Energy Storage: Moving Toward Commercialization

White paper Energy storage: Moving toward commercialization Energy storage will allow utilities to decouple generation from demand, increasing both grid flexibility and performance. Evolution of the utility grid serve the constantly changing demand. acknowledged, “A system consisting The adoption of renewable energy As a result, grid stability and safety have of weather variable and invariable and smart grid technology has rapidly become major issues. generation will require a highly responsive altered the way we generate and deliver demand side and/or the ability to store electricity. However, with the increase in Fortunately, the latest energy storage electricity on a large scale.” [1] But once solar, wind, and other distributed energy systems and controls can address installed, energy storage will also allow resources (DERs), utilities are finding these issues, and that makes them an utilities to decouple generation from it increasingly difficult to manage their important next step in the evolution of demand, increasing both grid flexibility systems to ensure that these variable the smart grid. As the New York State and performance. sources of electricity are adequate to Public Service Commission recently Elements of an energy U.S. Energy Storage Deployments by Segment (MW) storage system For typical electro-chemical storage devices, 900 there are three major components: a) a storage medium; b) a power conversion system; and c) 800 advanced controls and software. However, at 700 present most utilities are looking at battery-based storage for the simple reason that batteries can 600 be located almost anywhere. 500 For typical electro-chemical storage devices, there 400 are two major components: a) a storage medium; and b) a power conversion system. [8] These are 300 supplemented by balance-of-plant components 200 including: 100 − Monitoring and control systems. − A building or containers. 2012 2013 2014 2015 2016 2017 2018 2019 − Hardware, including: switchgear, transformers, medium- and low-voltage cables, and other Utility Non-Residential Residential ancillary devices. Power converter – These are sized according to Figure 1: The U.S. energy storage market is expected to soar over the next five years. [2] the applications. For higher power requirements, several units can be connected in parallel to Indeed, in California, where solar is king, an 858 MW annual market in 2019. This provide dynamic control of active and reactive the state has mandated investor-owned would be 13 times the size of the 2014 power flow in both directions. utilities install 1.3 GW of storage by 2020. market and four times the size of the Control system – Allows manual and “Storage is also gaining interest in the 2015 market. (See Figure 1). automatic operation of all system components. Communication protocols support remote control Northeast, but for different reasons,” and monitoring and accept load and weather said Pat Hayes, Energy Storage Business In 2014, the PJM region, which includes forecasts. Development Manager, ABB. “There, most of the mid-Atlantic states, was Protection equipment – Includes AC/DC circuit states are seeking protection from future the largest utility-scale market, with breakers, protective relays, current & voltage mega-storms like Hurricane Sandy, which 40.3 MW of energy storage deployed, sensors, built-in temperature monitoring ravaged power systems in 2012, and followed by California. While storage devices, etc. they’re doing that in part with microgrids, systems installed in PJM were largely Switchgear – For safe and reliable grid which rely on energy storage for emer- for frequency regulation, the majority of connection and operation of the system. gency support.” California projects were utility-owned, Transformers – May include either liquid-filled transmission- and distribution-connected and/or dry-type transformers that meet ANSI, IEC, and other local standards. Overall, the U.S. installed nearly 62 MW storage systems. (See Sidebar: The Batteries – Depending on the application, utilities of energy storage in 2014, up 40% from California and PJM experiences) can select from a variety of technologies such as 2013, and completed 180 individual lithium-ion (li-ion), sodium-sulfur (NaS), nickel- installations – representing an investment But there’s more driving interest in energy cadmium (NiCd), lead-acid, or flow batteries. of $128 million. During the next five storage besides the California and the years the U.S. energy storage market is PJM markets. According to a recent expected to grow even faster, resulting in industry survey, more than half of the The California and PJM experiences “California’s mandate, which requires utilities in that state to adopt 1.3 GW Consequently, two-thirds of the 62 MW of energy storage deployed in the U.S. in of energy storage by 2020, is compelling those same utilities to undertake a 2014 was located in PJM’s service territory to provide frequency regulation, i.e., massive program of acquisition and testing,” said Michelle Meyer, Senior Product to balance energy load and supply in real time. This need arose because of the Manager for Energy Storage, ABB. “Their goal is to encourage the development strain that the addition of intermittent renewable generation and complex loads – and integration of cost-effective energy storage systems.” In developing that such as large electric motors at manufacturing plants – placed on the grid. mandate, the state’s PUC had three guiding principles: In the past PJM utilities typically would either start up or shut down coal or − Optimization of the grid, including peak reduction, contribution to reliability natural gas generators to balance load. However, the large rotating masses of needs, or deferment of transmission and distribution upgrade investments these assets take tens of seconds to ramp up and as a result cannot follow a − Integration of renewable energy fast-moving electrical signal. In contrast, battery or flywheel energy storage, − An 80% reduction in 1990 greenhouse gas emission levels by 2050 for example, can respond instantly (in milliseconds) to correct deviations in “PJM took a different approach,” said Meyer, “and the way it changed its frequency levels. compensation mechanisms for regulation services – basing them on speed and “To date, PJM is the only system operator to fully adopt and implement FERC accuracy – was a game changer for energy storage. Its ability to respond in Order 755, which requires ISOs to pay for performance,” added Meyer. “And as milliseconds resulted in higher payments, making storage for a single application a result, energy storage systems in that area receive much higher revenues per a lucrative investment.” MW for regulation.” 2 Energy storage | ABB white paper nation’s utility executives ranked energy Depending on a utility’s specific needs, storage as the top emerging technology energy storage systems can be employed Energy storage in which they believe their companies on either distribution or transmission should invest. [3] systems and for single-purpose or applications and benefits multiple-purpose operations, often with These may be combined into “As regulators and policy makers varying discharge times. (See Figure 2.) attractive value propositions. [4] develop the rules, the standards, and the incentives for energy storage, utilities are “Many of these benefits can be Electric supply just beginning to scratch the surface of combined to develop attractive value 1. Electric energy time-shift its true potential,” said Hayes. “They have propositions,” said Hayes. For instance, 2. Electric supply capacity begun to look at how energy storage storage that reduces an end-user’s Ancillary services can be integrated across their fleets time of use (TOU) energy charges could 3. Load following to optimize their entire systems.” For also reduce demand charges, provide 4. Area regulation these and other reasons, Hayes noted, dispatchable load control, or even reduce 5. Electric supply reserve capacity “utilities are coming to realize that energy T&D congestion. “That,” noted Hayes, 6. Voltage support storage – done right – not only offers “could defer both T&D expansion and strategic advantages in creating a more the investment that would require.” (See Grid system enhancements flexible grid, it also has the potential to Sidebar: “Energy storage applications 7. Transmission support strengthen the bottom line.” and benefits”) 8. Transmission congestion relief 9. Transmission & distribution (T&D) Identifying the benefits Taking a strategic approach Upgrade deferral Recent advances in energy storage Recognition of these benefits has 10. Substation on-site power technology and power electronics are a generated dynamic growth in the energy End user/utility customer benefits major reason for the increased interest storage market. However, to ensure the 11. Time-of-use (TOU) energy cost in energy storage. In fact, they enable cost-effective deployment of storage Management energy storage facilities to provide utilities systems, it has to be done right. This 12. Demand charge management at least 17 readily identifiable benefits means storage has to become an integral 13. Electric service reliability that fall into roughly five categories: [4] part of utility networks, not something 14. Electric service power quality − Electric supply bolted on to meet an immediate local − Ancillary services need. “Adding energy storage is more Renewables integration − Grid system enhancements complicated than simply buying the

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