The Importance of Energy Storage for System Regulation

by Richard Fioravanti, KEMA

Carbon taxes or caps, higher oil and natural gas prices, worries over oil availability and increased fuel switching are increasing the penetration of renewable generation resources into our transmission and distribution networks.

States are setting renewable portfolio standards to stimulate renewable energy adoption. As deployment of these variable generation devices increase, many state and federal agencies, independent system operators (ISOs) and utilities are examining the impacts of these technologies on the electricity grid and weighing options to ensure continued reliability. The additional volatility introduced to the grid by renewables might require greater regulation services to balance network load and generated power.

Fast-response, high-performance energy storage systems to mitigate these issues are attracting considerable interest. The use of storage for frequency regulation can improve electric grid system reliability, efficiency and flexibility. In ISO environments, they represent a new option for grid operators and a potential revenue opportunity for storage device operators.

In considering such systems, complex questions must be addressed:

  • What capacity and duration (energy-to-power-capacity ratio) is needed for storage devices to respond to persistent calls for regulation service in each direction?
  • How will large amounts of storage impact overall system performance?
  • Can automatic generation control algorithms be designed to take advantage of the fast-acting capabilities of the emerging storage technologies?
  • Are high-performance energy storage systems more effective than conventional generation resources in meeting regulation service requirements?


In 2008, AES Corp. engaged KEMA—an energy and utility consulting, testing and certification firm—to examine the use of high-performance energy storage systems for regulation. Three representative ISO environments were simulated and included automatic generation control systems and real-time market conditions. The study yielded key findings:

  • A fast-response storage device with an appropriate duration is at least as effective as conventional generation for regulating services. In some cases, it might be more effective megawatt for megawatt. When the same amount of regulation is provided by a storage device, there are decreased area control errors. Storage devices with low durations (energy-to-power ratios of less than 12 minutes) might be unsuitable, depending upon a particular system’s area control error characteristics. By decreasing dependence on traditional generation units, there might be added benefits such as reducing system maintenance costs and adverse emission effects.
  • Storage device effectiveness increases if the automatic generation control unit is adapted to take advantage of a fast-response device so that it also needs to be repaid to restore its energy levels within a finite period. The area control error improves, and more important, the ability to use a storage device shortens durations, resulting in lower regulation service costs.
  • A storage device responding to a filtered area control error signal is more effective than conventional generation at providing automatic generation control regulation in system area control error performance. This implies that less regulation can be procured using storage vs. conventional resources and used as the primary resource for responding to area control error.
  • Storage device economics are favorable at today’s price levels for regulation and real-time energy purposes. The overall cost-effectiveness of a storage device for regulation also depends on capital costs, which vary among technologies. These costs should come down over time.


Two common fast-response energy storage systems include advanced batteries and flywheels. Compressed air energy storage (CAES), although not considered a fast-response system, is gaining popularity because of its ability to scale for larger implementations. The available technologies vary in capital costs, production costs, capacity, energy density, power and energy ratings, cycle life and efficiency, but they all can contribute to enhancing the stability and quality of electricity networks.

  • Battery storage system: This can be desirable because it offers relatively high efficiency—as high as 90 percent or better. Technologies range from lithium-ion, advanced lead-acid and flow batteries such as sodium sulfur and zinc bromine. Batteries offer high capacity and independent power and energy ratings. For small-scale electricity storage, the redox (reduction oxidation) flow battery provides an alternative.
  • Flywheel energy storage system: This rotates a disk at a high speed and retains the energy by slowing down the flywheel; the kinetic energy of the disk is stored as electricity. Interest in flywheels is increasing because they can charge and discharge power quickly to the grid. Studies have shown that advanced storage technologies for regulation can result in lower carbon dioxide, sulfur dioxide and nitrogen oxide emissions when compared with traditional storage systems. When maintenance, operation and equipment lifetime costs are compared against those for traditional fossil fuel-based power technologies, flywheel technology has been shown to deliver regulation services at the lowest cost.
  • Compressed-air energy storage system: This involves the use of renewably generated or off-peak electricity to compress air. When demand for electricity later peaks, the compressed air—often stored in a coal mine—is heated with a small amount of natural gas and goes through turbo expanders to generate electricity. A compressed air system can have great graphical impact for implementations greater than 100 MW.


Another innovative energy storage option is being explored: an energy island in the North Sea. This man-made island would store power generated from an offshore wind farm. The concept is the initial result of an ongoing feasibility study among KEMA, the civil engineering firm Bureau Lievense and technology illustrators Rudolph and Robert Das—for Dutch energy companies. The design incorporates a new concept in pumped hydro storage—an inverse offshore pump accumulation station. On the island when there is surplus wind energy, the excess would be used to pump sea water out of the interior subsurface lake into the surrounding sea. Upon a wind power shortage, sea water would be allowed to flow back into the interior lake through commercially available generators to produce energy. The pump station would be stationed on an artificial island off the Dutch coast in the North Sea and comprised of a ring of dikes surrounding a 50-meter deep reservoir. The island would be built from materials dredged to deepen the interior reservoir.

The proposed storage system would have a maximum generation capacity of 1,500 MW, depending on the water level. It also would have an annual storage capacity of more than 20 GWH—enough energy to offset 500 to 840 kt of CO2 emissions. Currently, the costs and benefits of additional regulating reserve, download wind power, CO2 reduction and environmental impacts are being analyzed. In addition to providing an alternative for large-scale electricity storage, the energy island concept has the potential to provide coastal protection, harbor and liquefied natural gas terminal facilities, aquatic biomass and eco-tourism opportunities.

It is inefficient to keep large-scale power plants on standby to handle energy fluctuations when storage alternatives can provide a large added value. These fluctuations are increasing as we use more distributed resources and add more variable energy sources to the mix.

Storing electricity increases the technical reliability of energy supplies, stabilizes the cost price of electricity and contributes to the reduction of CO2 emissions, especially when combined with wind or other renewable energy resources. Investment in large-scale energy storage can increase the efficiency and reliability of conventional power plants and offset investments in replacing or developing new conventional peak production capacity.

Richard Fioravanti is director of storage applications and support at KEMA Inc. He can be reached at 800-892-2006 or visit


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