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Some electric utilities are running into electricity supply challenges, and batteries are stepping up with solutions. Here’s what utilities are facing:

  • Hi-tech equipment can fail during a power interruption of even a few milliseconds.
  • Interest in renewable energy is increasing, but solar power won’t work when the sun doesn’t shine and wind turbines won’t spin when the wind doesn’t blow.
  • Consumers want electric service to be restored more effectively after outages. Even if a storm leaves a large number of homes and businesses without power for several days, consumers want plans in place to quickly restore power to essential services, such as grocery stores, gas stations and pharmacies.

A solution for these dilemmas lies in the emerging technology of large-scale battery storage, which could provide additional power when the demand for electricity is high. However, at this time the large batteries necessary are extremely expensive.

The demand for better smart phones, laptop computers and electric cars has fueled a frantic race for batteries that are lighter, smaller, longer lasting and less expensive. These demands are being met through research into technical improvements and by the economics of mass production.

The lithium-ion battery was the key

What’s behind all these developments is 40-year-old lithium-ion battery technology, named for the lightweight metal lithium it’s made of, and ions, which are pieces of atoms that move back and forth inside the battery to produce and store electricity.

“One of the break-throughs has been the adoption of the lithium-ion battery for vehicles as well as consumer products,” says Andrew Cotter, a program manager for the Business and Technology Strategies group at the National Rural Electric Cooperative Association (NRECA). “A lot more lithium-ion             batteries are being produced, so there are a lot of companies able to package them much more cheaply. And that has spurred more companies to start investigating and investing in research.”

In a 2016 report titled “Welcome to the Lithium Age,” the Germany-based international financing giant Deutsche Bank wrote, “Lithium-ion battery costs are falling rapidly as global battery producers expand manufacturing facilities, unlocking economies of scale.”

The next step for the battery industry, says Tom Lovas, a technical liaison and consultant with NRECA, “is scaling up for applications in the electric utility industry.”

This is the beginning of the process

Right now only a handful of utilities are making significant use of batteries, but one industry research group predicts that number will grow eight times by 2020, for a market value of $2.5 billion. That kind of potential leads to some bold claims as battery companies compete for their share.

“There’s a lot of hype out there,” says Lovas, as marketers tout batteries as “the linchpin of putting together the smart grid” to modernize the flow of electricity.

Cotter says, “The technology is available. People are interested, but no one knows the flaws yet.

“As utilities gain experience using batteries in routine operations, they will learn the imperfections and start figuring out what are the most conventional uses. Vendors, in turn, will start developing batteries for those specific applications.”

For example, one of the most likely of those applications will be to resolve the problem of intermittent power flows created by renewable energy. Since solar and wind power can be generated during times when people don’t need it, batteries could store the excess energy for future use. While beneficial in theory, in practice it’s not clear whether there’s a broad economic case for this. Each utility will have unique factors that will play into this decision. 

Another use of batteries could be to smooth out power fluctuations from renewable energy. Solar and wind energy can come from many sources – independent vendors and even homeowners selling power back to the utility from their relatively small sets of solar panels or wind turbines in ways that are hard for the utility to predict. The result can affect the quality of power and even damage equipment as transmission and distribution lines are used in ways they weren’t designed for. But again, the economics of such an application are unique to each utility.

In time, utilities will become familiar with the best uses of the technology. Storage applications will become commonplace, and vendors will sell optimized products for them. Until then, NRECA’s Business Technology and Strategies group is using cases that provide methodologies for a storage assessment.

Like all things in the energy industry, it’s not all economics. Some state governments are even getting into the act, passing laws requiring utilities to use batteries in their operations to encourage renewable energy and provide immediate power to essential businesses after storm outages.

This new utility world holds great promise and could start taking shape in as soon as 1 to 3 years, says NRECA’s Cotter. But first, he says, the battery industry needs to mature and show the effectiveness of its products.


There are lots of new terms for defining electrical energy storage

The emerging technology of using large batteries to store electrical energy is primed to become a full-blown industry in the next few years, with one research firm predicting an eightfold increase by 2020.

One of the tricks to managing a new industry is ensuring people know what they’re talking about, which is why electric co-ops decided a logical first step would be to write a dictionary.

NRECA published a technology advisory last year titled “Electrical Energy Storage – A Lexicon.” The 13-page paper defines 55 terms from “battery” to “interconnection voltage.”

Most consumers aren’t concerned with the details of those definitions, but when utilities meet with battery vendors, misunderstandings could cost a lot of money. Battery vendors are viewing electric utilities as a promising market, says Andrew Cotter, one of the developers of the Lexicon. He says a salesperson with a background in battery chemistry might not be familiar with what’s important to the general manager of an electric utility.

“Battery companies are working hard to engage utilities and work with them because they want their piece of equipment to be the utility solution,” says Cotter. “Many companies don’t understand the terminology and specifications utilities are required to maintain for reliable service.”

For example, a battery rated at 1,000 kilowatt-hours might only have 600 kilowatt-hours of actual available capacity – or the price of a battery, which produces direct current (DC), might not include the equipment needed to convert that power to alternating current (AC), the kind of electricity used in your home.

“When you’re reviewing bids from vendors, it gets much more confusing to make comparisons if people aren’t saying the same things,” Cotter says. “So we really saw this as the first and most important step.”


Paul Wesslund writes on cooperative issues for the National Rural Electric Cooperative Association, the Arlington, Va.-based service arm of the nation’s 900-plus consumer-owned, not-for-profit electric cooperatives.




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