The Business Case For Power
Storage In Buildings
Catherine Luthin and David Pospisil
September 18, 2014
Overview
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Electricity prices
Peak demand
Cost of energy storage
Consume electricity at one time (off peak hours), and use
it at another (on peak), via a battery and software to
control it
Electric bills
Profitability of on-site renewable power
Pursuing these options involves understanding your tariff
rates, NYSERDA/Con Edison Demand Management
Program incentives, and your facility’s load profile
1
Forms Of Energy Storage
Energy storage at the utility level to manage
grid loads is not new:
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pumped hydro storage (~99+%)
compressed air storage (~.3%)
various types of batteries (~.3%)
Energy storage for commercial buildings:
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Thermal storage for A/C in buildings
(using chilled water or ice made overnight)
reduces electric chiller kW demand
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Energy storage in buildings to cut peak
demand (using batteries)
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What is a Battery?
When a device is connected to a battery, a reaction occurs
that produces electrical energy.
This is known as an electrochemical reaction.
Italian physicist Count Alessandro Volta first discovered this
process in 1799 when he created a simple battery from metal
plates and brine-soaked cardboard or paper. Batteries can
also be fashioned from other systems such as the …
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The Lemon Battery
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Types of Batteries
• Modern batteries use a variety of chemicals to power their
reactions. Common battery chemistries include:
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Zinc-carbon and Alkaline battery: Used in many AAA, AA, C and
D dry cell batteries.
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Lead-acid battery (rechargeable): This is the chemistry used in a
typical car battery. An analysis of density, cost and longevity should
be undertaken (10 year required).
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Lithium-ion battery (rechargeable): Lithium chemistry is often
used in high-performance devices, such as cell phones, digital
cameras and even electric cars. This battery has been the most
widely used in buildings.
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Understanding Peak Demand
Electric rates are based on how fast, how much
and when electricity is consumed (time of day, day
of week, and season).
How fast you consume electricity is kW
How much you consume is kWh
Billed peak demand (kW) is based on the most
kWh consumed in a time interval (15 – 30 min)
during an on-peak period. It is NOT instantaneous
load. Very brief surges don’t affect billed demand.
‘Smart’ meter data is needed to profile loads.
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Battery Storage Technology in Buildings
• Charge battery at off-peak times when cost of electricity is
lower
• Discharge battery during on-peak times to shave peak
demand or replace expensive grid power
• Batteries can be used to:
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Directly power specific equipment
Flow into the building’s grid
Load optimization (eliminate demand spikes during the day)
• Demand Response
• Support renewable generation
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Batteries Are Getting Cheaper
And REV Envisions a Different Future
This is ~$300/kWh
Today’s PHEV batteries range from ~$600 to ~$500
per kWh. Tesla claims it will make lithium ion units
for $175/kWh in its new “gigafactories” (2016-17).
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What to Look For
• Cost to purchase and install
• Cycle Life – how many times can it be recharged?
• High Energy and Power Density – the amount of energy or
peak demand that can be produce in a cycle per measure
of weight or size.
• Safety
• Grid interconnectability
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Ballpark Economics
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Potential to cut peak by
100 kW
To reduce the peak each
day need 4+ hours of
storage
With 20% charging and
inverter losses, we then
need to store
100 kW x 4 hrs + 20% =
480 kWh per daily
charge
600
500
400
kW
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300
200
100
0
Hour
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Con Edison/NYSERDA Demand
Management Program Information:
Project
DMP Incentives
Thermal Storage
$2,600/kW
Battery Storage
$2,100/kW
HVAC/Controls/P
rocess
Lighting/LED
DR Enablement
$1,250/kW +
$0.16/kWh
$800/kW +
$0.16/kWh
$800/KW
To learn more, register for the
Energy Storage Expo:
Oct, 2014
Nov, 2014
Jan, 2015
For more information, visit:
www.NYSERDA.ny.gov
www.ConEd.com
www.Agrion.org
Incentives for Non-Electric AC & CHP
www.NY-BEST.org
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Making The Numbers Work
Energy storage payback may be acceptable
where:
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$2,100/kW incentives for equipment (+ maybe demand
response)
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Annual demand charges ~ 42% of total bill
Average on/off-peak $/MWh differential ~ $2
At least 1.5 MWs of common load (usually above
300,000 SF)
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A typical generic business case for the
owner / operator:
1.
Supplier installs, owns, and operates an energy storage
asset in a building owner’s unused, back-of-house space
at no upfront or incremental ongoing cost. Supplier is the
interface/applicant with ConEd (and monetize any
incentives) and bears the M&V, operating, technology,
etc. risk.
2.
Supplier shares savings created by the asset from
reducing base-building or common load costs. Supplier
structures these savings contractually to best fit a building
owner’s preferences. A typical deal will yield between
$100 and $400 k (depending on the size of the building
and the asset) per year in value for the building owner.
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A typical generic business case for the
owner / operator:
Essentially the supplier provides a value proposition to the
building owner at no upfront or ongoing incremental cost,
while removing the hassle and risk of applying for, building,
owning, and operating an energy storage asset. The
supplier typically targets commercial and residential buildings
with at least 1.5 MWs of common load (usually above
300,000 SF) to achieve appropriate scale on the assets.
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Contact Information
• NYSERDA:
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Ariella Cohen, ac2@nyserda.ny.gov, (212) 971-5342 x3017;
Joshua Clyburn, joshua.clyburn@nyserda.ny.gov, (212) 971-5342
x3071
• Luthin Associates:
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Catherine Luthin, cluthin@luthin.com , (732) 774-0005
• Willdan Energy Services:
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Zachary Suttile, zsuttile@willdan.com, (212) 701-7275
• Con Edison:
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David Pospisil, pospisild@coned.com,
(212) 460-2429
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Thank you for your time
and attention.
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Types of Batteries
• Modern commercial batteries use a variety of chemicals to
power their reactions
Battery chemistry
Can the technology be deployed in the market by 2015?
Can it discharge Can it discharge over 4 hrs?
over 6 hrs?
Vanadium redox
Yes, already have several installations in US, as well as over seas
yes
yes
Sodium nickel chloride
Yes, already have several installations in US, as well as over seas
yes
yes
Li‐ion
Yes, already have several installations in US, as well as over seas
yes
yes
Sodium sulfur
Yes, already have several installations in US, as well as over seas
yes
yes
Lead acid
Yes, already have several installations in US, as well as over seas
yes
yes
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Permanent Load Reduction
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Target predictable, consistent
spikes during all hours
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Continuous peak-clipping and
DR, no switching between the
two modes
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Scale kW to peak clipping in 6
hour window
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Peak Clipping
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Target predictable, consistent
spikes
– Elevators, water pumps, industrial
equipment, etc.
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Controls work like a kW
“thermostat”
– Algorithms have a kW “setpoint”
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Low kWh keeps costs down
– Most cost-effective and popular
project model
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Peak Clipping with Demand Response
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Target predictable, consistent
spikes during peak demand
hours
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Switch between peak-clipping
and DR mode
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95%+ of the time is peak
clipping
Scale kW to peak clipping in 4
hour window
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Profile expands pool of
eligible building loads
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