Battery Storage: Is it the Holy Grail?

By Rodney Smith, GreenSmith Energy Management Systems

There’s one major problem with traditional demand response (DR) programs: They require changes in customer behavior. Many consumers simply don’t want to turn down their air conditioners on the hottest days of the year. But, what if you had a device that allows the customer to continue normal power use at system peaks while at the same time allowing the utility to shave those peaks?

That’s exactly what storage batteries can do. Batteries provide the equivalent of traditional DR without any required change in consumer behavior. Thus, incentives to conserve are not affected.

In all recent discussions about the smart grid, AMI, smart homes and communications protocols, the most valuable potential component of the future T&D system is often left out: the growing potential for energy storage.

Advantage 1: Peak Load Management

DR and load shifting are usually thought of as the main advantages of storage. Because batteries charge at night during the least expensive hours and discharge at peak in the most expensive hours, there is potential for major efficiency savings. Shifting peak load to off-peak also provides the utility the ability to defer or cancel planned new peaking capacity with hundreds of millions of dollars in potential savings. But DR and load shifting are only a small part of the total value equation.

Advantage 2: Back-Up Power Supply

The distributed generation (DG) capabilities of batteries have many other potential benefits to utilities and homeowners. Batteries can provide backup power during short- to medium-term outages and are a cost-effective, quieter and more environmentally sound solution than diesel or natural gas generators.

Advantage 3: Ancillary Services Reliability

Additionally, lithium ion batteries have characteristics that make them ideal for the provision of ancillary services. In particular, batteries with onboard communications capability can be used for system regulation—discharging when the utility needs positive regulation and recharging when the utility needs negative regulation. Lithium ion batteries can also provide spinning reserves because they need almost no time to start discharging at full capacity.

Advantage 4: Renewables Optimization

Batteries can be used to turn intermittent renewable generation into peaking generation simply by storing the solar or wind power generated during periods when it is not needed. And, the batteries don’t have to be located at the generation site. So, the need to build new transmission infrastructure to transmit more renewable power at peak is alleviated.

Advantage 5: Multiple Beneficiaries

In regions where vertical integration no longer exists, even more entities could benefit from batteries. By focusing on the utility or the load-serving entity as the potential owner of the residential battery system, the utility could share savings with customers to entice them to host batteries in their yards. The utility could also work out deals with other customer segments to make the overall economics work.

With all its advantages, many utilities have long recognized storage as the industry’s Holy Grail—because of both proven and potential benefits. So, why are batteries not being deployed throughout the nation? The historical concern has always been cost, but as technology has improved, the technology has become cost effective for most utility applications. Safety has been another concern with lithium ion or other advanced batteries. New battery designs, however, have more than adequately addressed the safety issue. Battery technology and economics have seen vast improvements over the past several years. Things are certain to get even better as more investments are made in the battery industry. With the advantages on the rise and the negatives falling, batteries could be a major player in the smart grid of the future.

Rodney Smith is cofounder and CEO of GreenSmith and an inventor of GreenSmith’s proprietary technology. In addition to distributed storage technology, GreenSmith holds intellectual property related to intelligent control and smart grid applications.

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