Green energy is a popular topic right now, with many countries signing on to the Paris Climate Accord and planning to move away from fossil fuels toward renewable energy.

While most countries are working toward establishing solar and wind power farms, some countries like Canada are looking toward the creation of compressed air storage plants for power storage and generation.

How can compressed air change the way countries use and store green energy?

Compressed Air as Energy Storage

Compressing air in porous caves can serve as a backup form of power that can be tapped when the demand for power is high. Essentially, the compressed air is stored in caves of porous basalt rock when power demand is low. When more power is needed, the air is heated and piped through turbines to generate power.

This is a great way for countries that already rely on wind power to hedge their bets, so to speak—to ensure that there is a sufficient supply of power even if the wind doesn’t blow as much as they would like.

But a problem with this type of energy storage is that it relies on natural gas to heat the air. As of 2016, natural gas use made up more than one third of the USenergy industry, and while it is more efficient than coal power, it is still a non-renewable resource.

A Step Away From Natural Gas

The biggest difference between traditional compressed air storage plants and the new 7 MWh plant approved to be built in Goderich, Ontario, is the way the air is heated before being piped through the turbines. As mentioned, standard plants rely on natural gas to heat the air used to generate power. The new Goderich plant, on the other hand, uses a heat exchange system.

This heat exchange system stores the heat that is generated when the air is initially stored. When the air needs to be heated to generate power, that heat is simply released, making this an emission-free form of energy storage.

This is a step away from the traditional energy storage markets. Lithium-ion batteries like the ones in the Tesla Home battery system currently hold the majority of the market. Most of these batteries, though, are designed for small, single-home applications. Compressed air storage, on the other hand, can generate power for entire communities or power grids when the need arises.

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To date, distributed-scale ESSs have focused on providing storage benefits to residential or commercial and industrial (C&I) host facilities, including resilient backup power and energy demand charge savings. Companies such as Green Charge Networks, Stem, and Sunverge are Leading Integrators of Distributed-Scale ESSs.

However, stakeholders in the stationary energy storage market also recognize that these ESS installations can deliver grid benefits to regional transmission organizations and independent system operators, as well as local distribution system utilities.

“Leaders in the distributed-scale ESS sector have built on innovative software platform capabilities to focus on playing multiple roles across the delivery value chain,” says William Tokash, Senior Research Analyst with Navigant Research. “As a result, they can drive down costs, enable financing innovation, and establish customer access advantages relative to their peers.”

Grid benefits from distributed-scale ESSs are driving the development of software platforms that can integrate distributed generation and building controls along with storage to reduce demand charge. These software platforms can also serve as virtual power plants (VPPs) capable of analyzing, controlling, and optimizing a portfolio of these ESSs.

As power market rules mature, according to the report, these types of VPPs are expected to emerge as a necessary integration solution for distributed energy resources.

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Work begins this month on solar-plus-storage projects in North Carolina that will deploy a total of 12MWh energy storage, by developer Cypress Creek Renewables and turnkey solar and storage provider United Renewable Energy.

The pair is working with local electric cooperative, Brunswick Electric Membership Corporation (EMC) on the projects. There are 12 in total and construction begins this month, with completion expected before October of this year, Cypress Creek Renewables said.

The electric cooperative will be the off-taker for energy and services from the projects, signing power purchase agreements (PPAs) that were put together by United Renewable Energy.

“These projects provide low-cost solar energy to our members, and compound the value by delivering it exactly when we need it. This partnership will provide significant value to our members for years to come,” Brunswick EMC CEO Don Hughes said.

The 12 projects were acquired by Cypress Creek, which also executed project development, financing and now construction. The company has 5GW of solar PV deployed or in the process of deployment.

The batteries – for which the technology to be used was not specified by the partners in their announcement – will charge cheaply from the solar panels during the day’s off-peak periods. The PV panels will continue feeding directly into the grid once the batteries are fully charged, while during subsequent peak load times, a combination of solar and batteries will be used to reduce the cooperative’s peak power demand.

