Bus-sized batteries may help efficiency of U.S. grid

By Nichola Groom - Analysis

LOS ANGELES (Reuters) - The next time some U.S. utility customers collectively pump up their air conditioners on a sweltering summer day, that power may be coming from a battery the size of a double decker bus.

U.S. utilities are increasingly investing in super-sized batteries and other forms of energy storage to reduce their dependence on slow, dirty backup plants, put off building new substations, and to store power from wind farms and other growing but volatile sources of renewable energy.

"We are going into a state of extreme growth," Ali Nourai, manager of distributed energy resources at American Electric Power Co Inc (AEP.N: Quote, Profile, Research), said of the market for large-scale energy storage. "We sensed it was coming ... now it's happening."

Columbus, Ohio-based AEP, which delivers electricity to more than 5 million customers in 11 states, installed a one- megawatt (MW) battery in West Virginia nearly two years ago, allowing it to delay construction of a new substation and other infrastructure. Six additional MW of storage will be added this year, and the company plans to have 1,000 MW of storage capacity on its system in the next decade.

In AEP's territory, one megawatt supplies enough power for about 800 homes. Right now, the company is using the technology to help distribute power and delay making more expensive upgrades to its system, such as installing a substation.

Large-format storage devices hold so much promise for utilities because they can be charged overnight, when power is cheap and readily available, and can be tapped during the day when demand outpaces supply. And unlike generators or power plants, storage devices can be accessed almost immediately without emitting harmful greenhouse gases.

"Big generators have a hard time changing speed very quickly," said Bill Capp, chief executive of Beacon Power Corp (BCON.O: Quote, Profile, Research), which makes flywheels that can store energy and relieve pressure on power grids. "We can do it very fast."

Beacon, which is based in Tyngsboro, Massachusetts, is installing its first flywheel plant in New York state and expects to bring in revenue by the end of the year, Capp said. Under its business model, Beacon will build its own plants and sell the power it stores to utilities when they need it.