Posts Tagged ‘energy storage’

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Beacon Power patents idea of flywheels for frequency regulation?

August 31, 2011

Michael Giberson

Can Beacon Power patent the idea of using flywheel technology for frequency regulation? Apparently the answer is yes, at least according to Beacon’s press release.

“Beacon Power invented the idea of using high-energy flywheels to regulate grid frequency, so it’s appropriate that we’ve now been awarded a core patent for the idea,” said Bill Capp, Beacon president and CEO. “The patent gives Beacon exclusive rights to this innovative method of providing an essential grid service, and further strengthens our intellectual property position.”

The patent is U.S. Patent No. 8,008,804, “Frequency Regulation Using Flywheels.”

Beacon has certainly developed a great deal of control  and grid integration technology to enable their flywheels to supply ancillary services in regional power grids. For some background see, for example, this 2010 paper from Beacon that describes flywheel system performance in an 18 month field trial in the ISO New England system. A paper from 2004 presents Beacon’s analysis of the benefits of using flywheels for grid frequency regulation instead of using hydro or fossil-fueled generation.

Still, I don’t see how they can claim to have invented the idea of using flywheels to supply frequency regulation services. Especially given the prior use of flywheel systems to provide grid frequency regulation service, as described in this paper published in 2000 describing a 1996 commercial installation of a flywheel on the Okinawa Electric Power Company transmission grid in Japan.

The 2000 article, which refers to the flywheel system as ROTES  (ROTary Energy Storage system), reports:

This is the world’s first commercial operation of such a large capacity flywheel energy storage system… When the ROTES was disconnected from the 66kV bus, frequency fluctuation of over +/- o.4 Hz often appeared in the line frequency, resulting from sudden load changes as large as 30 MW. When the ROTES was connected, the frequency fluctuation was suppressed within +/- 0.3 Hz, thus meeting the goal of installation. The ROTES has been operating properly for more than two year, showing great promise as a FACTS device which has the capability of releasing or absorbing electric power with a response time as fast as less than 100 ms.

(HT to correspondent/former colleague/occasional reader MH for tipping me off to the press release and useful dialog.)

UPDATE: A commenter from Beacon helpfully provides a link to the patent, http://bit.ly/nMupPp, and notes that the above article was specifically considered by the patent examiner as part of the patent application review.

Posted in Electricity, Energy markets, Technology | Tagged , | 8 Comments »

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EPRI white paper surveys the electrical energy storage field

May 6, 2011

Michael Giberson

The Electric Power Research Institute has just published “Electricity Energy Storage Technology Options: A White Paper Primer on Applications, Costs and Benefits.”

I haven’t read the report – including appendices it is 170 pages long – but the news release claims: “Study results indicate that the total U.S. energy storage market could be as large as 14 gigawatts of capacity if energy storage systems could be installed for about $700–$750/kW-h and the energy storage owners and operators could monetize the estimated benefits.”

ABSTRACT: A confluence of industry drivers—including increased deployment of renewable generation, the high capital cost of managing grid peak demands, and large capital investments in grid infrastructure for reliability—is creating new interest in electric energy storage systems. New EPRI research offers a current snapshot of the storage landscape and an analytical framework for estimating the benefits of applications and life-cycle costs of energy storage systems.

This paper describes in detail 10 key applications which can support the entire chain of the electrical system, from generation and system-level applications through T&D system applications to end-user applications. Included are: wholesale energy services, renewables integration, large and small storage and transportable systems for T&D grid support, ESCO aggregated systems, commercial and industrial power quality and reliability, commercial and industrial energy management, home energy management, and home back-up storage. Capturing multiple benefits—including transmission and distribution (T&D) deferral, local or system capacity, and frequency regulation—was found to be key for high-value applications and for supporting the business case for energy storage. Applications that achieve the highest revenues do so by aggregating several benefits across multiple categories. An analytic framework is presented to estimate the benefits and life-cycle costs, and help guide and shape the economic treatment of energy storage systems. Because energy storage systems have multi-functional characteristics, which complicates rules for ownership and operation among various stakeholders, policy challenges were identified that need to be resolved to realize the true potential of storage assets.

