NAATBatt Plans for Q1 2012
Written by James Greenberger on December 30th, 2011
As 2011 comes to an end, NAATBatt looks forward to continuing its mission of promoting the manufacture of advanced batteries and the development of advanced battery technologies in the United States in 2012. The first quarter of 2012 will be particularly active. The NAATBatt white paper on distributed energy storage (DES) will be released in January and will highlight to policy makers and state regulators the importance and value to the nation of storing electricity locally on electricity distribution systems. NAATBatt and its members will use the white paper to advocate for a new nationally-coordinated program of DES demonstration projects, which will help utilities better understand how to use such systems and how to reduce substantially the cost of their deployment.
The NAATBatt member site visit meeting program will also continue in the first quarter of 2012. In February, NAATBatt members will be invited on a private tour of Oak Ridge National Laboratory and receive a briefing from Oak Ridge personnel on expected developments energy storage technology and their impact on the commercial market. Stay tuned for more information about this event, which will be announced shortly.
On April 3, 2012, NAATBatt will host in Chicago a private workshop for NAATBatt members and invited guests on thermal runaway in traction batteries. This workshop will feature the leading experts in North America on how to deal with thermal runaway issues both at the chemical and cell levels. Thermal runaway is a top concern of consumers and government regulators. Capturing the high ground on this issue is essential to the success of electric drive vehicles and to the future of advanced battery manufacturing in North America. Do not miss this important program.
NAATBatt also hopes to launch during the first quarter of 2012 an industry-wide effort to educate retail electricity consumers about the benefits of distributed energy storage. This program will add a new aspect to product marketing for our advanced battery manufacturing members. To date, advanced battery marketing in the commercial sector has been characterized by trying to push the technology into commerce by advocating its benefits to government leaders. In 2012, NAATBatt will try to generate pull for advanced battery technology by highlighting to retail electricity consumers the benefits that DES technology can provide to them.
2012 will be an exciting year for our industry. At NAATBatt we hope to be at the forefront of that excitement and the spearhead of the commercial success of our members. Happy New Year!
Allocating the Costs of Distributed Energy Systems
Written by James Greenberger on December 23rd, 2011
Last October, San Diego Gas & Electric (SDG&E) requested that the California Public Utilities Commission (CPUC) approve a plan under which net-metered PV customers would be required to pay a “network use charge” designed to divide operational costs among solar-owning and non-solar-owning customers more equitably. The proposal has raised howls of protests from PV solar installers in Southern California, who fear that the new charge will undermine the economics of distributed solar generation. This unfolding dispute should be of interest to the energy storage community because the operational costs at issue likely include the costs of distributed energy storage necessary to regulate power on parts of SDG&E’s distribution system impacted by high levels of distributed solar penetration.
NAATBatt takes no side in the dispute between SDG&E and the solar installers, as the dispute turns primarily on questions of California law. However, the controversy highlights a tension that will certainly be revisited in jurisdictions around the country as distributed solar generation systems and distributed energy storage systems are deployed.
The tension, of course, is between the longstanding principle in utility economics of “user pays” and the equally longstanding principle that, in order to provide a certain agreed-upon level of utility service to the general population, certain costs of providing that service must be socialized rather than borne by individually identified users.
Both distributed solar energy and distributed energy storage have attributes that make their deployment desirable to society as a whole in addition to the customers who benefit from them most directly. A strong argument can be made, therefore, that in setting things such as “network use charges”, utilities and utility regulators should not impose the full costs of such systems on the customers who benefit from the systems most directly, but should instead be socializing the costs of those systems (or at least a portion of the costs) among all electricity consumers.
One of the challenges that the solar industry and the energy storage industry share in common is the necessity of their advocating for socializing a significant portion of their system costs. Absent an ability to socialize a significant portion of their respective system costs, it is unlikely that distributed solar generation systems or distributed energy storage systems will ever be sufficiently cost-effective to individual users to result in their widespread deployment. Too often, however, advocating for the socialization of costs pits our industries against utilities and consumer groups in a battle over subjective principles decided less by objective merit than by relative political leverage.
