Keys to Unlock Energy Storage for Micro-grids and Utility Grids

, senior energy analyst, Climate & Energy Program | October 6, 2015, 3:36 pm EDT
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New energy storage technologies can make electric grids better as batteries become part of the electricity supply. Huge markets for storage and self-supporting micro-grids are coming, and not because of our renewable energy needs. One of the largest U.S. power plant owners, NextEra, recently predicted that storage may be used for all new peaking power plants within a decade!

But these great advances are delayed by the absence of industry-recognized safety and performance standards. The Union of Concerned Scientists sees lessons learned and progress in many areas.

Lithium-ion batteries for advanced energy storage.

Lithium-ion batteries for advanced energy storage. Photo: Argonne National Laboratory/Flickr.

Freedom from outages, eventually from fossil fuel

Batteries on the grid can reduce outages, reduce the need for transmission construction, lower pollution from fossil fuels, and eventually permit a complete reliance on wind and solar. The potential for battery-based micro-grids to shield communities from the disruption of storm-induced  total loss of electric power means the stakes for society are very high. In my daughters’ lifetime, the use of large-scale storage along with renewable energy provides a path to complete freedom from fossil fuels and their increased contribution to climate change.

Unlocking storage potential

Storage can provide grid-enhancing services that are not simple commodities and have not been standardized. To realize the potential for batteries and other smart grid technologies, the electric power industry and technology manufacturers share a need and opportunity to come together on performance standards. Right now, energy storage and battery deployments are exotic, and most installations require extended technical deliberations and debates over value. I described these challenges in a recent article. These delays will be reduced by familiarity, and agreement on battery performance metrics.

We successfully use batteries everyday, where the need is well understood, highly valued, and manufacturers have lots of experience. All cars rely on batteries. Most car batteries are old-fashioned but even so, they allow the car’s electronics to work. We are talking now about batteries on the electric grid playing the role that batteries play on hybrid cars, and eventually, all-electric cars.

Powering your house not same as powering your car

Because the role of a battery on the electric grid, or even in your home, is more complicated than on a car, there are no standard packages ready to “plug-and-play” despite the marketing buzz.  How big the battery should be depends on what it needs to do. Homes are not all the same, and we don’t expect the battery in the basement to decide if we can use the computer or the radio while we cook dinner. But on a car, there are only so many appliances and a defined ability to propel the car.

Making a home run on solar-plus-storage, or a municipal micro-grid, means either managing the use of electricity when the regional grid is out, or making a very large investment in batteries and solar to serve during blackouts. Each home or micro-grid wanting to run on batteries needs to wire the electric circuits that will be used when the grid is down in proportion to the size of the battery that is connected.  With cars, the analogy would be the idea that bringing one electric car into the garage won’t make all the cars run on batteries.

On the electric utility grid, battery storage comes in 40-foot long shipping containers, and take as much room as an entire house or office building. Buyers and sellers for this kind of utility-scale storage need agreement on classifications and requirements to fill utility industry needs beyond simple energy commodities of megawatts and megawatt-hours.

Grid storage is in the money

The first commercial energy storage projects have been built for fast, short response to imbalances in utility supply and demand. This “frequency regulation” need has long been met by comparatively slow adjustments to fossil-fuel plants, with a cost in fuel and efficiency. The market presently has been defined by the grid operator in the mid-Atlantic, PJM, which made changes recognizing the added value of quick and precise adjustments in supply. But all the excitement for this is in PJM, because their calculation of the value has not been repeated by other grid operators. So the boom today in storage is limited to 1% of the needs of one grid operator.

Where are we headed?

The breakthrough storage application is to meet peak demand. Current technology is a gas-fired plant that sits idle more than 80% of the year. The high cost of building gas plants and the gas pipelines to make them run is only becoming clear now with changing weather. The failings of our fleet of gas turbines to respond to sudden needs further undermines the trust that gas is reliable.

Storage-based peak-supply is beginning to appear, but again the performance standards (how to specify number of hours of energy supply and re-charging for the storage) are not widely agreed.

The interests of vendors and utility system owners converge on the need for understanding which codes and standards apply before and after the installation of energy storage systems.

Simplifying the complexity

The complexity associated with batteries the size of buildings requires the adoption of new, uniform standards that address the issues that arise with new technologies previously unknown to potential buyers, building inspectors and financial backers.

As confirmed in conversations with the energy storage associations, at conferences, and foretold in the DOE 2014 Energy Storage Safety Strategic Plan, obstacles remain for building inspectors, investors, lenders, insurers that are unable to rely on benchmarks, published guidelines or certifications.

The potential for new energy storage is huge, but the scale of deployments will be shaped by the pace of learning in the market, hastened by adoption of standards and the willingness to think about the possibilities.

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  • Mike Jacobs

    Tom- Thank you for keeping up on this topic and sharing here. You are highlighting both the rapid advances in thinking on storage, and some of the clumsy treatment we see in the rules established for the power grid and asset owners. I like to say there are rules of physics which we can’t change, and rules of man that we can change.
    I am sure that we will learn to use storage to capture more functions than we see in most analyses.
    My sense is that the frontier will be the ease of using storage, regardless of who is the owner, and what other equipment, such as you mention, is adopted in decentralized manner. It should be exciting times. Thanks again.

  • Tom Collins

    Great analysis, but the focus on grid storage is somewhat misleading. A recent publication from RMI demonstrates that the maximum value of storage can be gained through distributed storage sited at the end-consumer, with software “stacking” the functions to meet grid-level demand. Of course grid-scale allows economies of scale, but it is limited in the number of functions it can provide.

    Secondly, a number advanced residential storage systems include demand management functionality – a wall plug interface which can be turned off wirelessly in order to focus on whatever loads are most needed.

    Finally, plug-and-play is absolutely an increasing trend in the design of systems. I wouldn’t agree that simply mounting two or three boxes on a wall is any different than one box, provided the system is AC coupled, “plug and play” is an accurate descriptor.

    Feel free to check out my own recent article explaining these advances in distributed storage: