Bridge the Gap
Peak shaving and energy storage can overcome many of the intermittency and power quality problems that plague alternative energy resources like wind and solar.
The outlook for the nation’s electricity system is cause for major concern as rising demand continues to strain utility resources. New power plant construction is still a tough sell, with coal a less-than-desirable fuel source and nuclear energy now suffering under the long shadow cast by Japan’s recent earthquake and tsunami. Yes, there is significant growth of photovoltaic (PV) and wind turbine projects, but it’s not enough to close the gap, and renewables create problems of intermittency and power-quality issues.
One the positive side of situation, there are two solutions bridging the gap—peak shaving (the use of onsite energy or demand reduction to reduce electricity consumption during peak demand periods) and electrical energy storage (EES). Of course, there are numerous other solutions, but that would entail writing a book rather than an article; so let’s start with EES, a method that can actually overlap with peak shaving, along with many other purposes, such as backup emergency power, load leveling, and power-quality or “smoothing” activities. With so many applications, it’s not surprising to find that EES is a promising market that’s set to explode in the coming years, according to market research from NanoMarkets, Glenn Allen, VA.
In “Batteries and Ultra-Capacitors for the Smart Power Grid: Market Opportunities 2009–2016,” NanoMarkets predicts that the global market for storage batteries and ultra
capacitors on the smart grid will rise from its current level of $326 million to $8.3 billion by 2016. One of the key factors driving the phenomenal growth is the need to protect commercial and industrial users from costly power interruptions. Worldwide, NanoMarkets estimates that these interruptions cause equipment damages, plus production and commerce losses that amount to $75 to $200 billion per year. With so many billions at stake, numerous technologies are competing for a slice of the business.
In the case of Xtreme Power, Kyle, TX, the competition recently paid off with a 5-MW storage system on First Wind’s 30-MW Kahuku Wind in Hawaii, on the north shore of the island of Oahu. Xtreme makes a battery storage system called the Dynamic Power Resource, and it digitally smoothes the wind farm’s output to ±1 MW per minute by rapidly absorbing or releasing power as needed to protect Hawaiian Electric Company’s customers from disturbances due to varying winds at the Kahuku Wind farm. The design allows the system to double its storage capabilities in the same square footage, should First Wind require additional capacity.
Xtreme’s PowerCell chemistry started as a 1990s joint venture of Ford Aerospace and defense contractor Tracor, designed to fill the needs of California’s zero-emissions vehicle fleet. When the state pulled the plug, Xtreme rallied investors (including the Texas Emerging Technology Fund), and bought the technology for about $25 million. The company claims that their “chemical capacitor” can beat lithium ion batteries in terms of energy storage, efficiency, life cycle, and cost. Without side-by-side performance tests, that’s a difficult claim to evaluate, but it does bring up the benefits of lithium ion batteries as claimed by other manufacturers, such as A123 Systems, Watertown, MA.
In February 2011, A123 announced the sale of a 20-MW lithium ion battery system from AES Gener for a spinning reserve project in northern Chile. The project is the second order from AES, the first was in 2009 and involved a 12-MW spinning reserve project at AES Gener’s Los Andes substation in the Atacama Desert in Chile. A123’s batteries are designed to improve grid stability and facilitate the integration of renewable energy sources. To date, the company has shipped more than 35 MW of its advanced energy storage units to AES and other customers worldwide.
More Watts Per Gallon
In an era of record-high oil prices, megawatt-scale batteries could mean great savings for a different market, the many smaller towns and villages that rely on diesel fuel as either their main source of power or for backup. In fact, the implications can be staggering for remote villages, such as Kotzebue, AK. Located north of the Arctic Circle, Kotzebue’s 3,000 residents depend on diesel generators plus an array of wind turbines to supply a load that averages 2.5 MW.
“We buy an annual supply of 2.15 million gallons of fuel,” says Brad Reeve, general manager of the Kotzebue Electric Association. “That isn’t our total consumption, but it’s what we need in order to carry the prior year’s fuel and also to get a year’s supply plus four months backup.”
In 1997, Kotzebue installed its first wind turbine in an effort to reduce diesel consumption. At this point, they have installed 17 wind turbines that can produce a maximum of 1.1 MW. Power quality fluctuations occur, but aren’t disruptive because the diesels handle the majority of the load. Future plans call for a change to the role of the wind turbines, and Reeve is anticipating power-quality issues that require a battery solution.
