Energy Storage—Current state of

ChargeArchie DeBunker & Dennis Witmer

Where I’d rather be….

Grid environment—◦ Renewables Firming (Wind and PV)◦ Frequency Stabilization◦ Energy Arbitrage (buy low, sell high)◦ Transmission upgrade deferral (GVEA BESS)

Alaska◦ Save Diesel

Allow very high penetration of wind (much greater than 100% of peak demand)

Diesels off operation Load shifting to save fuel after wind event

Alaska needs are different—but our market isn’t big enough to drive product development

Why do we need energy storage?

Ends of the scale don’t require much investment risk—ideas are cheap, commercial products can produce profits to support incremental R&D

“Pre-Commercial” phase is especially dangerous for energy products—requires significant capital investment at high risk.

Different than software development◦ Real hardware needs to be developed—good engineering skills

required—and you limited by chemistry and physics◦ Must compete with existing commercial products (electrical grids,

diesel generators) Inventors turn to capital markets for investment Customers are important to convince investors that there is

a real market, but customers are not the source of sufficient funding to drive product development.

Product Development Scale

Commercial products have:◦ Fixed Price◦ Fixed delivery date◦ Fixed specifications◦ Warrantee

If product lacks any of the above, it is not a commercial product Commercial products are cheap and they work Most energy storage devices are not real commercial products

yet A brochure describing technical specs can be made in Adobe

InDesign—it does not mean that a real product exists—specifications may be more aspirational than real

There is almost always a gap between the hype and the hardware in pre-commercial products

Commercial Products

If cheap, reliable energy storage is possible, Alaska needs it Product developers need to understand our needs so their products will work

here—but will be developing products for larger markets Pre-commercial products are very likely not to work as well as advertised Product failures must be expected—

◦ Failure to deliver on purchase order◦ Failure to meet initial specifications◦ Rapid degradation or other failures in the field

This is research—the product we get is information about the energy storage systems

Funding should be intended for R&D—not from operations. Recognize that suppliers are more interested in investors than in customers—

we really aren’t that important to them now Supplier independent thinking—it’s the job of the developer to provide us with

a product that works, and if they can’t, we try another supplier—or another technology.

A number of large utilities in the lower 48 are following storage for grid applications—Duke, SMUD, EPRI—perhaps worth visiting.

Playing the role of “First Customer” (Hard lessons from Fuel Cells)

How much is energy storage worth?◦ How much diesel fuel can be saved? (modeling?)◦ How long will storage system last? (Need testing data)

Back of envelope calculations—show that many energy storage systems are too expensive for load shifting applications

More sophisticated modeling is needed to assess value for stabilization applications

Electrochemical systems often degrade more rapidly under high current density conditions

Modeling can be used as a screening tool to properly size systems, and screen out systems that are unlikely to be economical

Cannot answer basic questions about hardware—need to find other sources of information on systems.

Need for modeling

EMD 3000 Base Case

EMD 3000 + EX Wind

EMD 3000 + New Wind

EMD + Max NW 2Eng + Max Wind

With PP Bat0

5000

10000

15000

20000

25000

O&M $Cap $Fuel $

Preliminary Modeling Of KEA System for 24 hour period

Energy storage is becoming part of the US grid market ◦ Recent changes to FERC rules that allow third parties

to provide frequency stabilization services and bill for them.

Dozens of companies are developing products for this market

Many of the companies are small, and are chasing capital.

Money is flowing—about $600 M in investment across the industry, mostly in past few years

State of the Energy Storage Market

Pumped Hydro Compressed Air

◦ Underground ◦ Above ground—SustainX Isothermal Storage

Flywheels◦ Beacon Power had failures, went bankrupt, is back

under new management◦ Powercorp has flywheel system, but appears to be

tentative about marketing unit Batteries

Types of Energy Storage

NGK Sodium Sulfur battery appears dead◦ Two fires, appear to be preparing to shut down and

recall all batteries in the field Lead Acid and Advanced Lead Acid

◦ Xtreme Power Appears to be using advanced lead acid battery

technology developed for automotive applications◦ Ecoult Lead Carbon battery

Appears to have much better deep discharge and partial charge performance—but high quality graphite can be expensive

Batteries

Still appear to be quite expensive and may suffer from relatively rapid degradation

A123, Altairnano, and numerous other suppliers exist

Automotive applications are main driving force—but stationary applications might be able to use reconditioned automotive batteries

Use in peak shaving applications, not for load shifting

Li-Ion Batteries

Prudent Energy◦ Vanadium has become quite expensive, but major cost of

small systems (UAF sized) is in balance of plant◦ Larger system being demonstrated in California at onion

processing plant ZBB appears active but emphasized power

electronics rather than battery technology Redflow gave initial results from a community

based demonstration, but gave no economics Premium Power attended, but did not present Numerous new companies are attempting to

develop flow battery technologies

Flow Batteries

Zinc Air◦ Nice presentation, but apparently unchanged

from past three years Aquion

◦ Appears to be the darling of the VC crowd◦ Some slippage in schedules, but appears to be

aiming for demonstration later this year MIT liquid metal battery

◦ Lots of interest, but still keeping fairly low profile.

Other Batteries

EPRI Cost Benefit Analysis

Recent change in ownership of company◦ New investors are putting $60M into company◦ Deal completed October 2011◦ Previous management is gone

Battery shipped to Kotzebue is currently being described as a “mistake”◦ Transflow 2000 difficult to work on in field◦ Fittings that loosened during shipping are impossible to access◦ Lack of requested plastic shrink wrap around unit allowed salt

water intrusion during shipping—may lead to electrical problems

◦ Issues between old management and new management were brought to a head over discussions on how to support the unit

Update on Premium Power

Discussions with Premium Power reps at ESA meeting, and with KEA in May—PP wants the unit back.

Company is stepping back from product, focusing current work on basic understanding of technology◦ Have hired a flock of consultants to help with product development◦ Running stacks to failure, and conducting FMA◦ Discovering issues at deep discharge levels, high current densities◦ Admitted that promised storage levels on Transflow 2000 had never

been verified (FAT showed about half of 2.8 MW-hr capacity)◦ Backing away from trailer mounted system to smaller 125 kW Conex

based systems◦ Will not be shipping any product from factory before end of 2012◦ Proposed shipping a 125 kW stack to Kotzebue in 2013, balance in

2014◦ Promise that their units will meet specs, whatever they turn out to be

Update on Premium Power