The electric industry is going through a period where long prevailing planning and operating assumptions are being upended. Significant, multi-faceted changes in energy supply and demand technology are compelling electric utilities to fundamentally rethink their legacy business models and develop profoundly different visions of their role in the energy market.With expected technological innovation, storage will grow in importance, making it imperative for planners to consider storage for energy, capacity, and ancillary service needs in all parts of the industry value chain.

Join Siemens in an exclusive 4 part mini- series with Energy Collective as we decipher the energy storage value proposition. For a full download of  our whitepaper on the energy storage value proposition, please visit our website.

Introduction

While energy storage has grown rapidly over the past couple of years and several hundred MWs of projects are under development, the value to investors of energy storage remains somewhat nebulous. This series identifies leading energy storage technologies, defines key applications, reviews current leading battery projects, and estimates investor returns for differing applications and markets. Further, this series also discusses the key factors driving storage economics and investor returns.

Today, in the right application and market, battery storage can provide attractive returns. Clearly, there are other applications where the economics today do not meet a minimum threshold. The storage economic proposition will improve in all applications as capital costs fall, which they are expected to do. By its very nature, storage offers multiple value streams. A rational investor would take advantage of all possible value streams, so long as each value stream in practice can be realized and there is no “double counting” of benefits.

Storage End Uses and Value Streams

As mentioned briefly, storage applications can range from very short duration requirements like frequency response and regulation, operating and planning reserves, to longer term needs of energy management (e.g., to store energy from renewable resources generated in off peak periods an consume it during on-peak periods). The graph below indicates the rated power and discharge time for each key storage technology available to meet the system frequency response and regulation, operating and ramping, and energy management needs. As shown, Li-Ion batteries are quite versatile in terms of the range of applications they capture. For example, such batteries can respond quickly (seconds) to cover frequency response and regulation needs with small storage sizes and at the same time cover longer duration storage needs where speed of response is less critical. Flywheels, on the other hand, can provide an even quicker speed of response and hence are ideal for frequency response applications but the storage duration or capability is much smaller.

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BEIJING, Oct 12 (Reuters) – China aims to boost its large-scale energy storage capacity over the next decade, the government’s central planner said, in a major push to solve the problem of stranded power in the west of the country as Beijing promotes the use of more renewable power.

While China has led the globe in pushing for greater reliance on wind and solar power in recent years, getting clean energy from western regions to urban users in the world’s top energy consumer has been a major headache.

China generated a total of 5.9 trillion kilowatt hours (kWh) of power in 2016, of which 25.6 percent came from hydro, wind, nuclear and solar power stations.

Storage technology like batteries can help preserve renewable power when demand is low and save it for distribution when consumption picks up. Sufficient storage would prevent power generation being curtailed due to surplus supplies.

A key part of the plan is to issue subsidies to energy storage companies to spur the construction of new power-saving facilities, according to a statement issued by the National Development and Reform Commission (NDRC) on Wednesday. Details of the subsidy were not disclosed.

The government will also launch some pilot projects to test advances in energy storage technology, such as pumped hydro storage, compressed air energy storage, superconducting magnetic energy storage and bulk storage with batteries using substances like lead-acid lithium-ion, the statement said.

Those programmes are expected to be completed by the end of 2020, with the aim of putting the projects into large-scale production five years after that, it said.

“The development of energy storage industry will offer significant support to China’s supply-side reform and the transformation of the energy structure,” the NDRC said.

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Elon Musk has gotten a lot of attention for his proposed efforts to rebuild Puerto Rico’s electric grid, which could prove how cheap and valuable solar and energy storage could be in the decades ahead. Musk’s plan isn’t public yet, but it would likely mean bringing Powerpacks to the island to help deal with outages that still affect 90% of consumers. And this may be an instance where Tesla (NASDAQ: TSLA) could build a solution faster than most utilities. 

But Tesla isn’t the only company eyeing solutions in Puerto Rico. Sonnen has said it will build microgrids on the island as well. This is potentially the first big test for solar plus storage as a fast solution to island infrastructure challenges. 

With a little help from energy storage, renewable energy could be just what Puerto Rico needs. Image source: Getty Images.

How solar and energy storage could help Puerto Rico

There are two main problems facing Puerto Rico’s energy infrastructure. First, when centralized power stations go offline during a hurricane they leave thousands, or millions, of people without power. Second, downed power lines can make an operational power plant meaningless because they aren’t connected to the grid. It’s this second problem that’s the main issue for Puerto Rico today and in the long term. 

A grid with more solar and energy storage could reduce both problems in Puerto Rico. Solar arrays all over the island would spread out energy generation across the island, reducing the risk that one plant will go down. And to generate enough power for the entire island, about 9.1 gigawatts of solar would need to be installed, requiring about 72,800 acres, or just 3.3% of the country’s land. Wind turbines, particularly offshore, could reduce that land usage as well. Puerto Rico could easily generate 100% of its own electricity, assuming it had enough energy storage. 

From a distribution standpoint, having a de-centralized grid would help the rebuilding process. It wouldn’t stop blackouts completely, but if transmission redundancies are built into a grid based on solar and energy storage it could make blackouts less likely. 

It’s not clear how much energy storage would be needed to keep Puerto Rico’s grid operations — since it’s never been done — but 55,000 megawatt-hours or about 250,000 Tesla Powerpacks would be a full day’s storage. That’s 426 times the size of the company’s Australia project, so it’s a lot, but not outside the realm of possibility. 

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A new redox flow battery demonstration project was launched in Belfast, Northern Ireland, this week.

The joint UK-Ireland research programme will assess the best electrochemical properties of a redox flow system for the Irish grid, develop a pilot model and identify a path for a >125kW “scalable unit”.

