Pumped Storage | Energy Storage System

Energy Peaks and Price Fluctuations

Energy use for large businesses is not worth pennies. It is worth thousands of dollars. For one oil and gas company, their monthly energy bill is over $895,000 per month for a single location.

It is almost like American business owners have grown accustomed to it. The cost of energy is a political complaint discussed at the dinner table. No real solutions are ever found. Companies might create hype for employees with small campaigns. But encouraging employees to turn off the lights is only going to have minimal effect.

How does a company reduce its energy bill by more than a few nickels and dimes? It’s not a dream for a company to have the potential to cut its energy bill by thousands of dollars. It takes thinking a little bit outside the walls of a particular business.

First, energy users need to understand the driving cost of energy usage on the grid. Take a mental walk through a typical summer day within your city. The city wakes up around 6:30 am. They begin their typical daily routine of showering and making breakfast. By mid-morning, everyone is at work; using their computers, the lights in their offices, and making a cup of coffee in the break room. Since 6:00 am, energy usage has been on a steady rise.

Around noon, the air conditioners in the city begin to kick in, creating an even larger draw on the grid. In the late afternoon, the city has returned to their houses. They turn on their air conditioning, their TV’s, make dinner, and increase their energy use. Energy peaks late that afternoon. As the city heads off to bed, users shut off the appliances that consume energy. Usage then reaches an all-time low for the 24 hour period.

When connected to the grid through a standard meter, power companies charge a flat rate. Companies charge the same for energy used at peak time around late afternoon, as the energy used in the middle of the night. Per kilowatt-hour, energy costs the same no matter what time a customer uses it. This system works well for small businesses and homeowners, but large energy users end up paying more for energy than they are required to.

25% of the energy used in the U.S. is generated by nuclear and coal sources. 65% is from natural gas and petroleum (U.S. Energy Information Administration, 2016). These main sources of energy do not accommodate fluctuations well.

A coal plant, for example, may need to begin increasing output hours before times of peak energy use. Or a nuclear plant may dissipate energy in the form of heat during off-peak hours to keep the plant at full capacity to accommodate the next peak demand.

Power supply companies combat large drains on the grid with emergency systems. These systems are used when the demand exceeds the capabilities of the main system. But the energy costs of these smaller systems are more expensive than the main sources.

Figure 1: North Zone ERCOT Energy Usage vs Energy Cost for a Single Day in August 2011

Figure 1 shows this difference in energy cost. For 19 hours of the 24 hour period, energy costs around $50 per MWh. For 5 hours of the 24 hour period, the energy cost peaks at $3,000 / MWh. The average cost is around $204 / MWh. Customers operating on the standard meter system end up paying this average rate.

The other option for energy users is a “behind the meter” price structure. This type of pay structure monitors the used energy, and the time it’s used. A business would then pay for the energy at the price during specific time frames. If the business has the ability to choose when to use energy, it would use power when the energy price is the lowest.

Companies can use different models to reduce energy consumption during peak pricing. Large companies with funding and support may build their own power generation plant. The company then operates on their own produced energy around the clock.

Another concept used by companies is energy storage. Energy storage uses power from the grid at select time frames, prioritizing use at a low price. The selected power usage is stored for use at peak times. During peak times, this stored energy becomes the source of power.

Both systems have benefits and should be considered before moving ahead on a project. Each solution has its own advantages for specific business models. When used, these solutions can cut energy costs by tens of thousands of dollars. Even small steps toward energy independence can prove to be profitable.

Pumped Storage – Energy Storage for Today’s Businesses

What if it were possible to only use energy from the grid at the $50 per MWh price? Or even sell energy back to the grid at $204 per MWh during peak times? Many companies do not realize the possibility of this exact scenario. Imagine a company with an electric bill of $895,000 being cut to $365,000. If it were able to become energy independent during peak times, this energy cost reduction would be a possibility.

Becoming energy independent during peak hours is possible with an energy storage system. It’s the same concept as a smartphone storing energy when charging, then running on a battery. In a business, the only difference is the size of the system.

Storing energy can is accomplished using a variety of methods. Large batteries, capacitors, flywheels, and fluid power are a few methods in use today. Depending on energy requirements, these different applications may be beneficial for different situations. Batteries can power household light bulbs. Fluid energy can power a small company up to an entire small city.

The selection of energy storage systems depends on investment, infrastructure, and independent abilities. Not all energy storage systems are capable of providing high efficiency.

Pumped storage provides energy storage at a higher efficiency than most methods. The concept uses two reservoirs connected by a pipeline. When energy costs are low, fluid is pumped to a reservoir at a higher elevation. When energy costs are high, fluid is drained to the lower reservoir through a turbine. The turbine converts the fluid energy into electrical power.

There is a total of 42 commercial-sized systems in the United States. The San Diego County Water Authority completed the newest pump storage facility in the U.S. in 2012. The size of the system is able to produce 40,000 kW for 6 hours during power interruptions. The same system can be scaled for different needs. A 240,000 kWh system is too large for many business owners to invest in. But if the same system can scale to 5,000 kWh, it might become a real opportunity.

Pumped storage infrastructure often exists within businesses working with water handling systems. The required reservoirs may be in the form of a lake, pond, tank, or river. Pipelines that connect the two bodies of water are already in place to transfer water. The only missing component is the turbine and generator.

To simplify matters, some pumps within pump stations can be re-purposed for the use of a turbine. The same equipment that operates as a pump, will also generate power. It is not a large scale project to change the existing infrastructure for pumped storage.

Water handling companies may have the potential to be a leader in pumped storage. A required line of business might actually be an opportunity to offset large costs. In larger systems, selling excess power can generate an income. With some creativity and application experience, revenue-generating energy storage is a reality.

Power Zone has been working in Colorado to analyze pumped storage opportunities. They have over 16 years of experience providing equipment solutions around the world. Their on-staff equipment experts offer analysis, system design, and fabrication of equipment systems. Combined with innovative design experience, Power Zone is the right choice for providing pumped storage solutions.

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