energy storage journal — issue 7 winter 2014

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Issue 7: Winter 2014

Its payback time TSO study finds lithium ion batteries still too expensive

Lead, glorious lead Why the grids future depends on the oldest of battery chemistries

Lost in transmission Italian utilities fight intermittency with energy storage

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The next utility revolutionExisting business models redundant in a decade

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www.energystoragejournal.com Energy Storage Journal Winter 2014 3

CONTENTS

Grid storage moves to the fore across Europe 32

Italys resolves north-south divide over renewables 38

Ast: new president of Solar United (previously IPVEA) 6

Charles Merz: creator of the first national grid 45

COVER STORY: UTILITIES LAST STAND 26The coming revolution in the way energy will be delivered threatens the earnings streams of todays utilities it could even spell the end of many of them, say some forecasters. But it also throws up some exciting partnerships and new business models

EDITORIAL 4Finding relevance in the new world energy order

PEOPLE NEWS 6IPVEA rebrands to Solar United New president and board for Solar United John Edward Searle, 1954-2014 EnerSys reshuffles as Shaffer is promoted Ovan becomes president of Navitas Callihan joins Intersolar to head North America sales Trojan wins award for best India solar work EnerDel names Altairnano global VP as new chief executive Ballard appoints former Solar Integrated president MacEwen as new chief executive A123 Systems makes Hurley new CTO Sunpowers Butterfield joins Stem as CCO sPower expands board with ex-CAISO and SunEdison executives Californian utility veteran joins Aquions board of directors ViZn Energy Systems appoints two new vice presidents

ANALYSIS 11According to a recent study by the UKs National Grid, most electrochemical energy storage systems dont pay for themselves over their lifetime. So why all the interest?

NEWS 14Potential advantage for lead after study shows cost of lithium ion batteries unlikely to fall below 200MWh-300MWh Imergy cuts costs of flow battery power to $300 per kWh Advanced lead-carbon Axion wins solar storage and frequency contract Energy storage to the fore as large scale electricity generation set to fade, claims bank report to investors Ergon Energy orders battery storage from S&C Lead prices to fall near term with strengthening probable in 2015 SMA and German TSOs partner on project for balancing power with solar PV Maxwell reveals new supercap Andalay Solar partners Highpower for ESS New Vyon materials safeguard from battery explosions EPRI tests integration of EVs to respond to utilities power needs ABB and BYD partner on energy storage worldwide Green Charge Networks signs battery supply deal with Samsung SDI PNNL team develops hybrid Mg-Li battery

OPINION: LEAD ACID, THE GRIDS FUTURE 20A new generation of expander formulations is creating a new generation of lead acid batteries. The implications are huge.

EUROPEAN GRID COMES OF AGE

Large scale energy storage moves to the fore 32 in Europe as momentum for change gathers

Energy storage offers way to unify renewable 35 power gap in Italys north-south divide

FORTHCOMING EVENTS 42

HEROES OF THE GRID CHARLES MERZ 45 A tribute to Charles Merz who originally devised the concept of one transmission system into what eventually became the National Grid

editorial

4 Energy Storage Journal Winter 2014 www.energystoragejournal.com

It may be odd to apply this quotation to the future of the worlds energy supply. But its apposite. Most human beings have an almost infinite capacity for taking things for granted.

The phrase, coined by author Aldous Huxley in the early 1930s, rings as true now as it did then.

But it has an unexpected relevance when one sees the giant power utilities those that have dominated the developed world for almost a century slumbering while their business models start to fall apart.

The challenge of renewables is not just about whether they can save the planet from those troublesome fossil fuels and pesky greenhouse gases.

Because, irrespective of whether you believe in

global warming or not and, on balance, we do a revolution in energy generation and energy storage is upon us.

In previous times the electricity customer was, well, the customer. But in the coming decade, the customer will also be the provider.

Grid parity where PV, for example, is cheaper than mains electricity and beyond is already achievable in some places and in sight elsewhere.

Get the energy storage package right, some-thing that has yet to properly arrive, then the days of the consumer as provider have emerged.

At which point mass adoption of solar panels will become a no-brainer for domestic home and commercial business alike.

Utilities need to wake up to new world order for power provision

Sara Verbruggen [email protected]

Energy Storage Journal Business and market strategies for energy storage and smart grid technologies

Energy Storage Journal is a quarterly publication.

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The contents of this publication are protected by copyright. No unauthorised translation or reproduction is permitted.

Every effort has been to ensure that all the information in this publication is correct, the publisher will accept no responsibility for any errors, or opinion expressed, or omissions, for any loss or damage, cosequential or otherwise, suffered as a result of any material published.

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editorial


The first casualty in the way that we integrate renewable energy into our lives will at least in part be more about how the giant power companies of the past find themselves becom-ing irrelevant.

If your power needs can be generated at home although clearly that may never be the case for large swathes of people what is the role of the utility?

Does it become the ultimate deliverer of UPS? Or provider of power to a diminishing percent-age of the population? Who should pay for the grid infrastructure that provides a service on an occasional basis?

Theres a host of unanswered questions that need to be posed and answered. Every permu-tation of the laws of unexpected consequences is going to be faced by consumer and utility alike.

But for the moment our almost infinite capac-ity to take things for granted means that some parts of the industry are sitting complacent while the world is set to fall about them.

If the status quo is no longer good enough, then vision is needed.

When US president Franklin Roosevelt intro-duced the Rural Electrification Act in 1936

he had a vision of what cheap, avail-able power would mean to the coun-try, particularly for the rural poor in the south.

He was prepared to gamble that the costs of building the T&D would pay for themselves. He saw the social consequences reversing the flight from the country-side to the city as something worth achieving.

It was a gamble worth taking. And also one that paid off. Those grids bequeathed from brave US politicians and businessmen how-ever, fault ridden they may seem nowadays serve as reminders of the huge task that these leaders took on and won.

Similar bold measures were taken across Eu-rope. The UKs national grid, for example, came about in the mid-1920s by connecting some 120 of the best power plants to restore a stricken economy by providing reliable and cheap power for industry.

And so to 2015.

Some of the utilities appear unaware of the massive challenges that are facing them. Some are trying to adapt to the future one Ger-man utility is moving into a business model that incorporates selling electric vehicles! And some are equally desperately trying to push back the wave of change about to engulf them.

Irrespective of their perceptions, the provision of power and the role of the utility is just about to change forever.

But as ever with change come challenges and also opportunities.

Sara Verbruggen Editor


people NeWS

The International Photovoltaic Equip-ment Association better known as IPVEA has changed its name to Solar United, following a membership vote of the trade association in Septem-ber.

The new name reflects the asso-ciations ambition to become a global business and technology group for the whole photovoltaics industry.

Bryan Ekus, who has been executive director of IPVEA for the past seven years, told Energy Storage Journal: The name change is important. Over the past years weve seen the PV in-dustry go through both good and bad times but the overall theme of the in-dustry is now clearly one of both con-solidation and collaboration.

The lines between who does what and how they do it remain im-portant but we all realise that if we want this industry to create the revo-lutionary changes in the way that the worlds energy storage business incor-porates photovoltaics, then we need to emphasise the theme of unity.

This isnt mere sloganizing, its about how we present an entire indus-try to both the public and the energy business itself.

IPVEA members voted on the change of name and rebranding at a board meeting during the 29th EU Photo-voltaic Solar Energy conference and exhibition held this September in Am-sterdam.

This organization unifies leaders across the solar industry and associa-tions, and our company is proud to contribute to this important first ever global initiative, said CSUNs EMEA general manager Engin Yaman, one of

the newest members of the organiza-tion.

The decision was also taken to open up Solar United utilities and grid oper-ators. In addition the association wants to facilitate opportunities between na-tional and regional organizations.

The concept behind IPVEAs new name expansion is that we want to unite the whole solar industry value chain as well as associated industries through a collaborative approach, said the associations incoming presi-dent Eric Ast.

