Energy Storage Interview: How to bring alternative energy storage technologies to market?
We are pleased to share our Energy Storage interview with Chen Bo, President, Narada Power Source.
How to best reduce the costs of energy storage?
As energy storage is a strategic emerging industry, there are many technical routes. It is no all-purpose route now. The question consists of two parts – how to find the best route for specific energy storage projects (I will mention that later) and how to reduce the energy storage cost by technical innovation. Let’s refer to YCC Economic Benefit Formula: YCC=Rout-Rin/μCL×DoD+C0
Rin is the purchase price of electric power. Rout is the selling price of electric power. µ is energy conversion efficiency. C is initial investment per kWh. And C0 is operation cost per kWh. DoD means depth of discharge (means percentage of battery discharge vs battery capacity, as pumped hydro is 100%). L is service life.
The project profit margin formula is: P=(YCC-1)×100% by this formula, we will know the prices depend on market and others depend on technology. It is easy to tell if we can increase energy conversion efficiency, service life or DoD, or reduce Initial investment or operation cost, we can make the optimum economic benefit.
Narada is an advanced manufacturing enterprise focused on Lead-Acid batteries and Li-ion batteries. Lead-Acid battery can provide the second best Initial investment and operation cost, just a little higher than zinc-air battery. But zinc-air battery is an immature technology and there is no precedent for commercial energy storage project. Energy conversion efficiency, service life and DoD interact and influence each other, as the image below shows. The major defect of the Lead-Acid battery is its low energy conversion efficiency and short service life. That’s why we developed the Lead-Carbon battery based on the Lead-Acid technology, which has much longer service life and higher energy conversion efficiency. That technology can reduce storage cost a lot.
How to bring alternative energy storage technologies (other than Li-ion batteries) to market?
As I said before, energy storage is a strategic emerging industry and there are many technical routes. It is not an all-purpose route now. First, we need to find the client’s sore point. And then we analyze the sore point to find the key requirements. Later we select appropriate technical route to meet those requirements. For example,
1. Factories in industrial park use expensive on-peak power all the time.
When factories need electric power, the Electric system operator can’t provide enough electric power. When factories don’t need electric power, there is too much electric power that has nowhere to go. Electric system operators sell Electricity at TOU (time-of-use) price to show real cost. So industrial park needs peak load shifting. Essentially, it is a time mismatch between the electricity supplier and the consumer. Time Mismatch not only causes the electricity cost to increase dramatically, but it also causes voltage drops and has an effect on power quality. We have to solve these problems. So let’s take a closer look. Duration of storage is 10 to 20 hours. Discharge time is several hours. Load is about 1-50MW. Capacity of energy storage is 5-200MWh. And it must be convenient deployment and low cost. Only pumped hydro systems, CAES, SMES AND Lead-Acid/Lead-Carbon battery systems can satisfy all these requirements. Pumped hydro systems and CAES are restrained by geography. And SMES is an immature technology and very expensive. Narada used a Lead-Carbon battery system and created a commercial model named “investment + operation” and contributed much to build a sound energy storage market and make China’s energy storage market more commercial.
2. Lots of grid-connected photovoltaic systems and wind systems were shut down in China
Government statistics shows that 68.9 billion kWh of wind-power, or about 26 percent of all Chinese wind power, were wasted in 2016 alone. We have to close wind farms. Wind turbines are extremely intermittent and always built in undeveloped areas to produce much power to that area. This poses an enormous safety risk to grid operators and makes power grids vastly more fragile. Essentially, it is a place mismatch of electricity supplier and consumer. There are two ways to solve this problem. One is shutting down construction of new wind turbines and developing the economy. Trying to use electricity from wind farms locally. The other is transmission electricity.
The best way of transmission electricity is using high voltage transmission line. If we can’t build a very high voltage transmission line for a wind farm, we have to store electricity and transport it a very long distance. Duration of storage is days to weeks. And capacity of energy storage is TWhs. As we need to transport energy, it has to be high energy density. Only hydrogen storage satisfies all these requirements.
Can you please share your most recent interesting and challenging project that you have worked on?
1. The Germany primary FM energy storage PCR project.
First Phase scale: 50MW. The German grid FM market is a mature electricity auxiliary services market, with current market capacity of more than 800MW. As the market is conducted through variable, transparent and non-discriminatory auctions, long-term stable returns can be obtained. In April 2017, Narada Power Source and two German companies named Upside Consulting GmbH and Upside Invest GmbH & Co., KG signed an “energy project cooperation contract.”
