Aug 26 2009

PG&E Opts for Energy Storage

Posted by: Jonathan Marshall

When the wind stops blowing or the sun goes behind a cloud, where will we get the clean, renewable energy we need for a sustainable economy?

From storage--batteries, fuel cells, flywheels or other devices that convert surplus electricity to chemical or mechanical energy, then feed it back into the grid on demand.

Cheap energy storage is sometimes called the holy grail of renewable energy and a key component of future "smart grids" envisioned by utilities like Pacific Gas and Electric Company. It's also one of the hottest areas of clean-tech investing.

Now PG&E is taking steps to make it a reality, applying today to the Department of Energy for a $25 million Smart Grid stimulus funding grant, under the American Recovery and Reinvestment Act, for a large compressed air energy storage (CAES) project.

The application follows a previous PG&E request this month for a $42.5 million Smart Grid grant for a Home Area Network deployment project, in collaboration with the city of San Jose, Stanford University and several leading technology companies. Building on the utility's advanced SmartMeter(tm) program, it will help customers lower their energy costs and usage by installing 75,000 in-premise energy displays and controllers at select mid-sized commercial and industrial customers.

PG&E also joined a Smart Grid grant application this month led by the Western Electricity Coordinating Council to install high-tech devices called synchrophasors to monitor and enhance the reliability and performance of the Western electric grid.

With its latest project, PG&E plans to pump compressed air into an underground reservoir, using mainly wind energy produced during non-peak hours, and then release it to generate electricity during periods of peak demand. The project has an output capacity of 300 megawatts--similar to a mid-sized power plant--for up to 10 hours. It will take an estimated five years to design, permit and build.

"Energy storage is a strategic complement to the generation resources that provide power to our customers," said Hal La Flash, director of emerging clean technologies at PG&E. "This project will help us maximize the efficiency and flexibility of our system while enabling the delivery of clean, renewable energy."

Large-scale energy storage holds tremendous promise for helping the environment, improving grid reliability and reducing energy costs:

• It will reduce greenhouse gas and other undesirable air emissions by enabling greater use of intermittent renewable resources and by reducing the need to use conventional fossil-fuel "peaking" plants to meet peak demand.
• It will improve asset utilization by absorbing excess generation during periods of low demand and reducing the need to add new generation for peak periods.
• And it stands to lower costs by storing energy produced when prices are low (off-peak) and returning it to the grid when prices are high, avoiding the need to buy costly on-peak electricity.

CAES has orders of magnitude more capacity than typical utility batteries and appears to be the most cost-effective form of storage, according to technical experts at the Electric Power Research Institute. The concept has been proven by projects in Alabama and Germany. Several utilities, backed by DOE and Sandia National Laboratory, are working on a major CAES facility in Iowa.

A massive study of CAES at Princeton University last year concluded that it is ideally suited to smoothing out the ups and downs of wind energy, which often peaks at night:

CAES appears to have many of the characteristics necessary to transform wind into a
mainstay of global electricity generation. The storage of energy through air compression
may enable wind to meet a large fraction of the world's electricity needs competitively in
a carbon constrained world.

This project isn't PG&E's first foray into energy storage. For many years it has operated a 1.2 gigawatt hydroelectric plant near Fresno, the Helms Pumped Storage Facility, that uses inexpensive power at night to pump water into a higher reservoir for release during the day, when power is more costly. PG&E received permits last year from the Federal Energy Regulatory Commission to explore two additional pumped hydro sites totaling up to 2 GW in capacity.

Other utilities are also beginning to incorporate storage into their operations. Ohio-based AEP is installing utility-scale batteries on its network and says it plans to install a total of 1,000 MW of storage in its system over the next decade.  Beacon Power Corp. was awarded $43 million in loan guarantees from the DOE to complete a 20 MW storage project for National Grid in New York state using flywheels. Japanese utilities have installed sodium sulfur and vanadium flow batteries to integrate wind power into their networks. And Southern California Edison just requested a DOE grant to partner with A123 Systems to build the world's biggest lithium-ion battery assembly--32 megawatt-hours in capacity--to help balance out intermittent wind power in the Tehachapi Wind Resource Area.

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