Monday, September 28, 2015 by Tyler Whitson

Austin Energy one step closer to energy storage

Local energy storage – essentially a giant battery connected to a power grid – seems like a simple idea, but for years it has been too costly for Austin Energy to pursue. That could change next year, though, when the utility hopes to have a Tesla-manufactured, 1.6 megawatt lithium ion battery – the same kind found in cellphones – online at its Kingsbery Substation in East Austin.

The city came a little closer to hooking up that battery on Sept. 24 when the City Council Austin Energy Utility Oversight Committee recommended that Council approve the $3 million purchase on a 6-1 vote, with Council Member Don Zimmerman opposed. Mayor Steve Adler and Council Members Delia Garza, Ora Houston and Ann Kitchen were absent. Council will consider the item for final approval at its next meeting on Thursday.

“Utilities across the country are entering into a new era of storage technologies,” said Austin Energy General Manager Larry Weis. “It’s a very technical subject; we’re doing a lot of research into it. This, frankly, is a research project, if you will, our first installation – and more to come.”

The Austin Energy Resource, Generation and Climate Protection Plan to 2025 that Council adopted in December 2014 includes, among its goals, a plan to pursue 10 MW of local storage, along with as much as 20 MW of thermal storage.

It’s no coincidence that Austin Energy plans to install the energy storage system at its Kingsbery Substation, which is adjacent to the planned home of the utility’s first community solar project. That approximately 2.5 MW project, which will provide power to customers within the Austin Energy service area, is likely to be completed next year, according to contractor PowerFin Partners.

“The two projects are really independent, but also co-exist and have some synergies with each other,” explained Khalil Shalabi, Austin Energy’s vice president of energy market operations and resource planning. “The fact that they’re both co-located, they’ll be on the same feeder … offers us, from an engineering standpoint, a lot of study opportunity, and we’re excited about that.”

Shalabi later explained to the Austin Monitor how storage systems could supplement solar projects, which could benefit from “voltage smoothing” because their source – the sun – often provides intermittent power. “Even when the sun is out and it’s charging, we do get some variability out of that project – clouds come by, whatever – and we can smooth that,” he said.

“Essentially, what you’re doing is charging and discharging at sort of the same rate that the renewable intermittency is giving you,” Shalabi continued. “What you’re trying to do is make that intermittency almost invisible.”

Though voltage smoothing will be the primary function of the current proposed storage project, Shalabi added that energy storage could be useful in the future for nonrenewable energy sources. “It could just charge up at night, when prices are low and there’s not a lot of demand, and then release that energy during the day when the prices are high,” he said.

This potential use, Shalabi explained, is not necessarily practical in the present Electric Reliability Council of Texas – or ERCOT – market in which Austin Energy and the majority of Texas utilities participate. It would work best in a more volatile market, he said; however, current low natural gas prices and other factors keep the market from becoming too volatile.

Presently, it can be difficult for nondispatchable, weather-dependent renewables such as solar and wind to compete in the market with dispatchable, on-demand energy sources such as natural gas. As a recent article in Scientific American points out, though, the U.S. Department of Energy believes that development of energy storage technologies could transform future energy markets.

A third use that Shalabi mentioned, which does seem more applicable in the current market, involves using stored energy as “emergency backup” when demand is unusually high. There were occasions this summer, for example, when state officials expressed concerns about the grid’s ability to handle customer demand.

Shalabi noted that Austin Energy is currently planning to use energy storage only within its own service area and not in the larger ERCOT market, but that could change eventually as the technology advances.

Prior to the committee taking its vote, Zimmerman argued that the proposed energy storage purchase should be considered part of the cost of the city’s renewable goals and purchases.

“This technology need that we have, right, for storage – because the renewables are nondispatchable – it’s really very, very important,” Zimmerman said. “I just want to wrap my head around the finances of it and try to understand how the cost of this project, right, and the cost of the technology gets properly credited to nondispatchable renewables.”

Shalabi responded that the energy storage project would be funded by Austin Energy’s capital budget, that it could have uses beyond “smoothing renewables” and that it could be viewed as similar to the purchase of a more ordinary item such as a transformer.

Weis added that the storage could help Austin Energy provide reliability more broadly by, for example, acting as backup power during repairs.

“Trying to figure out how to use this within our distribution system is really the key,” Weis said. “Austin Energy hasn’t been an innovator for years without reasons, and this is one of them – so we’ll see what we can do with it.”

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Key Players & Topics In This Article

Austin Energy: As a municipally-owned electric utility, Austin Energy is a rarity in the largely deregulated State of Texas. It's annual budget clocks in at over $1 billion. The utility's annual direct transfer of a Council-determined percentage of its revenues offers the city a notable revenue stream.

ERCOT: Electric Reliability Council of Texas. The state-level organization that organizes utilities throughout the state. According to its web site, ERCOT, "manages the flow of electric power to 24 million Texas customers - representing 85 percent of the state's electric load."

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