Overview of distributed energy storage for demand charge reduction
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Review Overview of distributed energy storage for demand charge reduction
Said Al-Hallaj, CEO, AllCell Technologies, LLC, Chicago, Illinois 60609, USA, and Visiting Research Professor, Department of Chemical Engineering, University of Illinois at Chicago, Chicago, Illinois 60607, USA Greg Wilk, Project Engineer, S&C Electric Company, Chicago, Illinois, USA George Crabtree, Director of the Joint Center for Energy Storage Research, Argonne National Laboratory, Argonne, Illinois 60439, USA Martin Eberhard, Founder of Tesla Motors and Serial Entrepreneur, Woodside, California, USA Address all correspondence to Said Al-Hallaj at [email protected] (Received 19 June 2017; accepted 13 December 2017)
ABSTRACT The paper presents a comprehensive overview of electrical and thermal energy storage technologies but will focus on mid-size energy storage technologies for demand charge avoidance in commercial and industrial applications. Utilities bill customers not only on energy use but peak power use since transmission costs are a function of power and not energy. Energy storage (ES) can deliver value to utility customers by leveling building demand and reducing demand charges. With increasing distributed energy generation and greater building demand variability, utilities have raised demand charges and are even including them in residential electricity bills. This article will present a comprehensive overview of electrical and thermal energy storage technologies but will focus on midsize energy storage technologies for demand charge avoidance in commercial and industrial applications. Of the ES technologies surveyed, lithium ion batteries deliver the highest value for demand charge reduction especially with systems that have larger power to energy ratios. Current lithium ion ES systems have payback periods below 5 years when deployed in markets with high demand charges. Keywords: energy storage; energy generation; simulation
DISCUSSION POINTS • W hat is the role of energy storage in renewable energy growth and grid stabilization? • Energy storage technologies for smart grid applications. • Economics of energy storage for demand charge applications. • Grid-scale versus distributed energy storage.
load generators like gas combined cycle ($61–$87/MW h) or coal ($66–$151/MW h).3 Energy storage (ES) technology can charge during low demand periods and discharge during high demand periods to reduce peak electricity generation and therefore curtail new gas-peaking turbines and transmission equipment. When the utility installs ES technology it is referred to as ‘in front of the meter ES’ and when electricity customers install ES technology it is referred to as ‘behind the meter ES’.
In-front of the meter energy storage installations
Introduction Electricity demand is not constant and generation equipment is built to serve the highest demand hour, even if it only occurs once per year (Fig. 1).1 Utilities help meet this peak demand by installing gas combustion turbines that run only during peak periods, usually late af
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