The Other CES: Why Community Energy Storage is Such a Good Idea

As the clean energy standard idea proposed by President Obama in his State of the Union address works its way through Congress, another CES is also generating buzz in the clean energy world.  Its full name: community electricity storage.

CES--the storage variety--is about placing storage at the edge of the grid where it is needed and, by so doing, increasing network flexibility and resilience.  It is gaining attention because in a world of variable renewable resources, more electric vehicles and constrained transmission, storage is emerging as a vital element of a clean, stable electricity future. 

It is sometimes said of electricity that it is the only commodity that cannot be stored.  Indeed, storage is so basic to most commodities that the oldest cities in the world, such as Ur in Mesopotamia, had a warehouse and temple in their center to store grain.  Storage--the ability to time shift a commodity--is a good thing because it encourages economies of scale in production, pools supply and demand over time--and lowers the cost of transportation.  If electricity could not be stored that would make it, indeed, unique.

However, a closer look reveals that not only can electricity can be stored, it is: it is just that storage is undersized  relative to volume and, perhaps, more to the point, poorly matched to the network's needs. Other networks, for example, road, rail, water, pipelines and data networks have ubiquitous storage, embedded at every level to facilitate commodity exchange.  With road there is storage for trucks at central depots, for cars in parking lots and along streets and of course localized storage in the driveway.  Computer networks have storage in huge central data centers,on servers sprinkled around the world and on personal computers, phones and even onboard computer chips.

Electricity is stored, too, only not as widely.  Since the 1960s, utilities have stored large quantities of power--usually from baseload nuclear facilities--through pumped hydro, pumping water uphill at night so it can power generators on the way backdown during the day.  Pumped hydro storage capacity currently equals about 2% of US load.  That's on the order of size of windpower capacity.

Meanwhile, electricity is also stored at the micro level, in laptop computers batteries, watches, iphones and even on board chips in capacitors through increasingly innovative chemistries.  What's missing is what I have called the middle class of storage, home-sized storage, enterpise-level storage and neighborhood scale storage--enough power to keep a home, building or neighborhood going during a brown or blackout.

The traditional reason given for this gap in electricity storage is that electricity is simply hard to store.  However, the consumer electronics sector operating outside market regulation has accomplished wonders with storage--in battery form--building it into virtually every device we currently rely on.  Utilities have mastered pumped storage as well where topography permits.  And here and there one finds other storage forms---flywheels in hospitals, for example.  The real reason we have yet to see power midway between macro and micro at scale is that our electricity system has been able to work without it.  But for a high performance, 21st Century network storage is a necessity.  Enter CES.

CES, in its strict sense, consists of battery storage units of about 25 kw distributed at street corners.  Physically, it consists of green boxes that look like the transformers already visible in many neighborhoods.  The  company that has pioneered the boxes, American Electric Power(AEP) notes that their benefits include peak shaving, delaying the need for new substations and compensation for air conditioner compressors cycling on and off and fluctuations in solar power connected to the grid. Techically, CES is doable today.  It just requires batteries, rights of way that utilities already have along sidewalks as well as enough smart grid technology to control the units which sit beyond the substation, beyond which, utilities traditionally have not managed power.  Besides AEP, a number of other companies are experimenting with CES.

More generally, CES is a form of storage at the edge.  AEP has also introduced a larger version of distributed storage in substations of about 2 megawatts to serve groups of a hundred or more homes.  As many have noted, car batteries could become important mechanisms for storing power as electric cars come into service.  Ultimately, the ideal solution for a 21st Century network is to see storage become ubiquitous--as it is in the distribution of other commodities.

The fact is, it is not technically difficult to build home scale electriciy storage that might take up no more room than a washing machine, cost less than a large flat screen tv and use power management software no more complicated than that found in a typical laptop.  What's missing are the market forces needed to drive adoption.  Would companies and many people pay for 100% power resilience?  Probably.  Through peak shaving, storage might even pay for itself. (Peak shaving is just the electricity term for the cost saving benefits that result from the ability to store any commodity.) The economics work today.  The trick is aligning business models with returns to make storage ubiquitous across the network. 

Battery technology is only one of many storage technologies that are beginning to pay off.  Other promising storage technologies include ice storage--increasingly used at warehouses, flywheel technology that is well suited for short time periods--for example, during the time it takes a backup generator to kick on, and found today in hospitals as well as in regulation services to keep the frequence of alternating current within a specified range, and air storage.  Air storage is the technology being used by Brightsource a large utility scale solar company to store solar power collected in the desert.  In short, edge storage is coming.  We just need it to come faster.

What could accelerate storage?

First, public utility commissions should take heed of the new technology and look favorably on utility deployment.  However, there is a risk CES may meet the same resistance as smart meters--with PUCs questioning the additional expense and utilities holding out for rate recovery before investing.

There is another way.  Storage will proliferate in areas exposed to market forces because it makes as much sense for electricity as it does for every other commodity.  Why not allow free competition by utilities and start-ups to provide in home and in office storage with users capturing some of the savings?  Why not allow people who store power--by collecting solar or wind energy--to sell it back to the grid or, even better, to others?  (Demand response is an important step in this direction.)  Why not allow a warehouse in an industrial area that stores power to sell it to power hungry industrial users across the street?

The key to accelerating electricity storage is to remove barriers preventing people today from capturing its economic benefits.  Once those barriers are removed, community electricity storage will be a key and money saving part of a high performance, 21st Century electricity architecture. 

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