By Sara Stroud

Managing electrical grids is a delicate balancing act. Behind the scenes, grid operators must ensure that regional grids maintain a consistent frequency — a task that will only grow more complicated with the introduction of new renewable power sources and the rollout of electric vehicles.

That’s why energy storage companies and federal and state agencies are working on innovative ways to integrate faster and cleaner frequency regulation for regional power grids. Two such companies, Beacon Power and AES Energy Storage, got a boost from the U.S. Department of Energy this month in the form of more than $60 million in loan guarantees to develop energy storage projects in New York.

Traditionally, grid operators have relied on fossil fuels to provide frequency regulation, directing about one percent of total generation capacity to deal with fluctuations in frequency. The problem with that system is that it’s relatively slow and generates carbon emissions.

Beacon Power and AES Energy Storage harness different technologies — flywheels and batteries, respectively — to provide frequency regulation, but both companies say they can increase efficiency while slashing greenhouse gas output.

"In order to maintain the system flowing at regular intervals, which all of our power electronics require, we need frequency regulation service. This offers the opportunity to deliver that … at dramatically lower cost and much higher performance levels than currently can happen," declared Matt Rogers, a senior adviser to Secretary of Energy Steven Chu, on the DOE website.

Flywheels: ‘Like a Speed Boat’ 

Massachusetts-based Beacon Power’s answer to the energy storage problem is flywheels, which are essentially mechanical batteries. Electricity gets stored as kinetic energy in spinning flywheels when power supply exceeds demand, then is quickly delivered back to the grid by slowing down the flywheels’ rotation when demand spikes.

Beacon’s technology is not a long-term storage solution, rather it is a so-called "second-to-second stabilizing service." But it can ramp up in response to frequency fluctuations 10 times faster than fossil fuel sources, according to the DOE.

"It’s like trying to turn a cruise ship," Gene Hunt, a Beacon Power spokesperson, told SolveClimate News, of using fossil fuel sources to respond to demand fluctuations. "[We’re] like a speed boat."

Meanwhile, Beacon’s flywheels can reduce carbon emissions associated with frequency regulation by about 80 percent over conventional sources, according to the company.

In August, Beacon Power finalized a $43 million DOE loan guarantee, which is slated to go towards a 20-megawatt flywheel energy storage plant already under construction in Stephentown, NY.

Beacon first received conditional approval of the loan for the Stephentown plant more than a year ago, and has also received federal backing for other energy storage projects. In late 2009, Beacon announced that it scored a $24 million DOE grant to build a 20-megawatt plant in Chicago. In July 2010, the company also won $2.25 million to develop its next-generation flywheel from a DOE program designed to fund potentially transformational energy technologies.

Lithium-Ion Batteries at Grid Scale

While Beacon is relying on flywheels, AES Energy Storage’s technology uses lithium-ion batteries to store power for quick deployment.

In August, the company received conditional commitment for a $17.1 million DOE loan guarantee for a 20-megawatt storage plant in Johnson City, NY. Virginia-based AES has tapped battery maker A123 Systems to provide storage technology — including batteries and communications and controls software — for the Johnson City plant, and 24 megawatts worth of other projects.

"The loan to AES … provides a wonderful lens on where the electric power industry is going," Rogers said. "This ability to bring together the most advanced batteries and a new application — these are batteries that can be used in cars and are now being used at grid scale — provides the ability to take that technology and provide new services."

Energy storage projects like those of Beacon and AES are in part paving the way for widespread adoption of wind and solar energy and plug-in hybrid and electric vehicles, which together will create more variable power loads and more fluctuating demand.

NY’s Market Rules ‘Level the Playing Field’

"As more renewables come online, the need for frequency regulation will increase," Hunt said. "They’re harder to predict and to manage."

Globally, the market for energy storage could be worth more than $4.1 billion in 2018, up from $329 million in 2008, according to a report from Pike Research, a Colorado-based market research firm focused on cleantech, released last year. While government support is helping propel energy storage, companies face the challenge of selling into the regulated utility market, which tends to be slow moving, the report says.

Market rules established by the Federal Energy Regulatory Commission can also go along way towards supporting energy storage projects. In that respect, it’s no coincidence that both AES and Beacon are developing project in New York.

The state has an optimized set of rules to make best use of energy storage, as well as favorable rates, Hunt said.

In 2009, FERC approved market rules for the New York Independent System Operator power grid that allowed non-generating resources, like batteries and flywheels, to bid and sell into electricity markets. Similar rules are in place in the Midwest.

"The market rule changes [allow] for us to connect and make money," Hunt said. "They level the playing field."

(Sara Stroud is a freelance writer based in Oakland, Calif., who covers energy, technology and the intersection between the two.)

(Photos: Beacon Power Corp., Stephentown 20-megawatt plant progress)

See also:

Electric Energy Storage: Digging the Foundations (Part I)

Electric Energy Storage: Digging the Foundations (Part II) 

Breakthrough Solar Plant Stores Energy for Days

Al Franken and Kit Bond Team Up for Combined Heat and Power

Botched Smart Meter Roll Outs Provoking Consumer Backlash