Generac Grid Services Blog

Two years ago, Enbala posted a blog that posed a proverbial 64 dollar question. Noting that “DERs are becoming so entrenched in the daily operations of the grid that it’s tempting to ponder just where their limitations lay,” we then asked, “Can DERs play in utility wholesale markets?”

I recently reviewed an EPRI document that discussed storage, and by far the largest size storage systems were pumped storage plants.  I wondered why they did not include hydro (non-pumped) storage, as this form of storage is far larger than any other form of storage that is available on the grid now.

Parts of North America, but sadly not all of it, are blessed with mountainous territory that has many rivers and streams that run downhill, and many of these have been harnessed for electricity production. While not specifically intended as storage plants when built, the value of their storage may well turn out to be larger than the value of the electricity that they may produce.

Consider a hydro dam that is 35 M in height with a reservoir that is 10 km². Discharging the top 1 M of water through a generating station (90% efficient) would release almost 840 MWh of stored energy. This is a small hydro plant, with a small reservoir behind it, yet the storage is almost 840 MWh/M of depth that is drawn from the forebay.  That is in addition to the electrical energy generated for use.

So how does a utility that has no pumps manage to store and return energy?  The process is both simple and efficient.   

For more than 100 years utilities have supplied electrical power to customers and have done so with good reliability. The principle is simple. Loads may do as they wish. They may be random or intermittent and generally are not individually monitored by the utility.  Generation, on the other hand, MUST be both dispatchable and monitorable, and electric system operators must be able to manage the real and reactive power from a generator.

Historically, utilities have become very adept at managing generation capacity to maintain a continuous balance between supply and demand. But today, the world is faced with a need to reduce or even eliminate carbon emissions, which complicates the supply-demand balance. Most electricity in the US, for example, is generated by burning fossil fuel. This needs to change, along with change to the electricity supply system and the direct customer use of fossil fuel.  We are looking to remove the steady performers, and to replace them with supplies that are intermittent and perhaps random, all the time maintaining a balance between supply and demand.

Right now, analysts see enormous growth ahead for solar-plus-storage systems. A report by IMS Research forecasts the market for storing power from solar panels – which was less than $200 million in 2012 – to reach $19 billion by 2017. And, it’s easy to see why.

After all, rooftop solar panels are more valuable to people if they can store the excess energy produced and prolong the benefits of the on-site generation capacity. Plus, the flexibility of battery energy storage makes it truly valuable. With a quick response time and precise controllability, batteries can provide a wide set of grid services, so they can deliver value to multiple participants in the power system, including end-use customers, distribution utilities and wholesale market operators.

This blog was co-authored by Enbala and the Rocky Mountain Institute (RMI). Enbala extends its heartfelt thanks to the Institute for the insights and effort that went into creating this piece. 

INTRODUCTION:

Demand flexibility - allowing household devices like HVAC systems and smart appliances to interact with the electric grid in response to real-time price changes - can save customers money and lower the overall cost of electricity. The Rocky Mountain Institute's recent paper, The Economics of Demand Flexibility, analyzed the economics of making common household loads controllable and responsive to electricity price signals. The Institute found that just making two devices flexible, i.e., smart thermostats that could flex an HVAC system’s output up or down by 2 degrees and smart water heaters that could change the timing of water heating, could lower system-wide peak demand by eight percent and save $10–15 billion in costs to the grid annually. 

Given the proliferation of renewables — plus the dramatic growth rates predicted for solar and wind power over the next year or two — plenty of people are looking to storage as the way to save us from renewable intermittency. But, storage is pricey. And, given the potential for long stretches of inclement weather that knocks solar PV output down or fails to turn the wind turbines, the storage we have available today is unlikely to be sufficient for the power grid’s needs.

Hybrid storage – the process that leverages the flexibility of behind-the-meter resources to support grid services – is dramatically less expensive than other generation or storage options, plus it has other benefits. On the price side, Enbala has found that our hybrid storage solution typically costs as much as six times less than peaker plants and more than a third less than utility-scale storage options. By the numbers, that means utilities would spend some $900 per kW for a peaker, $500 per kW for utility-scale battery storage and $150 per kW for Enbala.

Distributed energy resources (DERs) like household solar and battery storage could provide enormous support to large and small electric systems that are now threatened by rising penetration of these technologies. DERs bring new capabilities and value. But, here’s the problem. Few jurisdictions facilitate distributed energy participation in grid markets to promote grid reliability and power quality.