Tesla grabbed headlines recently with its battery package to provide backup power for homes, but much of the traditional electricity sector is also eager to tap energy storage for the grid, Strategen Consulting Senior Director Chris Edgette said May 6 at the TransForum West conference in Denver.
TransForum is organized by PennWell’s TransmissionHub news service.
Energy storage is not just popular with “Silicon Valley startups,” said Edgette, who also represents the California Energy Storage Alliance (CESA).
Many familiar power industry companies are proposing storage projects, Edgette said. The list includes names like AES (NYSE:AES), Calpine (NYSE:CPN), Starwood Energy Group, LS Power, NextEra Energy (NYSE:NEE), NRG Energy (NYSE:NRG) and Exelon (NYSE:EXC) subsidiary Constellation Energy, he said.
Evidence suggests a boom in energy storage projects could be on the horizon, Edgette suggested
GTM Research forecasts that 220 MW of energy storage will be deployed in the United States in 2015, which is more than three times the amount installed in 2014. Look for a significant increase in 2020 as a number of large projects come online, Edgette said.
As of April were 352 storage projects in the United States and more than a third of them are located in California, according to Edgette’s material. Texas is a distant second with more than 20 projects. The other leading states in the nascent domestic storage industry include New York, Hawaii, Pennsylvania, Colorado, Illinois, Minnesota, Arizona, Michigan and North Carolina.
Expect energy storage projects to proliferate in the electricity sector, he advised. California legislation has mandated more than 1,300 MW of storage in the state by 2020.
Utilities like Edison International’s (EIX) Southern California Edison and the Fortis affiliate Tucson Electric Power (TEP) have been actively soliciting proposals for energy storage. Texas-based Oncor wants to invest billions in storage. Also storage is expected to play a significant role in programs like the California ISO Energy Imbalance Market as well as the state of New York’s Reforming the Energy Vision (REV) strategy, Edgette said.
The current grid system was set up for traditional central station power generators. There is an increased need today for “flexibility,” Edgette said. Storage is important to developing “the grid we want,” he added.
Storage projects can be located around transmission, distribution or customer locations.
Storage can prove a viable option to natural gas peaking power plants. Storage can be used more often than peaking units because of easier startup. Energy storage can ramp up in a second whereas a peaker could take 10 minutes to get going, Edgette said.
Storage installation can also help electric utilities avoid transmission upgrades, Edgette said.
Also, thanks to improving technology, projects that “didn’t look cost effective yesterday, might look cost effective tomorrow.”
Storage is “not a single thing,” Edgette said. There are probably a half dozen different types of storage including electro-chemical, mechanical, and bulk mechanical, thermal, pumped hydro and transportation, he noted.
Edgette advises to key an eye on Tesla’s large-scale storage. “Really what this is about is grid services,” Edgette said. “We’re trying to really get storage out of the retail space and into grid services.”