In partnership with PLMA, this group is for practitioners from energy utilities, solution providers, and trade allies to share load management expertise and explore innovative approaches to program delivery, pricing constructs, and technology adoption.

WARNING: SIGN-IN

You need to be a member of Energy Central to access some features and content. Please or register to continue.

Post

Microgrids and battery storage – industrial use cases

image credit: Dreamstime.com

Microgrids plus batteries, it’s one of the most important energy solutions to help increasing the share of Renewables.

Yet Battery Storage not only helps to increase the share of renewable power in the system. They also help to secure supply in critical times, and further reduces grid constraints and peak demand.

Thus, industrial clients increasingly turn to battery storage to maintain security of supply and reduce grid costs by peak shaving. One of the latest companies to turn to battery storage for peak shaving was Shell Canada, which just installed two #batterysystems at its Brockville and Sarnia facilities.

News magazine energy storage reported in November that Convergent had completed the projects.

At the Brockville facility, Convergent installed a 1-megawatt/1-megawatt-hour battery for the Shell lubricants factory. At Sarnia, the New York-based developer and asset owner confirmed it had activated another 10-megawatt/20-megawatt-hour battery system.

The idea is to use these systems mainly for reducing demand at peak times, e.g. peak shaving. This helps to reduce stress on the grid and reduces demand charges for Shell, creating a win-win situation. This comes as the Ontario power market is different from the US market as it also hits larger customers with demand charges, not only SME clients, charging them based on the five single hour peaks during the year (on five different days). Any company that can reduce peak demand has a huge financial advantage.

Yet Shell does not stop in Ontario. The company is also investing in a battery system at its Tabangao refinery in Batangas in the Philipines. There, a 3 MWh battery system will support a 3 MW solar  PV system to increase the renewable share at the refinery.

This means, behind the meter microgrids + batteries not only provide back-up power in case of emergencies, but also help to reduce costs of grid supply by lowering demand charges.

In the US, such systems benefit more the utilities than large clients, as the help to reduce peak demand on power lines into certain areas of supply. Therefore, we see these systems more deployed by utilities such as Snohomish Public Utility District, or Austin Power, as they help the utility to avoid grid expansion.

And then there are hybrid projects, where the battery acts as both peak shaving device and back-up. SPUD is looking for that solution at its Arlington project. The battery system there acts both as emergency power generator for the dispatch center and as help against grid bottlenecks.

The SPUD project differs from the other projects also, as it uses both Lithium-Ion and Vanadium redox flow batteries for testing the technologies. Lithium Ion batteries are currently covering over 90% of the market, yet refineries would be ideal clients for Vanadium redox flow as they have the expertise in handling the acid chemicals which is required for this technology (HCL). Vanadium redox flow batteries are supposedly better suited for daily cycling, which will occur in peak shaving operation as you try to limit your power demand to a certain pre-set limit, which might require daily discharge.

We will certainly see more of these systems in behind-the-meter applications as clients get smarter in finding benefits and more experienced in operating such systems, be it Vanadium or Lithium-Ion. And we need more such systems to increase the share of renewable power in the grid.

Also, as we see more storm induced outages, and as utilities start to offer resilience as a service to keep the lights and IT services going, will see more utilities investing in such systems to improve security of supply. This leads to the question: Is a regulated utility allowed to offer such services, or does this business belong to ESCO’s? Or, shall this business be left to battery companies?

Yet for now, let’s hope more large companies follow the lead of Shell. Especially in countries with huge demand growth, where both the companies and the environment benefit. Which is nice for everyone.

Sources:

https://www.energy-storage.news/news/convergent-completes-oil-refinery-ess-project-for-shell-canada

https://business.mb.com.ph/2019/10/07/shell-powers-refinery-with-solar-gas-battery-hybrid-technology/

 

Christoph Riekert's picture

Thank Christoph for the Post!

Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.

Discussions

Matt Chester's picture
Matt Chester on Feb 12, 2020 2:33 pm GMT

This comes as the Ontario power market is different from the US market as it also hits larger customers with demand charges, not only SME clients, charging them based on the five single hour peaks during the year (on five different days). Any company that can reduce peak demand has a huge financial advantage.

This is interesting-- what are the impacts of the five single hour peak measurements? Do you find that large users are thus more diligent about spreading out their power use? Are there any downsides? Would love to hear more about the impacts of this type of rate structure (and obviously how storage definitely becomes more valuable to them as a result!)

Christoph Riekert's picture
Christoph Riekert on Feb 20, 2020 3:06 pm GMT

Dear Matt.

Well, Ontario measures 5 peak load hours in given base periods, and then calculates the share of the peak load of a company on these 5 days.
Your company will then carry that share of peak load costs.

www.ieso.ca/en/Sector-Participants/Settlements/Global-Adjustment-and-Peak-Demand-Factor

If a company can reduce their share of load in these five hours, they will thus pay a reduced demand charge for an entire year.

So, prediciting the peak demand hours and reducing load in these hours brings enormous benefits. Large companies can do that themselves, smaller ones will use energy service companies to help them.

 

Matt Chester's picture
Matt Chester on Feb 20, 2020 5:19 pm GMT

Interesting. I haven't heard of these types of rate calculations (then again, I'm not in the commercial sector). Is this exact methodology common or is it unique to Ontario?

Christoph Riekert's picture
Christoph Riekert on Feb 20, 2020 7:50 pm GMT

Matt,

most utilities only have a single hour, or only 15 min intervall (Germany).

That sets the peak demand for either a monthly bill or yearly bill.

And the price for the capacity is predetermined in most rate areas.

Yet behind-the-meter batteries will come into more use as capex drops and capacity prices will raise. Could be worth another article.

Matt Chester's picture
Matt Chester on Feb 20, 2020 11:13 pm GMT

Yet behind-the-meter batteries will come into more use as capex drops and capacity prices will raise. Could be worth another article

Please come back and post a link to it here if you do end up diving in-- would love to read more of your thoughts! Thanks, Christoph!

Bob Meinetz's picture
Bob Meinetz on Feb 12, 2020 5:25 pm GMT

"This helps to reduce stress on the grid..."

No Christoph, the poor transmission wires on the grid do not get tired from carrying a heavy load. They don't seek therapy for all the stress they're under, delivering a reliability supply of electricity to customers.

Battery storage is all about reducing demand charges for Royal Dutch Shell, at the expense of increased emissions. "What? I thought batteries were supposed to reduce emissions!" you might say. But no, due to internal resistance and bi-directional inversion losses, batteries waste anywhere from 15-20% of the electricity that goes into them. Making electricity that comes out 15-20% dirtier than what went in.

"Yet for now, let’s hope more large companies follow the lead of Shell..."

Let's instead hope more of the public learns enough about energy to be able to distinguish greenwashing ("conveying a false impression or providing misleading information about how a company's products are more environmentally sound") from actions which are effective at reducing anthropogenic climate change.

As a company whose fuels are one of the primary causes of climate change, one which earned $14 billion in profit from selling them last year, Shell has nothing to offer for preventing climate change. So let's hope they go bankrupt, and that more large oil companies follow their lead.

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »