Follow Midwest Energy News
Midwest Energy News Channel on YouTube Midwest Energy News on Google+ Midwest Energy News Facebook PageTwitter Profile Midwest Energy News Facebook Page

With new FERC rule, outlook improving for energy storage

Lithium batteries store energy at a smart grid demonstration project in Oregon. (Photo by PGE via Creative Commons)

Lithium batteries store energy at a smart grid demonstration project in Oregon. (Photo by PGE via Creative Commons)

Development of energy-storage systems, which some consider essential to the growth of renewable energy, has trailed behind the installation of wind turbines and solar panels. However, it appears that is about to change.

Regulatory changes at the federal and state levels are likely to give a big boost to energy-storage projects, whether they stash electricity in batteries, pumped hydro, compressed air or some other technology.

Joe Spease, who’s developing several compressed-air storage projects in Texas and in his home state of Kansas, says he’s “ecstatic” about the developments. There’s a dawning recognition, he said, that energy storage is “the best thing that can happen for the economy and the environment. It’s inevitable that there will be a speedy movement towards these projects.”

Chris Shelton, president of AES Energy Storage in Arlington, Virginia, put it this way: “Key stakeholders – regulators and policymakers – are beginning to see that storage is part of the equation. That’s a big deal.”

One of the important changes, passed by the Federal Energy Regulatory Commission in July and taking effect in a couple of weeks, is known as Order 784. The rule basically permits enterprises other than large utilities to sell “ancillary services” — power sources that can be tapped quickly when needed to meet a rapidly-changing supply or demand situation.

Although conventional coal- and gas-fired plants can supply the power for these situations, they generally don’t do so as quickly or efficiently. Although storage is typically a more expensive option than peaker plants, one of the changes embodied in the new FERC order requires that buyers take into account which seller of ancillary power would be the fastest and most precise.

‘Opening the door’

Storage has been plagued by a “lack of clarity,” as Shelton sees it. Typically, would-be developers of storage seeking approval from FERC would look over an application form and find “no box to check” for a storage project – as contrasted with proposals to develop generation, transmission, distribution or load facilities.

“You might infer that that means this is a risky project,” he said. In the utility industry, “a lack of clarity creates uncertainty. You’re probably going to say, ‘Let’s put this on hold.’”

Sellers of storage still will have to compete against other potential providers of ancillary services — mostly utilities selling power from coal and gas-fired power plants. However, Shelton and Spease are confident that storage will come out ahead.

Spease said his compressed-air facilities will be able to go “from zero to 100 percent power in three minutes. No one can compete with that.”

Except possibly Shelton. He claims that his 40-megawatt lithium-ion battery installation in Ohio, which feeds into the PJM Interconnection, can produce 10 megawatts instantaneously. He estimates that most gas-fired plants need a full 60 seconds to generate that much, and coal plants even longer.

Shelton likens the regulatory changes to someone “opening the door and saying, ‘Come on in.’ ” FERC “is recognizing that this is here, and it is interested in encouraging it as much as possible.”

California, New York leading the way

The policy environment around energy storage is starting to change at the state level as well. The California Public Utilities Commission last month required the state’s three largest utilities to invest in a total of 1,325 megawatts of energy storage by 2020.

That action “has really been a turning point,” said Shelton. California is the first state to require its major investor-owned utilities to buy storage. New York could be second.

“We are starting to see these things happen in New York,” said Bill Acker, executive director of the New York Battery and Energy Storage Technology Consortium (NY-BEST). The collective of manufacturers, academic institutions, utilities and others was formed in 2010 to encourage and support development of a robust energy-storage industry in New York.

Just last week, the Long Island Power Authority issued a request for proposals to provide it with 150 megawatts of storage. And, the New York Power Authority recently put out a call for capacity, and indicated it will consider taking it in the form of storage, Acker said.

NY-BEST is encouraging state legislators and regulators to create a welcoming environment for storage, and, according to Acker, it is finding a receptive audience.

“There is a lot of interest among regulators in seeing storage participate in the grid,” he said.

Comments (2)

This is all technobabble. 40 megawatts for how long?

By Rolf Westgard on Nov 8, 2013

How long do you need?

By Ken Paulman on Nov 8, 2013