The current status of energy storage technology options and updated estimated ranges for their total installed costs, performance, and capabilities for key applications is also presented based on technology assessments as well as discussions with vendors and system integrators. Despite the large need for energy storage solutions, very few grid-integrated storage installations are in actual operation in the United States. This landscape is expected to change around 2012, when a host of new storage options supported by U.S. stimulus funding begins to emerge and, in turn, catalyzes a portfolio of new energy storage demonstrations. Such tests in real-world trials will provide needed data and information on the robustness of such systems, including performance and durability, cycle life costs, and risks.

As a key industry stakeholder, electric utilities are positioned to support energy storage applications because they can test, evaluate and deploy applications in different sections of the electricity value and supply chain, and enable the monetization of benefits of the various stakeholders. The high-value markets identified can help focus future demonstration activities to advance the deployment and adoption of energy storage systems.

Posted in Electricity, Energy markets | Tagged | Comments Off

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Commercial, merchant compressed-air energy storage plant under development?

March 29, 2011

Michael Giberson

Wind power RFP processes* are common enough these days, typically driven by renewable energy mandates placed on utilities. A recent wind power RFP announcement out of Santa Fe, New Mexico, is different. A new company, Chamisa Energy, has initiated an RFP seeking wind power to pair up with a planned compressed-air energy storage (CAES) plant to be developed in Swisher County, Texas. Chamisa has partnered with Dresser-Rand and intends to use their SMARTCAES technology, which it claims can “provide a wide array of electrical services: peaking, intermediate, base load, tolling and ancillary services.”

The RFP says that the CAES project may connect to the ERCOT CREZ lines that will be crossing Swisher County, or it may connect to Xcel’s system in the Southwest Power Pool (SPP), or it may connect to both ERCOT and SPP! This last option would put Chamisa in the interesting position of being able to arbitrage some price differences between the two power markets. (It may raise some of the same jurisdictional barriers that Tres Amigas is facing with its proposed three-way power system interconnection, planned for Clovis, New Mexico. ADDED: But a few existing power plants in Texas are dually connected between ERCOT and utilities in the Eastern Interconnection, so the issue appears manageable.)

The relationship between Chamisa’s CAES project and the Tres Amigas interconnection is interesting. Both companies are headquartered in Santa Fe, New Mexico. The proposed projects are about 90 miles apart, one at the eastern edge of New Mexico and the other directly east, in the middle of the Texas panhandle. Chamisa proposes an energy storage project that may link the two regional power systems; Tres Amigas proposes to build a link for three regional power systems but would have an energy storage component, too. Both aim to facilitate the accommodation of intermittent power resources to the grid by providing storage and other grid reliability services.

Not clear that the business of accommodating intermittent power is big enough for both of them, but maybe that is just “not yet big enough.” Many wind projects are under development in the region, and just waiting for a little more clarity on when and where transmission enhancements will be showing up.

* RFP = “request for proposals”, a common process by which one company invites others to offer to become suppliers.

Posted in Electricity, Technology | Tagged , | 7 Comments »

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“Energy Storage in the New York Electricity Markets”

April 2, 2010

Michael Giberson

The New York Independent System Operator has release a report, “Energy Storage in the New York Electricity Markets” (March 2010). The report offers an overview of existing grid-connected energy storage in New York, recent developments, and potential for further changes in the next several years. It is a good basic discussion of energy storage issues as seen from the point of view of the transmission system operator.

What I found most interesting was their discussion of the power market design changes needed to accommodate flywheel and battery-based energy storage systems:

The original NYISO wholesale market was designed when traditional resources, such as pumped storage and fossil fuel generation units, submitted bids for both energy and ancillary services including regulation. In the past few years, new technologies have become available that make energy storage more efficient and economical. This class of devices has an energy capacity limitation that precludes them from taking part in the energy market and thus would not fit into NYISO market model without market design modifications. Consistent with its mission to evolve the markets, the NYISO in collaboration with stakeholders participating in its shared governance process, crafted a market enhancement that will allow Limited Energy Storage Resources to participate in the NYISO Regulation markets.

To provide them access to the market, a new type of Regulation Service provider was defined: a Limited Energy Storage Resource (“LESR”). A LESR is characterized by its ability to provide continuous six-second changes in output coupled with its inability to sustain continuous operation at maximum energy withdrawal or maximum energy injection for an hour. LESRs are limited to providing Regulation Service in the NYISO markets.

