POWER August 2013 - 67

ENERGY STORAGE
CPUC Pushes Energy Storage
On June 10, the California Public Utilities
Commission (CPUC) released a proposal
that would require the state's three
investor-owned utilities (Pacific Gas and
Electric Co., San Diego Gas & Electric Co.,
and Southern California Edison Co.) to
procure 1.325 GW of energy storage by
2020. The proposal, " Proposing Storage
Procurement Targets and Mechanisms and
Noticing All-Party Meeting, " is in response
to A.B. 2514, which requires the CPUC to
design electricity market procurement and
regulatory rules for grid-scale energy storage.
These rules are expected to become
effective early next year.
The proposal " suggests procurement
targets for energy storage with the goal
of market transformation " so that the " energy
storage market becomes sustainable,
procurement targets for storage will no
longer be needed and it will compete to
provide services alongside other types of
resources. "
piston up, or the water is being pushed in the
other direction by the piston as it drops.
Much like a conventional PSH system,
electricity is consumed when the reversible
drive pumps the water from the penstock into
the power shaft below the piston, lifting the
piston to store the piston's potential energy.
To release its stored energy, the piston is released,
and as it descends, water is forced
through the pump that is now acting like a
water turbine and generating power using the
motor that now functions as a generator. The
speed at which the piston drops determines
the instantaneous power generated. The
depth and diameter of the power shaft and
the mass of the piston determine the amount
of energy stored.
Once explained, the function of the system
is intuitive. Gravity does most of the work.
The response of the system is on par with
modern PSH systems and much faster than
other fossil-fueled backup power sources. A
synchronized pump-turbine motor-generator
can ramp from zero to full power in less than
15 seconds. The overall energy storage efficiency
(power produced divided by the power
consumed to charge the system) exceeds 80%.
Also, siting of the facility is very flexible:
1,600 MW or more can be installed on less
than three acres, unlike a typical PSH system
that requires two large reservoirs and perhaps
15 to 20 years to complete the environmental
permitting process and construction.
Gravity Power proposes that its first comAugust
2013 | POWER
The proposal rightly recognizes that
there are many different energy storage
technologies, so it is written to be inclusive.
Although the primary purpose of the
proposal is " to help bring down market
barriers, reduce costs, and increase scale
of market penetration over time, " it is not
an R&D proposal but instead is meant for
" commercially available, eligible storage
technologies utilized in grid applications "
that have been demonstrated. The suggested
procurement approach is a clone of
the Renewable Auction Mechanism now in
place.
This is good news for bulk energy storage
proponents, and given the significant
levels of energy storage contemplated by
the CPUC, investment in energy storage
technologies will surely rise.
My only wish is that the bureaucrats
who write these proposals will soon learn
that energy storage is measured in MWh,
not MW.
mercial demonstration GPM be designed
with a 30-m-diameter power shaft extending
500 m deep. These design parameters
will produce the equivalent of 160 MWh, or
40 MW for 4 hours of bulk energy storage
in return for consuming 40 MW for about 5
hours. The cost of this system is estimated as
$4,400/kW or $1,100/kWh.
Although constructing the first demonstration
project is the major hurdle now facing
Gravity Power, Mason is looking beyond the
demonstration project to a future commercial
product line. His goal is to construct larger
systems, ranging upward from 200 MW to
1,600 MW and greater with estimated sell
prices of $2,000/kW to $950/kW, based on
scale economies, perhaps dropping as low as
$500/kW in special cases where existing infrastructure
is available. These are " overnight "
cost estimates (they don't include the cost of
money during construction) and carry the
usual exclusion caveats: land purchase, permitting,
transmission interconnect, water fill,
and other developer soft costs. The estimates
do include a generous 25% contingency.
As good as the system sounds, a solid
product, market interest, and government
support doesn't guarantee success. Investors
demand a strong commitment from customers,
while utilities (thought to be the primary
customers for the GPM) want to see for themselves
a demonstration plant in operation.
Building serial No. 1 is the sticking point for
Gravity Power, which is ready to move forwww.powermag.com
ward
today, as it will soon become for other
bulk energy storage technologies now on the
drawing board.
Within the U.S., the challenge is compounded
by a flat rate of load growth that
dampens utility enthusiasm to offer power
purchase and sale agreements that will incentivize
developers and excite investors. Many
utilities look upon bulk energy storage as
another loss of load instead of a progressive
step toward a hardened yet very responsive
smart grid.
Successful commercialization of developing
energy storage technologies will also require
electricity markets to formally place a
tangible value on bulk energy storage. Several
regions are now developing specific tariffs
for energy storage, in conformance with Federal
Energy Regulatory Commission Orders
890 and 719, which require independent system
operators to develop tariffs and market
rules for nongenerating resources. Current
market rules focus on real-time or day-ahead
markets, where bulk energy storage technologies
must be assured of a long-term revenue
stream, such as power purchase agreements
or feed-in tariffs for their products, in order
for developers of new technology to attract
investors. The California Public Utilities
Commission, for example, recently put forward
a proposal that will surely accelerate
the commercialization of bulk energy storage
technologies in its state (see sidebar).
Engineering and Construction
Plans
The GPM concept of operation may be
straightforward, but investors and potential
purchasers must ensure their investment
dollars are not exposed to excessive risk,
particularly product cost, construction, and
schedule risks. Gravity Power commissioned
Babendererde Engineers, underground engineering
and construction experts located
in Bad Schwartau, Germany, to produce
GPM construction plans, cost estimates, and
schedules. That work was further examined
by Hochtief, a large international engineering
and construction firm headquartered in
Essen, Germany.
After completing its analysis of the GPM,
Hochtief has offered to construct GPM
plants, providing customary warranties. Andritz
Hydro, the world's largest manufacturer
of pump-turbines, has also signed on to supply
equipment with customary warranties, as
have other equipment suppliers. Mason said
the GPM preliminary design, which includes
engineering and construction details for all
the critical elements of the system, is nearing
completion.
The most significant task in building a
GPM is constructing the power and penstock
67
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POWER August 2013

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