Energy storage goes patriotic

KEMA and industry group opt for centrism

Phil Carson | May 02, 2012


Today we look at fresh industry arguments about the implementation of energy storage and the strategic use of language to gain a place at the table. While the linguistic strategy is admirable, the storage industry's recommendations may sound familiar to the various camps in this discussion.

The myriad roles that energy storage can—or should, in some minds—play in the nation's grid is being closely debated, particularly by regulators and diverse stakeholders in California.

Our most recent pieces on the topic include "Bulk Energy Storage: A Modest Proposal," "Energy Storage and the Barriers to Adoption" and "California's Energy Storage Policies."

The first piece cited the Coalition to Advance Renewable Energy Through Bulk Storage (CAREBS), an industry group that has proposed ways to monetize and value bulk storage. In the second piece, we looked at nine hurdles to adoption cited by California regulators. The third piece attempted to capture the competing interests involved in energy storage policy and the approach that California has taken to a truly complicated subject.

In each case, proponents, opponents and those utilities exploring storage applications for data-driven decisions in the matter all have some basis for their argument. Proponents say that if you don't actually implement storage, you'll never have real-world data upon which to base decisions around deployment and cost recovery. Some opponents say that the market should dictate everything: without a clear-cut case in favor of deployment, why burden the grid and the ratepayer? Utilities would prefer to conduct demonstration projects for promising applications and evaluate the data before moving forward.

Comes now the National Alliance for Advanced Technology Batteries, assisted by KEMA, whose new paper—"Distributed Energy Storage: Serving National Interests"—articulates a fresh approach in an election year whose outcome is uncertain. The trio of reasons why NAATBatt wants to advance "wide-scale distributed energy storage" in the United States?

  • Enhance national security and the economy
  •  Develop and secure national energy supplies
  • Support national energy independence


This is a time-honored use of language, particularly as NAATBatt's argument cannot wait for the outcome of the presidential election this fall. (The election outcome, of course, may well require a fresh argument tailored to the victor's energy policy, should any such policy actually emerge in a country scarred by a decade of war and a half-decade of recession in which pure demagoguery has replaced all rational discourse.) The paper was presented to current Secretary of Energy Steven Chu in Washington, D.C. in mid-April. In terms of odds you'd go with the incumbent, initially, but it could easily be presented to the new Republican nominee. 

Would any candidate come out against motherhood and apple pie? Or "national," "secure" "energy independence"? Of course not. Bingo! An argument thus has a greater likelihood  of a hearing. That's always the first step: get the conversation—your conversation—going. Then, the substance.

The NATTBatt membership includes "industrial companies, electric utilities and advanced materials suppliers." The mission is to encourage "the development of a combined, multi-gigawatt market for advanced automotive batteries and distributed stationary batteries" and U.S. leadership in advanced battery technology for the "long-term health of the U.S. economy" and "tens of thousands of future U.S. jobs."  

The argument for distributed energy storage or DES: Four trends—intermittent renewables, the nascent electric vehicle market, advances in power electronics and DC/AC inverters and deployment of smart grid infrastructure—all combine to pose risks to grid reliability, stability and security. I quote the executive summary:

"By employing the nation's innovations in advanced battery systems, DES is poised to help address the growing challenges our electric energy infrastructure will face as demand for electricity increases and as the distribution system must manage greater levels of distribution grid-connected and smart grid system-enabled technologies such as EVs and renewable and distributed generation."

Modernizing the grid, in part by using DES, then is "critical to supporting America's prosperity, security and quality of life." There's a tenuous connection there that, properly couched, just might appeal to both sides of the aisle in Congress.

Acknowledging the barriers to deployment, NAATBatt suggests that regulated utilities (i.e., investor-owned utilities) will be the primary owner/operator of such systems. Thus, IOUs need operational experience with them to understand the benefits of deployment. And they need standards and specs to create a uniform basis for comparing experiences. Further, "no clear regulatory procedure exists" for operators to apply for compensation for benefits provided to the system by DES. And the diffuse nature of benefits makes it difficult to monetize the value of DES to the nation.

So NATTBatt recommends a program of demonstration projects to validate DES applications, compensate ratepayers who pay for DES, perhaps through tax credits to utilities, establish a national approach to regulatory reform on DES and, among other things, continue to fund research, development and deployment (a phrase that creates a tidy linkage between a nascent technology and the market).

My take? I can't argue with most of these assertions and we've written on, for instance, AEP Ohio's work with community energy storage (CES) and purported advancements in EV batteries, both of which are covered by NAATBatt's arguments.

(See "Another Step for Distributed Storage" and "EV Range Jump, Price Drop, Possible `Soon'?")