The next steps to for Solar United will be to organize strategy committees to focus on the main issues for the so-lar industry, which will include leaders and experts along the PV value chain, said Ekus.

The original association was set up in 2008 to represent the interests of production equipment and technol-ogy providers in the upstream por-tion of the PV industry companies that have invested in developing more advanced production techniques and processes to bring down the cost of so-lar energy.

These types of businesses, which in-

clude Manz, Meyer Burger, Schmid Group, Jonas & Redmann, M+W, and others, continue to account for the largest portion of the associations membership base.

While the association will remain focused on technology, Ekus says that expanding Solar Uniteds membership base and influence will bring about more opportunities for members to promote issues such as quality and re-liability to the wider industry.

Many of these initial member com-panies are also expanding into lithium batteries, fuel cells and energy storage.

Ekus continues to expand the reach of the association. This January he was appointed an advisory board member of GCC Solar Alliance representing SASIA better known as the Saudi Arabia Solar Industry Association.

The Solar GCC Alliance exists to en-courage each of its affiliate countries to pursue independent solar develop-ment, while simultaneously providing an infrastructure for international col-laboration.

Ekus is also a board member of the Asian Photovoltaic Industry Associa-tion. APVIA represents members ac-tive along the whole solar Photovoltaic value chain. APVIA aims to encourage technological and economic informa-tion exchange, strengthen connection with governments, and to expand the PV market share in the renewable en-ergy sector.

Solar United/IPVEAs new mem-ber companies are: Trojan Battery, Coveme, DSM, EVASA, Hellmann, JinkoSolar, Multi-Contact, Shoals Technologies Group and SolarPV.TV Consulting.

Bryan Ekus executive director of Solar United

New president, board for Solar United Solar United then called IPVEA elected new board members during the associations annual gener-al meeting held during the Intersolar conference and exhibition meetings in June in Munich.

Eric Ast, global business development manager pho-tovoltaics at Multi-Con-tact, replaces Sven Jarby from Oerlikon as president of the IPVEA.

Richard Moreth from Vitronic was elected as vice president, replacing Stefan

Schiller. Under the associa-tions article both Jarby and Schiller had reached the end of their terms.

Laura Azpilicueta, from EVASA, was nominated as secretary, Bernhard Krause, from Singulus Technolo-gies, as assistant treasurer while Elke Hoffmann from Jonas & Redmann was re-elected for an additional term of three years as treas-urer.

Ortrun Asslaender from

ACI Eco-tech term also came to the end of her three year term and did not run for re-election and has joined the advisory board.

Ast thanked past board members for their leader-ship, as well as vision dur-ing the most recent difficult times.

This has built the foun-dation for more growth and new opportunities for the associations members, said Ast.

IPVEA rebrands to Solar United


people NeWS

It is with sadness that Energy Storage Journal has to report that John Searle, chairman of Safts management board, died suddenly of a heart attack on September 24. For the past decade John had been the charismatic and much respected face of SAFT. He was also one of the masterminds behind the successful management buy-out of the company from Alcatel in 2003 and responsible for the firms steady growth since then.

Alfons Westgeest, secretary general of EUROBAT, the Association of European Automotive and Industrial Battery Manufacturers, told Energy Storage Journal: all our board members recognize his commitment to the company, his employees as well as EUROBAT where he served many years as vice president. His eloquence, insight and wit shown at board meetings, dinners and in chairing our forum will be very much missed by all.

Yann Duchesne, president of the supervisory board, said: John Searle transformed Saft and made it into an undisputed leader in its markets. He was both a visionary and a great industry leader. Throughout his career within the group, John constantly shared his passion, his professionalism, and his values with the teams at Saft.

However, the tributes to John from his staff were more personal. He was not just a decent man but a fair and kind man who retained both those qualities

while still energetically leading Saft through some difficult times, said one senior manager.

Another said: His French was fluent. Easily enough to be persuasive or amusing in both languages but always with a strong, and to my ears charming, English accent.

After graduating with an engineering degree from Cambridge University, John traded his technical abilities to making things happen. John joined SAFT in 1990 as a commercial director, first in the UK and then later he steadily rose through the ranks as he moved to France.

In 1999 he was appointed head of the SBG division and in 2002 became in charge of SAFT groups operational activities. He became president and chief executive office of Saft in March 2005 and also chairman of the management board of Saft Groupe.

Under his management, the group made significant developments, notably becoming a listed company, accelerating its international expansion, and by successfully developing and deploying lithium-ion technology, said the firm.

Perhaps his most successful moment was his role in the management buy-out of SAFT Batteries in 2003 when the Alcatel subsidiary was bought by private equity firm Doughty Hanson.

Andy Lynch, head of Schroders European Dynamic Growth Fund, later said that he had admired the way that SAFT had coped with the post-buy out environment. Saft faced enormous challenges after floating. It had a contract for night goggles with the US military, which suddenly turned the taps off. Then the price of nickel for SAFTs batteries went from $10,000 per tonne to $50,000 per tonne; Yet the management throughout delivered good results and gave investors clear guidance on the impact of the cost of the raw material changes.

His successor is Bruno Dathis who has been chief financial officer of the group since 2008. Dathis becomes interim chairman of the management board.

He leaves behind his wife of many years Jane, and two daughters.

He was just 60.

John Edward Searle 1954-2014

EnerSys reshuffles as Shaffer promotedJohn Craig the face of EnerSys and its prede-cessor Yuasa for almost two decades stepped down as president of the company in November but remains as chairman and chief executive of-ficer.

David Shaffer, who was president of EnerSys EMEA and Asia opera-tionshas been appointed to the newly created po-sition of president and chief operating officer at the parent. Shaffer is widely known and re-spected in the European energy storage scene and is an active member of EUROBAT.

Shaffer, who has over 24 years experience in the battery industry, joined EnerSys in2005.

Craig said the reshuf-fle was a further element in the companys goal of reaching $4 billionin revenue by 2018. This new position is one more element that will help ensure we achieve this objective, he said.

Craig: moving sideways

Shaffer: promotion


pEoplE NEWS

EnerDel names Altairnano global VP as new chief execEnerDel, the lithium ion battery fi rm formally appointed Michael Canada as its chief executive offi cer in September. Canada joined as chief operating offi cer in January and has worked as interim CEO since April. Canada has over 15 years experience in engineering, operations and project man-agement and strategic planning across the automotive, aerospace and clean energy industries, according to an EnerDel state-ment. He has worked with global com-panies such as DaimlerChrysler, Goodrich Aerospace, Harman/Becker Automotive Systems and Praxair.

Before EnerDel, Canada was global vice president of engineering and operations and general manager of Altairnano. There he was involved in commercialization initiatives delivering multiple large-scale grid and micro-grid systems for renewable

integration. Canada launched expansion initiatives in Asia, establishing more than one million square feet of manufactur-ing space to serve the transportation and stationary markets, said EnerDel.

At Praxair, he was in charge of the glob-al engineering group with project P&L responsibilities for 38 facilities worldwide.

Navitas, the US energy stor-age and electronics fi rm, has appointed Mil Ovan as president. Ovan has over 30 years of experience in bringing new products to global markets, with the most recent 12 years as a founder and CEO of energy storage and renewable en-ergy companies.

Over the past three years, Ovan has been in-strumental in the formation and growth of our compa-ny said Navitas Systems founder Alan ElShafei. His leadership in the last 18 months as chief market-ing offi cer has continued to positively impact all areas of our products, business divisions, and served mar-kets.

Ovan becomes responsi-ble for overseeing all func-tional areas of the company.

Before Navitas, Ovan was a principal of Nova Associ-ates, providing marketing and business development consulting to renewable en-ergy and advanced materi-als companies.

Ovan was previously sen-ior vice president and co-founder of Firefl y Energy, an advanced lead acid bat-tery start-up.

Separately, David VanAss-che is joining the company as a vice president of op-erations and strategic pro-grams.

Intersolar North America recruited renewable energy industry publisher Jim Cal-lihan as director of sales and marketing for the re-gion in October.

