Electric Energy Storage: Digging the Foundations (Part I)

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Part I of a two-part series on the development of electric energy storage, starting with the storage we need and continuing Part II on Aug. 31 with a look at the technologies and the political challenges they face.

Unlike our information system with its local hard drives and remote data centers, our electric grid has virtually no storage.

At our peak energy-using hours, or when the weather calls for indoor warming or cooling, the grid must generate more power in order to meet more demand. It does this by turning on more capacity — “peaker plants,” which cost significantly more to run than bulk power plants.

Similarly, about 15% of the energy in the grid is always kept in reserve to ensure power performance when a grid flow needs balancing. The reserve is very rarely used and so, as it can’t be stored, it is usually wasted. Yet its business and its emissions costs must be paid.

This huge waste has always been accepted by utilities. Running peaker plants or just excess of bulk power has been arguably cheaper and certainly less risky than investments in experimental storage — or in other kinds of efficiency.

With little policy constraint on energy production or use, there’s been little incentive for reform. But this is beginning to change, driven by forecasts of rising demand, by pressures (CO2-based and otherwise) on supply, and by the first shifts of a centrally-organized and hierarchical system toward a more distributed model.

The 2005-2009 Bush DOE budgets allocated about $11 million to electric energy storage research, development and deployment (EES RD&D); versus $2.5 billion for fossil fuels RD&D. The Obama stimulus package put real money on the table, allocating $210 million in matching grants to utility EES RD&D. It allocates $1.5 billion in matching grants to building battery manufacturing capacity, associated with the development of electric vehicles.

An EES story is unfolding amid the contexts of a scrambling-to-change centralized grid and an emerging model of distributed energy. And against it being anyone’s guess whether centralized and distributed systems will ultimately compete or be complementary.

Storage is needed to reduce significantly the financial and emissions costs of keeping everyday grid performance reliable, and to enable renewable power resources to be integrated into the electric system on a massive scale. It is needed to enable power generation, transmission, and distribution, the components of the centralized grid. It is also a critical enabler of decentralized energy models — that is, of energy systems at the edges of or even off the grid.

"Energy storage is an essential enabling technology for a low‐carbon power system." — Nicholas Institute For Environmental Policy Solutions, Duke University


Today’s centralized U.S. electric grid (under a limited central control yet comprised of 3,200 utilities, several regional transmission service areas, and many independent power providers) has two essential uses for storage. It is used to maintain power performance, locally and regionally, amid the ebbs and flows of what is both a physical system and a marketplace. It is also used to reduce the grid’s operational costs.

Yet its role is minimal in both areas, accounting for only 3% of electric power production capacity. A third essential use comes on line with the integration of renewables, intermittent resources (needing the sun to shine or the wind to blow) that cannot deliver continuous high-performance power. A fourth comes on line with the electrification of vehicles and a vehicle-to-grid infrastructure.

In the way the grid has developed over 125 years, generation refers to the points at which electricity is made from feedstock, such as coal, natural gas and hydro power. Transmission refers to the movement of electricity via wires from generation points to areas of usage—to the substations around metropolitan Pittsburgh, for example. Distribution refers to movements of electricity from substations to places where electricity is used.

Each of these system sectors has technology, business, regulatory, and interconnection infrastructures.

Supporting Performance: Local performance or power quality is affected by occurrences as diverse as supply and demand variations in the electricity market, and partial or full system failures that originate at points of generation, transmission, or distribution. We all know that even bad weather can be a culprit. We watch the power flicker or go out.

It happens rarely in the U.S., though, because grid managers use expensive means, which move small amounts of electricity very fast, to maintain reliability. These crisis situations have high dollar and CO2 costs, because managers turn to spinning reserves, wasteful as they increase by 15% to 20% the amount of generation that must always be available, or to expensive spot markets. Often they also confront clogged transmission lines.

Energy stored across the generation, transmission and distribution grid, thus closer to problems wherever they surface, and designed for rapid movement, would give managers a lower cost, far cleaner alternative for use in performance support.

Supporting Efficiencies: Utilities hedge the costs to make, transport, and distribute electricity with a set of strategies. The lower their costs, the lower the costs to consumers. Keeping system costs relatively low will become even more important as the social costs of carbon are added to the total price.

Being regulated, utilities must deliver power everywhere, even to low-population areas, and they must deliver highest quality power at all times. At peak usage times or when the temperature makes people ratchet up air conditioners or heaters, the grid must still perform perfectly. It does this by accessing “peaker” capacity — energy plants that generate lots of power but run infrequently, and therefore, because of start up costs, expensively.

