Energy Storage Application 2: Electricity Generation Deferral

Depending on the circumstances, energy storage could be used to defer and/or reduce the need to meet increasing demand by installing more electricity generation equipment. New electricity generation equipment is expensive to build and in some instances may have an optimal output or minimum power rating that is higher than the predicted increase in demand. Energy storage technology, often characterized by the ability to output significantly variable levels of electricity, can be used in place of new generation to meet demand (Denholm P. , Ela, Kirby, & Milligan, 2010).

Base load generation equipment often has an optimal output. If the lowest point in the off-peak demand curve is below this optimal output, base load generation equipment must be rolled back to an often lower level of efficiency to match the reduced demand. In this case energy storage devices in their charge phase can be used to keep off-peak demand at the optimal output level and then discharge to meet demand that is above current generation capacity during peak periods (Eyer & Corey, 2010). This scheme to defer the purchase of new electricity generation equipment relies on the time-shifting capability of energy storage. Through this example the multiple application nature of energy storage is evident as the device could provide arbitrage services along with the ability to defer generation equipment upgrades while allowing the current equipment to run at optimal levels.

For an example, consider the hypothetical electricity demand curve shown below (Figure 1). Here, the base load generator runs optimally at a power rating of 4 kW. Operating at its maximum output (6 kW) or its minimum output (2 kW) is very inefficient compared to the 4 kW optimal output. During peak load, the maximum power of all generators is 8 kW. Figure 1 shows how energy storage can be used to maintain demand at the optimal level for the base load generator (during the charge phase of the storage device). Figure 1 also shows how the energy storage device can be used to make up the difference between the maximum power of all generators (8 kW) and the maximum peak demand (10 kW) thereby deferring the need for additional generation capacity. If electricity during peak hours is more expensive than off-peak power, the time-shifting benefits of energy storage will also be realized. In Figure 1 the discharge energy is less than the energy required to charge the device. This may be a function of the storage device’s round trip efficiency. Also, the charge in the storage device may exceed the demand allowing for further discharge in the future. This ability to hold energy and release it rapidly, is a valuable differentiation between energy storage and electricity generation.

   

Figure 1 showing how increasing demand to charge the energy storage system can bring base load generators to optimal operating efficiency. Discharge can be used for time-shifting and the deferral of new capacity.

Works Cited

Denholm, P., Ela, E., Kirby, B., & Milligan, M. (2010). The Role of Energy Storage with Renewable Electricity Generation. Las Vegas: National Renewable Energy Laboratory.

Eyer, J., & Corey, G. (2010). Energy Storage for the Electricity Grid: Benefits and Market Potential Assessment Guide. Albuquerque, New Mexico: Sandia National Laboratories.