Callihan, who has nearly two decades of experience in the solar industry, will work with the event organ-izers exhibitors and part-ners to boost their corpo-rate presence at the show and will oversee event mar-keting programmes.

Callihan will help grow the energy storage part of the show by tapping into

the event organizers Eu-ropean energy storage ac-tivities, which includes the Electrical Energy Storage exhibition within Interso-lar in Munich. He will also work with Intersolar North American energy storage exhibitors.

Callihan says: Energy storage today reminds me of where solar power was 15 years ago It took poli-cy shifts, further technology advancement and new busi-ness models to expand so-lar power to its signifi cant place in our energy mix today. However, electrical energy storage with basic technology in place and advancements rapidly on the way, does not have to wait for policy, sales chan-nel development or fi nanc-ing that has largely been provided by solar power.

Callihan co-founded the solar industry news site, So-larAccess.com, which was rebranded as Renewable Energy World.

Ovan becomes president of Navitas

Callihan joins Intersolar to head N America sales

Trojan Battery, the US manu-facturer of deep-cycle batter-ies, and its project partner, Team Sustain, were named winners of the Intersolar Solar Projects in India at the Intersolar India confer-ence in Mumbai on Novem-ber 18.

The companies were rec-ognized for their remote tel-ecom project.

Trojan and Team Sus-tain were selected based this exceptional pioneering project in the fi eld of so-lar building, industrial and commercial use projects based in India, said the conference organizers.

Team Sustains solution with Trojans Smart Carbon battery enhances the ability of remote mobile towers to serve as the communication backbone for rural India, contributing to the regions development, said a Trojan offi cial.

Trojan wins award for best Indian solar work


pEoplE NEWS

Randall MacEwen took over as chief executive and president of fuel cell firm, Ballard Power Systems, on October 6.

MacEwen has spent most of his career in and around clean energy and partic-ularly the solar sector as well as an extensive experi-ence in high-end corporate finance.

Before setting up his con-sultancy NextClean Tech in 2010, he spent five years at Solar Integrated Technolo-gies, lastly, from December 2006, as president and chief executive. Solar Integrated is a manufacturer and in-staller of commercial pho-tovoltaic systems.

MacEwen was made company secretary and general counsel of the Los Angeles based firm in Sep-tember 2005.

Before that he was ex-ecutive vice president cor-porate development and general counsel of Stuart Energy Systems Corpora-tion.

MacEwen was heavily in-

volved in the corporate-led Stuart Energys $120 mil-lion initial public offering, its $23 million acquisition of its largest competitor, based in Belgium, in 2003, its $20 million follow-on public equity offering in 2004, and its $125 million sale to Hydrogenics Corpo-ration, an onsite hydrogen production company, in January 2005.

Solar Integrated Technol-ogies, was bought by En-ergy Conversion Devices in 2009 but was sold off by its parent following the PV in-dustry down-turn in 2012.

MacEwen replaces John Sheridan at Ballard who is retiring. Sheridan will ad-

vise MacEwen during the transition before leaving the board of directors on December 31.

MacEwen has a legal background: he studied law at the University of West-ern Ontario in Canada and after graduating in 1995 spent the first six years of his career as a corporate and securities lawyer at international business law firm Torys.

Ballard Power Systems, headquartered in Vancou-ver, Canada is principally engaged in providing clean energy fuel cell products for a range of applications that include back-up power, and distributed generation.

Ballard appoints former Solar Integrated president MacEwen as new chief exec

A123 Systems, the lithium-ion battery manufacturer, has appointed Patrick Hurley as its new chief technology of-ficer. Hurley also becomes in charge of A123 Venture Technologies, the companys research and development unit which focuses on a col-laborative business model for innovation in lithium-ion battery technology.

Hurley brings to A123 both academic and industry experience in transportation applications of advanced batteries, according to the company.

Hurley earned his doctor-ate in inorganic chemistry from Purdue University in Indiana and then did 2-1/2 years of post-doctoral re-search at the California Insti-tute of Technology. While at CalTech he focused on mul-tiple cleantech innovations including projects on energy storage materials.

Hurley left academia in 2006 and then worked at Air Products and Chemicals as a senior research chemist.

In 2011 he joined Johnson Controls as a senior strategic technology planner where he was responsible for the iden-tification of new business op-portunities for energy stor-age systems. The following year he was made a director of research and development and xEV segment lead.

In 2013 he won two in-house Johnson Merit awards for micro-hybrid vehicle platform development team and for a lab project at the University of Wisconsin known as the Energy Ad-vancement Centre.

The centre provides an R&D environment in which scientists, students and fac-ulty have a dedicated space to conduct research, as well as helping Johnson Controls exploration and develop-

ment of new chemistry and technologies for energy stor-age. Later that year he won a Gold Edison Award for the same project.

Most recently he was exec-utive director of global core engineering in the power so-lutions division at Johnson Controls.

While at Johnson Controls, Hurley developed a solid net-work of relationships with academia and government research organizations, says A123. The firm says his role as the industrial liaison for the Joint Center for Energy Storage Research helped him form collaborative relation-ships with the US Depart-ment of Energy.

Hurley will have to inte-grate the companys battery development activities in Hangzhou, China. The de-velopment organization in China was originally part of the Wanxiang Groups bat-tery investments before its acquisition of A123 Systems in early 2013. Through this initiative A123 says it is also further expanding the bat-tery chemistry alternatives in its global portfolio by com-plementing the established nanophosphate product family.

New A123 CTO Hurley: has explored collaborative business models

A123 Systems makes Hurley new CTO


pEoplE NEWS

Renewable energy devel-oper Sustainable Power Group has expanded the companys board and also the senior management team with new appoint-ments.

In September sPower promoted chief financial officer Chip Everest to the new role of president and appointed Bob Foster to its board of directors. Everest is seeking to

Other recent board ap-pointments include Jigar Shah, who founded solar ser-vices company SunEdison.

Everest will lead projects both in the US and abroad, following sPowers recent merger with Silverado Power, which increases the companys portfolio of op-erating assets to 130 solar projects and a pipeline of more than 1GW.

Foster resigned from the California Independent System Operator (CAISO) to join sPowers board of directors. ISO board mem-bers are prohibited by state and federal policy from be-ing affiliated with market participants due to poten-tial conflict of interest.

As an ISO board member, Foster played a key role in establishing Californias adoption of renewables, which included CAISOs implementation of new

rules for giving clean energy sources equal footing in the market and more efficient grid planning for renewable energy transmission.

sPowers business in-cludes acquiring solar as-sets in any stage of devel-opment as well as buying existing operating solar projects in the US. The company recently expand-ed into Europe through a partnership with UK solar developer Camborne. Both sPower and Silverado are backed by Fir Tree Partners, a global investment fund.

In 2003 Shah founded so-lar services firm SunEdison, to adapt and commercialize power purchase agreements for the PV industry.

sPower is an interest-ing company as it analy-ses and assesses which stalled renewable energy projects can be developed to completion. This is the only company that buys these half-finished pro-jects. Estimates show that the amount of abandoned solar projects that could be bought up and fully de-veloped could add several GWs of new solar capacity by 2016, he says.

Shah is also a lead inves-tor at Clean Feet Investors, which includes investments in Stem, an energy storage developer in the US.

Californian utility veteran joins Aquions board of directorsTom McDaniel has been appointed to the board of di-rectors of Aquion Energy, a maker of aqueous hybrid ion batteries and energy storage systems. Aquion is tar-geting distributed grid-connected and off-grid markets.

McDaniel spent 37 years, including working as chief financial officer and treasurer, at Edison International, which manages $48 billion in assets within subsidiar-ies that include public utility Southern California Edison and Edison Mission Group, an independent power pro-ducer that develops and operates fossil fuel and renew-able generation projects in the US.

Most recently McDaniel was a director and chairman of the board at Tendril Networks, which supplies smart grid and energy management software services. He is also a director at high output solar panel maker Sun-power Corporation.

