Storage systems bolster solar09 / 2011, Industry & Suppliers | By: Charles W. Thurston
Storage systems: Storage technology solutions are emerging in the U.S. solar market as something like the second punch in a boxer’s one-two knockout combination, delivering a hard-fought win for solar project economics.
“Solar and storage technologies still are relatively expensive, but when you put them together, it lowers the cost,” observes Eric Cutter, a lead analyst at Energy+Environmental Economics, or E3, based in San Francisco. Energy storage approaches are as diverse as solar cell manufacturing practices. Among storage techniques are chemical, thermal, mechanical, bulk and gravitational methods, so far. A variety of new or emerging storage solutions were reviewed at the recent Intersolar Show in San Francisco in July, demonstrating that storage has decisively moved into the design equation for major solar projects. “Storage technology should be looked at as an opportunity, not a burden,” says William Richardson, Director of Research & Development at Solon Corp. U.S., in Tucson, a subsidiary of Berlin-based solar developer Solon SE.
Storage value to be determined
As more storage technologies are proven economically, their costs are expected to drop. But “storage technology still is largely unproven so the costs have not been proven yet,” laments one solar executive. Others agree, but suggest that costs have not been demonstrated largely because they have been ignored until recently. “Thus far, there has been no means of monetizing or valuing the function of energy storage throughout a system,” says Janice Lin, Director and co-founder of is the California Energy Storage Alliance, or CESA, based in Berkeley, California. In the case of lithium-ion batteries, which only became the battery of choice for consumer goods a few years ago, evolving efficiencies could help make it the battery of choice for future residential solar systems. “A standard lithium-ion battery may perform 6,000 cycles with a 60 percent degree of discharge, but special lithium-ion batteries being tested in Japan can perform 15,000 cycles near 90 percent degree of discharge,” notes Matthias Vetter, Head of off-grid and battery systems at the Fraunhofer Institute for Solar Energy Systems, in Freiburg. “We suspect that the largest projects will yield the lowest unit costs,” predicts Obadiah Bartholomy, Project Manager at Sacramento Municipal Utility District. Whatever the relative cost of a given storage technology, “energy storage is a must-have for our decarbonization goal,” he says. While much focus in the storage arena focuses on scaling up technologies to an industrial level, consumers may also drive the market. “Applications on the consumer side of the meter will be one of the first areas of storage adoption,” predicts Lin. Others agree. “Sooner or later, from the homeowner perspective, battery storage can be economically installed,” says Vetter.
An increasing number of U.S. utilities are examining the way in which storage projects can help solve problems of electrical frequency variations, according to Lin. In the process, it is becoming clearer to utilities that a new energy storage plant might be able to eliminate the need for the expansion of an electrical substation’s capacitor bank, or even a new energy transmission line, she notes. Utilities also can use storage systems to avoid curtailment of intermittent energy from renewable sources, a growing U.S. utility problem, notes Tom Stepien, the CEO of storage technology company Primus Power, based in Hayward, California. Whether storage technology is aimed at a residential solar system or a large industrial solar plant, there is likely to be a niche solution before too long – albeit at differing costs. “All applications for storage technology have different costs, and a recent Sandia Lab report found 17 application-specific benefits for storage,” notes Richardson.
Proving storage costs
To help prove costs for different storage solutions, Solon has partnered with the Arizona Research Institute for Solar Energy (AzRISE) and local utility Tucson Electric Power to set up a joint proving ground in Tucson. The site will tap solar energy from a 1.6 MW solar plant built by Solon, and initially evaluate a compressed air energy storage (CAES) pilot developed by the university, using above-ground storage tanks. This autumn, a lithium-ion battery pilot is expected to be built, and by next year, two other storage technologies are planned for demonstration, explains Richardson. Once a preferred storage technology has been selected, power optimization may still be an issue.
Some storage market leaders point out that storage technology cannot be separated from power management for long. “We say that our business is energy storage and power management, at any scale,” says Carlos Coe, CEO of Xtreme Power, based in Austin, Texas. Xtreme has installed micro-grid storage systems as small as five kilowatts, he notes. Power management involving storage technology would benefit from more international standardization, says Vetter: “In terms of communication, we need a universal energy supply protocol. Standardization overall will become more and more important.” Manufacturing cost savings, eventually, will also help more proven technologies, if not help some technologies prove to be economic. For example, “There are some lithium-ion batteries coming out of China that are showing cost drops,” notes E3’s Cutter.
