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A few months ago I was at a conference on energy storage in Waltham MA and there, something I had long suspected, was confirmed - A123 Systems was indeed expanding into the utility-scale energy storage market. By leveraging the lithium-ion battery technology they developed for their powertools and vehicle products, A123 was able to develop a storage unit capable of providing ancillary services to the grid. What are these “ancillary services” that batteries can address? Ancillary services are required to ensure the reliable delivery of electricity and represent some of the highest-value and most-lucrative capacity in an electric market. Most of these services are designed with “grid stabilization” in mind and are used to address short-term fluctuations in supply and demand, frequency, or voltage.

While grid-connected storage isn’t a new concept, it has only been deployed in limited fashion. Battery-based technologies have been held back by technical limitation (i.e. lead-acid) and cost. Pumped hydropower, which uses the flow from water resevoirs to spin turbines, has been a form of storage that has seen relative success (about 90 GW deployed worldwide), but it is hampered by topographical requirements, cost, and construction time.

Different storage technologies have different characteristics and therefore different applications. For example, pumped hydro is not well-designed for rapid, short duration dispatch, but it can provide capacity for longer periods. This is what makes two rapidly growing battery technologies so exciting: lithium-ion and sodium-sulfur.

Lithium-Ion

Lithium-ion batteries are best known for their use in consumer electronics, like laptops. Recently, however, they’ve also become the technology of choice for next-generation hybrids and electric vehicles, which for the most part currently rely on nickel-metal-hydride batteries. They have high energy density, are incredibly efficient, and have long-cycle life - all important characteristics of a battery - and although prices are dropping, they’re still costly (there is a reason the Tesla Roadster costs $100,000…)

A123Systems and Altairnano are two of the most well-known firms developing advanced lithium-ion technology that is suited for the demands of vehicle propulsion. Importantly, this technology also has the ability to provide important ancillary services to the grid.

These services are divided into different products based on how quickly they can provide their capacity to the grid: Regulation (Automatic Generation Control) resources must respond almost instantaneously and primarily designed to match real time supply and demand. Next up are spinning reserves, also known as synchronized reserves in some markets. These are resources that are on-line and synchronized to the grid and are able to meet electric demand within 10 minutes of dispatch from a system operator. Close behind are non-spin reserves, which also must respond in 10 minutes time, but are comprised of offline resources that can be ramped up and synchronized within the required time, such as quick-start gas turbines.

Historically provided by generators, dispatchable load (demand response) can now also provide a selection of ancillary services in electric markets. But demand response faces obvious limitations - how many buildings can really curtail load in less than 10 seconds (as required for regulation services)? Storage therefore represents a promising resource as an alternative for typical ancillary service resources. In addition to be able to provide spin/non-spin resources like demand response, grid connected batteries can also be used for regulation purposes where near-instantaneous response is not an issue. Moreover, batteries can be called on far more frequently as there is no risk of creating “customer fatigue.”

But lithium-ion systems can do more than just provide regulation service. They can store excess wind capacity and dispatch it at later times when it’s needed and also provide backup power services to be used in the event of a plant outage.

Altairnano has delivered a 2 MW system to AES in Indiana and the two firms recently announced that  another of their battery storage systems has met the requirements to participate in PJM’s market. A123, meanwhile, is also working with AES and just announced that it has deployed a H-APU energy storage system (pictured above).

Sodium Sulfur (NaS)
While there is a clear environmental benefit from offsetting traditional regulation and reserves resources, perhaps a more significant one comes from facilitating the integration of intermittent resources like wind into the electric system. Lithium-ion batteries can do this to some extent, but are primarily designed to provide short bursts of energy to the grid. Thus, another technology, one that can provide many hours of storage, has seemingly emerged as the one to beat for wind power battery-storage.

As described briefly above, large battery installations can be used to store excess wind capacity at night to be dispatched later, such as during peak demand periods in the middle of the day. Not only does storage employed in this manner allow for a clean peaking resource (at a high margin), it also allows utilities and power plant operators to realize the full value of their wind farms. Storage can increase the capacity factor and revenue-generating ability of the wind farm and consequently also facilitates in meeting renewable portfolio standards, which are measured on the amount of kWh produced not kW installed.

Sodium Sulfur (NaS) batteries have been gaining traction in this space. AEP, one of the largest electric utilities in America, has begun installing NaS batteries 1MW in size to primarily help smooth wind power delivery but also to provide regulation service. The company has plans to install 25 MW of such batteries and build a total energy storage portfolio that is 1 GW (1000 MW) in size. Xcel Energy also just announced that it will be deploying NaS batteries made by NGK to store excess wind power. Interestingly, the batteries will be managed through a software platform from Gridpoint, a company which has historically focused on distributed energy storage and load shifting. Pacific Gas & Electric has also announced plans to deploy a 5 MW NaS battery which will join a small flow battery it already has in service. Flow batteries use tanks of liquid electrolytes and have similar characteristics to NaS batteries, able to discharge power for hours at a time.

Not surprisingly, this technology has enjoyed the most success in the home of the main (only?) manufacturer of Nas batteries, NGK - Japan. According to NGK, there was 165 MW of NaS capacity installed in the country as of 2007.

In Japan, wind farms are already being deployed with integrated battery storage. The ~31 MW Tomamae Wind Villa on the island of Hokkaido has 4 MW of on-site VRB flow batteries used to reduce the variability of the wind farm’s production (also studied in Ireland). Similarly, the 51 MW Rijjasho wind farm will have as much as 34 MW of NaS batteries integrated to provide storage.

Don’t get too excited, yet

While these developments are exciting and encouraging, it’s important to note that major hurdles to widespread deployment still exist. Cost is the major obstacle that must be overcome - cost estimates for NaS batteries range from $2,500 - $4,500 per kilowatt (kW). For the purpose of comparison, a new natural gas plant costs typically ranges from $500-800 / kW. Hopefully, with technological advancements and efficiencies achieved through manufacturing scale, prices will be reduced.

Interested in storage? Stay tuned - my next post will focus on non-electric types of storage, such as compressed air and thermal storage…