For Green Chip Stocks two weeks ago, I surveyed some interesting new utility-scale electricity storage applications, and found a $200 billion market just getting started.

Utility-Scale Power Storage Innovations

Storage: A $200 Billion Cleantech Market in the Making

By Chris Nelder
Friday, April 9, 2010

On the first day of this year, I wrote: “The intermittency problem of wind and solar will be largely solved this decade, as new storage solutions come to market.”

Yet the pace of progress in storage during just the first quarter has surprised even me.

Readers of this space are well familiar with storage technologies like pumped water, vehicle-to-grid, concentrating solar thermal, supercapacitors, hydrogen fuel cells, and flywheels.

This week, I’ll take a look at a few unusual, utility-scale applications.

The World’s Biggest Battery

Fairbanks, Alaska, has taken battery storage to a whole new level.

An array of 13,760 NiCad batteries–“the world’s biggest battery”–was deployed in 2003 to provide emergency power in a place so frigid that water pipes can freeze in a few hours.

If the data I found is correct, the 1500 ton, 3680 amp-hour, 5000 volt system can provide roughly 18,400 kilowatt-hours (kWh) of power. The array could discharge the power over a range from 27 megawatts of power for 24 minutes, to 46 megawatts for 5 minutes. That’s just enough to keep the grid in Fairbanks humming when there are problems wheeling power over from the generators in Anchorage.

At a cost of $30 million (in 2003), that works out to $1,630 per kWh. That seems pricey indeed when compared to the 15 cents/kWh regular grid power price in Alaska, but cost per kWh is the wrong metric to use. The real measure of its worth is in preventing damage to the health of customers, infrastructure, and economic activity. By that measure, the $30 million seems like a bargain. The system provided 529 minutes of backup during outages for more than a quarter of a million customers in the first year of operation alone.

Pumped Heat Storage

A newer and far cheaper solution is pumped heat storage. A startup company in the UK called Isentropic Energy has developed a modular system to store energy as heat, and claims it can do it for only $55/kWh.

The system uses two large containers of gravel, seven meters high and eight meters wide, with a reversible heat pump between them. One container is cold (-160° C) and the other is hot (500° C). Air pumped from one vessel to another lets it operate reversibly, to generate or store power. The claimed efficiency of the system is good, at 72-80%.

Designed for small utility scale applications, the first Isentropic systems will deliver 16 MWh of power, making them slightly smaller, but vastly cheaper, than the battery array in Fairbanks.

Ice Storage

A new heat pump solution announced this year uses ice as a storage medium.

Colorado-based startup Ice Energy is offering a system that freezes 450 gallons of water in large boxes placed next to air conditioners in commercial buildings. Freezing the water at night when grid power prices are low, then circulating air over the ice in the middle of the day, will let customers in warm climates shut down their air conditioners when grid power prices are highest.

The company claims its technology can slash fuel consumption by 30% by reducing the need for utilities to run expensive natural gas-fired plants to meet peak loads. Air conditioning accounts for as much as half the peak power demand in California.

In February, the company signed a $100 million deal for 6,000 of their “Ice Bear” units with the Southern California Public Power Authority for use at 1,500 locations in their Los Angeles service area. Each unit can reportedly shift 32 kWh per day of power demand from daytime to nighttime, and operates at about 85% efficiency.

I wasn’t able to track down enough data to calculate the cost per kWh of operation, but for the purpose of rough comparison we can hazard a guess. If each unit stores 32 kWh of power 200 days a year in Los Angeles, that’s 6,400 kWh/year of power storage per unit. At a cost of $16,667 per unit, that’s $3.47 per kWh. Although that leaves out the cost of using grid power to freeze the ice, and amortizes the cost over only one year, it does suggest that Ice Energy’s system will be a very low-cost form of energy storage indeed. Ice Energy CEO Frank Ramirez claimed, “I think you can draw the conclusion that nothing will ever be cheaper as a storage medium.”

Other players in the space are New Jersey-based CALMAC Manufacturing, which has been around since 1947, and Seattle-based startup Optimum Energy, which makes software for chiller systems. As yet, I have not found any public companies in the sector.