Sometimes accommodations made to let new technologies work in the market is pejoratively cast as special treatment or favoritism. The NYISO gets the tone just right: the existing market design was constructed around the then existing set of technologies; new technologies don’t always fit into the existing way of doing things and it is appropriate to change. For example, when the NYISO market was designed all providers of regulation service also were energy market participants and no one worried too much about the way rules for regulation service payments were tied up with energy supply requirements and energy supply payment systems.

While market design changes are an inherent and expected part the system, that doesn’t make them simple or non-controversial. An examination of the development of LESR rules in NYISO might provide an instructive case study of the market design process.

Posted in Electricity, Energy markets | Tagged , , , | 2 Comments »

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Incentives for efficient use of storage in electric power systems

March 29, 2010

Michael Giberson

In the most recent Energy Journal, Ramteem Sioshonsi has an article examining the welfare effects of the incentives to use energy storage in electric power systems. (“Welfare Impacts of Electricity Storage and the Implications of Ownership Structure,” See volume 31:2 here.) He considers the incentives faced by consumers, generators, and merchant energy storage owners (companies lacking consumer or generator affiliates).

His theoretical analysis demonstrates:

[W]elfare-maximizing storage use benefits consumers while reducing producer profits, [and therefore] will result in consumers and producers having vastly different incentives to use storage from one another and from merchant storage owners.  This is because the three different agent types will use storage to maximize their net payoffs. In the case of consumers this would consist of the sum of arbitrage value and consumer surplus change, whereas producers would maximize the sum of generation and arbitrage profits.  Merchant storage operators, on the other hand, will maximize arbitrage profits only.  Because consumer surplus is enhanced by welfare-maximizing storage use, and since consumers that own storage would not consider the impact of storage use on generator profits, they will tend to have an incentive to overuse storage.  Conversely, because storage use reduces producer profits, generators will have an incentive to underuse storage.

A numerical analysis based loosely on ERCOT system characteristics in 2005 provides further elaboration of the model.

Our numerical example showed that for most reasonable storage device efficiencies merchant ownership of storage is welfare-maximizing compared to the alternatives of consumer or generator ownership….  When storage assets can be divided amongst agent types the socially optimal allocation of storage favors merchants, although some consumer ownership of storage can be beneficial since their overuse of storage can compensate for underuse by merchants.

Sioshonsi observes that as the number of storage operators increases, overall use of storage capability approaches the social welfare maximizing outcome.  This is, of course, the familiar effect of competition in markets on welfare.

Reading this paper I couldn’t help but think of the Tres Amigas proposal, which I think would be the first merchant energy storage project of any significant size if built. (Am I overlooking any large grid-connected merchant energy storage projects?)  While this article was far from an analysis of the welfare consequences of building the Tres Amigas project, it does suggest that the project’s storage capability would offer substantial public benefits.

Sioshonsi only considers use of energy storage to buy and sell energy, but grid-connected energy storage can also be used to provide transmission support services (generally called “ancillary services”).  When energy storage gets built as a transmission-system component and factored into regulated transmission rates, regulations tend to prevent that energy storage from being used for energy price arbitrage.  So, “transmission-system” energy storage assets will be underused relative to the public interest.  But markets for ancillary services are incomplete, meaning merchant incentives to supply ancillary services may also be underdeveloped.  Most of the regional, integrated power markets (i.e. RTOs) have substantially improved their ancillary services markets over the past several years, and the way forward here is to continue to improve ancillary services markets.

ASIDE: Sioshonsi also notes that an integrated utility with consumer loads and its own generation assets may inherently favor the socially optimum welfare use of storage assets, “since these entities would be concerned with both producer and consumer surplus.”  However, this expansive claim is just an add-on remark in the conclusion not examined in the body of the paper.  Suffice to say that if the interests of integrated utilities were always aligned with both producer and consumer surplus, we could dispense with both restructuring and regulation and let consumers live in the warm embrace of unregulated, integrated monopoly power companies.