In the next two years, by means of the advanced energy storage battery technology and the rapid response of the energy storage system, Narada Power Source and Upside will build FM energy storage power station with a total capacity of more than 50MW. We will participate in the German FM market service (PCR). The total investment amount is about 42 million euros. The company will be heavily involved in the project and will have a deep understanding of the FM energy storage market. We will also be starting a larger scale construction to expand the FM energy storage system application in Germany and the rest of Europe.
2. China’s Wuxi Singapore Industrial Park Intelligent Distribution Network Energy Storage Power Station
This power station is located in Wuxi Singapore Industrial Park and currently is the largest commercial energy storage power station with a total power of 20MW and total capacity of 160MWh, and 9MW / 72MWh respectively for the first phase. All the equipment operation data of the energy storage power station is remotely monitored by the Narada energy Internet management platform anytime, anywhere, as a true smart grid. As the project is funded by Narada Power Source only and it provides all technical solutions, power station construction and operation services, it gets all the revenue as well.
Wuxi Singapore Industrial Park Intelligent Distribution Network Energy Storage Power Station provides energy storage and integrated energy services. The station was created to use both distributed renewable energy and intelligent micro-grid technology. That way, traditional energy and new energy can complement each other and provide coordinated supply. It provides users with efficient and intelligent energy supply as well as other value-added services like energy demand management, and cleaner energy production, while also promoting the company’s future in the distributed energy business.
What are the business models that you can provide?
Business model 1: “Grid primary frequency service”
· In the developed Electricity market, we can obtain a stable income by the frequency services.·
· As the energy storage system is quick and accurately responding, we can improve the transient frequency of regional power grid.
· As Energy storage provides high frequency efficiency, fast response, is relatively low cost and cleaner and environmentally friendly compared to the traditional thermal FM frequency, Grid primary frequency service by Energy storage has much better economic and social benefits than traditional thermal FM.
Business model 2: Industrial-Park-level “incremental distribution network + energy storage services”
· It is the priority layout for the industrial park power-sold business, to achieve the integration of distribution network and power-sold business model.
· The advantages of the energy storage system as a “virtual power plant”, allow us to manage park electric power accurately and operate park electric power intelligently, and optimize the park side distribution network to lower the electricity charge (including capacity charges and volume charges).
· Also, adjust the peak load balance of the park, provide intelligent energy-saving and emergency power supply, and achieve power demand-side response.
Business model 3: IDC “energy storage + backup” service model
· Replace the original ordinary UPS battery with the energy storage battery, and have one part of the capacity for backup power, the remaining part for energy storage.
· Convert the customer’s fixed assets into operating assets (the cost is converted to income).
· The system can run energy storage + standby service function at the same time. It will provide IT load of 15 minutes standby, and the remaining capacity can participate in peak load shifting to reduce electricity charge, and can participate in power demand-side response.
Business model 4: “Energy storage +quality power supply service”
· As China’s high-end manufacturing industry is upgrading now and is becoming more intelligent, refined, and integrated every day, there are very hard requirements to power quality. By “energy storage + power quality management service”, we can significantly improve the power quality and provide high reliability service
· Significantly reduce the investment in the original power quality control equipment
Narada Power Source was one of the Golden Sponsor at the 10th Energy Storage World Forum in Berlin, May 2017 and had the unique opportunity to share its Energy Storage success story and meet other top international market players – potential business partners and clients.
Narada Power Source, established in 1994 in Hangzhou/China, has become one of the leading global battery manufacturers and battery suppliers. The leading products are highly reliable Lead Acid batteries of the VRLA type, lithium-ion batteries and related components and subsystems. Narada Power Source has a strong focus on research and technological development to foster its growth and supply innovative solutions to its customers.
Would you like to be part of the 11th Energy Storage World Forum and the 5th Residential Energy Storage Forum in Berlin, May 14-18, 2018 and play a key role in shaping the industry future with your insights and company’s latest solutions? Learn more about our Speak and Sponsor opportunities.
If you want to know more about this and other topics directly from end users of energy storage technologies join us at one of these annual events: The Energy Storage World Forum (Grid Scale Applications), or The Residential Energy Storage Forum, or one of our Training Courses.