Using ice as a storage medium isn’t exactly new. Ice-based air conditioners have been used since the 1920s. In fact, air conditioners are rated in tons to denote the weight of ice they can produce in a day.

Distribution Instead of Storage

A different approach I mentioned in February is the $42 billion HVDC “supergrid” that nine European countries plan to build around the North Sea. When completed, the connections would enable renewable power to be shipped around Europe at will, whether it’s being generated by offshore wind in Denmark, wave power in Scotland, solar power in North Africa, or hydropower in Norway.

Additionally, Norway’s hydropower facilities–equivalent to about 30 large coal-fired power plants–could effectively function as power storage for the European supergrid. Excess production from any of the connected generators could be used to pump water up to Norway’s reservoirs, then generate power at a later time by running the hydropower plants.

Compressed Air Storage

Compressed air storage is another older technology that is being applied in some new ways.

For example, startup SolarCAT, Inc. is working on its first application in Arizona, which will use off-peak grid power to compress air in large underground salt caverns and other geological formations. The compressed air alone functions as a storage medium, but SolarCAT intends to take the idea to the next level.

The compressed air can be heated to high temperatures with a concentrated solar power (CSP) plant or another type of heater (such as a natural gas furnace), then used to power small, efficient turbines.

At this time, data on the cost of operation for SolarCAT’s system is not available.

Compressed air has also been under consideration in various parts of the world as a storage medium for wind-generated electricity.

Ammonia Storage

A handful of companies are working on another new application of an older storage medium: ammonia. Ammonia has been synthesized from natural gas and electrolysis for nearly a century, but it is mostly used to make fertilizer.

The new idea is to use it as a storage medium for energy generated by sources like offshore wind turbines that are too far away from the grid for transmission lines to be economical.

For example, offshore wind platforms could send their power to an adjacent platform performing solid state ammonia synthesis. From there it can be barged to land, where it can be used directly as a fuel, or pumped into a pipeline system. Ammonia is, therefore, a highly versatile medium, in that it can be used for generation, usage, storage, and transmission.

Matthew Simmons, the longtime oil and gas industry investment banker and peak oil expert, is a big proponent of the technology and wants to see it used to enable distant offshore wind production off the coast of Maine.

Ammonia has several advantages as a storage medium:

• It can be stored for a long time, like propane, without leakage or spoilage.
• It can be shipped long distances over water in relatively low-tech barges. At distances over 1000 km, the cost of shipping ammonia is about half that of shipping liquid hydrogen, and at distances of 400 km, it’s competitive with DC transmission lines.
• It’s highly scalable, and can be made in massive quantities (millions of tons per year).
• An extensive delivery system for it already exists.
• Its energy density is pretty good: about 13 kWh/gallon, as compared to 9 kWh/gallon for liquid hydrogen.

The cost is attractive as well. Solid state ammonia synthesis from electricity is cost competitive with gasoline at about 4-6 cents/kWh.

Hidden Advantages

As with Fairbanks’ giant battery, the advantages of these new utility-scale storage systems extend far beyond mere cost per kWh metrics.

They have real potential to reduce utilities’ reliance on fossil-fueled generation, as well as to enable significant growth of renewables. In effect, they can help sources like solar and wind become true baseload capacity generators. As they help shift loads from fossil fuels to renewables, they will also reduce CO2 and other emissions.

But arguably, the best benefits are intangible: greater energy self-sufficiency, better public health, resiliency, and extended economic benefits–such as keeping revenue local instead of sending it to the Middle East, and maintaining grid stability. The extended economic benefit of transmission support alone has been estimated at a whopping $197,486 per kWh.

New studies show that the energy storage market will double from $21 billion in 2010 to $44 billion by 2015. As it develops, the cost per kWh will continue to fall.

Even so, it’s still an industry in its infancy, and could become a $200 billion market in time. California Attorney General and gubernatorial hopeful Jerry Brown recently proposed a bill that would require storage equivalent to 2.25% of peak power demand in the state by 2014.

Until next time,

Chris

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