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Viable economics for distributed storage

In December, I wrote about the U.S. Senate Committee on Energy and Natural Resources hearing about grid-scale energy storage.

At that hearing, Federal Energy Regulatory Commission Chairman Jon Wellinghoff stated in his testimony that distributed storage "can be grid scale...but it doesn't mean we should ignore large-scale centralized storage."

Wellinghoff's point: "It's a matter of looking at cost benefits and economics to determine what's viable."

On Wednesday, the Southern California Public Power Authority (SCPPA) and Ice Energy announced their intent to do just that.

Using Ice Energy's Ice Bear(R) smart grid-networked distributed energy storage systems, SCPPA will shift approximately 64 gigawatt-hours of on-peak consumption to off-peak annually. The more than 1,500 host sites for the Ice Bear will include government, commercial and industrial buildings throughout Southern California within the SCPPA's 11 municipal utilities (Anaheim, Azusa, Banning, Burbank, Cerritos, Colton, Glendale, Los Angeles, Pasadena, Riverside and Vernon).

This is no small pilot. In fact, it's the largest distributed energy storage project of its kind anywhere in the world, and the United States' first utility-scale, smart grid-enabled distributed energy storage project. The intent of the 53-megawatt project is to help to permanently reduce California's peak energy demand by shifting a significant amount of on-peak electrical consumption to off-peak periods. This, in turn, improves the reliability of the grid without the need for increased generation.

"We analyzed this particular project in several ways," said David Walden, SCPPA's energy systems manager, "and made a decision to work on the demand side of the problem rather than the supply side."

Even more interesting is that this project is cost-effective, without the need for government incentives to help bring implementation costs down. "Our technology is cost-effective on a stand-alone basis, without support," Ice Energy's chief executive officer, Frank Ramirez, said, while noting that, in general, government incentives that drive the cost of new technology very low "help break inertia."

Deployment will begin immediately, to be completed over two years. Once a each site is up and running, "they start working on Day One," Walden said.

Chris Hickman, Ice Energy's senior vice president of utility solutions, noted that "all forms of storage are good," and each type of storage provides a solution to different problems on the grid. "Each utility will have different needs." Hickman said flywheel is fast-acting, thermal (such as Ice Energy's solution) can shape load, and large batteries fall in between the two.

Smart Grid Demonstration Grant projects recently announced will test a number of different approaches to grid-scale energy storage. But while those projects gear up, all eyes will be on Southern California as this project is deployed.


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