Quick Take: Energy management consultancy Luthin Associates' latest newsletter argues that power storage is turning the corner. Scan below for the high points of their reasoning, or download the newsletter (PDF).
I wanted utilities to see this partly because of a recent conversation with an energy consultant whose opinion I respect. He says "all commercial and industrial customers want to get off the grid." I don't think it is quite that simple, but I do think that the cost of energy storage is the gating factor. As you will read, it's not just that storage costs are dropping. It's that storage incentives are climbing as well. â€“ Jesse Berst
The tipping point for energy storage appears to be rapidly approaching. Just as the cost of large batteries is dropping, financial incentives are rising. New York is offering $1,500 per stored kilowatt of capacity (plus an additional $800 if it is enabled for demand response). California is offering $1,800 (even more if the equipment is made in California).
Peak demand charges are an increasing percentage of electric bills for commercial customers. They can buy electricity when it's cheap (or generated via rooftop solar) and store it for use when prices are high.
Luthin Associates suggests that the buildings best suited are those with a high peak, which may allow them to reduce their bills simply by peak shaving. Those with flatter load profiles may not find it economic unless they can participate in DR. Several firms now offer software that optimizes charging and discharging based on a building's unique characteristics.
One such firm is Green Charge Networks, which sells a hardware/software combination called GreenStation, which was recently profiled on the Environmental Defense Fund blog. The heart of the technology is a stochastic algorithm that learns the building's electricity behavior over time. It is then able to predict second-by-second changes to electricity load profiles, store energy from the grid when charges are low, and discharge the stored energy when charges are high.
Jesse Berst is the founder and Chief Analyst of SGN and Chairman of the Smart Cities Council, an industry coalition.
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