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A call for back-up: How energy storage could make a valuable contribution to renewables

As renewables look to achieve greater penetration in the grid-connected market and increase their role in off-grid applications, energy storage technologies could help provide a valuable link - increasing the dispatchability of renewables and their economics too, writes Richard Baxter.

Energy storage technologies can enable renewables - wind energy in particular - to be more useful and valuable, and are a key asset in the sustainable growth of this resource. Many involved with wind energy have been aware of energy storage technologies for some time but have been sceptical of their technological maturity and cost effectiveness, so they have waited to see tangible results of successful operation of these technologies in the field before incorporating them in their plans. Fortunately, there is a growing body of successful experience with deployed energy storage technologies. As this increases, storage technologies are emerging as a real option for system operators, wind developers and policymakers interested in the continued growth of wind energy.

Energy storage technologies come in many sizes and designs. It is important to recognize that each has its own strength and is thus more suited for certain roles than other ones. This variety has led to some misunderstanding about these technologies in the past, and even to disappointment as the only technologies available at the time (frequently lead-acid batteries) were placed in a very challenging role, did not perform as hoped, and left a general misperception as to the capability of energy storage technologies in general. For this reason, it is important, as with any technology, to match the capability to the needed role. As the number of storage technologies matures and expands, the range of applications they are capable of operating in is growing, leaving them poised to assist wind energy in three ways: stability, profitability and sustainability.

  • Stability: Primarily of interest to system operators. Energy storage technologies can provide a stabilizing influence to the grid by absorbing and discharging energy as needed. A more stable grid will support the continued introduction of additional wind energy.
  • Profitability: Primarily of interest to project developers. Energy storage technologies can improve the profitability of wind-generated electricity through making it dispatchable, reducing related transmission costs and arbitraging power profitably.
  • Sustainability: Primarily of interest to policy makers. Significant expansion of wind energy generation brings with it requirements of both wind farms and the power grid to work better together. By leveraging energy storage technologies’ ability to act as a ‘shock absorber’, policy-makers can craft better policy to enable the continued growth of wind energy.
 

Wind is not a typical energy source. It is variable, and the best wind resources generally require longer-distance transmission of the power than for other forms of generation. These considerations raise the cost of utilizing this resource. Even relatively recent estimates put the cost of integrating wind energy into the grid at 5%-30% of the cost of generation,1 although as experience is gained - both by the grid operators and wind developers - these estimates are declining toward the lower end of this range, as seen in Table 1. In addition, early wind integration studies suggested that wind penetration rates of only 5%-10% were the limit that the grid could handle. With experience, this has grown to 20% or more without system stability issues.


The upper reservoir of a pumped-hydro storage system in Wales, UK

This is encouraging, but energy storage technologies can still provide value. Average conditions and effective costs across an entire utility are not the same as those found around a particular wind farm. Transmission issues still loom as the major hurdle for wind energy’s continued expansion. Grid operators are focused on supplying the growing demand for electricity on a transmission system in need of major upgrade to maintain reliability. In response, grid operators set a high bar for wind developers in their interconnection. Experience is showing that wind farms are capable of being integrated, and efforts such as (in the US) FERC Order 890 show that progress is being made to deal with wind resources on a more even footing. However, if energy storage technologies can be shown to provide additional flexibility in a cost-effective way, then they should be given another review by grid operators, wind developers and policymakers as one of the needed tools to help sustain the growth of wind energy.

Energy storage technologies

A number of energy storage technologies are now available to be incorporated into wind power projects to improve the value and usefulness of wind energy; these include:

  • Flow batteries: Flow batteries store energy in charged electrolytes and utilize ion-exchange membranes similar to fuel cells. The two electrolytes flow from separate holding tanks through the reaction cells, separated by the membrane. Here, the reaction creates electrical power as one electrolyte is oxidized, while the other is reduced; reversing the flow reverses the reaction and absorbs energy. Sized up to tens of megawatts.
  • Pumped-hydro storage (PHS): Pumped-hydro storage facilities consist of two large reservoirs, one located at a low level and the other at a higher elevation. During off-peak hours, water is pumped from the lower to the upper reservoir, where it is stored. During peak hours, the water is released back to the lower reservoir through hydraulic turbines to generate electrical power. Sized at hundreds of megawatts.
  • Sodium-sulphur batteries (NaS): The NaS battery cell has a molten-sodium negative electrode in the centre with a solid alumina electrolyte separating it from the molten-sulphur positive electrode. During discharge, sodium ions pass through the electrolyte to the positive electrode, where they react with sulphur to form sodium polysulphide. When charged, the sodium polysulphide at the positive electrode decomposes, and sodium ions migrate back through the electrolyte. Sized up to tens of megawatts.
  • Compressed air energy storage (CAES): CAES facilities store energy in compressed air held in underground chambers. Electrical motors drive compressors which charge (compress the air into) the cavern at night with low-cost system power; this air is then used as input for a gas turbine during peak price periods during the day. Using the compressed air allows all of the energy output of the gas turbine (minus the compressors) to generate electricity; normally, the pre-compression of air in a gas turbine absorbs 2/3 of the power output of the combustion stage. Sized at hundreds of megawatts.
Applications

Energy storage technologies can be used to assist wind energy along three avenues, providing stability, profitability and sustainability. A number of new installations showcase these opportunities.

Stability
Maintaining the stability of the transmission and distribution system is key for the expansion of wind energy. Energy storage facilities can be of use in two areas: island grids and the larger power grid. On small island grids, the ability to cycle power in a stabilizing role makes the focus on the $/kW aspect of an energy storage facility support the stability of the system. On the wholesale level, energy storage facilities must be rated at a significant power level to provide long-term stability or arbitrage a large volume of energy in a meaningful way, and hence the focus on the $/kWh cost of operation.


A 6 MW sodium-sulphur battery system in Japan ngk insulaters

Island grids are small, isolated power distribution systems either physically separated from, or having a very limited connection to, the main power grid. These can be difficult systems to operate, and even many in the wind industry agree that niche markets like these are good opportunities where energy storage technologies can provide value. These power systems lack the stabilizing inertia found on a larger system, and therefore normal demand fluctuations are difficult to manage. Diesel generators are normally used to supply these highly variable loads, and even diesels can have a difficult time following the loads, so power quality suffers. While adding wind turbines to these systems has proven to be an excellent way to avoid high diesel fuel costs (including transportation) and added pollutants, they exacerbate the stability issues of the system. As wind resources are added, energy storage facilities capable of high cycling can act as a shock absorber between supply and demand.

Sumitomo Electric International (Osaka, Japan) installed a vanadium flow battery system at the 30.6 MW Tomamae Wind Villa on the island of Hokkaido, Japan. The facility has operated well since 5 January 2005, sometimes performing over 50 charge-discharge cycles per hour. By acting as a rapid source and sink for the sometimes highly variable wind energy production, this facility has reduced the ramping rates of the wind farm’s output with respect to the rest of the island’s grid by reducing the peaks and valleys of the wind farm energy output. The energy storage facility is configured with 16 modules rated at 250 kW each, which gives the entire facility 4 MW with 6 MWh of storage (90 minutes). Pulse power of 6 MW exists, but only for 20 minutes.


Tomamae wind villa in Japan vrb power

System stability is a growing concern for transmission systems operators around the world; solutions to this issue benefit everyone - especially wind developers. Transmission system operators use a variety of grid stabilizing equipment and operational activity to maintain a balance between supply and demand - even as those are changing constantly during the day. This is a continuous challenge for the grid operator, but even ‘stable’ demand periods have their own challenges as a change in the output of one generator requires the immediate and opposite change in another generator, both in scale and at the same rate of change. Wind’s variable nature is the heart of the issue here, not necessarily in scale, but in the speed of its change (its ramp rate), where it can have a large impact on grid stability. Wind farms transitioning from full off to full on (and vice versa) can be quite dramatic. If those wind farms are concentrated in certain remote areas, this fluctuating output can have an outsized and detrimental impact on the carrying capacity of the grid in those areas. These issues will be brought to the forefront in areas such as Tehachapi in California. There, today’s ramp rates of 100 MW to 200 MW per hour could change to 1000 MW to 2000 MW per hour by the time that all of the proposed wind power in the area is installed. The growth of wind power should not be curtailed for this reason, however. What is needed are additional grid-stabilizing technologies and modes of operating the power grid to support this expansion of wind energy. A very valuable role for energy storage here then, is to provide a capability to augment resources like wind that need only marginal support to firm up the supply of power. By absorbing and discharging even relatively small amounts of power, the reliability of delivery is improved - greatly reducing any reactionary response required by grid operators.