The ImpRESS project was launched at an International Energy Research Centre (IERC) workshop at Queen’s University, Belfast.

“Ireland has fluctuating energy dynamics, and as a consequence of being an island, the scale of the power system is such that it provides an excellent test-bed for the evaluation of energy storage solutions,” said Professor Tony Day, executive director of the IERC.

“The ImpRESS project focuses on all-island electrical energy generation, consumption and storage to meet current requirements, and examines technologies for future electrical networks and grids. It will deliver engineering recommendations capable of influencing future grid-code standards and electrical power system policy development,” said Day.

Ireland is adding more renewables to its grid as it struggles to meet its 2020 renewable energy target of 20%.

“The ImpRESS project provides new commercial opportunities for the businesses involved, including energy trading, providing access to new ancillary services for I-SEM, single energy market pricing and a competitive advantage for faster response services,” said Dr. Matthew Kennedy, head of strategy and business with the IERC.

The project involves collaboration with Chinese vanadium redox flow battery manufacturer Rongke Power, which is in the process of developing and then building a vast 200MW / 800MWh flow battery installation in China’s Dalian peninsula. A 125kW test site with supply from multiple renewable energy sources will be developed at the Belfast site.

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Hawaiian Electric Co. (HECO) has big plans for energy storage, but is wary of moving too quickly. The utility is looking for better storage technology and economics before moving too much on deployment.

The island state is often considered a test case or laboratory for the integration of renewable energy. With a 100% renewable portfolio standard in Hawaii and a 2045 target date, the state’s main utility is quite focused on what its generation mix is going to be and how it is going to get there.

The utility is expecting 2,700 MW of energy storage on Oahu by 2030, said Colton Ching, senior vice president for planning and technology at HECO. That includes both customer sited, behind-the-meter batteries and utility-scale energy storage installations, either owned by the utility or competitively bid to a third party. But HECO has been slow to embrace energy storage, despite the rapid influx of solar power in the state.

Hawaii has the highest solar penetration of any state. There are already 80,000 rooftops with solar panels and HECO expects that number to double by 2030. But so far, the utility has only 3 MW of utility-scale storage projects, and all three of those were pilot projects.

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Reality is, that most people who want solar power on their home actually want energy storage as well. We want energy storage because if the grid goes down, we want our house to run smoothly – day or not, sunny or cloudy. Additionally, many of us hold onto the dream of disconnecting from The Man.

At SolarPower International 2017 it was clear that the solar+energy storage hardware market – SolarEdge, Sonnen, BYD, Kehua, Outback, Hauwei, Schneider and others – are almost ready (or in terms of Sonnen/SolarEdge/Schneider – ready today) to serve the home energy demands of the broader population.

First, a small bit of education. The large majority of solar power installations installed today need special wiring/extra hardware in order to keep pumping electricity into the house when the grid goes down – this is due to ‘anti-islanding‘ laws. It’s probable that your solar system will also shut down when the grid goes down. This will change.

Outback and Schneider are the old-time players in the off-grid solar market that I’m most familiar with. The Outback FlexPower is a respected package of hardware (first image on the left below). Personally, my favorite installation was of a Schneider system I developed for a close friend at their off-grid cabin in the western hills of the Rocky Mountains (four images to the right below – including their pool). These systems offer all of the wonders of modern life – including the aforementioned pool.

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A new study by Navigant Research indicates annual installations of utility-scale power storage for transmission and distribution deferral is expected to grow rapidly over the next decade.

Specifically, installations are expected to grow from 331.7 MW this year to 14,324.8 MW in 2026.

“The major advantage energy storage has compared to conventional T&D upgrades results from the flexibility related to how storage systems can be deployed and the variety of services they can provide,” said Alex Eller, research analyst with Navigant Research. “Unlike most grid infrastructure systems, ESSs can be deployed in small, modular increments as needed to serve growing demand with limited risk of oversizing or stranding assets.”

Navigant predicts utility companies will turn to these types of deployments to avoid the typical challenges associated with transmission, including community concerns, timelines and future load growth uncertainty. 

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California is on the cusp of a dramatic jump in deploying cost-saving, climate-solving technology in the form of customer-sited energy storage, but the industry needs help cutting red tape that keeps the cost of the technology unnecessarily high for customers.

Energy storage helps electricity customers and the electric grid in many ways: It reduces monthly bills; delivers grid services such as peak reduction, emergency backup and smoothing out the increasing share of renewable energy production; and it enables California to keep the lights on while reaching our clean energy goals.

The state has recently passed a number of policies that could deploy thousands of energy storage projects in the next several years, such as the Self-Generation Incentive Program, storage and renewable energy procurement targets for each of the investor-owned utilities (IOUs), and the AB 2868 authority given to IOUs to accelerate widespread deployment of energy storage.   

But most California cities and counties — less experienced with the new technology and the relevant codes and standards — issue permits for energy storage projects in inconsistent processes with a broad range of permit fees.

Developers spend a great deal of time with repeated travel to deliver materials in person, to submit “wet stamps” on minor revisions of plans, and to complete reviews by unrelated agencies — all of which drive up installation costs for the customer. 

Moreover, local jurisdictions are largely unaware that the storage industry and fire protection professionals have collaborated on a comprehensive forthcoming 2018 standard for energy storage fire safety, the NFPA 855, as well as a wealth of product safety standards.

A new bill to clarify good permitting practices and to make permits and related fees more consistent was signed by Governor Jerry Brown September 30. 

The fact that the bill, AB 546, passed unanimously with bipartisan support shows policymakers’ clear intent to give customers access to this valuable new technology and to arm cities and counties with clear information on how best to permit energy storage projects.

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