As we enter 2012, we need to develop a better approach to dealing with this inevitable tension between private and public benefit in deploying and paying for distributed solar and distributed energy storage systems. The solar industry and the energy storage industry need to develop a coherent theory for socializing a certain percentage of their system costs, which can be used in the jurisdictions around the country that will soon join the CPUC in having to address this issue.
American Industry and EV Battery Safety
Written by James Greenberger on December 16th, 2011
Discomfort continues in the industry this week as news of the NHTSA investigation into the Chevy Volt fire continues in the media. Conversations around the water cooler center on how bad this really is and whether the problem is a passing piece of bad news or an existential threat to the future of electric drive.
The actual safety problem with the Volt battery appears minor. According to reports, standard safety procedures were not followed after the crash test at issue and the problem in the battery arose several days later. No one was injured; property damage was minor. As safety incidents in the automotive sector go, but for the fact that the fire involved an electric vehicle, the incident would have passed without much
notice.
The issue, however, is one of perception. And in the world of consumer products, perception is more real than reality itself. At this point there appears to be uncertainty among the general public as to whether the Volt fire was something isolated or something indicative of a more fundamental safety problem in electric vehicles.
Public concerns about the safety of electric vehicles can never be, and should never be, fully put to rest. Storing energy is dangerous, whether that energy is stored in a battery, a gasoline tank, a compressed gas or in a uranium atom. The public understands
this. But what the public wants to know, and needs to be reassured of, is that the inherent danger of EV batteries is
not great and can be managed to the most minimal level possible by using the safest possible technology and manufacturing techniques.
Over the past few years, it has been hard to miss the endless stories about what we do poorly in this country. Well, there is one thing we happen to do very well: Americans make safer consumer products than anywhere else in the world. The Japanese, the Koreans, the Europeans, and most certainly the Chinese, cannot touch us when it comes to consumer safety standards. The American pharmaceutical industry has ridden this fact to dominance of its domestic and foreign markets for the past several decades.
The bright side of the Volt fire is that it may just show the way for American companies and American technology to get a leg up in the advanced battery race. Let’s see product safety as an opportunity, not as a threat. Let’s encourage the NHTSA and other agencies of state and federal government to require the highest levels of safety possible in EV batteries. Safety is something we do very well as a country (relatively speaking). Let’s use that advantage to put American workers and American technology to work building safe advanced batteries for EV’s.
The Case for Electric Vehicles
Written by James Greenberger on December 09th, 2011
I spent the better part of today editing a draft of the NAATBatt white paper on distributed energy storage (DES). The white paper will argue that the principal barrier to DES deployment is that the technology appears uneconomic to utilities and to utility regulators because it is impossible for ratepayers who invest in DES systems to recover the value of the benefits such systems provide to consumers around the country, as opposed to those consumers who, through their utility bills, pay for the DES system. This is the Tragedy of the Commons, as Garret Hardin termed it, turned on its head.
Among the common, national benefits of DES technology the white paper will identify is DES’s ability to help reduce the cost to consumers of electric vehicles (EVs). The EV cost reduction effect of DES arises from its positive impact on the volume of advanced battery production (by increasing advanced battery production, DES helps manufacturers achieve economies of scale and reduce unit cost) and on its ability to provide a market for second use EV batteries (thereby providing a residual value to the vehicle that EV purchasers can capture).
But reducing the cost of EVs is only important if deploying EVs is important and has value to the nation as a whole. In reading the draft of the white paper, I noted that the writer had included the usual statistics illustrating U.S. dependence on foreign oil. Among those statistics are that the U.S. imports about 11.8 million barrels of oil per day, comprising about half of domestic petroleum demand; that about 70% of that petroleum is used in the transportation sector; and that about 60% of the oil used in the transportation sector is used as gasoline in light vehicles. Those statistics support the argument that reducing oil imports is an important national goal and that EVs can help reduce those imports.
But in reading the draft it struck me that the most important statistic was missing—and is in fact missing in most of the discussions I hear about the importance of EVs. The missing statistic is that nearly 100% of the U.S. light vehicle fleet is dependent upon petroleum-based fuels. This complete dependence, and the monopoly pricing power that it gives petroleum producers around the world, is the central reason why EVs are important and why their deployment is so critical to our national well-being.
To be sure, increasing the fuel efficiency of the U.S. light vehicle fleet is important. EVs can be an important tool in achieving that goal, though they are but one of many tools available to auto makers and, perhaps, not yet the most cost effective tool in the shed.
