It is widely recognized the power grid requires energy storage to smooth delivery of electricity from an increasing amount of intermittent renewables, such as solar, and intermittent demands, but the cost of implementing energy storage has generally been considered too expensive for widespread deployment. Due to continuing price reductions and efficiency improvements in battery systems, it is rapidly becoming both technically practical and economically attractive to use large battery systems for selective energy storage applications. There are many applications for battery-based energy storage. One attractive application is for peak demand reduction for commercial electricity customers. This paper discusses a more efficient, lower cost implementation of a commercial-scale battery storage system to reduce peak demand costs and provide other benefits.
The battery energy storage market segments are similar to the photovoltaic (PV) generation market with residential, commercial, utility, and off-grid market segments. In the PV industry, the largest market segment globally is in commercial-scale systems, since these systems provide economies of scale while displacing higher value retail electricity. In many geographic regions of the world, commercial-scale PV is becoming cost effective with conventional generation.
As the core battery technology matures and unit pricing declines, bi-directional battery converters providing both battery charging (AC to DC) and battery inverting (DC to AC) will emerge as a rapidly growing new market for power converters. The application and value of batterybased energy storage varies significantly in residential, commercial, utility and off-grid market segments.
Storage provides the opportunity to reduce peak demand charges, something only the commercial market segment experiences. Utility regulatory changes are not required for these systems to be cost-effective. In addition, a recently enacted Self Generation Incentive Program (SGIP) in the State of California rebates up to 40 percent of the installed cost of battery storage systems. This incentive should accelerate market demand for commercial storage in the next few years.
Peak Demand Charges
Commercial electric customers, unlike residential customers, typically pay for peak demand (kW) charges in addition to energy (kWh) charges. The peak demand charge is normally calculated as the highest peak demand during the monthly billings cycle based on a 15 minute sample interval. The marginal cost of energy during these peak periods can be $1.00/kWh or more, making this an attractive opportunity for significant cost savings. For many commercial customers the peak demand part of their utility bill can be 30–40 percent of their total electric bill. And for some customers it can be much higher. Electric vehicle fast charger installations can have peak demand (kW) charges reaching 80 to 90 percent of the monthly electric bill. Commercial customers with high peak to average demand will have a higher percentage of their utility costs tied to demand charges, and will benefit more from peak demand shaving enabled by energy storage.
The first step to reducing energy costs for commercial customers must be to address general energy efficiency issues such as replacing less efficient lighting with LED and fluorescent lighting and possible HVAC system upgrades. Additionally, if customers have heavy intermittent loads, such as large industrial motors, they may also need to stagger use of these loads to reduce peak demand. In some cases, utilities will also contract with large industrial and commercial customers to curtail load during peak times. There are a number of attractive energy management systems to help commercial customers with these issues, but they can be enhanced with local energy storage.
Adding local photovoltaic generation to a commercial building reduces utility energy (kWh) charges, but often has little effect on peak demand (kW) charges. Summer peak demands often occur during the late afternoon and early evenings just when the PV generation is sharply dropping. Commercial customers with PV generation may have the same high peak (kW) demand, but with lower average (kW) demand. Since they have a higher peak power to average energy demand ratio, they will generally benefit more from peak demand reduction using a battery storage system.
Battery Storage System Requirements
Typically only medium-to-large commercial and industrial customers pay peak demand charges. These customers normally have a 480Vac 3-phase AC grid inter-tie, which is a requirement for battery storage systems in order to eliminate the cost and efficiency loss of an external transformer. The system needs to be certified by a Nationally Recognized Testing Laboratory (NRTL) to conform to UL1741, which is the same grid-tied standard found in PV inverters. UL1741 guarantees a number of critical aspects of power grid safety, and is required by local utilities for distributed energy storage systems. The system should be scalable from tens of kilowatts to megawatts of power to address different customer requirements.
