New Study Urges Development Of Energy Storage (AES, AONE, BCON, AMSC)

There are several big knocks on the development of renewable energy solutions. The first, of course, is cost. The second is intermittency, that is the inability of wind or solar generation to work when the wind doesn’t blow or the sun doesn’t shine. Third, the best locations for wind and solar generation in the US are usually far from transmission lines, thus requiring new and expensive infrastructure.

 
Leaving aside the cost issues for now, let’s look at the intermittency and infrastructure issues. If there’s a primary goal for renewable energy it’s a method for storing the energy generated until it is needed. It’s best, though, not to think of this as a continuous, or baseload, solution. Rather, it is a regulation service that can be used to meet drops in supply or spikes in demand. Such a solution requires that an energy storage solution be able to respond instantly to requests for power.

 
Currently, gas-fired plants, and some coal-fired plants, meet this unusual demand by throttling up generation. Large batteries though could provide the service more quickly and with more flexibility than traditional power plants, and at less impact to the entire grid.
AES Corp. (NYSE: AES) and A123 Systems, Inc. (NASDAQ: AONE) have built a 12-megawatt lithium-ion battery system in Chile that helps a system operator meet fluctuating demand. A similar 2-megawatt system is on-line in southern California at one of AES’s power plants. The two companies are currently working on a similar 20-megawatt system in New York state.

 
Another provider of grid-level storage is Beacon Power Corp. (NASDAQ: BCON), which is building a 20-megawatt energy storage system using its patented flywheel storage technology, also in upstate New York. The plant is expected be operational by the end of this year.

 
A panel of the American Physical Association has just issued a report on integrating renewable generation on the grid  that recommends that the US Department of Energy develop a strategy of grid-level energy storage combined with a review of different battery chemistries and increased R&D funding.

 
The report also notes that transmission lines need to be revamped using superconducting high-voltage, direct current lines. That is good news for American Superconductor Corp. (NASDAQ: AMSC), which has just sold some 1,800 miles of its superconducting cable to South Korea.

 
Finally, the report recommends that the Federal Energy Regulatory Commission and the North American Electricity Reliability Corporation develop a business case that “captures the full value of renewable generation and electricity storage in the context of transmission and distribution.” In other words, this is going to cost a bundle, but it’s worth the money.

 
Paul Ausick