grids or “micro grids” or “isolated grids”, are a set of electricity generators and energy storage systems connected through a distribution network serving a localized group of customers. The future of mini-grids will depend on companies’ ability to sell systems that have traditionally had prohibitively large upfront costs making financing innovations critical to mass market appeal. Unlike battery systems which tend to be more popular in countries will large amounts of capital flowing around, micro-grids do well in developing countries like India where grid expansions fall behind demand and access is often unreliable where it does exist.

Energy storage technologies may save U.K. consumers as much as 2.4 billion pounds ($3.35 billion) a year by 2030, according to a new report funded by three utilities: EON AG, SSE Plc and Scottish Power Ltd. The utilities claim that energy storage would curb the need for grid upgrades and boost use of renewable energy technologies. The paper was written by the Carbon Trust, an organization that helps companies reduce their greenhouse gas emissions.

“Energy storage has long been seen as a panacea for the low carbon energy sector in the U.K., offering a suite of services to balance the system, make electricity networks more efficient and help the U.K. to meet its carbon targets at the lowest cost,” said Andrew Lever, director of innovation at the Carbon Trust.