Off-Peak Electric Heat Blog

The Department of Energy and Sandia National Lab have recently released a publically available energy storage selection software (http://www.sandia.gov/ess/esselect.html) that compares the value of different storage devices.  They also show the value of the market of different value propositions. Electric Thermal Storage (ETS) is the “low hanging fruit” when it comes to energy time shift (arbitrage), load following, and area regulation. The renewable integration abilities are shown by placing value for wind energy time shift and solar energy time shift.

The value of the energy time shift (arbitrage), load following, and area regulation are shown below:

Below is a comparison of distributed electric storage technologies: 

The graph below shows that ETS is currently the only small scale storage platform that has a payback:

The graphs show why Steffes has been producing ETS equipment for 25 years. ETS is the lowest cost storage available. There are lots of other electric storage choices but ETS makes sense today and in the future.

Grid-interactive Electric Thermal Storage is getting some more press. Otter Tail Power put out their Tail Winds “Wind Words” newsletter. The newsletter does a great job of describing the need for electric storage.

Without question, energy storage has a role to play in managing our electric system. And as technologies continue to evolve, we look forward to creating innovative solutions—both large and small—for our customers and learning how we all can capture renewable energy together.

Why GETS systems are beneficial is also discussed.

“GETS will provide utilities a new way to monitor energy demand  and manage output as they divert electricity—regardless of the generation source—into existing thermal-storage systems,”  said Al Takle, national sales manager at Steffes Corporation.

The thermal-storage systems that Steffes has been making for more than 25 years use dense taconite bricks to absorb electricity during off-peak hours, store it as heat, and distribute it throughout a building during on-peak hours. They range from suitcase-sized room heaters to large centrally ducted forced-air furnaces.

“The difference between the GETS concept and existing thermal-storage systems is that electricity could be captured and used 24 hours a day, taking advantage of the lowest energy-market prices at the time those prices are available,” said Takle.

I have been trumpeting how Grid-interactive Electric Thermal Storage (GETS) is the low cost electric energy storage equipment. The National Alliance for Advanced Technology Batteries has recently release a white paper that talks about Distributed Electric Storage (DES). The purpose of the paper is to speak to the need of a national policy to bring electric grid reliability, stability, and energy security. They also touch on the need for DES to integrate large quantities of renewable energy sources. The white paper has a nice chart that shows their suggested energy policy and the benefits. I certainly agree with these:

1. Electric Grid Reliability and Stability
   1. Supporting the grid through ancillary services, such as regulation and voltage support.
   2. Helping to reduce frequency and length of grid events.
   3. Enabling T&D upgrade deferral.
   4. Supporting consumer energy cost management, such as time of use and demand charge management.
   5. Renewable Distributed Generation Portfolio
      1. Integrate variable renewable energy resources.
      2. Improve power quality.
      3. Firming of intermittent capacity.
      4. Matching supply and demand.
      5. Managing ramp rates.

They go on to talk about electric vehicles. Unfortunately we haven’t figured out how to get electric thermal storage to power vehicles.

I am sure that these will be major talking points at the ESA Annual Meeting in Washington DC in 2 weeks. Kelly Murphy and Jim Deichert from our office will be attending.

I recently read “A Day in the Life of the Grid…” on the Greentechgrid blog. The blog was based on a talk that Jon Wellinghoff of FERC gave at the Green Tech Investor Summit. He walked through the hottest day of the summer 7-21-2011, hour by hour and what was happening to wholesale prices. At the end of his talk he mentions water heaters. Our feeling is that Grid-interactive Electric Thermal Storage (GETS) water heaters are the low cost way to positively affect the grid in a positive way. Below is the discussion about that day:

He noted that consumers are paying $0.09 per kilowatt-hour despite the wholesale rate ranging from $0.00 to $1.00 per kilowatt-hour.

2:00 a.m.: Despite low energy prices across the region, there is no rate incentive for consumers to charge their electric vehicles at this time of day. Electric vehicles could provide regulation service -- if they could participate in the market, according to Wellinghoff.

3:00 a.m.: Prices are near zero.

4:00 a.m.: Wind resources are still trapped in the western portion of the region because of transmission issues. The average wholesale energy price is about $0.023 cents per kilowatt-hour. At this time, an EV could charge at 40 cents per gallon gasoline equivalent, according to Wellinghoff.

5:00 a.m.: People in Detroit are waking up, and as power ramps up, pricing starts to rise.

7:00 a.m.: Wind starts to ramp.

8:00 a.m.: Trapped wind prices rise in constrained areas, but 100 miles away, prices are 10 cents per kilowatt-hour. The grid has generators inefficiently ramping-up when it would be more efficient for customers to change their loads. Wellinghoff said that this is an inefficient way of operating the grid.

