Electrify everything

An electrical grid is not unlike the telephone network or the Internet. The US grid is a complex network of more than 7,300 power plants and transformers connected by more than 160,000 miles of high-voltage transmission lines and serves 145 million customers. In most countries, they are state owned but in the US, the grid is nearly all privately owned.

Traditionally, there are four major entities that work together to deliver the electricity to you. You are most probably most familiar with the utilities, they are the retail entities that service your home and collect fees for how much you use each month.

Depending on the country, ownership of the grid and its various value chain segments may be state-owned or completely privatized. The transmission and distribution segments are often discussed together. However, ownership entities may not be the same.

In the USA & Canada, the grid is nearly entirely privately owned. In a given region, a private company may own generation but not transmission. 

For example, in the southeast United States, the high voltage transmission lines may be owned by a power company like Duke Energy, but the electrical substations where power is distributed may be owned by a municipality or an industrial factory. In other states, a private company may control the entire value chain the from power plants to the retail entity that bills you.

The advent of renewable energy has created a new value chain segment, storage. When scaled properly, storage not only solves the challenge of intermittency but delivers a more resilient and efficient power grid.

Energy storage devices, a.k.a batteries, come in many shape and sizes. Energy storage enables multiple applications on the grid: energy management, backup power, load leveling, frequency regulation, voltage support, and grid stabilization. These storage options include pumped hydro, compressed air energy storage, flywheels, and electrochemical capacitors .

For the grid, pumped hydro is the most widely deployed options (whereas for our mobile phones, laptops and even our cars, lithium-ion batteries are the dominant technologies.)

Energy storage systems like, pumped hydro plays an important role in load shifting and store energy during low-demand hours (e.g., nighttime). There are at least 40 pumped storage plants in operation in the US, comprising more than 22 gigawatts (GW) of storage capacity (roughly 2% of U.S. generating capacity). Europe and Japan have notably higher fractions of grid storage at 5% and 10%, respectively. Pumped storage plants uses excess electricity to pump water into storage tanks which can be used to power turbines.

To accommodate the introduction of more renewables into the grid, the state of California has mandated utilities add 1.32 gigawatts of storage by 2020. In February 2017, Southern California utility San Diego Gas & Electric (SDG&E) together with AES Energy Storage announced its brand new energy storage facility, a 30MW battery system capable of storing 120MWh of energy, which can serve 20,000 customers for four hours. The system, the largest grid scale battery in the world, consists of 400,000 Samsung 2170 cells, like the ones being used for Tesla’s Model 3. They were installed in nearly 20,000 modules and placed in 24 containers. 

By 2021, this facility will be superseded by one in Long Beach, California that will be capable of running at 100MW for four hours.

Pumped storage historically has been the prevailing technology for storage on the grid, however the focus of energy storage investments today is in lithium-ion battery and flow battery systems. The California projects in storage use lithium-ion technology but flow batteries are becoming viable alternative.

In Japan, Hokkaido Electric Power Company and Sumitomo Electric Industries are testing a 60 MWh redox flow battery with an output of 15 MW at the Minamihayakita Transformer Station in Hokkaido. Flow batteries, which are already used by the US military, have advantages to lithium-ion batteries. The power output can be easily varied and do not have safety issues associated with lithium-ion batteries today.

Flow batteries store energy in liquid electrolyte solutions which flow across a special membrane that prevents them from mixing but allows ions to pass though creating electricity.