Posted in Electricity, Energy markets | Tagged , | 2 Comments »

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Bloom off the rose

March 1, 2010

Michael Giberson

After eight years in stealth mode, Bloom Energy had a big week in the media last week.  They opened up on 60 Minutes and picked up mentions everywhere from the New York Times to local newspapers to a zillion blogs (us included).  Much of the discussion was a bit over-excited.  At Green Chip Stocks, Chris Nelder noted that environmental blogs seemed particularly agog over the announcement (“The green blogs fell all over themselves repeating the breathless ‘Holy Grail’ speculations in Lesley Stahl’s 60 Minutes report, which was indistinguishable from an in-house marketing puff piece.”).

But a few analysts, Nelder included, managed to run the numbers on the handful of specific claims sprinkled within the public relations blitz.  The exercise has left them less impressed.

Nelder, “Is the Bloom Box Energy’s Holy Grail?“:

Fuel cells aren’t new…. None have achieved real commercial viability yet…. What’s new about the Bloom Box is that it claims to be high efficiency (producing more power with less waste heat than other fuel cells), small, relatively cheap, and able to run on a variety of fuels including natural gas, landfill gas, and biogas….

Let’s have a look at the numbers….

And then, after chomping on a few numbers, he concludes the estimated “payback period” is longer than the product’s estimated lifespan (meaning you won’t have recovered your initial investment by the time comes that you need to buy a new one), the capital costs are high even compared to solar PV, and the emission reductions are good but not great.

In addition, Nelder notes, this fuel cell is unlikely to run on anything other than natural gas in residential use – how many homes will ever be served by a landfill gas pipeline? – and for similar gas supply reasons  it is unlikely to light up the dark in many developing countries.

Sam Jaffe, Renewable & Distributed Energy Blog, gives us “Four Things Bloom Energy Forgot to Tell the World,” namely that the fuel cell ”does not produce electricity more efficiently than centralized generation, isn’t much cleaner than centralized generation, and is more expensive to produce than most other forms.  Finally, Jaffe notes the process theoretically has energy storage capability*, but it isn’t clear when the capability may be made available.

*Instead of producing power, theoretically the technology can consume power and produce hydrogen, which can be stored for later use as a fuel.  But no information seems to be available about the efficiency of the system as a storage device, and the apparent lack of a willingness to speculate on the availability of the feature is not encouraging.

(HT to Kate Mackenzie at FT Energy Source for the Nelder link.)

Posted in Energy markets, Environmental policy | Tagged , | 2 Comments »

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Energy storage for electric power systems

February 26, 2010

Michael Giberson

Sandia National Lab has just published a study of energy storage applications for the electric grid: “Energy Storage for the Electricity Grid: Benefits and Market Potential Assessment Guide.” John Petersen at Alt Energy Stocks said:

I’ve been following the work in progress on this report since last summer and have eagerly awaited the opportunity to shift my focus away from the overhyped electric vehicle sector and focus on something with real meat. It looks like my time has finally come. For technology types that want a detailed understanding of what the various potential utility-scale applications for energy storage are, the entire 232 page report is a must read.

Petersen then provides an overview of the report’s information from the point of view of a potential investor.

Posted in Electricity, Energy markets, Technology | Tagged , | Comments Off

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Wind power and electric power storage

February 18, 2010

Michael Giberson

Some of the most common questions about wind power revolve around the role of energy storage in integrating wind power with the electric grid.

So begins a position piece, “Wind Power and Energy Storage,” issued by the American Wind Energy Association. And just as there are common questions, there are common answers. Just about everyone who has thought about it has concluded that a little bit of energy storage would go a long way in improving the value of the variable electric power produced by the wind. At least as long ago as 1909 an engineer writing in The Times of London observed that the usefulness of wind energy was enhanced by power storage.

So you might think the AWEA’s article on “Wind Power and Energy Storage” reports that the technologies are best friends forever? Not so. The next few sentences:

The reality is that, while several small-scale energy storage demonstration projects have been conducted, the U.S. was able to add over 8,500 MW of wind power to the grid in 2008 without adding any commercial-scale energy storage. Similarly, European countries like Denmark, Spain, Ireland, and Germany have successfully integrated very large amounts of wind energy without having to install new energy storage resources. In the U.S., numerous peer-reviewed studies have concluded that wind energy can provide 20% or more of our electricity without any need for energy storage.

