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Question

Could you please assist me in finding information about Cloud Energy Storage implementation?

Currently, I mainly need information about the implementation of cloud energy storage (without battery) including some financial information, risk management, production, and market challenges, and also opportunities. This research is going to be part of a university project on energy transition. We are required to propose an idea to one of the largest oil and gas companies to support them in the energy transition. 

Answers

CES (Cloud Energy Storage) reflects a trend associated with using remote resources to improve the electric system's performance by better adjusting supply and demand.

My suggestion is approaching the clients (oil and gas companies) to understand their challenges related to power usage. Then you could explore your options to help them with their demand x hour curve so as to achieve and maintain a better load factor (for example) therefore reducing power costs.

CES is only about dispatching remote power resources to improve the client's load profile. It is - conceptually - similar to other very well known solutions like purchasing power at the free (deregulated) markets. It is a financial transaction. Or load control so as to reduce maximum demand by shedding loads during high power usage taking into account that only a very low percentage of the energy consumption is above for example average demand plus 2 standard deviations.

I hope this helps.

Rafael Herzberg
rafael.herzberg@gmail.com

Fatima - hopefully you are getting more details from these firms on what they need as this is a very broad question, not even defining what form the energy storage is taking - we tend to default to electricity but of course there are many other forms of energy storage.  Also if we are discussing electricity, every region of the world has different market conditions where different regulations can overwhelm economics and distort markets making longer term investment decisions more reliant on politics than on economics - Germany is a great example of that.  Whether this analysis and data sharing occurs in the Cloud is relatively irrelevant - it can be a great solution to data sharing and control but is not mandatory.  

I agree with Rafael, assuming that this exercise is focused on their usage - have a model that accurately forecasts their energy usage is a good starting point and then being able to know how they can manipulate their usage to match market condition for price and availability of energy.  Google has recently articulated their use of AI to match their renewable energy generation from their portfolio of assets in various regions to the compute demand at their data centers - this maybe a good example of matching load with supply using AI on the Cloud to minimize the need for storage. 

Good luck

Gary

 

As defined by the originator of the term, cloud energy storage (CES) refers to aggregation of unused battery capacity.   I agree with the others who responded that non-battery cloud energy storage would be equivalent to a virtual power plant or aggregated demand response. 

That said, I suppose one could envision a business model for sharing energy storage capacity through aggregated "cloud" with non-battery storage such as startup Vault Energy Storage which is based on gravity and kinetic based energy storage.  Then there are thermal and fuel cells to consider, along with traditional non-battery storage such as flywheels and pumped hydro.  It's harder to imagine business models with those forms of storage.  Most of the pumped hydro today is owned by utilities and the market for flywheels hasn't been promising in the past.

Jasjeet Singh's picture
Jasjeet Singh on Nov 7, 2019 4:12 am GMT

I agree with Jill's view and mini VPPs could be the answer.

The concept of a cloud, in general, implies that the resource in question is located at some remotely managed location. In the case of cloud energy storage, that means that said resources affect energy use and storage.

It is essential to recognize that grid operators view the reduction in energy consumption to be similar to energy generation. Meaning that if you have an energy resource(s) (refrigerators, air conditioners, appliances, factory equipment, etc.) that are consistently known to consume 100 kW, shutting down said devices (from grid operators perspective) is identical to adding 100 kW of capacity to the grid.

Let's say you have control of every AC in every residential building, in a specific area. Buildings in question are all connected to the same location sub-station. For the sake of simple math, let's say there are 50 buildings, and each building has 100 apartments. Each apartment has a single AC unit rated at 2000 W. In the middle of a hot summer, if you were to shut down all of those ACs, that would amount to 10 MW of free-floating capacity.

Although rules vary, a lot of grid operators will value a nega-watt (a negative-watt is a watt obtained via curtailment) at the same rate as a watt obtained via generation. On top of that, the grid operators will also pay a "reserved capacity," which you will get regardless of whether the grid operator chooses tap CES resources.

If we look at NYC, the average cost kW/h is $0.25, thus turning off all CES resources ( from the example above) for one hour will net you $2,500 in energy fees. On top of that, you can get around $10 per kW of reserved capacity per month. Meaning every month, you will get $100,000 from the grid operator aside from the CES resource use fee.

Challenges are social, regulatory, technical. For one, you need to have reliable, consistent, and ongoing control of your CES resources. Managing hundreds or even thousands of devices across vast distances with different owners and behaviors is challenging. Further, aggregation of these devices need to comply with rules and protocols set forth from each grid operator. If you fail to deliver on your commitment to providing capacity, you promised there are substantial penalties.

From a regulatory perspective, you have to deal with each grid operator independently. Each operator will likely have their own set of rules that you have to follow and will have their unique way of doing validation and verification. It is critical to recognize how each grid operator will judge the performance of each CES resource. Specifically, what does it mean to prevent CES resources of consuming energy it otherwise would. How do you know that that CES resources would not turn off on its own (in case of ACs)?

From the social perspective, you need to need to find a way to mitigate impact curtailment will have on CES owners or at the very least, keep them in the program. Emphasis is placed now on ensuring no or minimal inconvenience to CES owners.

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