Robert H. Edwards, Jr., Partner & Co-Team Leader Energy, Project Finance...

It is critical to assess how various stakeholders perceive energy storage and what sort of developments can be expected in the solar PV arena.

Energy storage today can allow utility-scale PV to smooth out the power fluctuations and present a consistent output to the grid. The benefits of energy storage are important and have been acknowledged as vital for harmonized and dependable operation of utility grids.

John Wood, CEO, Ecoult Energy Storage Solutions says grid operators are necessarily extremely conservative. They are the ones who must maintain power quality when decisions are made to change the generation profile.

Wood explains further: “While they are slow to accept new technologies, perhaps more than any group grid operators have embraced high-quality energy storage solutions, particularly in the USA. This is due to the positive effect energy storage has on their grid operation, allowing more effective and efficient frequency regulation.”

Mutual benefits

According to Wood, utilities too have begun to realise that energy storage can provide mutual benefits to their customers and their own networks, particularly in markets where battery-backed frequency regulation is commercially successful , adding that the USA is perhaps the best market currently.

“PV plant operators are keen to adopt energy storage if the grid operator demands a certain ramp rate from their output. In that case high quality batteries have proved a very successful technology – for instance in the 500 kW solar Prosperity Energy Project on the PNM grid in New Mexico. Small-to-medium scale installers continue to aggressively pursue cost-effective energy storage technologies around the world,” said Wood.

Major developments

Lithium-ion (Li-ion) battery storage systems seem to be emerging as the preferred choice for PV storage for ramp rate control and frequency regulation, helping smoothen short term fluctuations in power output due to weather conditions.

Battery chemistry plays an important role in the amount and duration of energy available to smoothen these short term variations. Predicative monitoring such as cameras that detect clouds in connection with a PV plant’s control system are also being proposed.

Li-ion battery systems are being used for storage of solar energy, for instance, a diesel generation hybrid power plant in Bolivia using the same for system stability and countering short term variations in output from the PV array. The Pando plant started generating 2 MW of electricity in the third quarter of 2014.

The plant combines a 5 MW PV array with 16 MW diesel generation, and it is located in Bolivia’s Pando department, on the border with Brazil and Peru. The batteries are to function in conjunction with inverters and intelligent control systems, paving way for solar power to be integrated into diesel powered grids.

Referring to some of the major developments pertaining to storage, Wood says there is continued improvement of battery chemistry to create safe, easily deployable, large-scale distributed storage at decreasing prices, (for instance, various lithium ion chemistries).  Also, there is a need to consider dual purpose storage. Some storage technologies have the capability to perform multiple tasks at once, which can substantially reduce payback periods, says Wood.

Also, the recent development of plug-and-play storage modules that allow an end-user to install modular units of energy storage (usually with the intention of storing solar energy) that arrives essentially complete on a delivery vehicle and can be installed in a few hours.

Power certainty in a post-Sandy world

The first commercial, significantly islandable (the hurdle for “microgrid” designation), solar PV and battery hybrid project in Maryland came online in late 2013 in Laurel, demonstrating the reality these post-Hurricane Sandy conversations are aiming to create, writes the Rocky Mountain Institute.

While at an elevation of 200 feet and not in danger of storm surge effects, Laurel and many inland communities on the East Coast can none the less be heavily impacted by broader grid shutdowns from hurricanes and other natural or man-made disruptions.

Konterra, a real-estate developer of mixed-use, sustainable communities, installed 402KW of solar generation, two EV charging stations, LED parking lot lighting, and notably, battery storage capacity. The project was inaugurated with much fanfare by the likes of Maryland Governor Martin O’Malley and the Federal Energy Regulatory Commission’s (FERC) Chairman Jon Wellinghoff.

Solar Grid Storage, the company that provided Konterra with its lithium-ion batteries, is taking advantage of FERC’s ruling to realize profitability with these otherwise costly battery systems.

According The Rocky Mountain Institute, the firm has become “quite deft” at cobbling together various revenue streams to turn a profit, so deft in fact that the system was provided to the host site virtually free of cost. Such innovations begin to literally “change the game” regarding the economics of hybrid renewable and storage systems, shifting how customers engage with the grid and their utility.

The revenues Solar Grid Storage partially relies upon come from providing ancillary services to the grid. FERC defines these as: "those services necessary to support the transmission of electric power from seller to purchaser” and those required “to maintain reliable operations of the interconnected transmission system."

The fast-acting batteries at the Konterra site fetch these funds primarily by providing services in two general forms: By providing load-balancing, moving energy back and forth to and from the grid to achieve instantaneous balance between supply and demand; and providing power regulation services to the grid mainly in the form of managing power quality (reactive power and voltage control.

How should PV approach energy storage?

So how should solar PV entities approach energy storage? What should they attempt to do and what should be avoided?

Reflecting on the same, Wood says it is always tempting to imagine PV as a 24-hour solution with oversized panels and energy storage installed. He says, “We field many requests to size a battery system for this application. This is certainly a future scenario, but presently the costs still do not stack up for 6 to 20 hour storage.”

Traditional lead-acid batteries are quite well-suited to this task, but in an off-grid situation there is likely to be insufficient time to fully charge and refresh the cells using PV alone, and this lack of charge will prematurely age the cells.

“UltraBattery will perform significantly better, but the cells are ideally suited to short power bursts rather than long energy cycling – meaning that the cells will be underutilised and pushing up the levelised cost of energy.

However exceptional results can be achieved with fast-cycling batteries in situations where PV and diesel are combined,” said Wood.

“For a variable load served by a single diesel generator, significant diesel savings can be achieved with fast-cycling storage. Instead of running close to 24 hours per day on low output, the diesel can run for just a few hours per day on maximum (and highest efficiency) output. We have found that off-grid solar-diesel installations are the most successful applications for fast-cycling storage. This allows the PV to be more fully utilised and the diesel savings to be very significant.”

Wood recommends that buyers should consider the true recyclability of any storage solution. For instance, UltraBattery is manufactured in a closed-loop system – so end-of-life batteries are recovered to make new batteries. In fact around 96% of the material in an UltraBattery is reused to make new batteries and the other 4% is also captured and reused for other purposes. Some battery chemistries claim to be recyclable but are often only recovered for pulping and re-use in construction materials.

Partnering the wise option?

Robert H. Edwards, Jr., Partner & Co-Team Leader Energy, Project Finance & Technology Team, Kilpatrick Townsend & Stockton says asolar PV entity needs to quickly identify partners and collaborators.

“Figure out your place in the emerging ecosystem.  Play from strength to strength.  Find partners, collaborators, “frenimies” and anyone else who wants to play nice for mutual gain.  So for example a simple segmentation of the energy storage ecosystem would include: battery providers; electrical equipment and power electronics providers; system integrators; big data and high level IT integration.  Each one of the foregoing can be further broken down into sub segments,” explains Washington, DC-based Edwards.

“So an entity ready to call itself a “solar PV” entity, needs to think about what it needs to be in five years so as to not become extinct,” said Edwards.

Additonal reporting by K. Steiner-Dicks