Dispatches from San Diego, pt. 4

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This is part four in a series on our trip to San Diego for the Energy Storage North America conference and expo. Here are parts one, two and three.

It’s a long flight from Beijing to California, so it’s not every day that our Chinese members have the opportunity to visit demonstration projects in the United States. We wanted to make the most of our San Diego trip, and so scheduled a trip to Borrego Springs, a community two hours away hosting a 26 megawatt solar facility and a 4.5 MWh lithium-ion battery energy storage system owned and operated by San Diego Gas & Electric. The batteries were provided and installed by Saft, with PCS from Parker and ABB.

The microgrid was funded in part by the Department of Energy and the California Energy Commission to build energy resilience in a remote community within California’s largest state park. The community’s population fluctuates between 2,500 and 10,000 residents, causing seasonal swings in load. Most importantly, the community is served by only a single transmission line strung in rugged terrain, leaving the community vulnerable to prolonged outages due to fire, lightning strikes, or floods.  

The microgrid has already proven itself as a powerful back-up system. During a planned transmission maintenance outage in May, the utility was able to switch customers to microgrid-supplied power after only a 10-minute outage. According to Jeff Mucha, project manager at SDG&E, that outage length was necessary to maintain personnel safety while flipping switches manually. The company is currently installing automation systems to make it possible to control microgrid services from SDG&E headquarters in San Diego.

This facility demonstrates the myriad values that microgrids can provide. In many ways, it was the ideal bookend to a trip that began with a visit to UC San Diego’s microgrid. One site was a telescope looking at the future technologies and business models that can help achieve grid stability and reduced carbon emissions in an urban, EV-heavy setting. The other, by contrast, showed how microgrids and energy storage can build resilience in isolated communities with plentiful solar resources.

Big thanks to Jeff Mucha and Donna Miyasako-Blanco at SDG&E, and Linda Haddock at the Borrego Springs Chamber of Commerce.

This is the final part of our blog, Dispatches from San Diego. See parts one, two, and three.

Dispatches from San Diego, pt. 3

This is part three in a series on our trip to San Diego for the Energy Storage North America conference and expo. If you haven't yet, check out parts one and two.

Today was the last day of the Energy Storage North America conference. Today's themes were grid services, finance, and technologies. We heard from grid regulators, policymakers, and technical experts, including Dr. Imre Gyuk, Energy Storage Program Manager at the Department of Energy.

Distributed Storage at the Market Edge

A morning panel featuring California policymakers focused on how distributed storage can interface in electricity markets.

The panel noted that utilities were tasked with examining the value of energy storage on their grids. At the time, utilities came back saying that the technologies were mature, economical, or proven enough for widespread use. Five years later, we’re seeing thousands of megawatts of interconnection requests for distributed storage, reflecting the effectiveness of California’s subsidies and the growing value propositions of these technologies.

During the Q&A session, a representative from Trina Solar, asked how policies can help China manage the problem of having long distances and constrained transmission between renewable generation and load centers. The simple answer given was to build more power lines. But the panelists also stressed the importance of building a diversified renewable asset base.

In a later panel, two grid experts continued the conversation about the role distributed energy storage can play on the grid edge.

James Gallagher, executive director of the New York State Smart Grid Consortium, described how New York’s Reforming the Energy Vision (REV) program is trying to better align utility practices with the goal of integrating more grid edge resources. Because New York has the oldest electrical grid in the country, REV also aims to help deal with the challenges of using older grid assets.

To do this, he said, REV is helping utilities procure distributed assets to meet their operational needs. The plan intends to introduce further market mechanisms to incentivize deployment. For example, the cost of electricity distribution is averaged across a utility’s consumer base, but in reality, the actual cost of delivery may vary by a factor of a hundred. Clarifying the actual costs of running a distribution grid gives third parties an opportunity to make a profit by introducing distributed resources like storage to locations where it is needed most.

He also touched on the issue of financing. Because increasing ratepayer fees to finance upgrades can be hard for utilities, there is an opportunity for microgrid players, who can raise money from third party sources to build and operate assets which traditionally were owned and operated by utilities. He also noted that insurance companies are becoming aware that record storms and heat waves driven by climate change are going to put community resilience to the test. Insurance companies have access to big pools of money that can finance power system upgrades, including energy storage, that build resilience in the face of global warming.

Technologies and Standards

Dr. Imre Gyuk, Energy Storage Program Manager at the US Department of Energy, gave a presentation on new technological breakthroughs in energy storage and efforts to establish better codes, standards, and regulations affecting energy storage system safety.

He highlighted work being done in energy storage at several national laboratories. Pacific Northwest National Laboratory (PNNL) has made breakthroughs in mixed acid vanadium redox flow batteries by developing electrolyte with 80% improved temperature stability and 70% better energy density. This technology has been licensed out to several big flow battery producers, including UniEnergy, Imergy, and WattJoule.

He foresees the system cost for vanadium redox flow batteries (RFB) to fall from $325/kWh in 2015 to $275 by 2017. He also shared projections that aqueous soluble organic flow batteries will become commercially viable in the medium term, with projected system costs falling to $150/kWh by 2021.

The Department of Energy is also working to resolve energy storage safety issues. The Department has published an inventory of codes and standards to help industry players better design, install, and operate their technology. The document also provides a list of best practices to respond to incidents involving energy storage technology.

The conference finished off with free beer at a reception at the San Diego Convention Center. It struck us how large this event is – a signal that the industry is really picking up speed, especially in the United States. This year, there were over 1800 attendees, 110 exhibitors, and over 150 speakers. We’re happy to have come – we’ll certainly be back next year.