Utilities roll out storage projects
To accelerate the economic testing of industrial-scale storage plants, a host of pilot projects are now underway. “Utilities like Pacific Gas & Electric, which have long, radial service corridors, could readily benefit from storage technology,” says Cutter.
In Hawaii, the Kauai Island Utility Cooperative (KIUC) in January purchased a 1.5 MW utility-scale battery storage system from Xtreme Power, which will be installed at the Koloa substation to help mitigate the intermittency effects of a three MW solar photovoltaic project, which will also feed into the station. The project, slated for completion during third-quarter 2011, is Xtreme’s first utility sale of its Power Cell battery system. “We were one-third of the cost of adding a new transmission line,” Coe says.
The Xtreme battery is a twelve-volt, one kWh, dry cell battery with a metal alloy-coating and woven ballistic grade fibers, covering copper, lead and tellurium alloys that form bipolar plates. The battery reacts at the nanoscale, the company reports, resulting in extremely low internal resistance. “This system offers up to 99 percent storage efficiency,” Coe says.
A lithium-ion battery-based utility storage project now underway has been developed by Southern California Edison. The project involves large-scale batteries for storing wind energy at California’s Tehachapi wind resource area. With U.S. Department of Energy (DOE) and other backing, the batteries are being supplied by A123 Systems, based in Waltham, Massachusetts.
Similarly, Primus Power developed a chemical flow-battery project in 2009, for the Modesto Irrigation District in California, through a 14 million U.S. dollar (USD) grant from DOE. The Primus project was part of a 47 million USD DOE project to build a 25 MW storage system. Last year, Primus won an award from DOE’s Advanced Research Projects Agency (ARPA) to develop a long-lasting electrode for flow batteries suited for storing solar energy.
Among the most popular types of flow battery systems now being developed, is vanadium redox, some executives say. “I see great potential for vanadium redox systems,” notes Fraunhofer’s Vetter. Some utilities are conducting their own tests of multiple storage solutions. A pilot project has been under development by SMUD under a four million USD DOE grant program that will use lithium-ion battery storage at residential solar installations in its Anatolia neighborhood, according to Bartholomy. The project also includes cooperation with GridPoint, National Renewable Energy Laboratory (NREL) and Navigant Consulting. In the pilot, SMUD is including storage both at individual homes and also at utility sub-stations. The batteries are being provided by Saft, based in Bagnolet, France. SMUD is separately testing lithium-ion batteries from A123, notes Bartholomy. SMUD also is testing zinc-bromine flow batteries in-house, in a 500kW, six-hour configuration, supplied by Plexos Solutions, of Roseville, California. Apart from battery pilots, SMUD is testing a pumped-hydro solution on the American River in a 700 million USD project, that should yield 400 MW with a ten-hour supply duration. Similarly, SMUD is testing a compressed air installation at its Solano wind farm.
Part of the problem with developing new technologies as rapidly as demand arises is lack of low-cost bank financing. “It has taken years to get a few banks comfortable with this technology,” Coe says. In the mean time, Xtreme Power has been backed by investors including SAIL Venture Partners, Bessemer Venture Partners, Dow Chemical Company, Fluor Corp., BP Alternative Energy, Dominion Resources, Posco ICT, and SkyLake & Co.
New companies often turn to venture capitalists to help prove storage technology. Primus, for example, in January raised 11 million USD in venture funding for its flow batteries, with sources including I2BF Global Ventures and DBL Investors, a unit of J.P. Morgan; prior investors include Kleiner, Perkins, Caufield & Byers, as well as Chrysalix.
Legislation driving California storage
Where financing is limited, legislation at times abounds. Indeed, a market driver in storage technology has taken the form of a new law in California: AB2514, adopted in September last year. The law requires that “the Public Utilities Commission by March 1, 2012, open a proceeding to consider establishing investor owned utility procurement targets for viable and cost-effective energy storage systems to be achieved by December 31, 2015, and an additional target to be achieved by December 31, 2020.” Within the near future, a follow-up California law is expected to link benefits for storage solutions and solar systems, enabling the two to qualify for a broader set of state subsidies, under AB1150, now in the state Senate.
Such a linkage of storage technology with its generation technology counterpart may not be far off for federal legislators “There has been a rumbling at FERC (the U.S. Federal Energy Regulatory Commission) recently,” observes CESA’s Lin.