At both the federal and state level, expanding renewable energy generation has become a major focus of domestic energy, climate, and economic policy.  Today, twenty eight states and the District of Columbia have adopted some sort of Renewable Portfolio Standard (RPS).  President Obama has voiced his support for a national standard that would mandate a 25 percent share of renewable power by 2025 (up from 2.5 percent today, not counting hydroelectric generation), and that standard is included in a new energy bill introduced by  Congressman Ed Markey (D-MA) and 29 co-sponsors.  If the US is going to deliver on these pledges to increase renewable energy capacity and infrastructure, investments in generation technology will have to tackle an even greater challenge: electricity storage.

According to a report by the American Institute of Chemical Engineers, absent changes to the current electrical grid, pushing renewable energy’s share of the grid above 15% may be technically impractical.  Traditional sources of base-load power—coal and nuclear—provide continuous power to the grid and constantly adapt to changing power demands during each 24-hour period.  In times of increased demand, additional units can be brought online, or the plants can utilize their “spinning reserve”—literally spinning their turbines faster to produce extra power.  Solar and wind power on the other hand, do not have this capacity.  If the sun is not shining (or the wind is not blowing), there is no power flowing from those sources.

The intermittent nature of wind and solar sources means that increasing renewable power’s share of the power flowing into the grid will also increase the grid’s instability, complicating the moment-to-moment process of matching the supply of electricity to the demand.  Absent a technical fix for resolving momentary discrepancies between grid supply and demand, the resulting overloads can lead to rolling or even involuntary blackouts.

One way to address renewable energy’s intermittency problem is through advanced energy storage technologies that can store electricity and release it at periods of high demand (or inconsistent supply), smoothing the peaks and troughs of the energy equation.  While large-scale energy storage is still an emerging technology, a number of companies have already taken steps to commercialize various storage technologies.  For instance:

• In 2006, American Electric Power installed the first large-scale advanced battery, with a 1.2-MW capacity, in West Virginia;
• In the spring of 2008, Xcel energy installed a 1-MW battery at a wind farm in Minnesota;
• In Fall 2008, Altair nanotechnologies, in partnership with AES Solar, announced that their 1-MW lithium-titanate battery had met standards for commercial use in the PJM Regional Transmission Organization, the first lithium battery to do so; (Both AEP and Xcel Energy have batteries based on Sodium-Sulfur technology.) and,
• In November 2008, AES Storage LLC installed a 2-MW battery at an AES facility in in Southern California.

Federal policymakers have also recognized the importance of developing energy storage solutions.  The 2007 Energy Independence and Security Act included a title on “Energy Storage Competitiveness” which authorized the spending of nearly $300 million in each of the next ten years on advanced energy storage technologies. The 2009 American Recovery and Reinvestment Act also included significant funding for advanced batteries, and appropriated another $4.5 billion for the Department of Energy’s (DOE) Office of Electricity Delivery and Energy Reliability for grid modernization efforts, including energy storage. Energy storage companies are already pursing those funds, and the DOE, through Sandia National Laboratories, has established partnership programs focused on advancing battery technology.

Investing in giant batteries, fuel cells, and other advanced energy storage systems designed for the power grid may not draw the same popular attention as is lavished on developments in advanced electric cars, but if the U.S. is to embrace renewable energy in a meaningful way—and meet the mandates it has set for itself—developing the country’s energy storage infrastructure is a must.

For further information about this topic, please contact Akin Gump.