Cypress Creek and United said they look ahead to executing more solar-plus-storage, or “standalone storage projects”. Cypress Creek in particular said that in the short term, solar-plus-storage was of most interest, drawing on its track record in developing, financing and constructing utility-scale PV.

“Energy storage is a key component for solar. We see energy storage as inevitable. It makes solar 24/7 and permits us to be better partners to everyone in the energy food chain. Cypress Creek Renewables began building out our storage team in 2016. These efforts are aligned with our goal to create a generation profile that more accurately matches the needs of our utility partners and retail customers,” Cypress Creek chairman Ben Van de Bunt said.

“Energy storage allows Cypress Creek Renewables to provide ancillary services to utilities to help them with reliability concerns and to allow them to defer investment in certain types of grid updates.”  

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UK energy: ‘inefficient and carbon intensive’

Global research institute McKinsey & Company has analyzed current energy storage prices and concluded that commercial customers are already feeling the economic benefits of cheaper batteries and recent price falls in lithium-ion technology.

With battery-pack costs now down to less than $230/kWh – compared to around $1,000/kWh as recently as 2010 – storage uptake is on the rise across Europe, Asia and the U.S. This growth is being facilitated by a greater uptick in electric vehicle (EV) adoption, with major players now scaling-up their lithium-ion manufacturing capacity in order to meet demand.

The immediate effect of this has been a downward pressure on prices, and storage has now begun to play a more central role in energy markets, the McKinsey report said, moving from niche uses such as grid balancing to becoming a viable alternative to conventional power generators, and a stable support act for renewable energy.

Furthermore, as more and more PV markets begin to trim and pare back their solar incentives, consumers – particularly commercial-scale PV owners – are exploring with greater gusto the idea of solar+storage to allow them to consume power on demand and export excess electricity to the grid.

And the key driver behind this new trend is price. McKinsey believes that in a matter of years households and business will soon be able to pair solar+storage with a small electrical generator and defect fully from grids.

Aside from giving customers more energy independence, the impact of cheaper storage costs could be profound for utilities, the report found.

Challenges of cost

Cheap battery storage will pose an increasing challenge for big utilities behind-the-meter, whereas those that operate in-front-of-the-meter (such as large-scale installation used by utilities for a variety of on-grid applications) will see opportunities for flexible deployment and cost reduction increase, said the report.

“Cheap(er) storage will be even more disruptive to ‘business as usual’ because different combinations of storage and solar will likely be able to arbitrage any variable rate design that utilities create,” the report adds, pointing to how net metering and FITs have served as powerful incentives to install solar panels over the past few years.

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The Maryland Department of Transportation (“MDOT”) has issued a request for proposals (“RFP”) to create a Master Services Agreement (“MSA”) to select contracts to design, construct, finance, and operate renewable energy facilities and energy storage projects at MDOT locations throughout the State of Maryland.  The terms of the MSA will be five years, with an optional two year extension.

The scope of the RFP encompasses solar, geothermal and microhydropower renewable energy systems. In addition to traditional renewable energy facilities, bidders may also propose energy storage systems and microgrid development. Bidders are encouraged to find cost-effective project financing, and the contractor will be responsible for applying for and obtaining incentives offered by the State of Maryland.  Proposals are to be submitted in two parts:  Part I should include the technical aspects of the project, and Part II should contain the pricing information required by the RFP.  

Although the RFP places few limits on the types of projects to be considered, MDOT does include the following parameters:

• Responses should include a management approach to facility implementation, a plan for executing the project to meet the scheduled operational dates, and a plan for operating and maintaining the facility for the duration of the entire term of the MSA.

• While the RFP does not specify a maximum project capacity, each project “must not produce more power than [MDOT] can use or net-meter in any given location.”

• Bidders must be able to demonstrate compliance with MDOT’s “Offeror Minimum Qualifications,” which include at least five years experience and capability to design, build, commission, finance, operate, and maintain a grid-connected renewable energy system.

• Contractors selected shall control and coordinate with subcontractors and third parties, including other state and local agencies and the public.

• Responses should identify key risk areas of the project and address how they will be managed.

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