“When we add another 1.8 megawatts of wind equipment, we’ll be in high penetration, so we’re looking at some battery storage as part of the equation,” he says. “Storage is key for a lot of these island grid installations like ours in maintaining our power quality. If you have batteries, they can buffer against low- and high-wind problems, and, when you get a low load, you can run the diesels at their sweet spot in efficiency and use the storage to avoid having to turn on a peaking unit.”
Reeve estimates that batteries could provide ride through during fluctuations and avoid about 300 peaking engine starts per year, resulting in savings of 150,000 gallons of fuel. Such savings are persuasive when the cost of diesel is boosted considerably by the cost of shipping through Arctic waters. Ultimately, he says, the goal is to reverse the role of the wind turbines and the diesels, so the wind turbines supply the base load requirements.
Wind turbines in remote locations are an ideal target for Altairnano, Reno, NV. The company takes a new approach to lithium ion technology by replacing traditional graphite materials with a proprietary, nanostructured lithium titanate. Performance tests show that the process delivers fast charge/discharge rates (as measured in milliseconds), high round-trip efficiencies, long life cycle, and, for areas such as Kotzebue, the ability to operate under extreme temperatures. The storage systems are designed as 250-kW modules that provide up to 1 MW of instantaneous dispatch for 15 minutes per module. Recharging takes 15 minutes. Such demanding performance would result in a reduced life cycle for traditional battery technologies, but, with a 12,000-plus cycle life (full depth of discharge), this product has an estimated life of 20 years.
|Photo: Courtesy of Honeywell
Chiptec gasifier equipment for Eastern Illinois University
Every Home an Energy Network
Speaking of traditional battery technologies, don’t retire them yet, says Marc Thrum, vice president of marketing at Intelligent Generation, Chicago, IL. Intelligent has a system that will put the traditional lead acid battery to work as a component of a PV-based distributed renewable energy and storage network.
“It’s a system that has benefits for retail electricity customers in the form of significantly lower electricity bills,” says Thrum, “and wholesale power companies benefit because we provide immediate access to stored electricity for peak power and voltage regulation.”
But what about public acceptance of stationary battery systems in garages and homes? “Even though most people haven’t had the experience of keeping batteries in a cabinet in the garage, the level of safety is no different than what’s under the hood of their cars, or what hospitals have in their backup facilities,” says Thrum.
Maintenance-free lead acid batteries are a common product in today’s market, and that fact, combined with a design that sits “behind the meter”, makes Intelligent’s offering a simple decision for homeowners and businesses.
“In our system we are not doing any net metering,” explains Thrum. “We take load off the grid, but we aren’t putting anything back. So consumers don’t have to change their consumption habits, and there’s no display on your kitchen table asking you to switch everything off just when the Super Bowl is on.”
A cloud-based control system handles all operations, and in a typical residential setting with a 2-kW PV system, battery capacity would be in a range of 3–7 kWh, depending on the location factors such as sunlight and utility needs. Commercial scale systems would use lithium ion batteries. Although the system is grid-tied, it’s behind the meter, so there’s no utility permitting process needed.
Both commercial and residential customers would typically be grouped together in numbers that allow the network to reach consumption levels high enough to get the attention of the utilities.
Says Thrum, “With the network, we get into the minimum scale of half a megawatt that is required to become a player in the larger market that is not currently available to single building owners. So now we’re talking about the market of ancillary services including frequency and voltage regulation, capacity reduction, and, even, demand response in the energy market. The technology connects wirelessly to our cloud network where we run the optimization programs and send command signals to shift the load to and from the battery and order to generate the revenue streams.”
Payback Reduced by 50%
Intelligent’s product uses off-the-shelf technology, and using today’s prices, the economics are estimated to reduce PV system paybacks as much as 50%. Such economics would substantially boost the solar power marketplace, but ultimately, the success of the premise is based on its acceptance by utilities. Are they interested? At least one is officially on the record as being interested, and it may well be the one that counts the most, PJM. PJM Interconnection is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 eastern and mid-western states, plus the District of Columbia, making it the largest RTO in the nation. Intelligent is one of 35 pilot projects in PJM’s pool of renewable integration services.