But increased fuel efficiency of light vehicles will not solve the problem that has bedeviled our nation for decades: the long-term hemorrhage of American jobs and capital to petroleum producers. If our light vehicle fleet is 100% dependent on petroleum-based fuels, reducing use of those fuels will neither save money nor reduce vulnerability to supply disruptions in the long run. As in any market controlled by a monopoly, the monopolist has the option to raise its prices as demand declines. The consumer cannot come out ahead by conservation alone.
It is not enough that the U.S. reduce its use of petroleum; the complete dependence of the U.S. light vehicle fleet on petroleum must be broken. Only by breaking that complete dependence oil, not by simply reducing the volume of its use, can the monopoly pricing power of petroleum producers be brought to an end. Today that monopoly is the single greatest threat to the American economy and national security. EVs are the only realistic tool we have to break it.
The Volt Fire and Public Acceptance of Electric Drive
Written by James Greenberger on December 03rd, 2011
The news in the industry this week continues to be dominated by reports of the Volt battery fire and resulting NHTSA investigation. Electric drive skeptics have predictably taken the opportunity to question the efficacy of electric vehicles, calling them 21st Century versions of the infamous Pinto. Even some in the industry, aware of the other political headwinds facing new energy technologies, fear the ramifications of these incidents.
In fact, for those who have followed electric drive and the rise of lithium-ion battery technology, these incidents do not come as a surprise, at least not in a general sense. We have known to a certainty that these types of accidents were going to happen and the industry has been preparing for them for years. How it handles these incidents, and how they are managed from the standpoint of technology, public relations and public education, will determine their impact on the future of electric drive, not the incidents themselves.
The real problem, of course, is not the Volt or its lithium-ion battery but the fact that we are dealing with stored energy. Storing energy in any form involves risk, regardless of whether the energy is stored in the form of a charged lithium-ion battery, a full tank of gasoline or pressurized gas. If stored energy is released in an uncontrolled fashion as can happen in an accident, bad things can happen no matter what the form in which the energy was stored.
The issue is not that the Volt battery is more dangerous than a tank of gasoline or pressurized gas, but that it is less familiar. The public understands what happens when a tank of gasoline ignites and, because of that understanding and the opportunities for risk mitigation that the understanding provides to consumers, the public feels sufficiently empowered in order to accept the risk. That is not the case where the risk involves a new technology that consumers feel they do not yet fully understand. That is where we are today with lithium-ion batteries.
By all accounts, General Motors has responded admirably to the Volt incidents. A review of post-accident procedures is underway, educating first responders is being given renewed priority, loaner vehicles have been offered to any nervous Volt owners, and better ways of educating those owners about operating electric vehicles safely are being developed.
As initial safety problems go, these initial problems with electric vehicles have gone as well as anyone could have hoped. No one was killed or injured. No serious property damage has occurred. The right questions are being asked and better post-accident procedures put in place. Most importantly, we are starting down the necessary path of educating consumers and first responders about how to operate electric vehicles safely. As that education continues and public familiarity increases, so will public comfort with the technology.
The incidents involving the Volt were regrettable, as any accident is regrettable. But on balance, so far, so good.
The Smart Grid’s Problem Should Be Storage’s Opportunity
Written by James Greenberger on November 25th, 2011
I recently attended a conference on smart grid technology in Chicago. Following the conference, I had lunch with another attendee and asked him what he thought about the conference. My lunch guest, who is a wise fellow and has worked for many years in the cleantech and sustainability fields, just rolled his eyes. The conference was fine, he said. But the problem with the conference is that we just spent two days talking about how we make what is in effect a problem for utilities into a problem for consumers. That project he felt might be of interest to utilities and smart grid advocates, but has little hope for success in the real world.
My lunch guest summarized in a few short words the principal challenge of the smart grid, as most utilities are thinking about it today. Our national grid infrastructure is largely antiquated and, as electricity use grows over coming decades, utilities face what is in effect a political problem: Billions of dollars of unpopular new infrastructure spending is needed in order to upgrade the grid. Those expenditures can, however, at least in theory be reduced if electricity consumers can be persuaded or compelled to use electricity differently. Much of smart grid technology, which is referred to as demand response, is about trying to make that happen.
