Energy storage gives utilities, power marketers and industrial customers the flexibility to respond to power shortages, price increases or brownouts. For instance, utilities have to accurately measure their load generation with their customers’ needs. This is a mammoth task since energy consumption fluctuates. This is especially true for industrial sites as they often adopt new processes which affect power usage levels. Without adequate capacity, all wholesale buyers of electricity are held hostage to the whims of the market.
In California and New York City, businesses can expect to pay over 40% of their monthly power bill in peak demand charges. In some cases, that can range up to 70%.
Up until recently, customer-sited storage has seen limited growth but companies like startup Green Charge Networks and Stem are beginning to spark interest in the market as consumers recognize the need for flexibility and independence from the grid.
Stem recently brought in US$15 million from GE and Iberdrola, and closed a US$5 million fund to finance 15MW of projects.
Green Charge Networks has developed a new energy storage appliance, the GreenStation™ 2.0, which aims to empower industrial and commercial ratepayers to manage power consumption and rising demand charges. The product promises easy installation, is maintenance-free and provides a decent return on investment.
It has been field-tested in partnership with the US Department of Energy through a three-year long smart grid demonstration program in New York City.
Green Charge Networks has unveiled a new set of project agreements worth 1.1MW of cumulative capacity. The portfolio consists of lithium-ion batteries installed at retail stores like 7-11 and Walgreen, colleges and municipal buildings in California and New York.
The energy storage unit, a lithium-ion battery system, is designed to operate like a mini, on-site, peaker plant. It gives businesses energy independence as they use their self-stored power during peak demand rate periods instead of using grid power. This results in a flattened power load curve during peak consumption periods, saving the customer and utility lots of money. Existing customers are already benefitting from a 15% reduction in their monthly power bills.
Benefits for the environment
In addition to cost-cutting, the device has positive implications for the adoption of renewable energy which is considered to be an intermittent source of power. In addition to this, utilities can forego investments in power plants as well as transmission and distribution lines, since these assets would now be more efficiently run. As the number of large-scale customers storing energy off the grid increase, utilities won’t have to build new peaking plants as economic activity in their service area escalates.
Bankability continues to stand in the way of this fledgling market as many storage devices are unproven and could be viewed as “risky” for investors. Also, energy storage technologies are still quite expensive. However, as government-led initiatives are developed (such as in California where utilities have to buy energy storage to help them manage the growing amount of solar and wind electricity that flows into the grid), investors will show more interest and devices will enjoy increased commercialisation.