Peaker power is called “dispatchable,” differentiated from bulk power. Some peaker facilities operate less than 10 hours per year. This gross inefficiency is being addressed by efforts to lower demand in peak usage hours, through the use of “demand response” information technology tools that use various methods to dynamically lower system usage as needed.

By becoming a demand response tool, storage will provide cleaner and cheaper alternatives to fossil-fuel peaker plants, and will reduce the need for the transmission and distribution build outs that follow population shifts. When supply is stretched, the grid manager will be able to flow stored energy into the system.

Supporting Renewables: While the early penetration of renewable energy feedstocks, primarily onshore wind, into the U.S. electrical grid have not suffered from their single major weakness, the penetration at scale of renewables won’t be accomplished without effective workarounds. The weakness is the variability of wind and solar: Where the wind is not blow or the sun is not shining, the grid fails at these points of generation.

This represents a major potential degradation of the grid, where both bulk and dispatchable power sources, however high their CO2 content, have been reliable. Coal and natural gas plants simply turn on and work. Wind and solar have both regular (for solar, night) and and irregular (for solar, rainy days) periods of failure. The first generations of wind power systems have been able to depend on existing peaker capacity to even out their variability, but this is neither a scalable economic solution nor a CO2 solution.

Energy storage, however, can be a major contributor to the necessary workaround. At the points of renewable generation, solar or wind farms whatever their sizes, storage can provide reliability without additional transmission costs. There will be generation, transmission, and distribution applications for different storage technologies, to support the integration of renewables for both grid performance and grid efficiency.

"Electric energy storage technology has the potential to facilitate the large-scale deployment of variable renewable electricity generation, such as wind and solar power, which is an important option for reducing GHG emissions from the electric power sector." —Pew Center on Global Climate Change


Much like the telecommunications industry of the 1980s, today’s utility industry maintains a ubiquitous, largely static infrastructure. A few years ago, its R&D budget was less relative to its revenues than the pet food industry’s, and it had changed little in eight decades.

Reluctance to change, perceived or real, has led to a movement that seeks to modernize electrical usage at the edges of the system, in buildings and neighborhoods that would be partly or wholly independent of the grid. These places would need local, distributed storage. Conversely, early stage efforts to electrify vehicles has led some industry participants to experiment with aggregating distributed local storage to support grid performance and efficiencies.

The linchpin on all this is that for distributed, local storage to scale it will have to be inexpensive and safe.

Supporting Electrified Transportation: Driven by oil security and climate change concerns, the U.S. has made transportation electrification a priority. Evidence for this is the $1.5 billion in stimulus matching grants allocated to build domestic vehicle battery and component manufacturing capacity.

U.S. consumer electricity consumption would increase 50% if everyone owned and nightly recharged a plug-in hybrid electric vehicle (PHEV). The utility business would grow by 50%. In addition, the new load, distributed nationally across neighborhood garages and charging stations, would potentially be available to the electric power grid as local storage. Utilities could aggregate it locally to use as a demand response resource, thereby improving the utility’s performance and efficiency.

At present, however, the main thing working against this vision is the lack of scalable storage technology.

"The transportation energy storage market will grow from $12.9 billion in 2008 to $19.9 billion in 2012 … principally driven by light electric vehicle shipments rising from about 500,000 to nearly three million as new plug-in hybrid and pure electric vehicles emerge." —Lux Research

Supporting Community Energy: The model of affordable portable storage, with development funding from transportation stakeholders, has great additional appeal for the less-leveraged distributed energy movement. Very simply, a PHEV not in use could feed its stored energy into the local system or building instead of into the utility distribution network.

Likewise, this hypothetical portable, inexpensive storage could be used directly for community energy; an apartment building could have a dozen PHEV storage units in its parking garage and stand-alone units in its basement. A CO2-free community energy system might only use solar energy and storage.

A microgrid—microgrids being large integrated systems, like the facilities of a university, that minimized or eliminated grid connections—might rely on hundreds or thousands of storage units. One utility, AEP, is testing community storage, putting a few secure, now expensive units in to support the houses on a street.

EES is essential to a clean energy ecosystem, but it faces business, technological, and political challenges. In Part II of this series, we will look at the technologies and political changes needed to meet our future storage demands.


See also:

Electric Energy Storage: Digging the Foundations (Part II)

Smart Grid: Digging The Foundations

10 Senators to Watch as Electric Utilities Up the Ante

FERC Adopts Smart Grid Policy with Rules for Raising Rates

A Case for Electric Cars in Carbon-Heavy Canada