Properly understood, demand response is not really about saving costs, but about moving costs from one party onto another. Compelling a consumer to charge a vehicle or wash clothes at night, rather than at 6:00 p.m. in the evening, means that a utility will have to spend less money to accommodate peak load. But compelling a consumer to act differently is a cost to that consumer. Technology might be able to take some bite out of that cost by eliminating uses of electricity that consumers may agree are unnecessary. Installing a motion sensor on a light switch is a good example. But the question of who has to buy the motion sensor remains.
Utilities and smart grid advocates are not likely to give up on demand response initiatives anytime soon. But, as my lunch guest surmised, they face an uphill battle.
Energy storage advocates have a different story to tell and by many measures a more compelling one. With energy storage, a utility or electricity service provider manages the challenge (and, yes, the cost) of drawing electricity from the grid in the most efficient way possible. The electricity is then stored locally, by means of a distributed energy storage system, which the consumer draws from when and as the consumer wants. Peak electricity usage on the grid is reduced and greater energy efficiency is achieved through the utility’s management of the storage resource without involving the consumer.
This is a good news story for consumers and one which energy storage advocates must be more proactive in telling. Consumer upset about smart meters and concerns about privacy are a virtual invitation to set out a different vision of the smart grid of the future: a smart grid that truly values consumer choice and that leaves power management to the experts—the utilities—rather than imposes it on retail consumers. The smart grid’s problem should be storage’s opportunity. We must seize it.
Solyndra is Not the Failure It Appears
Written by James Greenberger on November 18th, 2011
On Thursday, Secretary of Energy Steven Chu had the unenviable task of testifying before a House subcommittee about Solyndra and explaining why that company’s bankruptcy will cause the government to take a $500 million loss. The subcommittee’s response to Secretary Chu’s testimony was in large part predictably hostile, with some lawmakers demanding that he be fired. Several business writers, notably Kimberley Strassel in today’s Wall Street Journal, kept up the pressure, accusing the Secretary of being a “green Gordon Gekko”, taking huge risks in private companies with other people’s money.
Victory, as the saying goes, has a 100 fathers but defeat is an orphan. And so it fell to Secretary Chu to play the orphan on Thursday. The problem is that, though Solyndra as a company has failed, it is far from clear that the technology in which the Department of Energy invested by way of its loans has failed. The final verdict on the success of the DOE’s investment in solar energy technology, as well as its investments in advanced battery technology, is still out. But there are plenty of indications that the ultimate outcome may be more positive than many in the Congress and the media imagine.
Properly understood the DOE’s loans and grants are investments in technology, not in individual companies. Individual companies may come and go. Ownership of the financed technologies may change. Whether the stockholders of Solyndra make a return on their investment or are wiped out in a bankruptcy matters little to the DOE or to U.S. taxpayers. What is important is that the technology that was financed continues to develop, that the domestic know-how with respect to that technology continues to build, and that a market for the technology begins to develop. Those are the measures of success for a government technology investment, not the success or failure of a private business that happened at one time to own the technology.
By the measures of success that should matter, it is far from clear that the investments made by the DOE in Solyndra and in hundreds of other technology projects over the past three years have failed. Notwithstanding the bankruptcy of Solyndra, the efficiency of solar cells continue to rise, their costs continue to fall, and new technologies keep entering the marketplace to fight for a piece of a market that barely existed three years ago. The same is true in advanced batteries.
The bottom line is that the DOE appears to be winning most of its technology bets, not losing them. Gordon Gekko might see things differently, but the country should not.
Government Support for Electric Drive Must Continue
Written by James Greenberger on November 11th, 2011
As deadlock continues on Capitol Hill and storm clouds darken over the Super Committee on deficit reduction, there is increasing danger that government support for vehicle electrification may get sucked into the maelstrom. Vehicle electrification has historically been one of the few points of bi-partisan policy agreement. It is important that supporters of vehicle electrification and advanced battery technology rearticulate why vehicle electrification is so important to the country and why government support for it is essential and should find strong backing on both sides of the aisle.