Pumped-hydro storage facilities have played a vital role enhancing grid stability for over a century. Existing pumped-hydro facilities such as Dinorwig in Wales and Rocky Mountain in the US state of Georgia provide a variety of ancillary services, such as frequency regulation, load-following and spinning reserves to a wide area. Very large energy storage facilities (100 MW plus) like these will play a key role in providing stability to the grid so that additional wind energy can successfully be brought online. The planned 500 MW (600 MW pump) Lake Elsinore Advanced Pump Storage (LEAPS) plant in southern California is a good example of how energy storage continues to be counted on to provide stability to wide areas of the power grid. Although not directly connected to a wind farm, LEAPS and its associated power line will be an important facility for area wind developers as it will provide stability to the Southern California Edison and San Diego Gas & Electric systems. This is a crucial first step in paving the way for additional wind farms to be built out in the surrounding area and will provide a moderating force to the Southern California power grid.

Profitability
A number of energy storage projects are currently under way to evaluate these technologies’ ability to improve the profitability of a wind farm. Wind developers remain interested in energy storage but are still generally sceptical about these technologies’ cost effectiveness. Energy storage technologies can help improve their profitability in three ways. First, they can arbitrage the wind energy during off-peak hours to peak power periods to enable sales of dispatchable, firm delivery contracts. Second, energy storage can help reduce the net cost of transmission by increasing the reliability of power sales by storing power when the local system is fully loaded. This will reduce make-up charges and can help to optimize the transmission line build-out required by increasing the average utilization of the transmission line without overloading it. Finally, for some wind developers there exists the possibility of even using the energy storage facility to simply arbitrage grid power by pulling in power from the grid during periods of no wind and selling that during peak demand periods. Although this portion of the sale from the wind farm would not be wind-derived energy, this strategy would more fully utilize the wind tower and electrical interconnection assets. Any one of these strategies by itself is not generally cost-effective, but taken together, their additional benefits are designed to promote a greater utilization of the assets the wind developer must pay for, and thus improve the profitability of the investment. For this reason, the success (or failure) of utilizing energy storage in relation to wind will be made on a project-by-project basis. In the end, the question the wind developer must answer is, are you better off spending your next dollar on another wind tower or an energy storage facility?


Vanadium flow batteries vrb power

Japan Wind Development Co. Ltd is developing the Futamata wind farm with energy storage envisioned from the very start. The 51 MW wind farm will be at Rokkasho village, Aomori Prefecture (Japan), and will contain 34 MW of NaS batteries (17 x 2 MW systems) from NGK Insulators Ltd (Nagoya, Japan) with the plan that the entire facility be commissioned at the end of March 2008. The cost of the energy storage component was not disclosed, although a 1.2 MW, 7.2 MWh NaS installation at an Ohio substation was recently installed for $2400/kW. This will be the largest combined wind and storage installation in the world when the facility comes online. The NaS energy storage facilities are designed to stabilize wind fluctuations and improve and provide bulk energy time-shift capacity by shifting night-time production to daytime by adding value to the energy to sell it on-peak. The developers of the wind farm wanted sufficient storage capacity so that the output of the combined systems would have a more constant power output to the 40 kV line to which the wind farm will be connected. With Japan’s best wind resources remote from load centres, transmission stability at the source of wind energy production is of great concern to Japanese policy makers, in order to get this wind energy to market.

In another example, VRB Power Systems Inc (Vancouver, Canada) is developing a 2 MW, 12 MWh VRB-ESS™ vanadium flow battery for the 6.9 MW Phase II of the Sorne Hill Wind Farm in County Donegal, Ireland. The unit will have a pulse-power capability to provide 3 MW of pulse power for 10 minute periods every hour in order to deal with short-term volatility in wind generation. The cost of the system is $9.4 million, and its goal is to overcome wind resource intermittency and improve the ability of the wind farm output to be sold at higher, firm power rates. The order is based in part on the positive outcome of a feasibility study on the implementation of the energy storage facility that was commissioned by Sustainable Energy Ireland (SEI) and Tapbury Management Limited. The study concluded that day-ahead firm contract profiles can be offered to market with a high degree of reliability. The study estimated that the reliability of selling firm power can be in excess of 98% with as little as 6 hours of storage capacity. These and other benefits to the wind farm owner provide an estimated IRR of 17.5% for this installation of a VRB-ESS. The study was also designed to have broader implications for the wider use of energy storage throughout Ireland alongside the rollout of wind power to meet Ireland’s Kyoto commitments. The study estimated that upwards of 700 MW of storage could be used across Ireland as wind expands to 3000 MW of installed capacity.2

