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Energy Storage Now Emerging in the United States

By: William Flanagan |

At the recent San Francisco, CA Intersolar conference and trade show, companies offering battery storage and microgrid solutions had a large presence, signaling to many the continuing emergence of a major energy storage market here in the United States. More than 25 companies – mostly large, very well-known firms – were on the floor with storage solutions for all segments of electricity grid users, from residential to electric utility scale solutions.

So, what is driving the emergence of the storage market? Who are some of its players? Where is the market, and how does storage provide user benefits over the centralized electricity grid?

A unique confluence of events is now occurring in the United States and driving energy storage solutions and a growing industry surrounding it. Grid congestion, severe weather and increasing prices for sources of fossil fuel used to produce electricity are quickly coming together to challenge the country’s centralized grid for delivering electricity. Electric utilities operating in high-density population regions of the country such as in the Northeast and Mid-Atlantic States, along with California and Texas, now regularly contend with periods of high electricity demand during summer heat as new records for electricity consumption are set.

At the same time, severe weather storms during both winter and summer time periods stress the grid with ongoing substation, pole and wire damage. Strong and severe storms in the forms of tornadoes and wind storms with record hail and dust are wreaking havoc on electricity grids in lower population density regions of the country, like the Midwestern and Southwestern states.

Drought, both long term and temporary, stresses the operation of U.S. nuclear facilities which rely on large amounts of water in their operations for cooling purposes. As more electricity must be produced in certain high population areas, the electric utility industry is seeing price increases for baseline generating fuels such as coal, nuclear and oil. The current pricing for natural gas is one, if perhaps not the only, electricity generating fuel that has seen decreases in pricing. However, as the electric utility industry knows well, natural gas – which now accounts for more than a third of U.S. electricity production – has a long history of volatile and unstable price spikes.

To answer these challenges, independent electric grid operators such as the Pennsylvania, New Jersey and Maryland Interconnection (PJM) working with private firms have recently begun integrated battery storage into their grid operations. According to the PJM, AES Corporation has installed 32 megawatts (MW) of battery storage to support its 98MW wind farm located in Laurel Mountain, WV. The project provides PJM with regulation service and allows AES to smooth minute-to-minute fluctuations in output from its turbines. At the same time, in Hazle Township, PA, Beacon Power is installing 200 flywheels that will provide PJM 20 MW of frequency response. The company put 4MW into commercial operation on September 11 and expects the full 20MW plant operational next year. And at Lyon Station, PA, batteries housed in what look like large storage sheds are providing 3MW of frequency regulation to PJM and peak demand management services to Met-Ed.

Recently, New York City’s electric utility, Con Edison, announced it will soon release a proposal to provide its customers with incentives to invest in more efficient lighting, batteries, rooftop solar panels and other strategies in order to reduce reliance on the power grid. According to Robert Schimmenti, Con Edison’s Vice President of Engineering and Planning, such a move would delay the need to build a substation to handle surging demand in the city’s two fastest growing boroughs until at least 2024. Keeping up with the population growth, Con Edison’s long-term planning team determined that it would cost the utility $1.1 billion to build the substation and related infrastructure to go online by 2019, Schimmenti said. The population growth is testing the limits of the utility’s infrastructure. In addition to the cost analysis, lessons learned from Super Storm Sandy regarding damage to large sections of the utility company’s operating grid, are now showing the value of decentralized distributed energy resources instead of simply building more and more vulnerable electricity grid infrastructure.

Further evidence to support the growth of more decentralized energy storage is the state governments of California, New York, and New Jersey launching programs to provide financial incentives for commercial customers to get off the grid during periods of emergency or high demand. These are known in the industry as “demand response incentives.” The New York State Energy Research and Development Authority (NYSERDA) and Con Edison now offer significant financial support to commercial business owners who install energy technologies which reduce energy use and allow them to participate in the utilities’ ongoing demand response programs.

Recent technology developments in lithium ion battery chemistry, fully designed and engineered seamless integrated battery storage systems, and the arrival of robust operating software programs to not only monitor storage installations but allow them talk with local electric utility operators, are all leading to the mainstreaming of battery storage as an integral part of our overall energy mix and delivery systems.