Our electric power system requires a constant balance of supply and demand. In the past, we’ve traditionally overbuilt supply to maintain electric system reliability: ensuring that at any given time, there is enough power supply available to accommodate peak annual demand. The net result is that we have trillions of dollars of infrastructure that isn’t used very often, and greenhouse gas emissions from power plants that aren’t run very efficiently.
Energy storage, therefore, is vital to our electric power system. It is a solution to fixing our aging power grid, a critical tool in increasing the spread of renewable energy, and a bridge between the needs of utilities and their customers. Energy storage can be installed at many points in the grid. In fact, there are already tens of thousands of grid-connected storage systems installed at facilities throughout the world. But what is energy storage, and how can it be put to use, today, in facilities across the country?
Grid-connected energy storage is not a new concept. Currently, there are over 1,000 storage systems – equivalent to 150,000 megawatts – installed worldwide. Energy storage can refer to a wide range of technologies and approaches to manage power. There are a number of technologies relevant to commercial and industrial facilities, all of which are able to fit within the established architecture of a building:
- Solid-state batteries: batteries are often paired with an intelligent software system that can charge and discharge them based on a building’s energy usage, weather patterns and historical use patterns.
- Flow batteries: a type of rechargeable battery, where energy is stored directly in the electrolyte solution; benefits typically include a longer cycle life and fast response times.
- Flywheels: these systems store electricity in the form of kinetic energy. If power fluctuates or goes down, the rotor will continue to spin and the kinetic energy that results can be converted into electricity. Flywheels are useful for power quality and reliability.
- Thermal storage: thermal technologies enable temporary energy reserves in the form of heat or cold. Ice storage, for example, works by making ice during off-peak hours when rates are low. When demand increases and rates go up, the ice system turns off the AC and uses the stored ice to provide cooling.
Energy storage can be installed at many points in the grid – including factories and other commercial or industrial facilities. There are already tens of thousands of grid-connected behind-the-meter storage systems installed at commercial, industrial and residential locations throughout the world. These systems are providing a multitude of benefits to facilities, a number of which are especially advantageous to high rises: demand charge reduction, participation in demand response programs, maximized time-of-use rates and emergency backup.
Demand Charge Reduction
Depending on location, many commercial and industrial facilities are subject to demand charges on their energy bills. These charges are based on the 15-minute period in which the demand for energy is highest throughout the day and in some cases, can account for 50% of the total energy bill. While energy efficiency or solar PV can reduce total electricity consumption, these benefits do not always coincide with a building’s peak usage. Energy storage systems, especially those paired with intelligent software, can track a facility’s load and reduce demand charges by dispatching battery power during periods of peak demand, effectively ‘flattening’ the load.
Participation in Demand Response Programs
Demand response for commercial and industrial facilities traditionally involves ratcheting down usage at times of peak demand. Energy storage can enable participation in demand response markets without impacting on-site energy use or operations. By responding to utility price signals, storage systems can increase financial return from participating in DR programs, while also benefiting the grid overall.
Maximizing Time-of-Use Rates
Energy storage systems can shift consumption of electricity from expensive periods of high demand to periods of lower cost electricity during low demand. This reduces the risk of lowering the value of on-site solar if tariff structures change over time, and peak demand periods shift to the evening when the sun isn’t shining. This also allows facilities to make the most of time-of-use pricing and reduce tariff structure change risk to electricity cost.
Planning for emergency backup power is an essential part of a resilience plan. Historically, commercial and industrial facilities have invested significantly in local emergency backup infrastructure. With advanced storage solutions on the market today, there may be opportunities to upgrade this infrastructure to not only provide emergency backup, but also a host of other money-saving and money-making solutions. And by using this infrastructure on a daily basis for demand charge reduction, its reliability and availability in the event of an outage can be increased as compared to a standalone battery and diesel generator that is only during an outage.
Case Study: Glenwood Demand Management Project
Glenwood is one of New York City’s largest owners and builders of luxury rental apartments. The full-service Manhattan real estate organization prides itself in being able to offer residents everything they need to live the “Manhattan lifestyle.” Like most high-rise properties in New York, however, Glenwood is affected by the demand that 13 gigawatts of peaking power places on the city’s grid during the summer air-conditioning season.
To address this problem, Glenwood participates in New York ISO and Con Edison demand response (DR) programs aimed at shedding loads during peak periods. Glenwood has been working with Demand Energy on an energy storage-based solution at a number of its residential properties. The systems are controlled by Demand’s Distributed Energy Network Optimization System (DEN.OS), which maximizes the economic returns of behind-the-meter storage systems, alone or in combination with distributed generation.
In 2012, Glenwood installed a 225 kW/2 MWh storage system with Demand’s DEN.OS software in its Barclay Tower property in downtown Manhattan. One benefit for building owners is the relative compactness and portability of such systems, which can be installed in constrained spaces such as garages and basements. The energy storage system allows Glenwood to switch operating modes from demand capping to DR without a financial penalty, and also helps Con Edison manage a more granular, location-based response to peak electricity demand across different sections of New York.
New York has some of the most expensive demand charges in the world. After the first year of operation, however, Glenwood saw a 14 percent reduction in its cost of energy and power, demonstrating the value and potential for battery-based storage to meet grid challenges throughout the year. The company is now working closely with Demand Energy to install an additional 1 MW/4 MWh of storage systems across ten Glenwood buildings for distributed grid support.
Energy storage is a proven group of technologies that has been in existence for decades. Thanks to tremendous technological progress in recent years, there is now a wide range of affordable and reliable storage options available, and a host of major companies are delivering grid-connected storage to the marketplace.