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Published on December 18th, 2013 | by Giles Parkinson

8

Creating A Solar Energy Bank



Originally published on RenewEconomy

What if households could deposit excess solar output in an “energy bank”, and use it to drawn down when needed or loan energy to others.

There is no doubt that rooftop solar systems are seen as a threat to incumbent utilities – be they they generators suffering from lower demand or network operators finding their business model under threat.

Most of the scenarios generated for the development of rooftop solar, such as that by the CSIRO Future Grid forum, suggest the development of in-home battery storage that could enable householders to shift their peaks, store energy for night-time or even, one day, go off grid.

But another proposal involves a different way of thinking about this – using storage, in this case compressed air, to create a sort of “solar bank” that would allow householders to deposit surplus electricity, and either draw down for their own use or lend it out to others.

solar-stuffThe proposal comes from General Compression, a Boston-based company which is developing and trialling technology that allows excess output to be stored as compressed air in large caverns.

General Compression argues that its proposal avoids the pitfalls of rooftop solar created when too much strain in put on the network when the sun goes down, or from too much electricity being sent back to the grid.

But what if a single bulk energy storage facility could act like a bank for thousands of distributed solar system owners, suggests Peter Rood, the development manager from General Compression.

A network connected storage project would allow multiple customers to “deposit” energy into the bank during the day when they have excess generation and later “withdraw” that energy when the sun goes down.

He says that low cost of bulk storage – estimated at around one quarter of the megawatt hour cost of batteries, combined with a pay-for-use model would allow easy access to storage for customers – and allow the network to benefit from the fast responding ancillary services provided by the storage system.

Like a bank, not every customer would demand their stored energy be withdrawn at the same time and unused energy from the storage facility could be “loaned” during peak periods and later repaid during off-peak periods. This would further off-sett the cost of the facility and increasing the benefits to the network.

Rood says this would help networks because it would maintain their relationship with customers – which others have pointed out is under threat from rising network costs, falling solar and battery prices, and unchanging and inflexible business models.

And it would provide access to low cost storage to distributed solar owners and avoid individual households having excess capacity at each location. As mentioned before, general Compression sees CAES at one quarter the cost of batteries.

If such a system were introduced, it would probably require the rules of the market to be re-written, and the roles and responsibility of the storage facility operator, the network operator and the electricity retailer would need to be defined.

Note: Certain market rules and regulations may require revision to allow for the creation of the business model described in this section. In particular the roles and responsibilities of the storage facility operator, network operator, and retailer need to be defined.

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About the Author

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.



  • http://www.swift-codes.org/ James@ swift-codes.org

    ultimate blog man

  • jburt56

    Continuing the analogy bank accounts correspond to batteries. . .

    • Bob_Wallace

      Bank accounts (and money markets) give one a bit of interest. Batteries return less than what one puts in.

      If we could only invent batteries that grew their charge….

    • Marion Meads

      Make that Swiss bank accounts, because you pay the interest, not the bank. The interest are the energy losses for storage. You gain money by playing the bank like a day trader. Take it all in when the price is low, and take it out to sell high during peak demand. That is how you make money with your account.

  • jburt56

    A solar panel is analogous to a bond–it’s embodied energy is it’s face value and the energy it produces per year is the interest.

    • Bob_Wallace

      That’s an interesting and useful way to look at it.

      Bet I can use that one soon….

    • agelbert

      Agreed. And that “bond” has excellent (as in very low) present value when all costs, including the environmental ones, are considered.

      This is where economists have missed the boat on renewable energy versus fossil fuel energy infrastructure investment. They have always assumed that the up front costs of RE are higher than fossil fuels.

      That is false. Another great example of applying apples and oranges accounting to make one thing look good and RE look bad financially is a house. Consider the present value of house built to provide rent income with another one built for the same purpose with carbon neutral to income generating excess renewable energy.

      Because the RE house costs more it allegedly has a higher present value (the inferior investment). Well if RE had the same financing advantages that a house does, you would immediately see that the house with all the RE bells and whistles is the superior investment. It’s time the science of economics got behind the renewable energy band wagon and abandoned the fossil fuel bankrupt paradigm.

      “When deciding between projects in which to invest, the choice can be made by comparing respective present values discounted at the same interest rate, or rate of return. The project with the least present value, i.e. that costs the least today, should be chosen.”

      http://en.wikipedia.org/wiki/Present_value

    • http://www.swift-codes.org/ James@ swift-codes.org

      oops

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