The latest sign of trouble for vehicle electrification was a white paper released this week by former U.S. Secretary of Transportation Norman Mineta and the U.S. Coalition for Advanced Diesel Cars. The white paper, entitled “The Case for Technology Neutral Public Policy in Fuel Economy Debate: Allowing Performance To Determine Solutions”, is designed to appeal to those who believe that the federal government has spent too much money trying to outguess the market on technology investments over the past three years. The white paper reiterates the familiar argument that the fastest and cheapest way to promote greater fuel efficiency is to invest in more efficient internal combustion engines (ICE’s) rather than in electric vehicles. It suggests that this is exactly what the market would do if left to its own devices.
Mr. Mineta is right, of course. If the goal is simply to increase the short term fuel economy of the U.S. light vehicle fleet, concentrating on more efficient ICE’s, including diesel engines and mild hybrids, is clearly the way to go. Moreover, if the government requires the market to put a price on fuel inefficiency through CAFE standards (which Mr. Mineta, despite his free market mantra, is implicitly advocating), business investment and consumer purchases will flow into these new ICE technologies without the need for further subsidy. Few in the advanced battery community would argue with the effectiveness or efficacy of this approach.
But the point of vehicle electrification is not to improve short term fuel efficiency. The point of vehicle electrification is to address the single greatest economic and strategic threat that the United States faces: its near complete dependence on petroleum-based fuels.
The statistics concerning our dependence on petroleum fuels are stark and well known: Today petroleum accounts for approximately 37 percent of all energy used in the United States and, more critically, in excess of 95 percent of all fuels used for transportation. Nearly 60 percent of all petroleum used in the United States is imported. Worldwide demand for petroleum is growing steadily, most rapidly in the developing world. The Energy Information Administration (EIA) projects that, at the current rate of growth, world oil consumption will rise 50% in the next 20 years.
Petroleum is a wonderful fuel but a finite resource. Over the past 30 years, the oil industry has done a remarkable job of finding and exploiting new sources of conventional petroleum and of developing new technologies to recover oil from non-conventional sources, such as oil sands and shale, though often at an economic and environmental cost that remains unclear. Three decades ago most experts, if informed what would happen to oil consumption over the next 30 years, would have predicted that we would reach “peak” oil well before 2011. It is not clear that we have hit it yet.
But all the promise of petroleum technology and all the power of the Big Oil companies cannot repeal the law of gravity. There is a limit to economically recoverable petroleum reserves and that limit grows closer the faster that demand for oil rises. Information about petroleum reserves is notoriously unreliable and many of those with access to information have no incentive to share it. Moreover, petroleum imports travel from and through some of the least stable parts of the world and are subject to sudden and critical disruption. Sooner or later a major imbalance must occur in the supply and demand for petroleum fuel. Based upon our limited experience with such imbalances in 1973 and 1979, we know that when that imbalance occurs it will occur suddenly, without much warning and with catastrophic consequences.
Vehicle electrification is simply a hedge against a petroleum crisis that we know to a certainty is coming. Within the transportation sector, electrification is the most complete, technologically achievable and cost effective hedge that we know of. More efficient ICE’s may offer improved fuel efficiency, but they offer no such hedge. The Chinese government, which is estimated to have spent about three times what the U.S. government has spent on vehicle electrification technology, has made the same calculation. The Chinese interest in vehicle electrification has less to do with its desire to compete with the West than with its concern for economic survival in a post-peak oil world.
Unfortunately, there is no market for a long-term hedge against oil shocks. Higher fuel economy standards will not in themselves push consumers to buy, or investors to invest money in, electric vehicles or advanced battery technologies. The billions of dollars that are required to develop the batteries, the vehicles and the charging infrastructure necessary to prepare the country for the post-peak oil period must come from somewhere other than consumer purchases of relatively short-lived assets. It must come from government incentives and investment leveraging private capital as best it can.
Electrifying transportation infrastructure is a national insurance policy that benefits everyone and will protect the entire nation from a clear and well-defined threat to its economic and strategic position in the world. Both the threat and the hedge against that threat have long been recognized by Republicans and Democrats alike. Support for vehicle electrification should not be made an issue in the unfortunate partisan wars ongoing in Washington.
