Someday, the electricity grid will operate with the equivalent of a giant hard drive. But in the short term, grid storage will look more like a PC's cache or RAM, able to serve up small bursts of power to keep things from crashing.
A panel of experts, organized by the New England Clean Energy Council, earlier this week said that the utility storage field has enormous potential. But rapid deployment of storage devices is held back by concerns over technology risk and financial complexity.
Technology optimists say that wide-scale energy storage will change the face of the transmission grid and make wind and solar power more compelling economically.
In this scenario, utilities store electricity made from renewable sources or produced during off-peak times. Then, when demand for electricity peaks in the middle of the day, they could draw from the stored-up charge.
This "peak shaving" practice avoids the need to build new power plants to meet growing demand. Utilities could also idle dirty and expensive "peaking plants," which are only turned on during times of high demand, such as very hot summer days when air conditioners max out the load.
But moving megawatts' worth of electricity around the grid like files on a computer is more theory than practice these days.
"Buying power at night and then selling it during the day--something like that will happen maybe in 30 or 40 years when storage technologies are one-tenth the costs they are today," said Ric Fulop, co-founder and vice president of business development at lithium-ion battery company A123 Systems.
But as utilities try out new technologies for different uses, Fulop and others predicted that storage will start to take hold in a variety of ways.
"I think we will see a lot of deployments in the next few years that will change how the grid works," Fulop said. "Then we'll see utilities jump on the bandwagon."
Two markets for energy storage
A123 Systems, which makes batteries for and power tools among other devices, is with more than 100 people dedicated to the market, said Fulop.
It's targeting what's called grid stabilization, or grid support, where warehouse-size installations of lead-acid batteries are the incumbent technology. That alone is a multimillion dollar market and will pave the way for different grid storage applications, he said.
With grid stabilization, kilowatts' or a couple of megawatts' worth of electricity are pumped onto the grid for a short amount of time, from a few seconds to under an hour. It's used to match grid demand and supply to make generators run more efficiently or to ensure a steady frequency.
Earlier this year, grid operators in Texas had to shut down power to its customers because the wind died down momentarily, effectively cutting off supply from its wind farms, noted Lawrence Gelbien, vice president of technology at utility NStar.
"If you could take the wind power, store it in batteries, and discharge when the wind starts again, then that's a fine application of storage," he said.
Gelbien said that storage units could be deployed in place of installing more "wires and poles" in a place that isn't served with enough electricity to meet demand for only a few days of the year. Because storage devices are movable, they could be redeployed in other places after a few years as the need arises.
Grid support is relatively mature at about $2.4 billion and growing at 3.3 percent per year, said Lux Research President Matthew Nordan.
Batteries with different chemistries as well as ultra-capacitors, such as the ones being developed by, serve this end of energy storage, Nordan said.
Flywheels are also a viable alternative. Flywheel maker Beacon Power earlier this month said it expects to have a, able to store 15 minutes of power, on the grid by the end of this year.
Dizzying array of technologies
At the opposite extreme are companies pursuing the "bulk storage" market where power is delivered for more than an hour.
This part of the market, where companies are developing a range of technologies, from so-called flow batteries to compressed air storage, represents the biggest business opportunity in grid storage.
The end game is to allow utilities to provide baseload power--meaning electricity during the middle of the day when demand is highest--with stored energy.
If only 10 percent of the installed wind power plants adopted large-scale energy storage, the market would hit $50 billion, according to Lux Research. That's because electricity costs more for utilities to purchase and deliver during peak times.
But utilities are risk-averse, and power plants take 5 to 10 years to construct. As a result, Lux Research pegs the market at $600 million in 2012, growing at about 25 percent per year.
One company tackling bulk storage head-on is General Compression, which is developing a wind turbine with an integrated air compressor.
Air is compressed and pumped underground into geological features like depleted gas wells or limestone caverns. There are currently two compressed air energy storage (CAES) plants in operation with a few others in development. But some utilities are seriously considering CAES.
"There is an increasing gap between the growing demand for electricity and the availability of options," said Julianne Zimmerman, chief marketing officer for General Compression. "With increasing shareholder resistance to new fossil fuel and nuclear plants, there's a shrinking set of options."
Different types of batteries are competing for bulk storage as well.
So-called, where liquid chemicals move between huge storage tanks to deliver a charge, are also being tested on the grid.
Start-up Deeya Energy says it is developing a flow battery for grid backup power or to integrate wind and solar power that will be far cheaper than lead-acid, lithium-ion, or nickel-metal hydride batteries and cheaper than fuel cells. Its products will be able to delivery between 2 kilowatts and 2 megawatts of electricity for 2 hours or up to 24 hours, it says.
Another flow battery maker, VRB Power, is currently testing systems, including a 5-kilowatt, four-hour prototype in Florida.
Pumped hydro, where water is pumped up a mountain and released as needed in a hydro plant, is also used, but its use is limited by the number of available sites.
The latest generation of concentratingare being developed with integrated storage, in the form of hot water or even molten salt to deliver electricity after the sun goes down.
But for all the promise of making the grid operate more like a hybrid car, there are serious challenges, panelists said.
Many of these technologies don't have a 15-year track record that utilities like to see, which makes them skeptical. Large-scale battery projects requires systems integration that involves batteries, electronics, software, and thermal management systems, said A123 Systems' Fulop.
They are also very capital intensive. To get around that problem, Beacon Power doesn't sell its flywheel. Instead, it bids on power generation contracts and sells the electricity to utilities.
Regulations for utilities are written around power generation units, but not energy storage, said Matt Lazarewicz, vice president and chief technology officer of Beacon Power.
"The market rules have to change to allow nongeneration assets to connect to the grid and get paid for it," he said. "And to make the grid look more like a Prius, utilities need to change their mindset to make more efficient use of the generation system."
Rising fossil fuel prices are an incentive to explore energy storage, as well as the rising costs of constructing new plants.
Ideally, a utility would be able to get money from a storage unit in multiple ways. One rural co-op installed a four-hour, 300-kilowatt storage system to offset peak electricity rates and to provide backup power to a nearby industrial company, said Matthew Johnson, director of business development at Gaia Power Technologies.
Utilities are showing interest in more options, but storage is still very much an emerging technology.
"There's a lot of technology development and new work. But one of the reasons we don't see more of it today is because the economics of this are actually quite complex," said Bruce Phillips, director at Northbridge Group.