Those arguments essentially require federal action to keep funding demonstration projects begun under the DOE's stimulus program, to expand those demo projects and to coordinate a federal push on state regulatory reform to allow the industry to move forward. Wrapping these arguments in the flag (the NATTBatt logo includes red, white and blues stripes) is an effective approach that can appeal to the current administration's instincts on grid modernization while pushing "national," "secure" and "energy independence" buttons for the contender.

Let's see how it plays.

Phil Carson
Intelligent Utility Daily



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Innovation will happen... unfortunately not in USA

The national power grid hasn't changed much since Edison first screwed it up at the start.  China is leapfrogging USA with huge investments in mass energy storage. Particularly vanadium redox batteries.  In Nevada American Vanadium has a huge battery-grade vanadium mine ready to produce for domestic markets - those markets do not include the power grid.  The immediate future for mass storage is microgrid systems for off-grid power specifically mining projects in remote locations.  Got to start somewhere.  Maybe one day the powers that be at the power companies will see the light but American Vanadium and the rest of us should not hold our breath for that.

Put the cost of energy in perspective

Let's say we have a load growth in our system that adds 1000MW of base load and 2000MW at peak.  And, let's further say we have a renewable energy standard that means we have to meet the new load with a combination of wind, solar, and storage in order to work toward compliance.  If we take a somewhat typically mid-South demand curve, the high peak occurs between 1700 and 1800 hours and the low demand around 0400 to 0500 hours with the curve being roughly sinusoidal.  Let's then look at the typical output of a "windfarm on the plains", which is typically significant from about 2200 hours to maybe 0800 to 0900 hours and the generation curve results in an average capacity factor around 32%.  Further, let's throw in 1000MW of solar PV to mitigate the amount of energy we must store and give it a capacity factor of 17.5%.  The solar PV output will peak at about noon or so and will not have significant output at demand peak so the battery systems will have to be putting out 2000MW at 1700 to 1800 hours--but that is not the driver for battery system size.  The driver is the charge rate.  The overall added new demand over a day's period is 36,000MWh.  The solar PV will knock off 4,000MWh.  The wind generation during its significant contribution time will knock off 7,680MWh leaving 24,320MWh to be stored.  To store that much energy over a 7.68 hour period (24 X .32) means the average charge rate is 3167MW.  (These numbers are working with averages so the actual will be a bit more but the point will be illustrated sufficiently.)  To charge at 3167MW and still provide baseload means we need 4176MW of wind turbine capacity. 

Let's get to dollars of capital cost.  The windfarm(s) will cost roughly $8.3 billion.  The solar PV will cost roughly $4 billion.  The energy storage will cost roughly $3 billion for the first 3167MWh and $14 billion for the remaining 21,000MWh.  The total cost then is $29.3 billion.  If we completely ignore interest, o&m, and other costs and give the system a 20 year life, that amounts to $111.5 per MWh.

If we built 2,000MW of gas turbine combined cycle, the capital costs would be roughly $2 billion.  Giving it an average heat rate of 7,500BTU/KWh due to partload versus full-load operation means we will burn up about $11 billion dollars worth of fuel gas at an average price of $5 per million BTU over a 20 year span.  Add another $1.3 billion for other O&M costs ($5/MWh) and the raw overall cost are $54 per MWh.

The kicker is, the renewables generating facilities will still need fossil backup of 2,000MW capability for times when the wind does not blow enough to recharge the battery systems adequately or even meet baseload power requirements.

So, we should do these renewables to increase our power costs in the name of reducing CO2 emissions.  But the increased power costs will drive many manufacturers to India, China, Vietnam etc. where they are building coal-fired plants at a phenomenal rate thereby more than doubling the CO2 emissions from a combined cycle plant.  What good does it do to eliminate CO2 emissions in the OECD countries only to replace them in the rest of the world?  None, whatsoever.

And, these renewable-at-any-cost shysters are going to wrap renewables and energy storage in the American flag to appeal to our patriotism!  Yes, let's destroy our economy to stop emitting CO2 so China can emit even more CO2 while they gain world domination due to dumping and currency manipulation--that is really patriotic.

I listened to the renewables Siren's song when they initially said renewables were cost effective but the continued demand for government to plow taxpayer money into commercializing technologies that are not ready convinced me to take a closer look.  What I found made me sick that I was so gullible.

Storage R&D

If you strip away the rhetorical embellishments, this proposal might not be too bad with a couple of caveats.  First, funding is limited to perhaps a hundred megawatts.  Second, it encompasses batteries, thermal storage and CAES.  Third, it's phased in with a requirement to improve cost, efficiency and performance in early stages before getting funding for subsequent stages.

However, there should be no blank checks and the money should be directed elsewhere if storage can't be made cheaper and more efficient.

Jack Ellis, Tahoe City, CA