9:00 a.m.: MISO declares a maximum energy event.

9:35 a.m.: Frequency on some lines drops to 59.964 cycles.

10:00 a.m.: Wind "is falling off a cliff" but ramp is rising. Peak wind is 3 gigawatts less than the previous day.

11:00 a.m.: High prices above $0.10 per kilowatt-hour start to hit the system as imports from PJM dry up.

12:00 p.m.: The wholesale markets are indicating the true costs of energy but there is a disparity between the wholesale price and the price the customer is paying.

1:00 p.m.: The temperature is 100 degrees but wind is down to 1 gigawatt. Only 1,800 of 30,000 turbines are producing power.

2:00 p.m.: Maximum energy warning declared.

4:00 p.m.: PJM sets an all-time peak record of 160 gigawatts while wind drops to a low point. There is a west-to-east price shift that shows a need for transmission build-out.

5:00 p.m.: The maximum energy event is terminated, but people are still making energy decisions with no knowledge of real-time electricity pricing.

6:00 p.m.: Temperatures are starting to cool off in the Midwest and prices have halved.

7:00 p.m.: Higher temperatures are holding firm in some areas and keeping the supply-demand balance tight.

8:00 p.m.: The heat index near the Lake Michigan shoreline and in eastern Michigan drops and demand falls.

9:00 p.m.:  Streetlights come on and generating resources go down. MISO brings on more expensive power.

12:00 a.m.: The system becomes unconstrained as the load continues to drop.



The FERC Commissioner summed up his talk with this statement:

"If we want our nation's energy system to remain efficient, we need to align prices with the costs of production. With a new transparent pricing environment, an array of businesses and aggregators can provide automated services that will control consumer loads. In sum, the new opportunity in energy is to align the [consumer] price with the real wholesale price."

He added that this will "enable loads like water heaters, refrigerators, and EVs to adapt to pricing. This is the challenge for the entire smart grid and cleantech industry."

He exhorted those in the utility industry: "Unleash the information, unleash the power."

Grid-interactive Electric Thermal Storage (GETS) may play a major role in future energy efficiency programs According to today’s issue of The News, the Brattle Group is predicting electricity demand will decrease by as much as 15%. The article predicts the decrease will “be brought on by factors such as the rising costs of generating and delivering electricity, rapid advances in appliance and building technology, innovative rate design, and cultural shifts in American values that encourage behavioral change.” Such a significant drop in electricity demand will have a profound effect on electricity utilities.

 It makes sense that technology advances could help to drop demand. It is also easy to see how rates designed to be high during high demand times could help to lower demand. Products that are able to store the peak time energy, such as Steffes space and water heating products, seem to be an important part of the future of cutting energy demand.

It is also easy to see how rates designed to be high during high demand times could help to lower demand. According to the article between 7.5 and 20% of residential customers will have dynamic pricing by 2020. Our experience with time of day pricing is that a significant amount of change in customer behavior can be had with the correct pricing signals. Products that can take advantage of this new pricing structure and not leave the customer inconvenienced will have great value as we get closer to 2020.

Some of you have heard us talk about the ETS program in Summerside, PEI. They are using Grid-interactive ETS (GETS) space and water heaters to help the municipal utility integrate the wind energy from their 4 turbines. The wind turbines are not only providing green electricity but they are also reducing the need for imported oil used for heating.  The Summerside municipal utility is developing a city wide “intranet” to have two way communications with each heating device. This is truly a smart grid application that is beneficial to the consumer, the utility, and the community.

They talk about ETS heaters at the 2:30 mark of the video found here: http://www.cbc.ca/video/#/News/Canada/PEI/Compass/2179017826/ID=2194825538

According to this article by smartgridnews.com, the California Public Utilities commission is considering making storage its own asset class. This would allow utilities to offer long term contracts to energy storage companies and developers. Since Steffes Grid-interactive Electric Thermal Storage (GETS) is the low cost electric storage option, setting up storage as its own assets class should create opportunities for GETS programs in California. Analysis by the Cooperative Research network shows the value for electric storage to be between $2000 and $12,000/kW. The cost of GETS space and water heating is between $100 and $200/kW.  Setting up storage as an asset class and deploying GETS space and water heating will be provide a positive return for the rate payers in California.

Other states would be wise to explore this as well.

Paul Steffes has been in the news a couple of times in the last few weeks. The first time was for receiving first place for his white paper at the Power Gen conference recently held in Las Vegas. The paper was in the renewable energy category. The paper was on Grid-interactive Electric Thermal Storage (GETS) for space and water heating. The award can be found here.

There is also a nice article on Paul in the City magazine. The content is on being an engineer-entrepreneur in western North Dakota.

