Tuesday, September 29, 2009

How Do You Value Grid Connected Energy Storage?

This is almost a part II to my earlier post, but I was reminded again of the problems we face when it comes to defining, and then valuing, Grid Connected Energy Storage (GCES).

The recent New York Times article, "Companies Race to Develop Utility-Scale Power Storage" pointed up the problems and potential for confusion. "Power storage" technologies listed included the Beacon flywheel, the NGK molton sodium-sulfur battery, the A123 lithim ion battery, and compressed air (again!). Quoting a report by GTM Research, this article made a very insightful distinction between "power oriented" technologies, used mainly to regulate short-term changes to grid frequency, and "energy oriented" storage -- in which energy use is shifted to other times of the day. However, the author could have done a better job applying this distinction and pointing out the difference in cost.

For example, the article discussed the $69 million Beacon project in New York, where they will install, "...hundreds of "flywheels" to store 20 megawatts of electricity, enough to power 200 homes for a day." In reality, the flywheel is designed to store only 15 minutes of power and falls into the "power oriented" category above. Its total energy storage will only be 5 MW hrs, about enough to power 40 homes for a day, although it will never be used for that purpose.

Also, the article reported on the $25 million requested by Southern California Edison for an A123 "32-megawatt-hour battery" - but is it really 32 MW hrs? I pose the question because the system will be designed as an 8 MW battery with 4 hours of storage (32 MW hr), but the application is at a wind farm, where multiple cycling is needed to firm wind - a "power oriented" application. Lithium ion batteries are good for about 500 - 600 complete charge and discharge cycles. If it is used in an "energy oriented" application, shifting wind power at night to the day, then it will only last about 2 years. However, in a "power" application, where the battery is barely discharged, it will last for many thousands of cycles. In fact, this is how it is currently applied. In this case it would be operated like an 8 MW flywheel, with usable energy storage of only about 2 MW hrs.

So how do you value these installations? If we value the flywheel and the li-ion systems by the MW hr, then their cost is $13.8 million and $12.5 million respectively. However, if all we care about is their power capacity, then the cost is $3.45 million and $3.125 per MW. (The NGK battery is the only energy oriented technology mentioned in the article, but no cost information was provided.)

By contrast, a VRB-ESS (vanadium redox flow battery - energy storage system) will provide both energy and power, with nearly unlimited cycles, full or partial, for about the same cost per MW of the flywheel or li-ion battery. However, the VRB-ESS will also include 4 - 8 hours of storage, dropping the cost per MW hr to a fraction of the cost for a "power oriented" system.

For example, a 5 MW system with 6 hours of storage would cost about $18 million, with all costs included - a complete turn-key system. That would provide 30 MW hrs of energy at a cost of about $600 thousand per MW hr. The cost of power is only $3.6 million per MW.

Although not directly relevant to the discussion, it's good to know that the VRB-ESS will last 10 years before needing refurbishment. This consists of replacing the PEM (proton exchange membrane) at a cost of about $3 million. The system is then good for another 10 years!

Bottom-line? - It's important to understand the application, whether energy, power or both, and then determine the cost per energy (MW) and/or the cost for power (MW hr), when evaluating the technology.

Friday, September 18, 2009

What is Grid Connected Energy Storage?

The California Energy Commission recently requested input on what the definition should be for "utility connected energy storage". Here are some of my thoughts:


1. How do you define utility scale energy storage?

I would suggest looking at several common sense issues to get a handle on what is utility scale or grid connected energy storage (GCES).

First, we should define energy storage as "electrical" energy storage. That means electrical energy storage in and electrical storage out. For utility or grid applications, we need to store electrical energy for use when needed; meaning excess electrical energy is shifted to a time when electric energy is scarce. This excludes some types of valuable energy storage, like thermal energy storage, but it clarifies what we are doing.

Thermal storage is a good thing and useful, but it cannot be used to produce electrical power for the grid, so it should be excluded from our consideration. This is not to single out thermal energy, but to illustrate the need to focus on electric energy storage. The distinctive of utility or grid energy storage should be the storage of electricity. Storing electricity energy for use as some other type of useful energy does not provide the grid with the electric energy when needed. It is load only. Electric energy storage should be a two way street, not a one way street.

Logically, this also excludes electric energy generators. Again, this is an example of taking a different type of energy and converting it to electricity. Unless we define GCES as electricity in and electricity out, then a coal plant could be considered as GCES since it stores energy in the form of coal and provides energy as needed. If we do not specify electric in - electric out, then our discussion will be so broad as to be meaningless.

And, if we are careful to define GCES as electric in - electric out, then this will also exclude fuel driven compressed air energy storage systems. Such CAES systems are more clearly understood as highly efficient natural gas generators. Electric energy is used to run compressors. The compressed air is used to run natural gas generators more efficiently. Burning natural gas to produce electricity is not electric energy storage. It may be very desirable in some ways, but it should not be in the same box as other technologies that store electricity. If we include fuel driven technologies, then, again, our discussion becomes meaningless.

The second concept to address is the "storage" issue. The common sense expectation is that we are focused on storing and delivering useful amounts of electrical energy.

For example, there is a difference between delivering energy and providing power quality services. Various devices and technologies can store and deliver short bursts or pulses of power to balance short term variations in power quality. Utilities and energy users install various devices for this purpose. But their use is for power quality, not energy.

Similarly, the CAISO operates a market for frequency regulation that is considered a "capacity" market, as distinguished from their "energy" markets. Some ISO's are developing opportunities for Limited Energy Storage Resources (LESRs) to provide capacity - not energy - services, because they recognize the benefit from the quick response of such technologies. However, these systems are, by definition, limited in their energy and are not valued for their volume but for their capacity. Although valuable, they are not useful for energy delivery. At a minimum, a GCES facility should be able to store and deliver electric energy in hours, not minutes. We refer to the technical parameters used by the California Public Utilities Commission in their definition of advanced energy storage for the Self Generation Incentive Program. (Decision 08-11-044 November 21, 2008, page 12, “Ability to be discharged for at least four hours of its rated capacity to fully capture peak load reductions in most utility service territories (required AES duration of discharge will depend on each customer’s specific load shape, and the duration of its peak demand during peak utility periods).”)

LESRs should be in their own separate category for the valuable power quality benefits they provide to the grid, but they should be excluded from the GCES discussion because they cannot deliver energy in useful quantity.


Any comments?