Battery storage systems require a highly-efficient bidirectional battery converter. Conversion efficiency is even more important in this application than with PV inverters because two power conversions are required —rectifying or charging the DC batteries from the AC grid, and inverting or discharging power to the AC grid from the DC batteries. The battery converter efficiency is particularly important at relatively low power levels. PV inverters typically operate at 50–75 percent of rated power for 5–6 hours/day. Battery storage system often operate at about 10 percent of rated power for 24 hours/day, so the 10 percent rated power efficiency is the most important efficiency specification.
While conversion efficiency is critical to battery storage systems, battery chemistries also need close scrutiny. Traditional lead-acid chemistries are seeing increased competition from lithium-ion and from other battery chemistries which reduce $/kWh costs by increasing the number of battery cycles supported. Significant capital investments for electric vehicle (EV) lithium-ion batteries can be leveraged for grid storage applications if the storage system can use standard EV battery packs. Lithium-ion batteries also have zero maintenance requirements and can be easily sited in commercial environments without burdensome requirements of some other battery chemistries.
Ideal Power Converters Battery Storage System
Ideal Power Converters (IPC) has patented, and is further developing, a revolutionary new power converter technology significantly improving weight, size, cost, efficiency and reliability. The company’s initial product is a 30kW 480Vac PV inverter (IPV-30kW-480) that is 90 percent lighter in weight than conventional systems. The lightweight inverter saves customers up to 90 percent of their shipping and installation costs, while providing improved efficiency and reliability.
The IPC PV inverter is built on the Universal Power Converter Platform™, which allows the same hardware design to be used in different applications with a simple change to the embedded application software. The IPC Battery Converter (IBC-30kW-480) provides both battery charging (AC to DC) and battery inverting (DC to AC) functions using the same hardware design as its PV inverter.
The Battery Converter product offers even greater competitive benefits than the PV inverter in size, weight, cost and efficiency. This product has about 95 percent efficiency at 10 percent rated power, an improvement of about 7 percentage points over conventional battery converters. Since battery storage systems require two conversions, one for charging and another for inverting, the IBC-30kW-480 reduces battery kWh requirements by 7 percent and the electrical energy input by 14 percent, a potential gamechanger in grid storage.
A grid storage system with the IPC Battery Converter is shown in Figure 3. The IBC-30kW-480 may use two battery packs in a bipolar configuration maximizing the power and efficiency rating of the system. The batteries may be of any type or chemistry, including Liion electric vehicle battery packs. An external Battery Controller is required to translate TCP/IP commands based on IEC 61850-7-420 to RS-485 Modbus for the Battery Converter and to CAN for the Battery Management System. High-level energy management algorithms residing in local or cloud-based webservers will direct the Battery Converter when to charge or discharge energy from the battery system.
Combined PV and Battery Storage System
Distributed photovoltaic systems reduce kWh energy charges, while battery storage systems can reduce kW peak demand charges. Combining distributed commercialscale PV generation and battery storage leverages the benefits of both technologies to create more economic value than each system individually. Consequently, there is strong market demand for combined PV and battery systems, and to further improve cost and efficiency of power conversion solutions of these hybrid systems.
The Ideal Power Converters platform will further improve system efficiency, cost and ease-of-installation for photovoltaic and battery hybrid systems. The company’s PV Inverter (IPV-30kW-480) and Battery Converter (IBC-30kW-480) are designed to be easily used together in larger hybrid systems as shown in Figure 5. The Battery Controller can also provide monitoring of the PV inverter system by simply daisy-chaining the converters on a common RS-485 serial communications line.
IPC is developing a 3-Port Hybrid PV & Battery Converter that will combine the functionality of the PV Inverter and Battery Converter together in a single-stage 3-port power converter. The company’s indirect power transfer with Energy Packet Switching™ enables this revolutionary new alternative to AC grid-tied or DC bus-tied hybrid systems. It offers two independent DC ports and can transfer power between any of the three ports in any mix with a conversion efficiency of >96 percent. The 3-Port Converter is only modestly heavier than each 2-Port PV inverter or Battery Converter. It also retains the same communications and control interface enabling a simple upgrade path.
This white paper was permission from Ideal Power Converters www.idealpowerconverters.com