Our fourth and final part in this series takes us to Borrego Springs, where SDG&E is pioneering microgrids and solar power to bring energy resilience to an isolated community in the desert.

California’s Integrated Demand Side Management Proposal

California’s utility regulators are proposing to take the grid a step further towards the edge.

Earlier this September, CPUC Commissioner Mike Florio released a proposal that would represent the next step towards larger deployments of grid-connected distributed energy resources (DER).

This summer saw California’s major utilities each present a Distributed Resource Plan. These explored how distributed energy resources could provide value to grid operators. Commissioner Florio’s new proposal aims to clarify how that value can be passed on to consumers through novel pricing signals and other mechanisms. This proposal, the “Decision Adopting an Expanded Scope, a Definition, and a Goal for the Integration of Demand Side Resources,” set a new goal to integrate demand side resources “that provide optimal customer and system benefits, while enabling California to reach its climate objectives.”

According to Greentech Media, the proposed decision was the result of workshops that included CNESA partner, the California Energy Storage Alliance, among other advocacy, business, and regulatory organizations.

While the actual mechanisms for compensating and sourcing demand side resources that perform grid services are yet to be discussed in future workshops, this proposal marks a further step for California on the path towards integrating demand side resources into the grid. Stem’s policy director, Ted Ko, remarked in a CPUC meeting that the proposal could allow utilities to look to their customers to provide grid services like capacity, ramping, and voltage support.

Nonetheless, some participants expressed concerns about the scope of the proposal. In particular, utilities and CAISO, the California grid operator, asked for clarification about the risks involved with decentralizing grid resources. If the resources don’t show up when they’re needed, who should be responsible? How should mechanisms be designed to ensure that the electric system is reliable?

To answer remaining questions about how specific mechanisms should be designed, the CPUC will hold further workshops. In a later phase, the Commission will look at potential pilot programs to provide data on sourcing and pricing mechanisms. 

China's Energy Internet

Photo: Jeremy Rifkin

Interest in the energy Internet is growing in China. Following the release of some big reforms, China is moving towards a next-generation grid -- which holds promise for those in energy storage. Here we're looking at the basics of the energy Internet, and discuss what role energy storage has to play.

What is the Energy Internet?

The Third Industrial Revolution, written by Jeremy Rifkin, presents a vision of the energy Internet. He envisions a shared, two-way energy and information network that integrates the electrical grid with natural gas, thermal power, and transportation networks via information communication technology. It relies primarily on renewable energy, and includes distributed elements, information components, and energy storage devices.

1. Energy networks are the physical foundation of the energy Internet. The electrical grid is the heart of the system. It closely integrates thermal, gas, oil, and transportation systems via electricity storage, thermal storage, and hydrogen storage technologies, as well as via vehicle charging points. High penetrations of distribution resources including distributed generation and storage helps to “flatten” the current top-down energy structure.
2. Information networks are the nervous system of the energy Internet. Most elements in the energy grid, including generation units, consumers, and T&D substations can be structured as nodes in an information network. This allows operators to collect and analyze grid information such as energy production, usage, demand, and operating status. This helps manage resources on the energy Internet.
3. Energy management, analysis, and trading platforms within the information network are used to dispatch local or regional energy resources and make the most out of the system. These platforms include big data analysis software, interactive exchange platforms, electric vehicle charging services, demand response platforms, etc.

China's Energy Internet

Research on the energy Internet in China is still in its early stages. According to information leaked from the NEA’s upcoming Energy Internet Action Plan, the energy Internet should rely on real-time, high-speed, two-way information exchange. It should use the electric grid as the core of the system, with a high degree of integration between multiple energy sources and transportation/logistics networks.

In 2014, President Xi Jinping called for an energy consumption revolution, including reduced energy consumption through industrial restructuring, implementation of energy savings guidelines, and the establishment of an energy saving mentality across society. With this in mind, we expect that China's first steps towards integrating energy resources and the Internet are most likely to involve distributed resources, microgrids, demand-side management, contracted resource management, and data-based energy services.

Energy Storage in the Energy Internet

In the energy Internet, energy storage not only includes electrical storage, but also hydrogen, heat, and natural gas storage.

The energy Internet will bring fundamental changes to every link in the energy chain, including production, transmission, and usage. As the "electricity consumption revolution" rolls onward, and continued reforms are made to China's power sector, we expect opportunities for energy storage in demand response, distributed generation, and microgrids.

Demand response in particular seems to be featured in the consumption revolution. It is also highlighted in the NEA's Energy Internet Action Plan. This is good news for energy storage, which can help reduce peak load without affecting consumer energy use.

Earlier this year, in fact, the Beijing municipal government authorized CNESA to operate the city's first integration pilot program. CNESA is helping businesses across the city save money using a custom-built online platform. We hope these experiences will inform future deployments across the country.

The new power sector reforms are also an important development. The reforms are opening up electricity retail, unlocking the potential for more distributed generation and microgrids in China. On 22 July 2015, the NEA followed up with  a document further specifying the role of microgrids in opening up electricity retail and distribution to society at large, titled Guidelines on Promoting the Construction of New Energy Microgrid Demonstration Projects. In line with the principles of an energy Internet, it encourages the use of internet-based and information technologies in generation and usage.

Although many of the precepts of a true energy Internet may be years away, China's policymakers are beginning to recognize the value that these ideas and technologies have. The confluence of power sector reforms and favorable regulations for distributed generation and microgrids suggest that non-hydro energy storage may soon be ready for its China debut.