Implementing energy storage for peak-load shifting

Engineers should offer building owners the ability to reduce energy load by shifting it from peak to off-peak hours.


This article has been peer-reviewed.Learning objectives

  • Understand the basics of peak load shifting using energy storage systems.
  • Identify the benefits of implementing energy storage systems with respect to mitigating generation requirements, energy demand, and usage costs.
  • Understand the basic concept of implementing energy storage systems with renewable energy storage.

Peak-load shifting is the process of mitigating the effects of large energy load blocks during a period of time by advancing or delaying their effects until the power supply system can readily accept additional load. The traditional intent behind this process is to minimize generation capacity requirements by regulating load flow. If the loads themselves cannot be regulated, this must be accomplished by implementing energy storage systems (ESSs) to shift the load profile as seen by the generators (see Figure 1).

Figure 1: This diagram demonstrates the implementation of energy storage for peak-load shifting. Courtesy: Triad Consulting Engineers Inc.Depending on the application, peak-load shifting can be referred to as "peak shaving" or "peak smoothing." The ESS is charged while the electrical supply system is powering minimal load and the cost of electric usage is reduced, such as at night. It is then discharged to provide additional power during periods of increased loading, while costs for using electricity are increased. This technique can be employed to mitigate utility bills. It also effectively shifts the impact of the load on the system, minimizing the generation capacity required.

Load shifting is not a new concept and has been implemented successfully by end users in numerous industrial and large-scale commercial facilities in the past to decrease electrical peak demand and associated energy costs. With the rapid expansion of renewable energy plants in recent years, peak-load shifting has received noteworthy attention, and for different reasons than in the past. Renewable energy sources-specifically wind and photovoltaics (PV), which have seen exponential growth recently-provide irregular power due to meteorological and atmospheric conditions (see Figure 2). As these power sources come to provide an increasingly significant contribution to the load flow in the electrical grid, their effects become more pronounced on the power quality of that grid. The erratic fluctuations in power generated by these renewables can be detrimental to maintaining transient and dynamic stability within the system. Power quality concerns generally associated with renewable energy sources include voltage transients, frequency deviation, and harmonics.

Figure 2: These PV panels are part of a utility-scale renewable energy plant. Courtesy: Triad Consulting Engineers Inc.However, by implementing an energy storage system, it is possible to turn the intermittent source into one with a relatively uniform and consistent output. As such, the large-scale deployment of renewable energy sources coupled with the Smart Grid relies greatly on energy storage systems for maximum effectiveness and optimization.

Cost reduction

When peak-load shifting is applied to reduce energy costs, it is often referred to as "peak shaving." Peak shaving describes when a facility uses a local energy storage system to compensate for the facility's large energy consumption during peak hours of the day. Most facilities do not operate 24 hr/day. In fact, most facilities do not even operate most of the day. In this scenario, the energy demand, typically measured in kW, remains relatively low most of the day and rises only during operational hours. By charging an energy storage system during the off hours of the day and discharging it during the operational hours, the peak demand charge from the utility can be reduced.

In most cases, utility companies provide a lower billing rate for energy used outside of peak operating hours, which further increases the economic benefit of implementing an ESS. For example, consider that ERCOT's pricing on June 27, 2014 varied from approximately $35/MWh ($0.035/kWh) to approximately $1,000/MWh ($1.00/kWh) between 1 and 4 p.m. Each MWh consumed to charge batteries in off hours would save $965, to be discharged during peak hours. For large energy users, this could result in thousands of dollars in savings a day.

In a typical financial evaluation, the peak demand and savings associated with off hours usage would be compared against the energy storage system capital expenditure, in addition to the inefficiencies of the system. ESS return on investment calculations can be even more attractive in locations with government or utility incentives. For example, the CAL-ISO bid schemes presently reward load sources that can commit, with certainty, with higher prices vs. those that are intermittent. Additional efforts are underway in California to further increase the financial incentives for ESS to better reflect their potential value to the grid as a system, as well as the environment.

Figure 3: A renewable peak-generation shifting diagram shows how energy storage can be used to shift peak generation from the PV system to be used when the demand requires it. Courtesy: Triad Consulting Engineers Inc.Power quality

In addition to the energy cost reduction, energy storage systems are capable of increasing the quality of power to a facility, in terms of maintaining nominal voltage and frequency values. Fast-acting energy storage devices, such as batteries or ultra-capacitors, can absorb or discharge power to account for transient fluctuations in the utility power to accomplish this.

Renewable generation

As renewable energy continues to expand into a more prominent source of power in the electrical grid, it becomes increasingly necessary to convert the variable and intermittent power output into a more steady and reliable source.

As PV power is generated only intermittently between sunrise and sunset, it is possible that generation does not coincide with a grid's peak power demands. Even if the generation source coincides with peak power demands most of the time, the utility must have generation assets to power the grid in case demand remains high while cloud coverage restricts PV generation. As PV power grows to represent increased contribution to the grid, reliability issues could emerge, similar to the impact of wind power in states where wind has had much greater penetration.

Figure 4: Samsung’s utility peak-shifting energy storage system uses high-density Li-ion battery storage implemented on a utility scale. Courtesy: SamsungThe concept of peak shifting can help remedy this situation with a slightly different approach: generation shifting. In other words, ESS not only holds the promise of supporting end users in reducing their costs, but through generation shifting also allows generators access to a higher value of dispatchable generation.

Energy storage can be used to shift the peak generation from the PV system to be used when the demand requires it, as shown in Figure 3. Excess energy can be stored during peak PV generation. This allows for the distribution of this energy when the PV system is not generating adequate power, or not generating at all.

Energy storage can also be used for peak smoothing with renewable generation. This is similar to peak shifting but with a significantly shorter period and higher frequency. During a low irradiance situation, such as a cloudy day, a PV array will generate power sporadically with dips and spikes. This irregular power applies to sudden changes in wind velocity with wind turbines or windmills. Both types of these fluctuations can cause dynamic instability in the electrical infrastructure's generating system. Local energy storage can mitigate these fluctuations in output power by regulating ramp-up controls and absorbing the spikes in power, as well as responding to sudden sags by injecting power. This smoothing of the generation curve provides a more stable power source and reliable distribution grid. In certain jurisdictions, utility companies have requirements for grid connected generation, regulating power production waveforms by means of energy storage. This is especially true where the utility grid is considered weak or isolated, such as on an island. With the exponential growth of renewable energy, integration into these electrical grids can have a more dramatic effect, which explains the fairly stunted renewable expansion in these regions.

Utility usage 

Thus far, we have discussed mainly private use or renewable merchant generator peak-load shifting. However, this technique is employed by utility companies as well. As power generation facilities age, equipment failures accelerate, and as the demand for power increases over the years, existing plants have trouble meeting load requirements. To compensate for this, a plant may elect to install an energy storage system that can be charged when demand is low and discharged when demands cannot be met by the primary generation source. This allows power plants to postpone major upgrades that could be exponentially more costly (see Figure 4).

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