The article explains that the existing flexibility of resources connected to the electric grid provides sufficient capability to accommodate significant amounts of variable wind power output without requiring new energy storage systems.  The AWEA acknowledges that energy storage would be “helpful,” but also that “many types of energy storage are poorly suited to help accommodate … wind energy” and that it is “often not cost-effective.”  Elsewhere, AWEA refers to the “storage bogeyman” and says it is a myth that wind power needs energy storage.

So it may not be too surprising that energy storage supporters feel a certain animosity toward the AWEA, even if they see their energy storage and wind power technologies as natural complements.

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EVs need to avoid charging during peak hours? Nonsense!

February 17, 2010

Michael Giberson

From time to time you see reports of electric utility executives or analysts worried about a forthcoming avalanche of electric vehicles (EVs) that will, just maybe, overwhelm utility distribution systems. What happens if everyone comes home from work and plugs in at the same time?  What happens if drivers want to recharge on-peak rather than off-peak?  I’m omitting links because I’m reacting to the general attitude and not a specific analysis, but a recent sample comment was the stern declaration: “EVs need to avoid charging during peak hours.”

Nonsense.

When car batteries become sufficiently advanced that lots of people actually buy and drive an electric car, then electric-utility scale batteries will also be more advanced.  It is, or at least can be, the same technology.  Utility applications actually have more choices, the batteries don’t have to be lightweight, so improvements in battery technology are likely to become widespread within the power industry before they become widespread in vehicle applications.

The supply side of the industry will readily handle the changes in load presented by growth of the electric vehicle market.

Posted in Electricity, Energy markets | Tagged , , | 2 Comments »

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Energy storage on the grid: transmission equipment or market participant? (Again)

January 25, 2010

Michael Giberson

In the wholesale power markets world, commercial energy storage concepts are commonly somewhat of an afterthought. None of the large regional wholesale power markets integrated into transmission operations put too much effort into thinking about energy storage as they developed their market rules.

A part of the problem is that the transmission system and the rules that surround it is set up to move power from generation sources to electrical loads. Grid-connected energy storage devices are something of a hybrid: sometimes act like generators – supplying power – and sometimes act like loads – consuming power. They don’t always fit neatly into traditional categories. Further mixing things up, energy storage can contribute greatly to system reliability, usually treated as a matter for transmission-system based coordination rather than market transaction.

But as commercial-scale energy storage begins to arrive on the scene it has become more important to sort through these issues.

I’m just quoting myself from a post of 14 months ago on the topic of integrating energy storage players into regional power markets.  At the time the case involved American Electric Power’s desire to add a battery storage system as part of a transmission system upgrade in Texas, and a request that the energy storage device be treated as transmission facilities (and therefore have costs recovered through regulated transmission rates) rather than as an energy market participant of some sort.  The PUC of Texas permitted AEP its battery-storage-system-as-transmission-facility.

Last week FERC took initial action on a similar request (link goes to decision; see also FERC news release).  Western Grid Development LLC has proposed installing energy storage devices on the CAISO-managed transmission system and seeks to have its system treated as transmission facilities. The comments and protests filed in response to the Western Grid raise the same concerns heard in the AEP/Texas case.  Some parties object that storage inherently involves participation in energy buying and selling and therefore the systems ought to be energy market participants; Western Grid states that any purchase or sale of energy would be incidental to operation of the system in support of the transmission grid, done only at the direction of CAISO, and net revenues – if any – would be refunded to transmission ratepayers.

In FERC’s decision, it agreed that the facilities could be treated as transmission equipment so long as they are built and operated as described by Western Grid, and so long as the CAISO approves the project as part of the ISO’s regional transmission planning process.  (CAISO, by the way, filed a strong protest in response to the Western Grid request, so I expect Western Grid will have much work to do to gets its project off the ground, even with this preliminary approval by FERC.)

FERC was clear that this decision is limited to Western Grid’s project as proposed and does not suggest any general position on the treatment of energy storage devices on the grid.  In fact no general position may be available, given, as FERC explains, “electricity storage devices …do not readily fit into only one of the traditional asset functions of generation, transmission or distribution. Under certain circumstances, storage devices can resemble any of these functions or even load. For this reason, the Commission has addressed the classification of energy storage devices on a case-by-case basis.”

By the way, a number of the key people involved in Western Grid are also working together on the Tres Amigas project though (I think) no official links exist between the two companies.

Posted in Electricity, Energy markets, Regulation | Tagged , | 1 Comment »

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