Texas evolving into a new energy storage hub
July 28, 2015
Deployment of energy storage in the U.S. continues to rise at a steady clip. According to Greentech Media, over 200 MW of energy storage is expected to be deployed across the country in 2015 alone. Lately, California has dominated the energy storage market with its ambitious installation goals. The state has widespread opportunities to use energy storage to support ambitious renewable energy standards, and this development has set an example for the rest of the country to follow. Texas is now poised to emerge as another big energy storage market by following in California's footsteps.
A mix of widespread integration of storage by utilities and innovative behind-the-meter applications by businesses is helping to set Texas in the same direction as the nation's energy storage leader. Considering the state's fondness for being No. 1 in wind power development, it may not be long before Texas is viewed as the next big influencer of energy storage development in the United States. Read on to learn what challenges the energy storage industry faces and which solutions are helping to lead the Lone Star State into the future.
The state's largest utility looks to integrate storage into the grid despite challenges
One of the biggest reasons that energy storage growth in Texas may exceed California's is due to an announcement last year from the state's largest utility, Oncor. According to The Dallas Morning News, the company proposed a $5 billion investment that would bring 5,000 MW of storage to Texas for the purpose of regulating and stabilizing transmissions across the state's power grid.
Unfortunately, the plans for the project were stymied by legislative troubles, The Dallas Morning News later reported. The state's deregulated energy market makes it illegal for the transmission company to own any technology that might be counted as a form of generation. Furthermore, many state power generators expressed concerns about Oncor's storage strategy, worrying the utility was aiming to capture some of their business. As a result, the company was not able to get the legislative backing it needed to change the law.
The Dallas Morning News also reported that Oncor remains optimistic about the future of the project despite this year's hiccup. At a recent conference, Michael Quinn, the firm's chief technology officer, expressed that the company could have an opportunity to move forward on the project as early as 2017. Although Oncor's plan did not come to fruition, Quinn rightly pointed out that the initial announcement started a new discussion in the state's public and commercial communities about the potential for energy storage in Texas.
Rising deployment of thermal energy storage for businesses
Despite the fact that the state's largest utility has experienced stalls in its own energy storage deployment plans, there are several examples of businesses and organizations that have chosen to integrate energy storage at building scale. Considering Texas' arid and tropical climates, it makes sense to deploy energy storage in ways that can help counteract the extra costs that come with cooling large buildings or campuses during the hottest months of the year.
Thermal energy storage has seen recurring adoption for its ability to shift the cooling load to after hours, when electricity is less costly and energy consumption puts less pressure on the grid. One way that this storage can be achieved is by melting and storing ice, and close to 200 locations in Texas, totaling 50MW, have deployed IceBank® energy storage from CALMAC for this very reason.
The Alamo Heights Independent School District in San Antonio, JCPenney's corporate home office in Plano and Nebraska Furniture Mart near Dallas are all examples of locations where CALMAC's ice-based energy storage solution has been deployed. Each location has enjoyed noticeable cost savings by reducing dependence on its chillers and buying electricity at the most cost-effective time of day.
Real time pricing offers advantages to thermal storage customers
Thermal storage customer Trane in Carrollton, Texas, is utilizing real time pricing to take advantage of less expensive nighttime energy and reap the financial benefits of lowering kW demand (the highest draw of electricity for any 15 minute period during the month). In addition, they avoid "ratchets", which occur when the peaks in summer electric use are carried all year long. Unfortunately, in Texas the vast majority of users are on "fixed priced" contracts. Fixed price insulates users from commodity swings and helps with monthly and quarterly budgeting. However, fixed price electricity is an insurance product – and insurance costs a premium. Real time pricing is cheaper for customers and creates a more responsive marketplace. It is the norm for virtually all consumer goods (oil, gas, grocercies, clothes.)
Consider if a medium-sized office building in the Houston area purchased a 2-year fixed price contract for 2014-15 at 5.4 cents/kWh. Would they have been better off with real-time pricing? The 2014 average real-time price was 3.68 cents; Weekdays: 3.8 cents; Summer weekday afternoons: 4.86 cents. In general, this customer would have saved ~20% strictly by using real-time pricing instead of signed a fixed price contract. All they needed was the technology, such as thermal storage, to help avoid using as much energy when it was most expensive.