ViZn Energy Systems appoints two new vice presidents David Mintzer and Del Al-lison joined energy storage developer ViZn Energy Sys-tems in September. Mintzer joins the company as vice president of business devel-opment and Allison as vice president of sales.

ViZn, produces zinc re-dox flow batteries for large and grid-scale applications, including replacing gas peaker plants. Recently the company announced that it is ramping up its produc-tion lines to meet growing demand for its batteries.

Mintzer was previously vice president of sales at ET Solar and in the past has held jobs in business devel-opment, sales and market-ing at SolarBridge Technol-ogies and JDSU. Previous companies he has worked for include Newport and Physical Optics Corpora-tion.

Allison, has worked at solar and semiconductor firms, most recently Solar-Bridge Technologies as well as Achronix Semiconductor and PureEnergy Solutions.

sPower expands board with ex-CAISO and SunEdison executives

Stem, the Californian en-ergy storage system sup-plier, appointed Karen But-

terfield in August as chief commercial officer.

Butterfield has more than 20 years experience in the solar power, energy ef-ficiency and utility indus-tries. For the past six years she worked at SunPower Corporation as a director of federal programs and for the past two years as man-aging director of the firms national and federal ac-

count team of sales, analyt-ical and business develop-ment staff. That team sold to Fortune 500 companies and federal government agencies.

Before that, she worked for Powerlight as director of energy efficiency and Honeywell Utility Solutions as director for sales in the west of the US. Before that she spent 10 years at DMC

Energy, rising to become a regional sales manager.

Stem provides software platforms that combine big data, predictive analyt-ics and energy storage to reduce electricity costs for businesses.

The companys investors include Angeleno Group, Iberdrola (Inversiones Fi-nancieras Perseo) and GE Ventures.

Sunpowers Butterfield joins Stem as CCO

ENERGY STORAGE FOR THE GRID


It may seems a basic question but its a good one all the same. (And ar-guably has more relevance than ever. )Is an energy storage system value for money, particularly one that uses ad-vanced batteries such as lithium ion?

In the past 18 months from Janu-ary 2013 to September 2014 out of an estimated 363MW of grid storage projects being built around the world lithium ion batteries are supplying 169MW of this, according to Navi-gant Research. This is equivalent to a market share of 46%, followed by sodium sulphur batteries with 35%.

But, according to the National Grid, the UKs transmission system opera-tor (TSO), an electrochemical energy storage system based on either of these

battery technologies does not pay for itself over its lifetime, when used to supply an ancillary grid service.

The grid operator conducted a case study, published in its 2014 future en-ergy scenarios report, to investigate the potential for electricity storage to become a viable, cost competitive tool, by taking four different grid stor-age technologies; lithium ion batter-ies, sodium sulphur batteries, pumped hydro and compressed air energy stor-age (CAES).

All the technologies are relatively mature and they are all deployed in the UK, mainly in trials. Lifetimes of 15 years for sodium sulphur and lithium ion batteries, 60 years for pumped hy-dro and 40 years for both above- and

below-ground CAES were assumed.The analysis investigated the num-

ber of years that it would take to recover the cost of these electricity storage technologies through revenue from individual reserve services alone either short term operating reserve (STOR) of say 3MW or fast reserve, 50MW and the decrease in total plant costs that would be necessary in order to recover costs.

For fast reserve, which emphasises the value of the fast response times of electricity storage, CAES was the only technology expected to recover costs within the assets lifetime for both small and large capacity cases.

For pumped hydro, only the small capacity asset recovers its cost within its lifetime.

In their 15 year lifetimes neither so-dium sulphur or lithium ion batter-ies recover their costs from providing either reserve service. For lithium ion batteries cost reduction for fast reserve and for STOR would have to be in ex-cess of 99% while for sodium sulphur cost reduction would have to be 85% for STOR and 58% for fast reserve.

The cost of lithium ion batteries, which make up about half of the cost of an energy storage system, is already falling and more investment in large-scale manufacturing will keep driving down costs, by around 30% many are predicting.

But, it is not enough.

Batteries for other purposes The other way to make expensive battery storage value for money is to exploit the technologys ability to be flexible, in other words devise ways and means for a block of batteries on the grid to provide as many dif-ferent services and functions as possi-ble, some of which generate revenues or which reduce costs in other ways, such as saving money on network up-grades.

There is a lot of information from

Unpicking the true cost of batteries on the grid

According to a recent study by the UKs National Grid, most electro-chemical energy storage systems dont pay for themselves over their lifetime. So why all the interest? Sara Verbruggen reports.

In their 15 year lifetimes neither sodium sulphur or lithium ion batteries recover their costs from provid-ing either reserve service. For lithium ion batteries, the cost reduction for fast reserve and for STOR would have to be in excess of 99% while for sodium sulphur cost the reduction would have to be 85% for STOR and 58% for fast reserve.

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NaS battery: comparison of total costs against revenue over 15-year lifetime

NaS battery: comparison of total costs against revenue over 15-year lifetime Source:UK Future Energy Scenarios 2014



storage pilots, around the world, about how well battery storage sys-tems on the grid perform in terms of different tasks or services, but com-paratively little on business cases for these types of assets. (See chart for conventional and once proven suc-cessful calculations.)

A 6MW/10MWh lithium battery storage system in the town of Leight-on Buzzard, about 70km outside of London, is trying to prove the value of storage over a 10 year period.

Primarily the battery system, oper-ated by distribution network opera-tor (DNO) UK Power Networks, will defer conventional network reinforce-ments. Like many urban areas outside of big cities like London, Leighton Buz-zards energy demand among the local homes, services and businesses are ris-ing, albeit gradually and steadily.

Costing projectsBefore the storage project began, there were plans for the construction of a 20km cable to ensure the network could handle local peak demand in the coming winters. Works would have had to have started about 18 months from now. The cost of doing the cable work is about 6 million ($10 mil-lion), though the analysis used by the DNO is based on net present value pricing what it would be if works had begun in 2016 so this cost is calculated at 5.1 million.

Again, based on net value pricing, the energy storage project cost is 16.8 million. Over two thirds of the fund-ing has come from Ofgem through its Low Carbon Network Fund scheme.

The project is a first of its kind. If the system were to be built as a real, com-mercial grid investment, in 18 months from now, with all the necessary soft-ware and other development work completed and without the various associated research and dissemination aspects UK Power Networks estimates the project cost to be 11.5 million.

However the analysis also factors in further cost reductions of 3 mil-lion related to technology that are ex-pected to occur between doing the in-stallation in 2014, versus carrying out the installation in at the latest point in time when intervention would be needed.

Still, building the storage system sole-ly for works deferral is a more costly alternative to building a 20km cable.

To help pay for itself the asset has to be able to generate revenues from grid services. Over the course of a typical year, in the winter months more of

the battery banks capacity is used for peak shaving. However, during other parts of the year more of the batteries capacity is freed up for providing grid services.

These are primarily frequency con-trol demand management, fast re-sponse and STOR. UK Power Net-works has compared costs of doing these different services and also fast reserve only, where revenues are ex-pected to be higher, in the region of 3.6 million for the 10 year period.

For providing the mix of services equally the revenues are calculated at 2 million. The risk of providing one type of service is the likelihood of missing contracts. Part of the pro-ject is to understand how the batter-ies have to be operated to be able to move between supplying these differ-ent services.

Estimates of the revenues are con-servative and they may well be higher over the next decade. Over the course of the project, which ends in 2016, it is expected that the value of different services will change, which can give

a more accurate sense of what they will be over the 10 year period. These changes will be reflected in progress reports published every six months, with the next one due in December.

If the system can be used to play a part in supporting transmission sys-tem-related activities such as helping to manage frequency stability with voltage control, further system cost savings in the region of 2.5 million are also possible.

The system can also provide other services, collectively known as toll-ing, where the energy supplier in the project, Smartest Energy, provides UK Power Networks, the storage system operator, with an operating profile over a time period and the storage as-set follows the profile for a fixed fee.

The tolling package can include, for instance, arbitrage and triad de-mand charges by the National Grid to customers. These are not as sig-nificant as the revenues from ancillary grid services so are not included in the analysis but further show how stor-age systems can have multiple revenue

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PHES: comparison of total costs against revenue over 60-year lifetime

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PHES: comparison of total costs against revenue over 60-year lifetime

Li-ion battery: comparison of total costs against revenue over 15-year lifetime Source:UK Future Energy Scenarios 2014

PHES: comparison of total costs against revenue over 60-year lifetime Source:UK Future Energy Scenarios 2014



streams and customers or beneficiar-ies of the services they provide.

UK Power Networks project man-ager Nick Heyward, is careful to avoid making any big proclamations at this stage in the project about how much the system can save and believes there is still scope for cost reduction by the energy storage industry.

How to extract valueAccording to Andrew Jones, at the projects contractor S&C Electric, the National Grids analysis, while not in-accurate, fails to acknowledge the full potential of battery storage systems, or acknowledge that prices for market services fluctuate and change and that the cost of battery storage is coming down.

Depending on the demand require-ments of Leighton Buzzard, by 2017 a decision will be made on whether to extend the storage system. If lithium ion technology was to be selected, battery costs will likely be a third of what they were when the system was procured. He says: A year ago,

lithium ion cost 1100 per kWh, to-day, the cost is 600 per kWh and by 2017 they could be 400 per kWh. These batteries also come with a per-formance guarantee of 20 years. The technology is more proven so the in-dustry can provide more assurances in this respect and that means that sys-tem payback terms are longer.

There are also intangible benefits to consider too. Storage increases the options available to utilities. Any potential intervention in the network depends on how quickly demand evolves locally and well know by 2017 if more storage is required for covering that peak or if conventional works are needed. We have that op-tion, says Heyward.

Also, if the storage project had not have happened and the only option was to install a 20km cable, this would have crossed many boundaries requir-ing several years of planning and in-volving various different departments and agencies even before construc-tion. In comparison storage systems can be developed and installed in less

time and entail less disruption. But, to extract maximum value from

storage the different business cases and revenue streams have to be con-sidered. A very simplistic analogy is a timeshare. One person builds a holi-day home that they only intend to use for the summer months and another person builds a holiday home that they only want to use over Christmas. This is an expensive way to go about it, when building one property and having a timeshare agreement would halve the cost.

The Leighton Buzzard battery bank is a first, because it is putting to rig-orous test the often cited claims that batteries on the grid are flexible and provide multiple benefits and services. As well as utilities in the UK, weve had interest and visits from all over the world, from utilities in Australia, Japan and Europe.

Lately, the enquiries suggest more concrete plans at some of these are underway because we are being asked about things like how to approach planning, says Heyward.

Conventional and once proven successful cost assessments Source:UK Future Energy Scenarios 2014

In order to recover costs during the lifespan of each technology, assuming revenue and cost ofelectricity remains fixed, this table shows the required reductions in total plant costs. Source:UK Future Energy Scenarios 2014

Device Cost reduction required for STOR Cost reduction required for Fast Reserve

NaS 80%85% 52%58%

Li-ion >99% >99%

PHES 15%17% 0%41%

CAES below ground 67%71% No reduction required

CAES above ground 51%53% No reduction required


NEWS

Carnegie Mellon University researchers re-vealed in October that the cost savings asso-ciated with manufacturing a high volume of batteries for electric vehicles may be nearly exhausted.

The implication for other battery chemis-tries is that if the mass production of lithium ion batteries needed for EVs cannot achieve the cost recductions that automotive manu-facturers seek then a similar picture might emerge for grid storage.

Mass production lowers cost, say the re-searchers but only up to a point. Moreo-ver, government subsidies have only disguised the reality behind the production prices.

Electric vehicle batteries are expensive,

says Jeremy Michalek, a professor of engi-neering and public policyand lead research-er. Federal and state governments have been subsidizing and mandating electric vehicle sales for years with the idea that increasing production volume will reduce costs and make these vehicles viable for mainstream consumers.

But we found that battery economies of scale are exhausted quickly, at around MWh200-MWh300 of annual production. Past this point, higher volume alone wont do much to cut cost.

The research findings, if true, have huge implications for the entire energy storage in-dustry.

Potential for lead as study shows cost of lithium ion batteries unlikely to fall below $300/kWh

Lead fundamentals, which remain bull-ish in the medium term thanks to its key industrial uses, are set to continue to improve. In the short term, however, the market has returned to a supply surplus and is expected to end the year flat fol-lowing its inability to hold price gains, according to Lead Analysis and Forecast for Q4, a report produced by Basemet-als.com

It outpaced fundamentals, following speculation of a supply squeeze next year when several largezinc/lead mines reach the end of their productive lives. With

lower mine production growth expected next year and organic growth likely to continue to fuel consumption, the lead market is seen moving into a deficit of around 130,000 tonnes in 2015.

Global demand has continued to fall this year, down 58,000 tonnes on the first seven months of the year, according to the World Bureau of Metal Statistics. This is an interesting trend with the major economies returning to strength, we would have expected lead demand to rise. This may prove prohibitive in the medium term to lead acid battery makers.

Lead prices to fall near term with strengthening probable in 2015

Axion Power International, the US developer of ad-vanced lead-carbon PbC batteries, was designated at the end of October as the supplier of energy stor-age and frequency regula-tion for a solar farm that in Pennsylvania in the US.

Axion Power PbC Pow-erCube technology has al-ready been admitted to con-nect with the 13-state PJM power grid, and brings that certification to the Coates-ville Solar Initiative project.

Phase I & II of the mul-ti-phased project consists of two 2.4MW DC solar facilities, generating ap-proximately kWh6.3 mil-lion from the 48 acre site which CSI has contractually agreed to sellto the Coates-ville Area School District through a 25-year solar power purchase agreement

According to CSI, when completed, the MW9.1 so-lar farm will be the largest solar park facility in Penn-sylvania.

Axion chief executiveDa-vid DiGiacinto said: The Coatesville Solar Initiative is a major milestone in in-dustry acceptance. A solar farm that will generate more than 9MW of electricity is an important step for the renewable energy industry in Pennsylvania. Axion has spent nearly a decade de-veloping PbC batteries and technology, and we have 13 patents protecting our bat-teries.

Meanwhile, Axions PbC batteries are en route to finding better acceptance with their use in road haul-age vehicles where the po-tential savings in fuel are predicted to be huge.

Advanced lead-carbon Axion Power wins solar storage and frequency reg contract

Imergy Power Systems, the US flow battery firm, has introduced the ESP30 series, a new generation of vanadium flow batteries that it claims lowers their cost from the industry benchmark of $500 per kWh to under $300 per kWh.

The increases the performance and flex-ibility of energy storage systems for utilities, renewable energy projects, microgrids, and commercial and industrial customers.

The ESP30 series has a power capability of up to 50kW and can store up to 200 kWh of electricity.

It is the first battery from Imergy to use sec-ondary sources of vanadium like mining slag, fly ash, and other environmental waste.

Customer deliveries of the ESP30 will begin in November in the US and India for micro-grid applications.

This new model represents an exponential step forward in vanadium flow battery tech-nology, says Bill Watkins, chief executive of Imergy Power Systems. The additional power capability and capacity of the new ESP30 series makes this battery one of the lowest cost storage options for solar arrays, wind turbines, and behind-the-meter grid ap-plications.

In addition, the minimum 20-year cycle life of the electrolyte and the residual value of the vanadium deliver a phenomenal value for the customer.

Imergy cuts costs of vanadium flow battery power to $300/kWh

NEWS


UBS, the multinational banking giant, reck-ons that a tipping point in energy storage and generation could arrive as early as 2020. At this point large-scale, centralized power stations could start to become a thing of the past.

The banks analysts, in a report to their professional investors, say they expect pho-tovoltaic technologies, cheaper energy stor-age and the rise in electric vehicles to signal the end of power stations with the transition likely to be complete within 20 years.

Solar is at the edge of being a competi-tive power generation technology, said the report.

The biggest drawback has been its inter-mittency. This is where batteries and electric vehicles come into play. Battery costs have declined rapidly, and we expect a further de-cline of more than 50% by 2020.

Centralized power stations, the briefing said, are too big and inflexible to continue to service the power needs of future gen-erations. The authors of the report instead suggest that households and businesses will increasingly find it cheaper and easier to generate and store their own.

The report said: By 2025, everybody will

be able to produce and store power. And it will be green and cost-competitive, ie, not more expensive or even cheaper than buying power from utilities.

The report urged UBS financial clients to join the revolution, identifying solar as the technologythat will be the most disruptive to the status quo.

The combination of cheaper energy stor-age irrespective of the chemistry used to store that energy caused by greater PV efficiencies as well as mass produced electric vehicles suggest that a financial return on a home solar PV system could be as little as six years.

It suggested too that this return on invest-ment could be made without the need for government subsidies.

Separately, a recent report by the Interna-tional Energy Agency predicts that world-wide renewable power generation will exceed that from gas and be twice that of nuclear by 2016. It will make up almost a quarter of the global power mix by 2018.

Developing countries, with China at the forefront, are expected to account for two-thirds of the global increase in renewable power generation by 2018.

Days of large scale electricity generation to end in a decade

Ergon Energy orders battery storage from S&C Electric

S&C Electric is to sup-ply Ergon Energy with 20 lithium ion battery storage systems for the network in Queensland, Australia, following a deal announced in Octo-ber.

Ergon Energy, which manages the network in the state of Queensland, will install the grid utility support systems (GUSS), together amounting to 2MWh of energy capac-ity, in 2015. The GUSS units will use lithium ion batteries, battery manage-ment systems and enclo-sures from Saft.

S&C has been working with Ergon on the pro-ject close to two years. In 2013 Ergon piloted pro-totypes of the system in the far north Queensland region.

The systems, each 100kWh in size, will im-prove the quality and reliability of electricity supply to rural customers on constrained single wire high voltage distribu-tion voltage lines, called single wire earth return (SWER).

The batteries will be in-stalled wherever there are long SWER lines suffering power quality problems, managing peak demand, and will be connected via a dedicated transformer. Each unit is 5m long by 1.8m wide and is 2m tall.

Ergon wants to install hundreds of battery stor-age systems on its SWER network in coming years, which could reduce the cost of upgrading this part of the network by more than 35%.

Traditional network upgrades to reduce con-straint on SWER lines can cost more than A$2 mil-lion (1.4 million).

Samsung SDI will supply Green Charge Net-works with up to 25MWh-worth of lithium ion batteries over the next two years.

The contract, which the firms signed in September, guarantees Green Charge has adequate supply of batteries as it seeks to expand its leading position in the growing market for intelligent energy storage.

The company says its order book has doubled in recent months, in the wake of securing in excess of $50 million from investors to fund its business of installing no-money-down energy storage systems for commercial and industrial end-users across retail, hospitality, schools and mu-nicipalities.

Green Charge Networks has been qualify-ing Samsung SDIs batteries for more than a year in its Greenstation energy storage sys-tems. chief executive Vic Shao says: Weve gotten through the R&D phase, and finally have a cookie cutter approach and process that can be scaled and that, in turn, needs partners with scale.

Green Charge Networks is one of a grow-ing number of energy storage providers, including Germanys Younicos and Green-

smith, in Maryland, using Samsung SDIs batteries.

For Green Charge Networks, Samsung SDIs batteries are supported with a 10 year warranty. This means a great deal to a com-pany like ours, which does not have a large balance sheet but Samsung does, says Shao. He believes that aligning with established industrial manufacturers and partners can give his company credibility with investors, customers and various other stakeholders, in a market that is fast attracting high-tech start-ups from Silicon Valley.

For 14 years Samsung SDI has been pro-ducing lithium ion batteries, in significant cumulative quantities, for consumer elec-tronics, transport and stationary storage markets. Recent projects include supplying 2MW of batteries to Italys national trans-mission grid operator Terna, with partner Younicos.

In October 2015 Chinas largest automo-tive lithium ion battery factory, in Shaanxi province, will come online, financed with a $600 million investment from Samsung SDI. The plant will supply over 40,000 EVs an-nually.

Green Charge Networks signs battery supply deal with Samsung


NEWS

SMA and German TSOs partner on balancing power, solar PVA new project in Germany, PV-Regel, led by inverter maker SMA, will investigate how PV systems, large and small, can provide balanc-ing power to keep the grid stable.

The 3 million ($4 million) project, which began in October, will run for nearly three years. The other partners are energy firm Gewi and the Institute for High Voltage Tech-nology and Electrical Energy Systems, within the Technical University of Braunschweig. Germanys four German transmission system operators, Amprion, Tennet, TransnetBW and 50Hertz, are also taking part.

Because the market for balancing power is dependent on centralized production struc-tures size is required to take part. PV-Regel will research balancing power using eventu-ally thousands of individual pooled residen-tial PV systems, as well as systems for large solar power plants.

The inverter is the central element in pro-viding balancing power, but other compo-nents, including communication technology, pooling/aggregation, as well as storage, will also be investigated.

SMA says the findings will develop further offerings for the market.

Grid management functions and system services delivered by solar installations al-ready include reactive power supply in order to maintain grid frequency or compensate lo-cal reactive power consumption.

As decentralized power capacity on the grid grows, new functions will be added to enable the solar installations to secure grid stability, such as coordinated reactive power supply, targeted use of active and reactive power for frequency and voltage maintenance, as well as blackstart capabil-ity after grid failure.

New Vyon materials safeguard from battery explosionsPorvair Filtration Group has developed hydropho-bic Vyon flame arrestor vents to its product range for use by battery manu-facturers to safeguard them from potential explosions in lead acid batteries.

Vyon sintered porous plastic materials offer excellent chemical com-patibility, exceptional strength and are resist-ant to most acids, said a company official. The new super hydrophobic material means that it will not wet out, prevent-ing gas venting. Versatile, strong, and efficient, it will also reduce the like-lihood of acid spillage, Vyon says.

Porvairs battery vents have been used to release excess gas from lead acid batteries during operat-ing cycles and prevent flame ingress into the battery. The creation of a flow path, by which gas-es released through the valve element can escape from the battery, prevent propagation of any po-tential flames.

Porvair, which has sup-plied the process industry with filtration equipment for over 25 years, manu-factures in both the US and the UK and has a network of sales offices and distribution channels throughout the world.

Andalay Solar partners Highpower for energy storageAndalay Solar, a manufacturer of integrated solar power systems, an-nounced a collaboration with High-power International, a manufacturer, of lithium and nickel-metal hydride (Ni-MH) rechargeable batteries,

to launch a pilot project that will provide energy storage systems for Andalay Solar customers.

Highpowers energy storage system has six 2.4KWh lithium-ion battery modules and an output inverter that

allows for expandability. For the hybrid system, when combined with Andalays integrated solar system, energy will be generated both by the solar system as well as by the utility grid network.

Power and automation equipment supplier ABB, announced in September, a collaboration with Chinese battery maker BYD.

The global tie-up will see Switzerland-headquartered ABB combine its products and technology for grid stor-age, EV charging and inte-grated marine systems, with BYDs expertise in battery technology.

Grid-connected energy storage, microgrids, solar power and marine are the main applications the part-nership will focus on, which builds on earlier cooperation in the field of EVs. Earlier this year ABB launched its EV fast chargers in China for the Denza model, which has been developed by BYDs joint venture with car OEM Daimler.

In recent years ABB has made a number of strategic acquisitions, including Aus-tralian flywheel firm Pow-ercorp and global inverter supplier Power-One, to help position itself in new mar-kets such as microgrid and energy storage.

The company is going af-ter microgrid projects in the range of several kilowatts to several megawatts, in the Americas and Asia as well as specific opportunities in Africa and other parts of the world where access to elec-tricity is still a challenge, ac-cording to ABBs CTO Claes Rytoft.

We are looking at vari-ous market segments includ-ing islands, for example the Mediterranean and Carib-bean, residential, remote en-ergy-hungry industries such

as mining. Places like Africa or India offer a large poten-tial in terms of off-grid pro-jects while grid-connected applications are developing in North America, such as campuses, he says.

During the companys capital markets day presen-tation in London in Septem-ber ABB said it would also invest more in expanding its services business and this includes remote services for microgrids.

Rytoft says, We view energy storage as a strong enabler for microgrids and renewable energy motivating our partnership with BYD. Energy storage, including, but not only limited to bat-teries, is often required to offer grid stability to off-grid systems while increasing the amount of renewables.

ABB, BYD join forces

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NEWS

Eight international car man-ufacturing fi rms and 15 US utilities took part in the fi rst demonstration of an open software platform in Octo-ber, to allow the batteries in plug-in electric vehicles to respond to the grids supply and demand needs.

The test, which was held in California, is a part of a project, led by the Electric Power Research Institute (EPRI) and Sumitomo Elec-tric Industries, to develop a central software platform that will allow PEVs to col-lectively respond to requests from utilities to help man-age the high demand on power grids at peak times.

This demonstration rep-resents a major milestone toward implementing a common interface commu-nications architecture that meets the needs of utilities and equipment manufac-turers while simultaneously benefi ting electric vehicle owners and electricity us-ers, says Dan Bowermaster, manager of EPRIs Electric Transportation Program.

Seven different plug-in ve-hicles a Ford Focus Elec-tric, a GM Cadillac ELR, a BMW i3, a Mercedes-Benz Smart ED, a Toyota Prius Plug-In, a Honda Fit EV and a Chrysler RAM PHEV took part in the demo,

which lasted one hour, to show the cars ability to accept a grid signal from a single utility for a demand response exercise. Each car simultaneously took a sig-nal from the Sacramento Municipal Utility District, to stop and then resume charging.

The vehicles at the demon-stration refl ect the range of communications technolo-gies that can be used to con-nect electric cars with the smart grid, such as wired communications through the charging plug and tele-matics/wireless communica-tions through a cellular mo-dem in the vehicle.

The OEM central server architecture has been de-signed to accommodate the different communications, to allow for the widest par-ticipation between vehicles and the grid.

The ability to integrate charging with the next-generation grid is a key challenge we need to meet, says Doug Kim, director of Advanced Technology at Southern California Edi-son, which was one of the projects utility participants. The adoption of standard-ized interfaces could pro-vide maximum ease and fl exibility for PEV owners.

Some vehicles required additional software controls for communication, but the hope is, if the pilot is suc-cessful, these controls will be built in to future models.

The secret sauce to the OEM central server is that it is able to act as a single gate-way interface to both the wired and wireless connec-tions to the vehicles. Some of the demo vehicles are in production today, some are near-production prototypes, says Fords Dave McCreadie who is leading the car mak-ers collaboration in the pro-ject.

The successful rollout of the EPRIs open software EV-to-grid platform de-pends on consumers see-ing the benefi t fi nancially. Many of our PEV custom-ers are environmentally conscious, so the idea of being able to support the grid in a way that will create less waste will be a selling point to some, but others may need a different incen-tive. Our fi rst challenge is to continue to expand the use of PEVs we are on a good path with more than 250,000 being driven in the US,says McCreadie.

The project was launched in mid-2014. The car mak-ers are: BMW, Chrysler, Ford, General Motors, Hon-da Mercedes-Benz, Mitsubi-shi and Toyota. The utilities were Austin Energy, Cen-terPoint Energy, Common-wealth Edison, Con Edison, CPS Energy, DTE Energy, Duke Energy, Manitoba Hydro, Northeast Utilities, Pacifi c Gas & Electric, PJM Interconnection, Sacramen-to Municipal, San Diego Gas & Electric, Southern Company, Southern Califor-nia Edison, and the Tennes-see Valley Authority.

Scaling up the demonstra-tion will require new ele-ments to be considered that are not part of the initial technical proof-of-concept shown this October. They include geographic diversity of vehicles and the utilities that serve these areas, as not all utilities have the commu-nications capability to inter-face with the OEM central server.

When this is rolled out to electric car customers, there will need to be systems in place for billing, or settle-ments, and exchange of information. Data privacy and security will also be of importance.

For Ford, the next steps

are testing the programme to ensure it is robust and expand the rollout with willing plug-in car owners, while adding more function-ality and capability to the basic platform architecture.

In 2015 other use cases that will potentially be add-ed include real-time pricing, renewable energy signals, aggregation and facility en-ergy management system integration.

The EPRI-led programme, at this stage, is only for the automakers and utilities that have agreed to take part, though all PEV au-tomakers can join. Vehicles from manufacturers that are not participating in the OEM central server project may still have the ability to interact with the smart grid, depending on their com-munication method and the utility territory they are in. Some forms of smart charg-ing can be accomplished through special charging stations.

The process for managing PEV charging will be trans-parent to the vehicle owner. Vehicle owners maintain ultimate control and would have the option to partici-pate in a demand response and load management pro-gramme managed either by the utility or by a third party, or opt out altogether.

In the next development phase, the EPRI team will be integrating the PEV com-munications platform with residential, fl eet, and com-mercial facility energy man-agement systems. This will enable testing of its ability to manage local control sce-narios such as demand man-agement for commercial and industrial consumers. Additionally, it will enable interface communications for charging stations and commercial demand re-sponse facilitators.

EPRI tests integration of plug-in vehicles for utilities power needs


POINT OF VIEW

Terry Murphy, chief executive of the Hammond Group, has a long associa-tion with the lead acid battery busi-ness his background in the industry goes back to his college days when he worked at the Hammond Group, packing 50lb bags of lead oxide, dur-ing the summers to pay for tuition.

His first major job after graduation was working on the space shuttle main engines which brought him into indi-rect contact with lead batteries but not as most of us at ELBC would rec-ognize them. It was lead telluride which used as a thermo-electric couple converts temperature differences into voltage, a system recently launched on the Mars Curiosity Rover, which is rolling on Mars today.

But if his first professional connec-tions with lead and energy storage verge on the arcane, thats not the case any longer. In October last year Murphy took over as president of the Hammond Group a company that is very much at the cutting edge of the lead acid battery business.

What does prove fascinating, how-ever, are the parallels Murphy makes between his far-off days with Rocket-dyne a Californian company that built the propulsion and power systems for NASA he spent 25+ years there and the modern lead acid battery com-munity.

NASA forged a technology that eventually changed the way that we look at space. Similarly too, advances in lead battery design, will change the worlds energy storage picture com-pletely, he believes.

Were facing a new frontier and only just glimpsing the potential of ad-vanced lead acid batteries, he says. I can think of two areas that are going to change in the coming years en-

ergy storage at the grid level and the automotive sector. A perfect example of this is the introduction of 48V lead acid batteries and a new generation of stop-start cars for all needs and cli-mates could emerge with lead as the standard.

Hammond itself is in the process of repurposing one of its own facilities outside Chicago which will add some 50,000 square feet dedicated to R&D. Murphy believes that its research in expanders he calls the arrival of its K2 product as a complete game-changer is just one step along a much more complex path for the firm.

Were going beyond highly engi-neered expanders, he says. Tradi-tional expanders used to have three components to them but now they have six or more. But were looking at better grid metals, greater varieties of additives, new lead alloys, additive manufacturing techniques and new battery geometries.

The ability to choose battery types will become increasingly evident. Five years ago, if you wanted a bat-tery, it was very much a commoditized product, he says. Nowadays, were ambitiously looking for an 80% in-crease in performance for 20% of the

Terry Murphy explains how a new generation of expanders has made it possible to create batteries that allow a high degree of charge acceptance while at a partial state of charge a game changer in the way that lead acid batteries will be deployed in the coming years.