Sustainability
In the not too distant future, wind energy is poised to become a significant - and potentially dominant - energy resource in many different power grids around the world. This prospect is a key plank in many public policy goals toward sustainability, but many improvements to the power grid are needed to make this happen. Energy storage facilities will be important assets for policy makers to enable these goals to come to pass. Energy storage technologies have already proven their capability to enhance the stability of the grid; they are in the process now of showing their ability to increase the profitability of wind farms. By operating in both of these modes, energy storage technologies are emerging as enabling technologies in support of the continued expansion of wind energy into the grid as part of wide-reaching policy goals.

 
A compressed air storage system in Iowa iowa association of municipal utilities

Energy storage facilities in this much more extensive use of wind energy will be focused on two aspects: wide area system stability and commodity storage of wind energy. As we saw with the system stability examples, a stable grid is a key precursor to greater wind integration, and this will be even more important as wind energy grows in scale. In fact, improving the capability of the transmission system will benefit wind energy more than other resources. Energy storage integrated into the transmission planning and operations strategy will allow large-scale wind energy to be moved great distances by enabling the high utilization of long distance transmission assets. Building-out or upgrading long-distance transmission systems is very expensive, so anything to increase the utilization of the line would make the building out of transmission lines to wind-rich areas far more cost-effective.

The Iowa Association of Municipal Utilities (IAMU) is developing the 268 MW Iowa Stored Energy Park (ISEP), a CAES facility in Dales Center. This $214 million ($800/kW) facility will use both off-peak system power and the output of a 75 MW wind farm to compress and store air in an aquifer. During peak hours the unit will operate as an intermediate load power facility. Construction is estimated to be completed in May 2011, with commercial operation beginning in July 2011. ISEP will be the first CAES facility to store air in an aquifer - the two other existing facilities utilize caverns in salt domes, similar to an underground natural gas storage facility. The aquifer is located in a sandstone layer that is capped with an impermeable later of rock. During off-peak hours, air will be pumped into the sandstone layer, displacing the water and forming a large bubble. The same wells will then allow the air to be drawn out when desired to produce electricity from the natural gas fired combustion turbine (minus the compressors). IAMU members increasingly need intermediate power resources, and the ISEP allows them to integrate more wind energy into their supply mix. Over time, this project will allow IAMU members to source more of their energy needs from local wind farms and purchase power off-peak.

Closing points
Energy storage can assist wind power expand as a key energy resource for the electric power industry. There is no single solution here - there are a number of energy storage technologies with different strengths that fit into a variety of roles in the market. That is actually a very good thing since there are many different challenges facing the continued expansion of wind. The number of installations of energy storage technologies supporting wind is growing rapidly as technologies mature into commercialization. Only through this mounting body of evidence and experience will wind developers and policy makers believe that energy storage technologies are very beneficial and cost effective - as many system operators already do. As that happens, energy storage technologies will move from only enabling system stability to also enhancing the profitability and sustainability of wind energy’s growth.

Richard Baxter is a Senior Vice-President with Ardour Capital Investments
e-mail: rbaxter@ardourcapital.com
web: www.ardourcapital.com

Ardour Capital Investments is an investment bank and securities research firm specializing in alternative energy and energy technologies. Richard Baxter is also the author of Energy Storage: A Nontechnical Guide (PennWell Publishing, 2006).

References

 

  1. Howatson, Al, and Churchill, Jason, International Experience with Implementing Wind Energy, The Conference Board of Canada, Ottawa, ON, February 2006.
  2. VRB ESSTM Energy Storage & the Development of Dispatchable Wind Turbine Sustainable Energy Ireland, March 2007.

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