Load Leveling / Generation and Transmission Deferral

Peak shaving and load leveling represent the largest potential market for utility scale batteries. 

There is a specific and a general case here.  In the specific case, for any transmission or distribution operator, there are often business cases to be made for batteries to provide a temporary or permanent replacement for new transformers, additional transmission lines, and other transmission and distribution assets.  Basically, if a battery can soak up generation, when not needed by the load, then for example, a transformer that is fully rated for the peak load may not be required. 

The value of utility scale energy storage in these cases will vary widely, and may actually for certain circumstances be the highest-value use of energy storage, higher even than ancillary service models. 

In the general case, the latest Department of Energy coal fired steam plant cost $670,000/MW, and of course you also have to fuel and maintain it.  A battery that replaces the need for new generation will allow a utility to avoid this cost.  In addition, a RAND study showed the average cost of additional transmission at $125,000/MW.  Therefore, a grid-connected battery could avoid $795,000/MW in generation and distribution costs along with providing other services.

In the specific case of replacing generation, a  25MW / 75MWh battery costing $47 million, will be built in 2010 by Primus Power corporation to replace the planned construction of a $78 million 50MW fossil fuel generator in California that was to be used to regulate wind energy. 

Some of this is hampered today, particularly in regulated utilities, as it is not clear if an energy storage device can be considered a transmission asset, and so added to the rate base as such.  These are political and policy issues, certainly not technical ones.

A service area with differences between it's momentary load and supply need to get this from one of two sources, transmission (importing or exporting energy from a service area), or generation (sufficient generation facilities to meet peak loads).  In fact, there is far more generation capacity and transmission capacity in the country then we need on an average basis.  If there were a way to level out our needs on a day to day basis, no new generation facilities, and very few transmission facilities would be be needed until total national energy usage was double what it is today.

While this general case of load leveling would require much less expensive battery storage than today, perhaps in the $50,000/MWh range, it does represent an enormous and valuable potential market for new technology batteries.

Batteries can clearly replace transmission and distribution equipment, either deferring the purchase of such assets or replacing them.  Policy needs to be clear that such a use of batteries constitutes a reasonable definition of a transmission asset.