“When I first heard them talk about this product, I thought they were totally crazy,” Hobbs says. “It was very unfamiliar to me.” Now, the manager is totally sold: he’s ordered even bigger batteries for 16 other hotels in California—as many as his supplier can muster—and is seeking to expand to other states. Since installation last fall, its first battery at the Mark Hopkins cut peak demand by 20 percent. By adding them in other hotels, Hobbs thinks he can save $2.2 million over 10 years. “We’re not reducing the amount of fuel it takes to accomplish the work,” he says. “But we are shifting the load and we’re avoiding the dirtiest ‘peaker’ plants that are used when the grid is maxed out.”
High-tech batteries are not a prerequisite—the Barclay Tower system installed and managed by Demand Energy is a prosaic lead–acid battery, and Stem uses the same lithium ion batteries found in electric vehicles.
The innovation comes from the trendy “Big Data for the Big City” strategy. Modern energy storage systems are plugged into the Internet and a cloud-based analysis of energy demand can decide the best times to store energy or power a portion of the building. “What we’re enabling the customer to do is essentially build their own power plant and move from being a passive user to controlling how and when they use energy,” says Shane Johnson, vice president of customer services and product management at Demand Energy.
A typical commercial or industrial company confronts little red tape compared with a utility in installing a battery on site, or “behind the meter” in industry jargon. The cut-over just needs to make economic sense and muster support of building owners willing to accept an out-of-the-ordinary solution for the building’s electricity needs. Depending on the company’s particular requirements and prevailing electricity tariffs, Demand Energy says that large energy-users could get a return on their investment in about five years.
Utilities, meanwhile, are slowly getting onboard with storage, which could speed up the technology’s adoption. The California Public Utilities Commission recently required Southern California Edison to consider energy storage to meet about 3 percent, or 50 megawatts, of its local capacity in the years ahead. Although energy storage, in general, is expensive, it may end up being better than the alternative of installing new transmission equipment or ripping up pavement to install thicker power lines to meet rising urban demand for power.
Con Edison, the power utility that serves New York City, will test later this year how well a zinc–air battery from start-up Eos Energy Storage can beef up the local power distribution grid. A small-scale prototype will lighten the load on transmission lines during peak time and boost voltage, which can sag at the end of distribution lines.
Energy storage innovators hope that dramatically lower costs and safe designs will compel more utilities to consider the technology. Eos intends to introduce a system next year able to supply one megawatt of power for up to six hours at a price of $160 per kilowatt-hour. That’s far cheaper than lithium ion technology, for instance, and is designed to last for as long as 30 years, far longer than traditional lead–acid batteries.
“Quite a long list of utilities are starting to understand that energy storage should be part of the tool kit, but the products are not quite there,” says Steve Hellman, Eos’s president. “Until energy storage is less expensive and effective than incumbent solutions, it’ll be a point of intellectual curiosity.” A single battery can perform multiple jobs, even bidding services into daily energy trading markets to maximize earnings.