Grid storage gets updraft from auto batteries

The nascent industry for grid storage is being aided by falling prices for auto batteries and the technology race to build better bulk energy technology to store wind and solar power.

The billions of dollars being plowed into electric vehicle battery manufacturing around the world is helping jump-start another clean-energy industry: storage on the electric grid.

Earlier this week, A123 Systems opened a plant in Livonia, Mich., to make lithium ion battery components and packs for hybrid and electric vehicles. Among the government officials at the event were state governor Jennifer Granholm and Energy Secretary Steven Chu, who called it a key step to restarting manufacturing in the U.S..

Ramping up lithium ion battery manufacturing by A123 Systems and other companies is projected to drive down the cost of batteries for autos and some forms of grid storage. Lithium ion batteries, which are also used in portable electronics, are typically not well suited for storing many hours of solar or wind power. But lower battery costs, combined with a flurry of activity around other energy storage technologies, are helping make utility-scale storage more commercially viable, a shift that could make the grid cleaner and more reliable.

"If you look at the [industry] price target for vehicles, which is 35 cents per watt-hour by 2015...there's a lot of interesting stuff you can do on the grid at a price that is comparable to gas power plants," said Chris Shelton, CEO of the energy storage group at power generator AES. "Around the same time that you have lithium ion coming into its own in terms of volume, you also have several research and development-focused technologies."

For decades, the electric grid in the U.S. has operated with little storage capability. But in the past few years, interest in storage has spiked among utilities and energy technology companies. Adding a buffer to the grid opens up many applications, including community storage, clearing up transmission line bottlenecks, and shaving peak power. Storage is also a key complement to the expansion of renewable energy since wind and solar power are intermittent.

The most direct impact from the ramp-up of electric-vehicle battery production is bringing the price down for storage systems that can provide quick bursts of power--on and off the grid--to maintain a steady frequency and voltage, a job that's typically done with natural gas generators.

Like other energy project developers, AES is using lithium ion batteries, packaged in truck-size containers, from A123 Systems and Altairnano for grid-stabilization applications, including a 12-megawatt frequency regulation and spinner reserve battery in Chile. On Thursday, AES announced a deal with Samsung SDI to provide 20 megawatts' worth of batteries for these types of applications and said it has a pipeline of 500 megawatts' worth of storage projects.

Smoothing out wind power
To bring down costs, A123 Systems is borrowing engineering concepts from the IT industry, said the company's Energy Solutions Group general manager Rob Johnson who, like many others at A123, previously worked in IT. Its grid storage units use standard components that can be swapped out in the case of a failure, much the way blade servers can be inserted into a data center rack, he explained.

"We're using a building block engineering concept where we take the same auto batteries and use them in the grid space," he said. "We can play off the (auto industry) value stream and leverage that volume and engineering."

Johnson projects that the market for frequency regulation will grow significantly as more wind and solar power generation is added to the grid because grid operators will need storage reserves to handle sudden drops in output from solar or wind farms. The sweet spot for auto-grade lithium ion batteries is a few megawatts of power for about an hour, a use that doesn't require subsidies, he said.

A sodium-sulfur battery tested to buffer energy from a wind farm in Minnesota.
A sodium-sulfur battery tested to buffer energy from a wind farm in Minnesota. Xcel Energy

As the technology improves, batteries will be used for more applications, such as supplying power during peak times when power generators are maxed out or soaking up excess wind energy at night, said AES' Shelton. Already, batteries are being attached to wind farms to smooth out energy supply to the grid.

Utility Xcel Energy, for example, earlier this summer reported results from a wind-to-battery project that uses giant sulfur-sodium batteries from NGK Insulators to manage output from an 11-megawatt wind farm and deliver peak-time energy. More recently, the city of Los Angeles on Wednesday announced that BYD, a Chinese battery company that makes batteries for electronics and cars, will provide a grid battery for the Tehachapi Mountain wind farm.

As part of its smart-grid efforts, the Department of Energy last year provided money to a number of grid storage-related projects with utilities that are testing out various technologies, including flywheels to provide frequency regulation services and zinc bromide flow batteries for community storage. The ARPA-E program is also funding research and development in pursuit of breakthrough storage concepts.

Chasing breakthroughs
But even with all the activity, today's battery technology has real limitations for both autos and the grid. Just as auto batteries cannot deliver the same driving range as a gasoline-powered car, there are few grid storage technologies that combine many hours of energy storage and the ability to deliver many megawatts of power at a reasonable cost and with a long life.

"What we really need--the game changer--is very, very large electrochemical batteries that can be deployed at utility scale, which implies that the cost has to be very low and implies life measured in decades," said Maurice Gunderson, a venture capital investor at CMEA Capital and co-founder of the energy technology venture capital company Nth Power.

The low-technology option used by many utilities now is pumped hydro, where water from a reservoir is pumped uphill during off-peak hours and then released and run through a generator during peak times when prices for electricity are higher.

Another storage method that uses geography is compressed air storage, where air is compressed, pumped underground, and released later and run through a generator. Pacific Gas & Electric is one of a few utilities with a project to combine compressed air storage with wind farms. But both pumped hydro and underground compressed air are limited by available locations and the potential environmental impact they could have.

Adding a giant battery with the right characteristics to a wind or solar farm would allow utilities to meet renewable energy mandates, particularly the aggressive targets in California, and change economics of renewable energy, Gunderson said. Delivering electricity from wind and solar plants to the grid around the clock means that the value of electricity goes up by a factor of three, he said.

To meet that holy grail of cheap, high-power, high-energy batteries, technology companies are trying entirely new chemistries to make batteries or are trying to improve on existing techniques. A123 Systems, for example, spun out a company called 24M Technologies, which seeks to combine the best of lithium ion batteries with better energy storage concepts from flow batteries. In a DOE-funded project, AES is testing a system from start-up SustainX, which stores energy as high-pressure compressed air in tanks.

Gunderson predicts that it will take 10 years before these breakthrough storage technologies come to market and give a boost to solar and wind. But that work is beginning now among researchers and entrepreneurs.

"What you have now is a whole new set of ideas. It's becoming clear that it's a big enough problem and opportunity that you really can [take advantage of], and lot of people can make a lot of money, too," he said.

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