The Good News Energy Storage Story
Written by James Greenberger on November 04th, 2011
This week was a great week for energy storage. Despite the bankruptcy of Beacon Power and the delisting of Ener1, which received inordinate attention from those looking for bad news stories in renewable energy, a game-changing regulatory decision in Washington and a record breaking storm on the East Coast signal a coming of age for energy storage technology. It is important that the energy storage industry tell its good news stories and break the doom-and-gloom Solyndra Syndrome that has come to dominate the media and the political chattering class.
Last week, the Federal Energy Regulatory Commission (FERC) released its long anticipated Final Order No. 755 on frequency regulation compensation. FERC determined that the current frequency regulation compensation practices of regional transmission organizations (RTOs) and independent system operators (ISOs), which do not account for the inherently greater amount of frequency regulation service provided by faster-ramping resources, are unjust, unreasonable and unduly discriminatory. This decision, which rights a longstanding regulatory wrong, opens a profitable new market for energy storage technology.
Operators of wholesale electricity systems, such as RTOs and ISOs, must buy a certain amount of power each day in order to maintain the frequency of the electricity being wheeled over their systems. Regulating frequency by adding electricity to transmission systems at specific times and at specific places is a complicated affair. As a general rule, the faster and more accurately that current can be added, the more effectively it can rectify frequency problems on the grid. Frequency problems undermine the stability of the grid and can in the extreme lead to system failures, such as blackouts.
RTOs and ISOs are obligated by federal law to purchase electricity fairly and without discrimination among vendors. Prior to Order No. 755, most RTOs and ISOs interpreted this to mean that they had to pay the same amount of money per kilowatt for electricity used for frequency regulation purposes regardless of how quickly or accurately the vendor of that electricity was able to add it to the grid. This practice effectively shut energy storage technologies, such as power-oriented advanced batteries, out of the frequency regulation market. Although batteries can add electricity to the grid quickly and accurately, the per kilowatt cost of the electricity they sell is generally higher than the power produced by natural gas peaker generators, even though that power takes longer to be ramped up and placed on the grid. Because energy storage providers could not be compensated for the quality of the power they provide relative to the power provided by natural gas generators, energy storage was effectively shut out of the frequency regulation market.
FERC Order No. 755 changes this. Pursuant to the Order, RTOs and ISOs not only can consider the quality of frequency regulation service in setting the prices they pay for it, they must. This change will put electricity vendors who use energy storage systems into the frequency regulation business, and into the money.
Many commentators have bemoaned the purportedly small size of the frequency regulation market. In 2009, GTM Research estimated the size of that market at 7,137 MW in the United States and 37,828 MW worldwide. Considering that the effective size of the frequency regulation market for energy storage providers has previously been -0- MW (except for some government-funded demonstration projects), the small market criticism rings hollow.
Moreover, the need for frequency regulation service will rise as variable, renewable energy is added to the grid. Each 100 MW of wind energy requires about 3-5 MW of additional frequency regulation. Today thirty-two states and the District of Columbia have renewable portfolio standards. Those standards will require the addition of huge amounts of renewable energy over the coming decade. The frequency regulation market will grow along with it.
In addition to government mandates, normal market forces will encourage the addition of level-cost renewable energy to the grid and expand the size of the frequency regulation market. The big (by volume) energy story of the next decade is likely to be the increasing use of natural gas for base load electricity generation. This is good news for wind and solar energy. While natural gas may have certain advantages as a fuel, its historic price has unquestionably been highly volatile. There is little reason to expect that natural gas prices will be less volatile in the future and much to reason to fear the impact of that volatility on electricity prices as natural gas becomes a more significant portion of the base load fuel mix. Utilities will hedge against that volatility by entering into long term supply contracts with renewable energy generators, whose fuel cost is always fixed (at $-0-). The frequency regulation market will be a direct and substantial beneficiary.
The second good news story for the energy storage industry this week was, paradoxically, a very bad news story for many electricity consumers on the East Coast. An early October Nor’easter last weekend knocked out power to about 3.8 million consumers. Many of those consumers went without power for days. And just about all of them are angry and looking for solutions.
Distributed energy storage (DES) is unquestionably one of the solutions. DES describes the practice of placing energy storage devices, usually a battery, in the distribution portion of the grid out near the ultimate electricity consumer. One of the many benefits of DES systems is that they can provide backup power for consumers. When there is a fault in a transmission or distribution line, whether caused by a storm or some other disruption, a DES system can ensure that consumers will, for some predictable time, continue to have access to electric power.