It’s not surprising that PJM would be interested in a network that can automate demand response at millions of residential and business locations, according to Dr. Alan Mantooth, professor and 21st Century Chair in Mixed-Signal IC Design and CAD Electrical Engineering at the University of Arkansas. Mantooth helped to establish the National Center for Reliable Electric Power Transmission and serves as director.
“When you think of utilities running their distribution grids, certainly putting things like smart meters on the distribution system gives them some eyes and ears as to what’s happening,” says Mantooth. “But the real question is, ‘what do they do with all that data?’ Now they need integrated tools that allow them to overlay time-of-use pricing with load profiling so they can level the load profile, and that gets back to peak shaving.”
|Photo: Courtesy of Honeywell
One of two Cummins generator sets for the Columbia Water Works
FERC Mandates Firmer Competition
Speaking of peak shaving, let’s take a closer look and start with some news from one of the entities that can get the immediate attention of an RTO like PJM, the Federal Energy Regulatory Commission (FERC). In February 2011, FERC released its 2010 Demand Response and Advanced Metering Survey. The survey covered 2009 and showed that more than 500 entities reported offering demand response programs in the US. The potential contribution from those programs is estimated at more than 58,000 MW, or 7.6% of US peak demand, and represents a sharp rise from the 17,000 MW found in FERC’s 2008 survey. Much of that advanced metering infrastructure [AMI] activity is in PJM’s backyard, with the largest adoption rates occurring in the Midwest to Mid-Atlantic region, followed by the Upper Midwest and the Southeast.
Just a month later, FERC released a new rule intended to benefit customers and help improve the operation and competitiveness of organized wholesale energy markets. The rule requires organized wholesale energy market operators to pay demand response resources the market price for energy, known as the locational marginal price, when those resources have the capability to balance supply and demand as an alternative to a generation resource and when dispatch of those resources is cost effective. In FERC’s words, the intension is to “ensure the competitiveness of organized wholesale energy markets and remove barriers to the participation of demand response resources in those markets.” It’s a strong message for RTO’s and utilities and should bolster the growth of companies providing peak shaving services.
The message is clear, and the market is growing, especially for large campus environments, according to Ron Blagus, energy market director for Honeywell Building Solutions, Minneapolis, MN.
“In a large campus with the potential for having a central plant on site, the possibility of being in different markets like PJM is a great opportunity,” he says. “Central plants offer strategies for peak shaving such as the usage of absorption cooling and ice storage for a complete shift of energy production.”
One example would be Honeywell’s work on a long-term strategy at Eastern Illinois University. The university’s coal-fired boiler had reached the end of its useful life, and, in addition to that, the University wanted to explore something more environmentally friendly in terms of fuel for providing thermal heat.
“We worked with the university to do an analysis and found that we could use wood waste products in a biomass thermal system to replace the coal-fired boiler,” explains Blagus.
The project began in 2009 and encompasses a $79-million renewable energy and building retrofit program that combines energy-efficient facility upgrades with one of the largest biomass-fueled heating plants on a university campus. Illinois is in PJM’s service territory, and, historically, peak summer day rates can rise from a low of less than $0.10 kWh to more than $0.50 kWh in a 24-hour period. So the savings will be substantial and estimated at approximately $140 million in energy and operating costs over the next two decades. Savings on electricity consumption are estimated at 6.2 million kWh yearly, and a small turbine driven by excess steam should contribute to those savings by generating more than 2.9 million kWh of electricity per year. The university will finance the improvements and use the savings, guaranteed by Honeywell through a 20-year performance contract, to pay for the work.
Hospitals are another market offering peak shaving possibilities, according to Paul Stohr, director of Energy Solutions Business at Cummins Power Generation, Fridley, MN. “A good example would be in the Gulf Coast,” says Stohr. “When [Hurricane] Katrina hit and diesel supplies were cut off, people realized that maybe diesel fuel was not a continuous emergency fuel supply. So there’s been legislation enacted around natural gas as a continuous fuel source for emergency power, and we’ve seen an emergence of a people interested in natural gas or for standby. But another reason they’re interested in natural gas is because, from an emission standpoint, it’s much cleaner.”
