Energy-Storage Plans Gain Ground in California 

Source: By MATTHEW L. WALD, New York Times • Posted: Tuesday, December 23, 2014

Ice Energy makes devices called Ice Bears, which make ice at night that is later used, with fans, for air conditioning.CreditKendrick Brinson for The New York Times 

In an unusual competition in California, proposals for energy storage systems beat out hundreds of bids to construct new power plants as a way to meet peak power needs.

Southern California Edison has retired its San Onofre nuclear reactors and is planning to retire natural gas units with environmentally troublesome cooling systems. So it invited proposals for storage — including conventional batteries and giant ice packs — and new gas-fired power plants.

To the surprise of the utility and even the storage companies, in many cases storage won. Demand response, or agreements with customers who volunteer to be unplugged at certain times, also did well.

Looking for 2,221 megawatts of capacity, about the size of two big nuclear plants, the utility selected 264 megawatts of storage, a huge amount for what is still viewed as a fledgling technology.

It is also extremely large relative to an order issued last year by the California Public Utilities Commission that investor-owned utilities install 1,325 megawatts of storage by 2020.

The bidding results indicate that the cost of storage is falling, experts say, although neither the utility nor the companies whose projects were selected would say what price the utility would pay. And the value of storage varies by location, with California an extreme case. Because of wind farms, the state has very cheap energy available at night, some of which now goes to waste.

The alternative, new generators running on natural gas, is particularly expensive in the Los Angeles area because of strict air emissions limits and high land prices. (Batteries take up less space than power plants.)

In addition to conventional batteries, a large slice of the utility’s solicitation was won by Ice Energy, a company that installs rooftop devices that look a bit like air-conditioners but are used to freeze water in 450-gallon pots.

The devices, called Ice Bears, run at night when external temperatures are lower so making ice is easier. During peak hours, the ice is used for space cooling, requiring only the electricity needed to blow the air around.

Ice Energy has units around the country with a combined 10 megawatts of capacity; this single contract, in one utility’s service area, is for 25.6 megawatts.

“We’re very excited you’re seeing storage as a real part of a solution,” said Michael Hopkins, the company’s chief executive. The benefits of his thermal storage units would be split, he said; business owners could save by buying their electricity at off-peak prices, and Southern California Edison could avoid the need for seven or eight kilowatts of electricity per unit during peak periods. Seven kilowatts is enough to light 70 hundred-watt light bulbs.

One crucial attraction of storage is that it could break the mold of utility system design, which is now geared around the few hours a year with the highest demand. Some plants are needed only a few hundred hours a year. Storage could also sharply increase the amount of energy that a reliable system can absorb from intermittent sources like wind and sun.

California is in the lead in storage, but other areas with renewable energy sources that are prolific but out sync with demand are also interested. The Brattle Group, a consulting firm that specializes in energy, found in a recent study commissioned by Oncor Electric Delivery, a major Texas utility, that customers in the state could save money with up to 5,000 megawatts of storage installed. The study assumes that the costs of batteries will continue to decline.

RES Americas announced recently that it would build two 19.8-megawatt systems in Illinois. It said those would be the largest installations in North America. In that state, late-night surplus wind energy sometimes forces prices on the grid to below zero.