Of course, DES systems are not a magic bullet solution to the problem of system reliability. A 25 kWh battery buried in a neighborhood or installed in a basement will not provide unlimited power over a several day outage to multiple households. But the significance of this limitation is often exaggerated. The greatest source of power outages in the United States is transient faults on distribution feeders and about 70 percent of these outages are restored within three hours. And even in the case of longer, multi-day outages, DES systems can give consumers the option of conserving power by directing it only to critical functions. At worst, consumers would have time to plan for outages that are unavoidable. After this past week, a good portion of the 3.8 million consumers affected by the East Coast storm would appreciate the benefit of this service and would probably demand it, if given the chance.
NAATBatt is trying to engage our friends in the electric utility industry in an effort to talk to consumers about DES. This will be a difficult discussion for many utilities, as it focuses, in effect, on system failures, which no one wants to talk about. But DES is an important technology that offers immediate, tangible benefits to electricity consumers and substantial additional benefits to the grid, a discussion of which are beyond the scope of this column. Electricity consumers have a right to know about DES and to ask for it from their electric service providers. This is another good news story for the energy storage industry and we must be proactive in telling it.
The commentators are right about one thing, however: When the DES market develops, it will make the frequency regulation market look small. That’s more good news for our industry.
The China Clock: Designing Urgency Into Energy Storage Demonstration Projects
Written by James Greenberger on October 28th, 2011
Last Monday NAATBatt hosted a meeting of the DES white paper working group in Detroit. The DES white paper group consists of leading advanced battery manufacturers, electric utilities, auto makers, electric power equipment companies and national laboratories working with KEMA, an energy consulting firm, to produce a white paper outlining the importance of distributed energy storage (DES) technology to U.S. energy policy. Among other things, the white paper will show that DES systems are necessary to enable the integration of high levels of renewable energy and electric vehicles onto the grid and are critical to ensuring the grid’s stability and reliability. NAATBatt expects to publish the white paper later this year.
Yet while DES technology is promising, it is moving toward actual commercial deployment only at a glacial pace. The slow pace of DES’ rollout was of grave concern to many in the working group. The barriers to DES deployment—high costs, limited operational experience, and unsupportive regulatory schemes—are real and, in some respects, daunting. The group spent much of its time discussing those barriers and how best to address them.
A central theme of the working group’s discussion was the need for more demonstration projects for DES technology. But many in the group voiced concerned about the agonizingly slow pace of the demonstration projects that have been funded to date. Large demonstration projects can take as long as six years to complete. Several participants questioned the value of such projects in light of the fact that DES has so many diverse applications and that energy storage technology itself is changing so rapidly. Death by demonstration project is a specter that hangs over many in the U.S. energy storage industry today.
Several participants noted that things seem to work differently in China. In China, projects appear typically to move from concept to full construction within one year. The ability to move quickly was noted as one of the major reasons why American companies seek to locate operations in China. The “China clock”, as one participant called it, has major advantages for business, particularly businesses that rely on new and quickly evolving technology.
Although the white paper will contain many suggestions about how the U.S. can more effectively deploy DES technology, one of the suggestions will be that the U.S. and the U.S. Department of Energy start living on the China clock. While much money has been spent demonstrating grid-connected energy storage technology over the past few years, the pace of development has been far too slow. The slow pace threatens the survival of many American firms that have invested heavily (and often with substantial government co-investment) in energy storage technology.
A better approach is needed to the design of demonstration projects in the grid-connected energy storage area. Demonstration projects are critical to the development and eventual commercial deployment of DES technology. But there need to be more of these projects and they need to be more diverse. Most importantly, they need to be awarded, constructed and completed more quickly.
In short, we need to adopt the China clock. Smaller, more numerous, more diverse and more rapid demonstration projects are the key to developing DES technology and realizing the advantages it holds for the grid. Money for DES demonstration projects is good, and more money is better. But what is really needed is a sense of urgency. Time to completion must become a major focus for government-funded demonstration projects going forward. We must learn to push the time envelope and to push it consistently as a matter of practice, just as they do in China.