Battery Energy Storage Systems and the Grid’s Next Leap Forward

Battery Energy Storage Systems and the Grid’s Next Leap Forward

by David Smith

In an age of seemingly never-ending technology disruption – think iPhones, Uber, and driverless vehicles – “the grid”, that ubiquitous system of power lines, substations, switches, utility poles and transformers, has been conspicuously slow to evolve. Recently, however, some exciting changes in energy storage have entered the scene and are changing the future of the grid. Batteries, specifically the large tractor trailer-sized variety, are beginning to reshape how the grid is built, operated and expanded. Increasingly, as costs have declined and performance has improved, these “grid-scale” batteries are being used to store and discharge bulk power in support of electric grid operations, improve power quality and reliability, avoid costly system expansions, and provide utility planners with new-found flexibility.

To appreciate the impact battery energy storage systems (BESS) will have going forward, it’s important to understand the inherent inefficiency of the power grid as it has been built-out and operated over the past 120 years to meet the uneven demands placed on it. Capacity to meet the peak demands of daytime and hot summer days goes unused during non-peak times. It is estimated that 25% of grid infrastructure and assets are needed less than 400 hours per year. Considering the country’s power system is made up of approximately $1 trillion of capital equipment, this means roughly $250 billion is used only 5% of the time. This capital inefficiency has not gone unnoticed by policy makers and regulatory authorities. Aside from utility programs and incentives designed to induce curtailing demand and/or shifting usage to off-peak periods, not much has been done to improve inefficiencies. Batteries, however, are changing the game. Deployed on the customer side of the meter or connected directly to a utility distribution system, batteries can reduce the need to build expensive peak capacity, while at the same time help meet growing demand.

In Brooklyn, NY, Con Edison’s Brownsville substation is being taxed beyond capacity on most weekdays during the summer. The cost to upgrade Brownsville and safely handle the growing load is estimated at $1 billion. The cost to deploy energy efficiency, distributed generation and battery storage systems to reduce and/or shift loads comparable to the required capacity increase is approximately $250 million. The math alone is compelling – Con Edison rate payers could enjoy potential savings of $750 million! Burns is designing a microgrid for three adjacent hospitals that receive power from Brownsville. The microgrid will seek to lower total demand by 8 MW using a combination of batteries, fuel cells and solar.

In addition to New York State’s regulatory shift towards energy storage, a growing number of states and utilities are beginning to follow suit, using distributed generation and other non-wires alternatives (NWA) to optimize the grid and unlock system capacity. California’s storage initiative calls for 1.3 gigawatts by 2020. Hawaii, Massachusetts, Nevada, Washington and Oregon also have legislation or programs in place, setting targets for battery energy storage. Even New York City – in response to grid congestion issues as exemplified by the Brownsville substation overloading – has set a 100 MW battery target by 2020.

Even in places and applications where there are no incentives or policy targets, grid-scale batteries are proving their value. At the Navy Yard in Philadelphia, the Philadelphia Industrial Development Corporation owns and operates a 30 MW electric grid. Burns, as owner engineer, is supporting the deployment of 1-2 MW of battery storage to reduce peak load, defer costly substation expansion, and earn new revenues through demand response and other electric market programs. This “stacking” of benefits reflects the versatility and appeal of dispatchable battery storage.

Another benefit of batteries is that they can store power from renewable energy such as solar and wind. These intermittent resources don’t always produce power when it is needed most, however batteries can store excess electricity during low demand periods and discharge at peak times. Coupling batteries with renewable energy promises to significantly disrupt how power is generated and distributed, and represents dramatic progress towards decarbonizing the grid. This shift is already happening, as new large utility-scale plants based on hybrid power systems are being designed and built to combine renewables, BESS and conventional generation. Burns is assessing a hybrid power plant and microgrid that would combine up to 20 MW of solar PV, 10 MWH of batteries, and 20 MW of reciprocating engines for a major mid-west international airport seeking resilience, power reliability, and net-zero carbon emissions – all at a cost competitive with conventional grid power.

It has been some time since Thomas Edison’s power plant first supplied electricity on Pearl Street in lower Manhattan to a network of 400 lamps in 1882, but with the cost of both batteries and renewables continuing to drop, and with the pace of technological advances, the grid is on the cusp of a great leap forward!