Electric cars have batteries. Why not power plants?

If they can build a commercially viable battery for cars, we  can do it for power plants.

That’s the mantra of Southern California Edison (SCE), which is at the beginning of a two-year demonstration project that promises to transform the utility industry. Instead of just generating energy, the Tehachapi Energy Storage Project, located on a wind farm about 100 miles north of Los Angeles, can store it in banks of lithium-ion batteries. If the idea of energy storage catches on, utilities could reduce the number of plants they have to build for peak-power generation and, just as importantly, hook up to the grid a whole host of renewable energy sources that currently generate power cheaply but at the wrong time.

“Energy storage has a compelling value proposition,” says Doug Kim, director of advanced technology for the Rosemead, Calif.-based utility, in an interview.  “The utility can store renewable energy that is generated at night and then use it during the day when there is a higher demand from customers.”

More such energy storage experiments are on the way. Besides Tehachapi, the US Energy Department used 2009 federal stimulus money to fund 15 other projects – some $185 million in all – to advance energy-storage technology. California's public utility commission, also eager to move things along, is now requiring the state’s incumbent utilities –  SCE, PG&E Corp., and San Diego Gas & Electric – to collectively buy 1,325 megawatts (MW) of energy storage by 2020.

Overall, the industry is a lot less skeptical about energy storage than five years ago, says Richard Fioravanti, head of distributed energy resources for energy and shipping advisory firm DNV GL. He notes in an interview that more megawatts were stored last year globally than over the last 30 years combined.

“It’s not a stretch to say that the cost is on the downward trajectory and still will be,” Mr. Fioravanti says. “When Tesla decides to build a $5 billion manufacturing facility, that's more of an indication of it.”

At least 40 different technologies are vying for primacy today: lithium-ion batteries, which are used to run electric vehicles, fast-response flywheels, and a related technology called kinetic energy storage that is practical for short-term needs. There’s also compressed air energy storage that holds air underground and releases it heated for to create electricity and matured pumped hydro storage, whereby turbines push water into reservoirs at night and then let it go during the day when demand peaks.

Just about all the technologies are able to discharge for 30-45 minutes – just enough to ease supply pressures when the demand for electricity would peak. In the case of wind energy, though, the batteries must be able to discharge multiple times per day. In terms of batteries, the best ones can go for 3 to 5 hours and run at 90 percent efficiency whereby little energy is lost during the production process.

The Tehachapi Energy Storage Project, which uses lithium batteries to collect and then generate 8 MW of electricity for four full hours, is thought to be North America's largest in terms of energy storage. Its wind farm has the potential to generate up to 4,500 MW, according to Mr. Kim. However, the 36 MW “Duke Notrees” project, which can charge or discharge at full power for 30 minutes using advanced lead batteries, is bigger in terms of overall power.

It is these and other projects that have thrust the United States at the forefront of energy-storage research. The bugaboo is cost.

The price of energy storage systems generally must fall sharply, according to the Electric Power Research Institute, which is the electric power industry’s research and development arm. Depending on the required duration of storage, costs must drop by up to two-thirds to become commercially viable.

The Tehachapi project, which cost a total $50 million in public-private funds, is a new link in a chain of research to bring down those costs. [Editor's note: The total cost of the plant was corrected.] 

"There is a very high likelihood that energy storage will come to pass," says SCE’s Kim. "There are so many smart people and so much money that is being devoted to this. Our hypothesis is that this going to become a real solution for us and for the society.”