Energy Storage for System Regulation: Why it’s Becoming Important

by Richard Fioravanti, KEMA

Carbon taxes or caps, higher oil and natural gas prices, worries about oil availability and increased fuel switching are increasing the penetration of renewable generation resources into our transmission and distribution networks. In the U.S., many states are setting renewable portfolio standards to stimulate renewable energy adoption. As deployment of these generation devices increase, many state and federal agencies, independent system operators (ISOs) and utilities are examining their impacts on the electricity grid and weighing options to ensure continued reliability. The additional volatility introduced to the grid by renewables might require a greater need for regulation services to balance network load and generated power.

Fast-response, high-performance, energy storage systems have been attracting considerable interest as a means to mitigate these issues. 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, as well as a potential revenue opportunity for operators of the storage devices.

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—a global 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 very low durations (energy-to-power ratios of less than 12 minutes) might be unsuitable, depending upon a particular system’s area control area characteristics. By decreasing dependence on traditional generation units, there might be added benefits, such as reducing system maintenance costs and adverse emission effects.
  • The effectiveness of a storage device 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 terms of system area control error performance. This strongly implies that a lesser amount of regulation can be procured using storage vs. conventional resources and used as the primary resource for responding to area control error.
  • The economics of a storage device 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 of the most common, fast-response energy storage systems include advanced batteries and flywheels. Compressed-air energy storage (CAES), though 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 enhance the stability and quality of electricity networks.

A battery storage system 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 interesting alternative.

A flywheel energy storage system 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. Flywheel interest is increasing because they can charge and discharge power quickly. 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.

A CAES system involves the use of renewably generated or off-peak electricity to compress air. When electricity demand later peaks, the compressed air—often stored in a coal mine—is heated with natural gas and goes through turbo expanders to generate electricity. A compressed-air system can have great graphical impact for implementations of more than 100 MW.

Another option is being explored: a North Sea energy island. This man-made island would store power from an offshore wind farm. The concept is the initial result of an ongoing KEMA feasibility study with the civil engineering firm Bureau Lievense and technology illustrators Rudolph and Robert Das for Dutch energy companies. The design incorporates an inverse offshore pump accumulation station. On the island when there is a surplus of wind energy, the excess would be used to pump sea water out of the interior subsurface lake into the surrounding sea. Upon a wind shortage, sea water would 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 water level, and an annual storage capacity of more than 20 GWH—enough energy to offset 500 to 840 kilotons of CO2 emissions. The costs and benefits of additional regulating reserve, download wind power, CO2 reduction and environmental impacts are being analyzed.

The energy island concept has the potential to provide coastal protection, harbor and or LNG terminal facilities, aquatic biomass and eco-tourism opportunities.

It is inefficient to keep large-scale power plants in standby mode 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 the wind or other renewable energy resources. Investment in large-scale energy storage can increase the efficiency and reliability of conventional power plants, as well as offset investments in replacing or developing new conventional peak-production capacity.


Richard Fioravanti is director of Storage Applications & Support at KEMA Inc. Reach him at 800-892-2006 or visit

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