By 2019, GTM Research expects the energy storage market in the United States to add 861 MW to the grid annually and be valued at $1.5 billion. That’s about 11 times its size in 2014. This year alone, the country is expected to deploy 220 MWs, which is more than three times its 2014 total.
In Canada, the energy storage market is also expected to grow with research well underway to prepare for future changes. The National Research Council of Canada is currently looking for partners to collaborate on studies for its Energy Storage for Grid Security and Modernization program, which intends to develop a roadmap that sets goals and directions for the energy storage sector in that country.
At the recent annual Canadian Wind Energy Association (CanWEA) conference in Toronto, energy storage took center stage for an important panel discussion. Storage is becoming a significant topic to consider as part of any grid expansion or renewable-integration project. But as one panelist at the conference pointed out, for future projects to develop successfully, the purpose and value of storage should be explored in more detail.
“In many ways this is a difficult conversation,” shared Jason Rioux of NRStor Inc during a CanWEA presentation. Rioux, works for the Toronto-based energy storage developer and owner, and focused on accelerating the development of storage technologies. “This is mainly because there’s a lack of information, a lack of projects, and a lack of in-depth analysis on operating projects and that includes the true value they deliver to the grid.”
Power storage is still in its infancy, says Rioux, so it doesn’t yet have years of development or operational hours to analyze and decipher to ensure it’s the best fit for a project or a region. “There’s a lot of new ground being covered,” he said. “So we’re spending a lot of time building business cases, assessing product opportunities, and analyzing the available information because, at the end of the day, energy storage has got to make economic sense compared to the alternatives.”
What makes storage more complicated are the many different types or modalities available, such as solid-state and flow batteries, flywheels, thermal storage, and others. “There’s no silver bullet for energy storage,” said Rioux. “Storage can do a lot of different things and it provides a lot of different sources. Currently, we’re focused on storage projects across the duration spectrum – from short to long.”
One such NRStor project includes a two-megawatt flywheel facility that provides regulation service to the Independent Electricity System Operator (IESO), which is responsible for the day-to-day operation of Ontario’s electrical system. The project is the first of its kind in Canada and has been running successfully for about a year now.
“It’s great for flywheels because the system gets beat up all day long,” laughed Rioux. “Every four seconds a new set-point instruction comes out. But it’s a very fast responding resource much like a battery project.” He explained that the IESO gets to analyze how well this fast-responding storage works with the electrical system and how it helps regulate conventional power assets. “We ask, for example: Does it let traditional gas-fired assets run more for efficiently, while the storage system deals with regulating and ramp rates? We’re finding that out.”
Flywheels aren’t the only storage modality Rioux and his team are working with. “We’re also playing with all battery types, even a compressed-air energy storage project that’s different than the conventional storage projects out there. It doesn’t burn natural gas and, therefore, it has no emissions associated with it.”
One of NRStor’s technology partners, General Compression, already has a two-megawatt prototype in Texas paired with a two-megawatt wind turbine. Its goal is to demonstrate baseload wind capabilities with the integration of storage.
“In this case, they wanted to demonstrate the capability of energy storage in terms of renewables and economics. But this might not be what the market needs…which brings us back to the value of storage. It has to make sense for the market,” said Rioux.
So, how can one realistically assess the value of energy storage for longer duration projects when there really aren’t any out there? Rioux said the answer was simple: “We hired a guy to build a model.”
He wasn’t joking. The hiring part was easy. Model building proved a bit more challenging. Part of the reason is that Ontario has a complicated system of electrical contracts and regulated assets. Layering on a large, long-term storage project to provide new and more cost-effective services to the grid isn’t an easy feat in that province.
“In the Ontario market, you have to look holistically,” he said. “If you only consider the price of energy, you’re missing the whole picture. There are many different contracts to consider as well. For instance, if energy prices are low, then global adjustment goes up. So it’s important to consider the net impact of the rate on consumers.”
To provide an accurate picture, the model also had to incorporate a realistic view of long-duration energy storage that included renewable integration and load leveling. More specifically, the study estimated that through a combination of renewables and load leveling, 1000 MW of compressed-air energy storage capacity could deliver between $6.5 billion and $8.3 billion in savings to Ontario ratepayers over 20 years. It would also reduce carbon emissions by 87 million tons over the same period. And according to Rioux, the system would serve effectively without the need to develop new gas assets or run gas assets in a peaking model.
“We wanted answers to the questions: What is the energy cost to the consumer if you change the system by adding storage? In what way is storage used most effectively? And how will it deliver value?”
Ultimately, for the sake of this study, only two things were considered:
- The load-leveling application – the peaking generation requirements that are required.
- Wind integration – the difference between the forecast error based on what was expected and the last-minute differences in the wind. These were short duration forecast errors and not from days on out, explained Rioux.
“We omitted everything else,” he said. “For example, we didn’t get into frequency regulations. We kept the model simple.”
Even with a simplistic approach, however, energy storage is complicated because it can be used for more than one task. When employed correctly, a storage system can compensate for the variability of wind power, for instance, and help with load leveling. And that’s exactly what the results showed.
“We found that shifting duty cycles had the most value,” shared Rioux. “Part of the year, the system was handling wind integration for the grid while during others, it could do load leveling.” This is significant because a storage system could help negate the need to build another gas plant. If something was missing from the grid short-term, the storage system could respond quickly. This was true whether it related to renewables or not.
“I’ve developed and operated gas-fired plants in Ontario. Gas plants are flexible but they come with challenges in terms of providing regulation to the system,” said Rioux. He pointed out that they have minimum run times and a minimum loading point of about 50% in most cases to meet their emission tolerances.
“The results here are that with storage, you’ve got a variable resource that has no minimum run times, that has no emission, that has flexibility of going up and down, and can act as a load when there are times of surplus.”
Longer-duration storage provides a clear value, and especially when it’s possible to cut costs when building these systems. “If we can cut project costs, and we feel we can, storage and wind will be spending a lot more time together in the future,” said Rioux.
However, he pointed out he wasn’t a strong advocate for merging the two technologies. “I don’t believe in mandating behind-the-meter storage with wind power. It depends on the project and performance requirements. Unleashing most value for projects means it’s not always behind the meter of another project and, therefore, able to provide other benefits to the grid when not balancing the wind. But long-term storage definitely has value on a per-project basis that’s worth investing in.”
Dr. Andrew Ford, Professor Emeritus at Washington State University, was the man hired to take on the challenge and build a reliable model. The study entitled, “Unleashing the Value of Energy Storage: Examining the value compressed air energy storage systems can deliver to Ontario” is available online for download.
The highlights of Dr. Ford’s full study include:
- Compressed air energy storage system technology can reduce Ontario’s energy costs by up to $8 billion over 20 years.
- Value for ratepayers will be delivered via more efficient integrated wind-generated electricity and load leveling.
- Grid operators need flexible resources to offset errors in forecasting the amount of wind and solar energy flowing onto the Ontario grid.
Filed Under: Energy storage