Obama Administration Seen Prodding Electric-Power Storage
By Judith Burns, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Here's the dirty little secret about clean energy
sources such as wind power: they're often strongest when energy demand is
weakest, creating a mismatch of supply and demand.
Help could be on the way, as the Obama administration is planning to dole out
up to $60 million to promote a patented technology that stores energy until it
is needed. Later this year, the U.S. Department of Energy is expected to
announce which companies will receive awards for compressed air energy storage
technology, which stores energy in the form of compressed air in underground
reservoirs which can be tapped during peak demand.
"It is clear that we need to be ready for a very quick expansion of
renewables," said Terry Boston, chief executive of PJM Interconnection LLC,
which coordinates electrical transmission in a 13-state region, and who took
part in a panel discussion in Washington, D.C., on Tuesday. Boston said while
PJM likes renewable energy sources, they pose challenges because they are
intermittent and often out of synch with customer demand--wind typically blows
hardest at night, rather than in the afternoon, when demand is higher.
Affordable storage should help overcome that problem, said Energy Storage and
Power LLC President and Chief Executive Stephen Byrd, who also took part in the
panel. ESP, funded with a $20 million investment by utility giant Public Service
Enterprise Group Inc. (PEG), has patented a system for storing electricity in
compressed air, which it says is much cheaper than battery storage and far more
durable.
Batteries are too expensive for overnight power storage, at least at present,
agreed Robert Schainker, head of the power delivery and markets group at the
non-profit Electric Power Research Institute, based in Palo Alto, Calif.,
another participant in Tuesday's discussion. He said renewable energy sources
and energy storage go hand-in-hand, and expressed hope that the U.S. will move
away from short-term investment horizons that have precluded development of
renewable power.
The Obama administration's push for renewable technology seems to include an
understanding of the need for energy storage, with Energy Secretary Steven Chu
raising the issue in a speech--which Boston said makes him "somewhat optimistic"
on the technology's prospects.
Byrd said some of ESP's customers have applied for Energy Department grants
for compressed air storage. The firm also hopes Congress will support federal
loans for renewable energy, create an investment-tax credit for energy storage
and modify a tax credit for wind power production to include wind power that is
stored rather than used immediately.
Tax credits already have generated so much wind power production in west Texas
that prices sometimes plummet to the point that producers will hold back
production at night or pay customers to take it.
"That's a real waste," said Boston. He figures the example in Texas may serve
as a warning for the rest of the country--and spur development of technology to
store electrical power until it's needed, noting that "it is not sustainable to
have large negative prices" for electricity.
Utilities and the Obama administration are making a related push to develop
so-called "smart grid" technology that will permit utilities to communicate with
customers and adjust prices based on demand and time of day. Byrd said storing
power generated in low-price periods could help wholesalers and retail customers
pay lower prices in peak periods, even after the introduction of "smart grid"
technology.
-By Judith Burns, Dow Jones Newswires; 202-862-6692; Judith.Burns@dowjones.com
(END) Dow Jones Newswires
10-27-091811ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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