Wednesday, July 10, 2013

EMS vs. Storage - Heavyweight vs. Weight

Here's a translated note from an article on the SMA site.

"A central energy manager is to purchase relatively cheap, practically free in operation and can also increase the efficiency of the memory - the ability to move electricity consumption over time should always be exhausted first."

The original German: "Ein zentraler Energiemanager ist in der Anschaffung vergleichsweise günstig, im Betrieb praktisch kostenlos und kann darüber hinaus auch die Effizienz des Speichers steigern – die Möglichkeit, Stromverbräuche zeitlich zu verschieben sollte daher immer zuerst ausgeschöpft werden."

Note how the author points out that we should always exhaust the energy management options before we consider storage. German policy support is misguidedly focusing on batteries because it doesn't recognize this important fact. Big expensive mistake they're making. Most renewable energy enthusiasts make the same mistake with batteries.

From what I can tell SMA is doing its damnedest to come up with an integrated energy management system but they can't do it alone. What you need is a coordinated policy. The guys building the EMS systems need to sit down at the same table with the appliance builders and come up communication and control standards (comtrol standards). The government then needs to require those standards on all new appliances that meet a given criteria.

Example: A hypothetical heat pump water heater (HPWH) with an oversized tank and EMS comtrols would have the flexibility to run during any part of the day. You could have this system powered purely off photoelectricity during part of the year and top it up with the cheapest electricity of the day (preferably wind) during the remaining part of the year. As far as topping off goes there are special reduced rate electrcity rates (20 cents/kWh) you can get specifically for heat pumps that operate in this manner. Quick facts: A heat pump water heater uses around 1800 kWh per year and there are 35 million households in Germany. If 10% of German homes (3.5 million) replaced their exisiting water heaters with these heat pump water heaters you'd get 6.3 TWh (3.5 million x 1800 kWh/year) of manageable load per year. This is load you can run wherever you want in a day. This shifting ability is comparable to how much electricity Germany currently gets from pumped hydro annually (8 TWh in an average year). If Germany could deploy these manageable heat pump water heating systems in half the homes they'd have over 30 TWh of shiftable load. Assuming the larger tank, heat pump and comtrol chip cost $300 extra per water heater your deployment costs would be around 5.25 billion in total. That's a lot of money but given the right rate designs this money would be recovered and more with savings on energy over the life of the equipment. Non-solar owners would only need to save a smidge over a penny per kWh to break even. If the off-peak tariff was set to 20 cent/kWh and the Annual Performance Factor of the heat pump was 4 a non-solar operator would just be able to satisfy the breakeven requirement. You'd really want to do better than break even but that's a separate rate design discussion. As things stand the current design allows for breaking even at a minimum.

Batteries with the same total shifting capabilities (15 years at 30 TWh per year = 450 TWh) would cost upwards of 150 billion ($500/kWh for Li-ion, 1500 cycle lifetime, 450 billion cycles required at $.33/cycle). That's a frightening number.

*If Germany deployed all these new HPWHs they'd add a sizable extra amount of load to the grid - probably around 25ish TWh per year assuming some of the HPWHs replaced pre-existing electric water heaters. Ideally Germany would want to cover most of this extra electrical load with renewables (solar, wind, biomass, hydro) but using electricty from perferred fossil generators would be an additional option.

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