Peter Fusaro: Developments in Energy Storage and the Microgrid

The impending commercialization and large-scale deployment of microgrids throughout the U.S. still needs the backup power of energy storage. Energy storage can be batteries or fuel cells. After many years of fits and starts, these technologies are approaching commercialization.

They are the holy grail of microgrid deployment on a massive scale combined with rapid declines in the cost of renewable energy, specifically wind and solar energy. We will begin to see more co-location of energy storage with renewables.

The best definition of a microgrid is that it does everything a utility does but on a much smaller scale. Severe storms have forced many decision makers to consider more rapid deployment of microgrid technologies. Connecticut already has nine microgrids, three of which were built by Schneider Electric, in response to the severity of recent storms in that state. Thus, microgrid growth offers significant opportunities for dealing with climate resiliency issues related to weather events.

The energy storage space is poised to make commercial breakthroughs in the next 12 to 18 months. Already stationary fuel cell sales topped $1 billion in 2012 and sales continue to increase. Advanced batteries are now taking their turn on the dance floor after many fits and starts.

Santa Clara, California-based Green Charge Networks recently signed agreements for 1 MW of energy storage with retail  chain customers and municipalities seeking to reduce their energy bills through smart grid technologies. They use a small-scale lithium-ion battery to dampen peak demand charges. Demand charges add heavy-duty charges to energy bills.

Larger-scale deployment of flow batteries has been used by Puget Sound Energy, which uses two 250 KW zinc halogen system from Primus Power. This is a flow battery technology that is a rechargeable battery.

Forecasts for the energy storage market are all over the place but Pike Research estimates a market of $35 billion by 2020, which seems conservative.

Energy storage for the microgrid is forecast to grow from $662 million in 2014 to more than $4 billion in 2024 by Navigant Research. While each microgrid is unique, the need for energy storage is driving costs down. Microgrid deployment will only accelerate with the more aggressive renewable energy deployment and impact of more severe storms due to climate change.

The bottom line is that the microgrid will make the grid more resilient. Couple that with advances in a slew of energy storage technologies, and the change will be unstoppable. Utility planners need to stop looking at the distributed energy solution as a threat and instead view it as an adjunct of more non- or low-carbon-based generation capacity. NRG is already there but few others look at the microgrid as an adjunct to existing grid capacity, considering it as a competitive threat instead.

Superstorm Sandy was the wakeup call for the utility industry; it showed them that they are vulnerable to more-severe storms during both the summer and winter seasons. These weather-related events are not a one-off event but most likely a continuing assault on the existing fragile system of generation, transmission and distribution.

Microgrids may be one answer to this vulnerability.

 

Peter Fusaro is the chairman of Global Change Associates, which is holding a full-day Microgrid seminar in New York City on Feb. 25 (go to www.pgsenergy.com for more information). Fusaro also runs the Wall Street Green Summit, set for March 31, 2014.

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