Commercial, Distributed Energy Resources, Energy Storage, Industrial - September 7, 2016 - By Janice Lin
Energy storage: The facility manager's newest tool
Our electric power system requires a constant balance of supply and demand. In the past, we’ve traditionally overbuilt supply to maintain electric system reliability: ensuring that at any given time, there is enough power supply available to accommodate peak annual demand. The net result is that we have trillions of dollars of infrastructure that isn’t used very often, and greenhouse gas emissions from power plants that aren’t run very efficiently.
Energy storage, therefore, is vital to our electric power system. It is a solution to fixing our aging power grid, a critical tool in increasing the spread of renewable energy, and a bridge between the needs of utilities and their customers. Energy storage can be installed at many points in the grid. In fact, there are already tens of thousands of grid-connected storage systems installed at facilities throughout the world. But what is energy storage, and how can it be put to use, today, in facilities across the country?
Grid-connected energy storage is not a new concept. Currently, there are more than 1,000 storage systems — equivalent to 150,000 megawatts MW — installed worldwide. Energy storage can refer to a wide range of technologies and approaches to manage power. There are a number of technologies relevant to commercial and industrial facilities, which can operate as standalone systems or in tandem with a solar PV photovoltaic installation:
• Solid-state batteries: Batteries are often paired with an intelligent software system that can charge and discharge them based on a building’s energy usage, weather patterns and historical use patterns.
• Flow batteries: A type of rechargeable battery, where energy is stored directly in the electrolyte solution; benefits typically include a longer cycle life and fast response times.
• Flywheels: These systems store electricity in the form of kinetic energy. If power fluctuates or goes down, the rotor will continue to spin and the kinetic energy that results can be converted into electricity. Flywheels are useful for power quality and reliability.
• Thermal storage: Thermal technologies enable temporary energy reserves in the form of heat or cold. Ice storage, for example, works by making ice during off-peak hours when rates are low. When demand increases and rates go up, the ice system turns off the AC and uses the stored ice to provide cooling.
Energy storage can be installed at many points in the grid, including factories and other commercial or industrial facilities. There are already many tens of thousands of grid-connected behind-the-meter storage systems installed at commercial, industrial and residential locations throughout the world. These systems are providing a multitude of benefits to facilities, including demand charge reduction, participation in demand response programs, maximized time-of-use rates, environmental benefits and emergency backup.
Energy storage has many environmental benefits that can make it a valuable tool for meeting sustainability goals. By improving the overall efficiency of the power grid, storage accelerates the broader adoption of renewable energy. On a more local level, an energy storage system has no emissions, so it can be placed anywhere in a facility with no immediate environmental or air quality impacts. And if paired with solar PV, not only will the power be GHG-free, the combined system is eligible for federal investment tax credits.
Demand Charge Reduction
Depending on location, many commercial and industrial facilities are subject to demand charges on their energy bills. These charges are based on the 15-minute period in which the demand for energy is highest throughout the day and in some cases, can account for 50% of the total energy bill. While energy efficiency or solar PV can reduce total electricity consumption, these benefits do not always coincide with a building’s peak usage. Energy storage systems, especially those paired with intelligent software, can track a facility’s load and reduce demand charges by dispatching battery power during periods of peak demand, effectively ‘flattening’ the load.
Participation in Demand Response Programs
Demand response for commercial and industrial facilities traditionally involves ratcheting down usage at times of peak demand. Energy storage can enable participation in demand response markets without impacting on-site energy use or operations. By responding to utility price signals, storage systems can increase financial return from participating in DR programs, while also benefiting the grid overall.
Maximizing Time-of-Use Rates
Energy storage systems can shift consumption of electricity from expensive periods of high demand to periods of lower cost electricity during low demand. This reduces the risk of lowering the value of on-site solar if tariff structures change over time, and peak demand periods shift to the evening when the sun isn’t shining. This also allows facilities to make the most of time-of-use pricing and reduce tariff structure change risk to electricity cost.
Planning for emergency backup power is an essential part of a resilience plan. Historically, commercial and industrial facilities have invested significantly in local emergency backup infrastructure. With advanced storage solutions on the market today, there may be opportunities to upgrade this infrastructure to not only provide emergency backup, but also a host of other money-saving and money-making solutions. And by using this infrastructure on a daily basis for demand charge reduction, its reliability and availability in the event of an outage can be increased as compared to a standalone battery and diesel generator that is only during an outage.
Janice Lin is the director and founder of the California Energy Storage Alliance and the Founder and Chair of the annual Energy Storage North America conference. She has more than two decades of experience in clean energy strategy, market development and corporate strategy. As founder and managing partner of Strategen Consulting, she has advised a diverse range of clients including renewable energy equipment manufacturers and service providers, large corporations diversifying into clean energy, and real estate developers building sustainable communities.
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