In California, Batteries, of all Kinds, Compete with Power Plants

December 23, 2014

Remember when 500 megabytes was considered a “large” hard drive? As the Internet took off in the mid 90’s, demand for larger hard drives pushed innovations in technology and production, dropping prices.

Similarly, the big drop in solar photovoltaic prices of the last half decade was precipitated by policies in Germany, California, and elsewhere, jumpstarting demand for new PV panels that were soon pouring out of China.
Storage of energy, a market which has only heated up in the last 5 years, looks like it’s following a similar innovation path, encouraged by policy initiatives in California and elsewhere.

Now the industry is taking off,  – faster than many anticipated. Sound familiar?


Last October, California became the first government to require its utilities to store a significant slice of the power they produce, instead of using it all right away. Now a growing roster of states and countries is taking up versions of the same idea, creating rules or incentives that will place storage in homes in Japan and Germany, at wind farms in Puerto Rico, along transmission lines in Ontario, and at individual buildings in Manhattan.

Every region has a somewhat different problem. The fact that energy storage is being applied to each is a sign that batteries are getting cheaper and better, and that the overseers of the power grid are beginning to rewrite the rules to accommodate energy storage, several industry experts said.

Renewable Energy World:

“One of the shots that was heard around the world was AB 2514, which is a California mandate for the minimum amount of energy storage the utilities have to install by 2020. That minimum allocated across the three major IOUs in California — Southern California Edison (SCE), Pacific Gas & Electric (PG&E) and San Diego Gas and Electric (SDG&E) — totals 1.325 gigawatts,” according to John Jung, CEO of the energy storage software, services & systems company GreenSmith.

Power Engineering:

Other states may follow California’s lead and adopt similar requirements. Texas and New York are aggressively pursuing several initiatives to promote the development and commercial application of grid-scale energy storage.

Home to more than 10,000 MW of wind power capacity, Texas has become a major testing ground for storage technology. Duke Energy built a large lead acid battery storage facility near a wind farm in west Texas. Dresser-Rand plans to build a 317-MW storage facility for compressed air in east Texas. In New York, state officials announced a $23 million public-private investment to build a battery storage test and commercialization center in partnership with NY-BEST.

The most obvious niche for energy storage is in meeting “peak” power demand, those few hours on high demand days where large amounts of additional power are needed for, say, air conditioning.  Traditionally, this market has been dominated by Natural Gas turbines, and even expensive diesel generating units. This power is very expensive.  The initial success of solar energy in California has been because, even at the higher prices of a few years ago, solar solutions were competitive with the very expensive “peaker” plants.  Energy storage companies hope to hit that same sweet spot in pricing as their technologies develop.

Now, in a bidding process for peak electrical solutions in California, energy storage has unexpectedly beaten hundreds of traditional power plant solutions for meeting peak energy demand.


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.

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.

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.



9 Responses to “In California, Batteries, of all Kinds, Compete with Power Plants”

  1. After Younicos, a German company, bought Xtreme Power in 2012, they completed the Notrees project.

  2. MorinMoss Says:

    Seagate Technology announced they intend to release a 10 terabyte hard disk next year. Their first HDD was the ST-506 5 megabyte, 5.25 inch in 1980 for $1500 (~$4000 today ) back when they were still known as Shugart Tech.

    If they introduce it at $500, that’s 200 MB per cent – an improvement by a factor of 6 million in 35 years.

    I don’t expect renewables or storage to achieve quite THAT level of improvement but I’m willing to be pleasantly surprised.

    • greenman3610 Says:

      mass production, and the potential for vast wealth, are the key drivers in both industries. Obviously the tech is different, but we see similar patterns once a need is clearly stated.

      • ubrew12 Says:

        I would also say that anything that benefits from ‘molecular engineering’ (i.e. solid-state physics), like memory, processor speeds, solar PV, and battery technology, is ripe for revolutionary development. Gas turbine engines can see incremental improvement, but they are 19th century technology: their revolution was 200 years ago with the understanding of Gas Dynamics. The revolution today is in our ability to manipulate solids at the molecular level, and predict the behavior of those solids before the manipulation.

      • j4zonian Says:

        The desire for civilization not to be destroyed and millions of species not to be pushed into nonexistence should be motivation as powerful as owning 3 Bentleys, and since the rich cause almost the whole problem of climate cataclysm, it behooves us to find a way to harness its power.

        • dumboldguy Says:

          Have been off visiting the grandkids in NJ for the holidays. Burned enough gasoline while making the trip to add 350 or 400 pounds of CO2 to the atmosphere. Merry Christmas and a warmer planet to all!

          Upon my return I found TWO comments from JeffyZ on two different threads. It is good that he has deigned to visit our corner of the climate change blogosphere as he travels around so many “fora” spreading “enlightenment”.

          However, I DO wish that he had said something that was more substantial, comprehensible, and relevant to the topic of this post than “civilization-destroyed-species-nonexistence-3 Bentleys-rich-harness power (harness WHICH power?)-eat less meat”.

          That makes about as much sense as a typical Omnologos comment. Jeffy Z is proving my point about his narcissism, though. I.E., say something—anything—to get noticed so that you can then bask in self adulation.

          Perhaps the other comment will be more cogent? I’ll go look and offer my opinion there.

  3. […] In California, Batteries, of all Kinds, Compete with Power Plants […]

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