Main story

http://www.thecitymag.com/image/cache/jan_2012_cm.pdf

Extra Content

http://www.thecitymag.com/?id=103&form_data_id=1589

Nice Job Paul.

The New York Times had an article last week by Matthew L. Wald commenting on a FERC ruling that states that Bonneville Power Authority (BPA) must re-write its rules to cope with events that cause an excess of renewable energy. Last spring and summer BPA dealt with large river flows and fast ramping wind events. BPA’s solution to these events was to curtail the wind.  This made the wind developers not happy.  At the end of Mr. Wald’s article he refers to a “radical program that installs equipment in consumer’s homes”.  Much of the equipment in this radical program is Steffes Grid-interactive Electric Thermal Storage (GETS). 

The Steffes GETS systems are able to receive signals to ramp up or down quickly to productively use this “excess” of green energy productively. As more renewable generation from wind and solar sources comes on line, the need to have fast acting resources will continue to grow. These types of articles will continue to pop up as grid operators are faced with the challenges of balancing variable demand and variable generation.  As such we will continue to promote the Steffes GETS space and water heating as a low cost solution.

On 11/10/11 Senators Wyden, Collins, and Bingaman introduced legislation for the Storage Technology for Renewable and Green Energy Act of 2011. The implications for Steffes Heating Systems are that there will be a 30% federal tax credit on room units, Comfort Plus, Comfort Plus Hydronic, and ThermElect. If this legislation can get passed paybacks for homeowners will typically be less than 3 years. For commercial customers ROI of greater that 50% may be possible. I will keep you updated of how this bill progresses. Below is the press release from the authoring Senators:

Wyden, Collins, Bingaman Legislation Will Increase Investments in the Storage of Renewable Energy

Washington, D.C. – As the nation takes steps to improve energy efficiency and develop renewable resource technologies, not enough is being done to ensure that electricity infrastructure is being used efficiently.  The focus on building transmission and generation capacity to meet peak demand for electricity means that consumers pay more while producers are forced to rely on less cost-efficient energy sources.

U.S. Senators Ron Wyden (D-Ore.), Susan Collins (R-Maine) and Senate Energy Committee Chairman Jeff Bingaman introduced the Storage Technology for Renewable and Green Energy Act of 2011 (STORAGE) to jump start the development of energy storage technology to better manage capacity to meet peak energy needs and make it possible for intermittent energy sources like wind and solar power to reach their potential.

As the percentage of energy from wind and solar increases, the energy grid must also adjust to the intermittent nature of these technologies. Renewable generation capability changes with the weather and the time of day and not necessarily when power is most needed.  Advancements in energy storage technologies will provide more efficient management of peak energy needs while simultaneously promoting the growth of clean, renewable energy technologies.

“The missing piece of the renewable energy debate has always been how to make those technologies reliable when the sun doesn’t shine or the wind doesn’t blow,” Wyden said. “Technologies that not only store energy to cover for intermittent output but also make the existing grid more efficient could be the very thing renewable energy technologies need to break through to the mainstream.”

“Deployment of storage technologies will make our nation’s electricity grid more reliable while also enabling more efficient use of existing energy sources as well as new ones, such as wind and solar,” said Bingaman.  “These technologies have the potential to cut electricity bills, reduce peak power demand and lower greenhouse gas emissions.  The incentives in this bill also will make storage technologies more affordable for businesses and homes.”  

“Storage systems comprise a broad range of technologies and can be used in a variety of ways,” said Senator Collins.  “The STORAGE Act would help advance energy storage technologies to improve the efficiency of the nation’s electricity grid, and energy storage for industrial, commercial, and residential establishments, while helping to promote wider use of clean, renewable energy.”  

According to the Electric Power Research Institute, more than 25 percent of the equipment and capacity of the U.S. electric distribution system and 10 percent of transmission equipment are needed to meet the demands of less than 400 hours of peak electricity use each year. The only resources currently agile enough to meet that demand are fossil fuels. The STORAGE Act offers business incentives for the development of technologies that can better store energy created during non-peak hours and distribute it to meet peak demand. This will make the grid more efficient than it is now, reduce reliance on burning fossil fuels and minimize a barrier preventing intermittent energy sources like solar and wind from breaking through into the mainstream.

The STORAGE Act provides a 20 percent investment tax credit of up to $40 million for storage systems that are connected to the electric grid and a 30 percent investment tax credit of up to $1 million to businesses and homeowners for on-site storage projects.  It provides tax credits to businesses and homeowners who install energy storage on their own property to help serve their own energy needs efficiently or capture energy from on-site renewable energy generation. The bill does not pick “winners and losers” and allows the market to decide which technologies are the best and not specifically singling out any one resource.