Lead acid to lead the way to the promised land of energy storage for the grid

Five years ago, if you wanted a battery, it was very much a commoditized product. Nowadays, were am-bitiously looking for an 80% increase in performance for 20% of the cost of a lithium ion battery.

POINT OF VIEW

cost of a lithium ion battery.Products such as our K2 expander,

for example, opens up a new world of business of offering tailored solutions which, as we did years ago, looked at producing the best for the whole sys-tem and not just one part of it.

Murphy believes that the lead acid battery industry is about to see a revo-lution in the products that it can of-fer and he believes that grid storage, which has highly specific needs be-yond simple energy storage, such as load leveling or frequency regulation, will be a major beneficiary of the en-ergy revolution that renewables will provide.

The latest IEA figures show, if hydro, is included that almost one electron in five is a green one and the trend is growing exponentially.

The grids of the future are going to be based on renewable energy and our next generation of lead acid bat-teries will underpin it. UPS for telecom cell towers, peak shaving to reduce demand charges, electric fork lifts, e-bikes. The list goes on and choos-ing the right expander formulations weve already generated some 100 different ones means we can create batteries that allow a high degree of charge acceptance while at a partial

state of charge. Thats a game change for lead acid batteries.

And most particularly at a price that is far lower than that of lithium or other battery chemistries.

Like many in the lead acid commu-nity, Murphy is puzzled by the con-tinued fascination with lithium as its rival but is hopeful that once end us-ers understand the new chemistry they will being to re-evaluate the situation. When I worked for Boeing Rocket-dyne Energy Systems part of my remit was to look across the whole orga-nization and see how could leverage aerospace into a cleaner and greener fashion.

One underlying principle was a simple one working out the total cost of ownership.

This situation cant last forever. I believe were already seeing a turn-around in automotive companies perceptions of non-lead batteries. We should soon be seeing that in greater research and development work, par-ticularly in partial state of charge

which is where the greatest benefits can be found.

Most importantly we can do so at a competitive price point. We are able, for example, to offer our K2 range of expanders at a range of prices some of the carbon additives that go into the expander mix are very expensive but battery manufacturers can tell us what they want the battery to do and we can work out some kind of middle ground in terms of balancing the cost with the performance.

Part of the key to the future, Murphy believes is some kind of competitive/collaborative mix as an industry stan-dard.

For the space shuttle to move ahead in the early years, we needed the whole aerospace industry interna-tionally and commercially to par-ticipate. The challenges were too great for NASA alone.

Were in a similar situation with pioneering the next generation of lead acid batteries and thats why we be-long to an organization like ALABC.

The grids of the future are going to be based on renewable energy and our next generation of lead acid batteries will underpin it

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COVER STORY: UTILITIES LAST STAND

The renewable energy revolution is just round the corner and its time for power utilities to get worried. We may have heard this all before but when the banking community starts to speak with (almost) a single voice thats when we need to listen.

Irrespective of our opinions of the capabilities of bankers in Wall Street, Zurich or London, they are a hard-headed community. Their job is to be more interested in a return for their money than fi nancing an energy revo-lution about to happen.

But the hard reality, they say, is that once-fanciful opinions of a green revo-lution in energy distribution have rap-idly solidifi ed into the nuts and bolts of the worlds fi nancial system.

According to UBS, the international investment bank, centralized power distribution, for example, could be re-dundant as early as 2025 in Europe. Many of the huge power plants that straddle the continent will be moth-balled. Many will simply be scrapped.

And all this is just a decade away.The bank urged its fi nancial clients

the professional investors to join the revolution, identifying solar

as the technologythat will be the most disruptive to the status quo. The com-bination of cheaper energy storage, irrespective of the chemistry used to store that energy caused by greater PV effi ciencies as well as mass produced electric vehicles suggest that a return on a home solar PV system could be made within six years.

Growth in the demand for electric cars, solar generation and batteries will, in turn, drive distributed genera-tion and ensure that power genera-tion is no longer the exclusive domain of utility owned centralized units.

The report said: By 2025, every-body will be able to produce and store power. And it will be green and cost-competitive even cheaper than buy-ing power from utilities.

Another banking giant HSBC predicts conventional generators will lose out at the expense of battery stor-age. The unstoppable growth in renew-ables has helped to drive this revolu-tion.

This August the International Energy Agency said renewables now produce 22% of the worlds electricity, followed by record levels of investment in 2013,

which exceeded $250 billion, in wind, solar and other green energy technolo-gies. The IEA expects this trend to con-tinue on an exponential curve.

In the US, which is served by a patch-work of under-invested electricity grids supplying power to the countrys 50 states, the seams are popping, especial-ly as renewables are added in increas-ing amounts.

Renewables gaining groundMany regulators and operators are addressing the challenge by changing policies to accommodate more fl exible technologies such as energy storage that can complement solar PV, which is popular, but also intermittent. In other states, meanwhile, rolling back net me-tering policies or introducing charges for installing solar panels is favoured.

Energy storage is gaining momen-tum because natural gas is a more cost-ly and complicated way of managing the grids supply and demand, says Ji-gar Shah, chief executive of Jigar Shah Consulting and a manager at Clean Feet Investors.

Usually power plants, typically run-ning off natural gas or even diesel, have

The rst casualties of the renewable energy revolution

The coming revolution in the way energy will be delivered threatens the earnings streams of todays utilities but also throws up some exciting partnerships and new business models. Sara Verbruggen reports.


COVER STORY: UTILITIES LAST STAND

to ramp up and down to supply, for a few hours a day, the need for energy at its highest, known as peak demand. Energy storage is proving a more ef-fi cient and nimbler alternative to this.

In addition to supplying electricity to end-users and customers the grid also has to maintain stability, constantly matching supply with demand. Grid operators do this in the form of ancil-lary services, which they contract out to the participants in their wholesale electricity markets.

For short term regulation, a power generator can use its own generation, or buy it from another supplier under a contract, or from the market itself, for example.

Americas largest transmission grid operator, the PJM Interconnection, has provided transparent pricing signals for frequency regulation in the ancil-lary services market provided by stor-age, triggering a level of demand for this type of technology that did not previously exist.

Electricity is a commodity. Com-modities rot unless stored properly, and electricity rots the fastest because it has to move or it is lost, says Shah. Dis-tributed generation has created the chal-lenges that are besetting the grid today, but it is storage functioning as a tool to

balance supply and demand which is where the real value proposition is.

The electric grid is built on the prem-ise that energy has to be consumed im-mediately it is generated and energy storage challenges this.

So how to capture value from these systems, which straddle the distinction between generation and supply?

Intermittency not an issueThe intermittency of wind or solar is not the problem, however, says Shah: It is not the responsibility of wind and solar plant developers and opera-tors to have storage installed next to these plants. It is the grids responsi-bility and those that manage it the utilities that provide stability and balance out the variability.

There are numerous companies that are commercializing energy storage on the grid network. One of the biggest is AES Energy Storage, a division of inde-pendent power producer AES. In terms of installed MWs of batteries the com-pany is a market leader with 174MW operational and counting.

The companys storage projects in-clude a 64MW resource in West Vir-ginias Laurel Mountain area that has been bidding into PJMs frequency reg-ulation market for the past three years.

More recently the company has built 40MW at Dayton Power and Lights Tait electricity generating station in Ohio, which is owned by parent com-pany AES.

The advanced storage systems AES operates in the PJM market have saved more than $20 million while providing improved operational performance, says John Zahurancik, chief executive of the fi rm.

To give an estimate of the size of this potential market for energy storage, the Energy Information Agency esti-mates that 30,000MW of new com-bustion turbines will be added in the US over the next decade. These new power plants are mainly for system reliability and fl exible capacity, not for energy production. Energy storage can provide an effective alternative to building these critical, but low utiliza-tion plants, says Zahurancik.

Like many fi rms at the coalface of the fast-growing energy storage indus-try, AES does not make the lithium ion batteries used in its storage systems but focuses on the software controls and system architecture side of things, in the form of the companys Advancion platform.

Zahur

energy storage journal — issue 7 winter 2014

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