By Janice Lin
Our electric power system requires a constant balance of supply and demand. In the past, we’ve traditionally overbuilt supply to maintain electric system reliability: ensuring that at any given time, there is enough power supply available to accommodate peak annual demand. The net result is that we have trillions of dollars of infrastructure that isn’t used very often, and greenhouse gas emissions from power plants that aren’t run very efficiently.
Energy storage, therefore, is vital to our electric power system. It is a solution to fixing an aging power grid, a critical tool in increasing the spread of renewable energy, and a bridge between the needs of utilities and customers. Energy storage can be installed at many points in the grid. In fact, there are already tens of thousands of grid-connected storage systems installed at facilities throughout the world. But what is energy storage, and how can it be put to use, today, in facilities across the country?
Grid-connected energy storage is not a new concept. Currently, there are more than 1,000 energy storage systems—equivalent to 150,000 megawatts—installed worldwide. Energy storage can refer to a wide range of technologies and approaches to manage power. There are a number of technologies relevant to commercial and industrial facilities, which can operate as standalone systems or in tandem with a solar photovoltaic (PV) installation:
- Solid-State Batteries: Batteries are often paired with an intelligent software system that can charge and discharge them based on a facility’s energy usage, weather patterns, and historical use patterns.
- Flow Batteries: This is a type of rechargeable battery where energy is stored directly in the electrolyte solution; benefits typically include longer cycle life and fast response times.
- Flywheels: These systems store electricity in the form of kinetic energy. If power fluctuates or goes down, the rotor will continue to spin, and the kinetic energy can be converted into electricity. Flywheels are useful for power quality and reliability.
- Thermal Storage: Thermal technologies enable temporary energy reserves in the form of heat or cold. Ice storage, for example, works by making ice during off-peak hours when rates are low. When demand increases and rates go up, the ice system begins operating, and the stored ice provides cooling in place of the air conditioning system.
Depending on factors such as location, utility rates and electrical load, energy storage can be an ideal solution for facilities to lower energy bills, boost resiliency, and improve environmental impact. The cost of energy storage systems is dropping, while the number of installed customer-sited energy storage systems is increasing. According to GTM Research, there was a 142% increase in installed megawatt hours (Mwh) from Q1 2015 to Q1 2016 in the customer-sited sector. The research firm also expects nearly 50% of all deployments to be customer-sited by 2021. Here is a closer look at the benefits these resources can offer:
Environmental Benefits. Energy storage has many environmental benefits that can make it a valuable tool for meeting sustainability goals. By improving the overall efficiency of the power grid, storage accelerates the broader adoption of renewable energy. On a more local level, an energy storage system has no emissions, so it can be sited at a facility with no immediate environmental or air quality impacts. And if paired with solar PV, the combined system is eligible for federal investment tax credits.
Demand Charge Reduction. Depending on location, many commercial and industrial facilities are subject to demand charges on their energy bills. These charges are based on the 15 minute period in which demand for energy is highest throughout the day and, in some cases, can account for 50% of the total energy bill. While energy efficiency or solar PV can reduce total electricity consumption, these tools do not always coincide with a building’s peak usage. Energy storage systems, especially those paired with intelligent software, can track a facility’s load and reduce demand charges by dispatching battery power during periods of peak demand, effectively “flattening” the load.
Demand Response Programs. For commercial and industrial facilities demand response traditionally involves ratcheting down usage at times of peak demand. Energy storage can enable participation in demand response markets without impacting on-site energy use or operations. By responding to utility price signals, storage systems can increase financial return from participating in demand response programs, while also benefiting the grid overall.
Maximizing Time-of-Use Rates. Energy storage systems can shift consumption of electricity from expensive periods of high demand to periods of lower cost electricity during low demand. This reduces the risk of lowering the value of on-site solar if tariff structures change over time, and peak demand periods shift to the evening when the sun isn’t shining. This also allows facilities to make the most of time-of-use pricing and reduce tariff structure change risk to electricity cost.
Emergency Backup. Planning for emergency backup power is an essential part of a resilience plan. Historically, commercial and industrial facilities have invested in local emergency backup infrastructure. With advanced storage solutions, there may be opportunities to upgrade this infrastructure to provide beyond emergency backup. By using this infrastructure on a daily basis for demand charge reduction, its reliability in the event of an outage can be increased as compared to a standalone battery and diesel generator that is only used during an outage.
Case Study: Walmart Solar PV, Storage
Walmart recently installed energy storage at eight retail sites across California. These stores are pairing solar PV systems with battery storage. The retailer is working with SolarCity, a full-service solar energy provider, on the solar-plus-storage systems to provide both peak load reduction and emergency backup power.
In the event of a power outage, Walmart’s critical load backup system is programmed to initiate a series of events to prevent unintentional islanding and to coordinate with the existing building management system that is installed across several of the retailer’s locations. The scale of these back-up power systems goes beyond traditional solutions and is a significant operational advantage to Walmart. These systems are the first of their kind in providing backup power at this scale while also reducing demand charges, according to the U.S. DOE Global Energy Storage Database.
Energy storage is a proven group of technologies that has been in existence for decades. With significant technological progress in recent years, there is a range of reliable storage options and a host of companies delivering grid-connected storage to the marketplace.
Lin is director and founder of the California Energy Storage Alliance and founder and chair of the Energy Storage North America conference. She has more than two decades of experience in clean energy strategy. She is also founder and managing partner of Strategen Consulting (www.strategen.com), a firm that works with larger energy users, utilities, governments, technology providers, and project developers to evaluate and implement clean energy technologies.
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