Our Lady of the Lake Regional Medical Center, Baton Rouge, LA, recently installed a Cummins 1750-kW diesel generator and five 1,750-kW lean-burn gas generators, as well as paralleling switchgear, transfer switches, installation reviews, and commissioning services. The diesel power provides the quick-starting capability required for emergency standby power, while the lean-burn natural gas units allow for maximum power availability.
During Hurricane Katrina in 2005, many areas were without power for over a week. Stohr notes that hospital administrators are turning to gas-fired generation because it’s easier to provide extended emergency backup. Moreover, using natural gas means emission levels that allow the units to participate in peak shaving opportunities.
“It’s a mixed solution between diesel and gas,” says Stohr. “They may put the critical life safety systems on a diesel for transient response and have natural gas with the flexibility to run longer hours and do peak shaving at some point in the future.”
Energy Flows Like Water
Onsite generation at wastewater treatment plants is also a growing opportunity for Cummins, and the company recently supplied a 1,000-kW diesel generator for peak shaving and other tasks, at a wastewater treatment plant in McCormick, SC. McCormick’s Commission of Public Works operates the plant, along with a variety of the area’s infrastructure, including a distribution system for electrical energy purchased from South Carolina Electric & Gas.
Schneider Electric, Palatine, IL, was also involved in the project and saw that, as an electrical power distributor, McCormick had an opportunity to maximize efficiency and manage its wastewater treatment facility and its electrical distribution system in a unique way. Schneider’s solution allowed for controlling load in the wastewater treatment facility and cogenerating power for the electrical distribution system, so ultimately the town reduces peak demand levels and avoids high peak demand charges.
It’s a good demonstration of peak shaving and energy efficiency, notes Mark Feasel, vice president sales and marketing, Energy Business, Schneider Electric. “Water and wastewater facilities have to keep generation onsite to comply with EPA mandates for treating water without interruption,” says Feasel. “Also, when you inject chemicals into the wastewater or water treatment process, it affects how energy consumption, because hard motors have to work harder to push the water around. So they have to stay within the bounds of the operation’s limitations, but how and when they choose to do these processes can have a profound impact. It’s a big consideration in peak shaving.”
Feasel sees many opportunities in water, higher education, and healthcare, but he says it’s hard to beat a military base in the desert for overall efficiency and peak shaving potential.
“Let’s talk about Edwards Air Force Base in the Mojave Desert in California,” says Feasel, with obvious enthusiasm. “People don’t know that the City of Los Angeles [CA] could fit inside Edwards Air Force Base. It’s a lot like a hospital or campus and has a massive load from space shuttle operations to controlling 19 runways and facilities. The energy policy act of 2005 mandated that they understand their energy consumption and take some effort to reduce their consumption.”
In 2007, the mandate pushed further by requiring participation in demand response and peak shaving if available. Edwards now participates in a demand reduction program that has yielded credits as high as $20,000 per week. In 2010, Edwards contracted to lease part of the base for a solar array with an estimated production capacity of up to 500 MW, making it one of the largest solar projects in the nation. In another development, the US Department of Defense will soon test two 100-kW, concentrating solar PV systems at Edwards and Fort Bliss in Texas. The $1.58-million project will test high-gain solar performance in hot and sunny climates, and validate field upgradeability, plus rapid system deployment capability.
Along with efficiency upgrades, the efforts can reduce the base’s utility bills that average about $20 million per year. However, Feasel notes that there are some consequences.
“Essentially, renewable energy such as solar, and efficiency upgrades, can have a negative impact on the other electrical power units in a facility,” says Feasel. “The PV, plus the lighting and variable speed controls have harmonics that can shorten the life of transformers and motors, because they increase the heat load and result in oscillation of motors. It’s important to be able to monitor and understand that because Edwards estimates that an outage at the facility costs about $200,000 in government payroll costs. Now they have eliminated about five hours of outages per year, and they can quantify about $1 million in annual savings just by getting a handle on how they are using energy.”
Such savings are impressive, and they demonstrate that peak shaving can make a substantial contribution when integrated into larger system approach, or standing alone. The same can be says for today’s energy storage solutions. Moreover, the possibility of building a network, such as Intelligent Energy’s approach, and aggregating single households, could mean a breakthrough for millions of small locations . . . and thousands of megawatts. Will it be enough to bridge the gap? That’s not likely, but it’s certainly an important step in the right direction.
Author's Bio: Writer Ed Ritchie specializes in energy, transportation, and communication technologies.