As energy storage solutions approach the scale of generation assets their benefits to owners will multiply, AES Energy Storage president John Zahurancik tells EcoGeneration.
As more sources of renewable energy are added to the generation mix attention is turning to ways to match erratic supply points of electricity with fairly predictable demand. In homes with solar PV, batteries are boosting self-consumption of energy generated on site.
System owners will always be better off using the energy generated on their rooftops than selling it to a retailer. Adding storage is a fairly simple solution, if you can afford it.
The benefits of building storage on a far larger scale, however, are a bit harder to understand because the commercial benefits are usually determined by the market environment. In some places storage is a substitute for building new transmission, in others it’s a better solution than building a peaking power plant. The list of uses goes on: demand response, peak shaving, load shifting … is there anything storage can’t do?
“If you’re not counting the other benefits you’re getting then maybe for one job [storage] may be more expensive,” says AES Energy Storage president John Zahurancik. “But if you realise once you have this, what are all the ways I would naturally use it? When you add all those benefits up it becomes very cost-effective.”
The technology may be relatively new as a substitute for buying a power plant, he says, but everywhere AES has added storage, with 476MW of storage solutions built or under construction in seven countries around the world, it has improved reliability, reduced costs and reduced emissions.
With systems in place nearly 10 years, AES has had plenty of time to learn about the possibilities for what is a relatively new technology in the utility-scale energy world.
When systems are commissioned the main focus for owners is fast response and relatively short duration tasks like managing frequency and outages on the power system, Zahurancik says. This is work that is difficult for power generators to do because they require very quick reaction times that tend to wear out power generators. “That’s typically where most markets start because it’s a pressing job and an expensive job.”
If a battery can be relied on to help manage frequency, power generators can be left to run at a steady state without incurring higher costs or pumping out extra emissions.
Almost the real thing
As owners have settled in with their AES storage systems the way they are used tends to evolve. The ability for rapid dispatch and accuracy of charge and discharge levels set storage apart from the pack, he says. “There are things you can do with storage that you couldn’t do with any other type of generator at all – there is no power generator that can absorb electricity, and that gives the system operator a lot of flexibility in managing the power grid reliably but at a more cost-effective level.”
Other than savings from managing a load profile and cutting reliance on retailers, the addition of large-scale energy storage allows owners access to another revenue opportunity in the frequency control ancillary services (FCAS) market. As more and more renewables are added to the nation’s energy mix to replace coal and gas, and intermittent sources of energy have to be managed, it’s likely that the FCAS market will become very important and very valuable.
But can massive batteries provide inertia, the property many say can only be supplied by large synchronous spinning weights? “Yes,” says Zahurancik, before pausing for a moment. “I guess I should qualify that … if you’re an electrical engineer, the answer is no, because inertia is the by-product of a rotating mass.”
The very fast response time provided by batteries can allow a storage unit to be programmed to respond along the same inertia response curve as a spinning mass, he says. This type of synthetic inertia can “for all practical purposes” provide the same service to the grid as the real thing, he says.
Bite the bullet
Back in 2008 and 2009 AES was installing batteries for about $6,000/kWh, Zahurancik tells EcoGeneration. “We were finding economic cases at a very high battery cost,” he says. “Today, where costs have dropped 90%, we’re finding more and more cases.”
The flexibility of the technology to fulfil all sorts of roles can make the exercise of working out whether or not to commit to storage rather difficult, especially when everyone’s telling you batteries will be cheaper tomorrow than they are today.
Many utilities around the world are including storage as standard in new procurements, he says. A more-conservative middle group is assessing storage and the late-coming crowd is hearing about it but still sitting on its hands.
It’s a game of wait and see.
“Every day the power assets we’ve already invested in as a society are getting older, and we’re adding other things,” Zahurancik says. “When we add a power plant or transmission line very often the utility, the power system operator, the regulatory agencies, they’re making decisions that have an impact over at least 10 years, in many cases 20 or 30 years. If you’re not looking at the best available solutions today because it might get cheaper in the future, you’re effectively making a very long-term decision to use the old solution, and I think that’s one of the dangers.
“The longer you delay with that, you’re just charging customers more than they need to pay to have a reliable grid.”
It’s the same case as with renewables in general, he says. If we hadn’t bitten the bullet and invested in them yesterday, they wouldn’t be as cheap as they are today.
Down in San Diego
With storage systems reaching capacity levels around 100MW the roles for storage are expanding. “You’re starting to see these systems get to the same scale you would buy power generation or transmission on,” says Zahurancik, who says large battery systems can replace transmission, defer investment in a peaking plant, enter demand response markets and more. “There are probably crisis points in the transmission system where you can add storage and it would have a huge impact on price and on effectiveness of that grid.”
The company is also busy working with commercial-industrial customers who are looking at better managing reliability or better managing cost, he says, where storage c
ould be a better solution than building a new generator.
In February AES commissioned the largest lithium-ion storage solution in the world, built for San Diego Gas & Electric in California as a substitute for a gas peaker (pictured at right). The 37.5MW battery system, split between a 30MW installation and 7.5MW installation, was deployed in about seven months and is also providing services to the grid, Zahurancik says. “The things we learned [from the San Diego project] are monumental.” He calls San Diego Gas & Electric a “progressive utility”.
In San Diego, storage came in very rapidly to make a big difference in a crisis, and he sees the same thing happening in Australia. “Australia is ideally suited for storage to have a great impact.”
AES is working in Australia on stand-alone storage projects and planned installations connected to renewables generation with a number of developers including Lyon Group.
In July the company announced a joint-venture with Siemens. Fluence, a 50:50 partnership with the German industrial giant, will be AES’s primary vehicle for its technology solutions. AES may choose to own and operate projects, Zahurancik says, in which case it will buy the technology from Fluence.