
The $100,000 Battery That Could Help Hotels Save Bundles of Money - jseliger
http://www.theatlantic.com/technology/archive/2013/11/the-100-000-battery-that-could-help-hotels-save-bundles-of-money/281194/
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cmsmith
>That’s a double-edged sword for utilities, depriving them of demand charges
that help finance improvements to the transmission system but also helping
them keep balance the grid and avoid blackouts or having to fire up a carbon-
spewing fossil fuel power plant when demand suddenly spikes.

I'd like to see a quote or statistic that says that this is true and that the
utilities are really price-gouging customers for peak demand charges. It would
not surprise me at all to learn that the added cost to utilities of handling
peak demand was more than the surcharge they are recouping from businesses -
in which case they would be happy for everyone to install load-balancing units
in their buildings.

This is supported by the article itself, in saying that the utilities are
rewarding customers for using less electricity during peak times (by
controlling their air conditioners).

~~~
icambron
If that were true, wouldn't the utilities just buy the batteries themselves?

~~~
alextingle
Not if they can just charge the customer extra. Where's their incentive?

~~~
icambron
Charging the customer extra when there's not enough supply is inefficient and
leaves money on the table. They just end up selling less electricity. In fact,
they're depending on it to stop their grid from crashing. In general, raising
prices in response to demand spikes is always worse than just increasing
supply to meet it (assuming you can) because of demand elasticity. Having the
customers all buy batteries fixes that, but in practice I don't see how it can
be very efficient to have your customers tackle your supply problem one-by-
one. It would make more sense to just charge some sort of premium to exempt
them from high-demand-time surcharges. Would cover the battery cost and
prevent the market distortion.

Look at it from the top down: would electrical companies rather be able to
meet the full demand for electricity or not? Clearly, they would. Otherwise,
_why make electricity at all?_

I'm not an economist, so I'd be happy for someone to take that apart. One
objection is that this charge-more scheme allows the power company to price
discriminate against customers who are less price sensitive (like hotels, who
just _need_ AC), but...well, I need to be convinced.

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jcampbell1
I think this is regulatory lag. Most peak power is provided by NatGas these
day, and NatGas is cheap. If Lithium-ion made sense at the wholesale level,
then power companies would do it. I'd bet this is because some regulatory
commission decided on rates for peak/non-peak based on information that is no
longer relevant.

~~~
drinkzima
Commissions don't decide peak power prices, the marginal producers of power
do. And, yes, natural gas is a large portion of the power stack, but peak days
(which only happen a nominal number of times per year) are driven by plants
that come online for short periods of time at high marginal costs.

Power companies just pass through market rates, they are mostly ambivalent to
driving down rates as they just tax tolls on each transaction.

~~~
gojomo
Not sure where you're describing, but it varies by jurisdiction. In
California, a commission called the California Public Utilities Commission
(CPUC) sets electricity prices charged by all the major operators. See for
example:

[http://www.cpuc.ca.gov/PUC/energy/Electric+Rates/](http://www.cpuc.ca.gov/PUC/energy/Electric+Rates/)

Of course this is subject to a long-term constraint that rates must be
sufficient to support generation and wholesale purchase... but there's no
direct "pass through of market rates" on an hourly, daily, or monthly basis.

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dougb
It sounds like they are trying to game the system by lowering their Peak Load
Contribution (PLC.) Good article explaining Capacity charges in PJM
[http://energysmart.enernoc.com/bid/188545/Deconstructing-
You...](http://energysmart.enernoc.com/bid/188545/Deconstructing-Your-Energy-
Bill-Capacity-Charges) They only have to use these batteries for a few hours a
year to save money all year round.

But, the capacity charge for PJM for 6/1/2013 - 5/31/2014 is $27.73 MW / day.
So if you can drop your PLC by 54kW, you would save $27.73 * 0.054 * 30 =
$44.91 a month. Hardly enough to make the $100k 54 kW system worth it.

Disclaimer: I know enough about the energy markets to be dangerous. I mostly
know about PJM, so YMMV in CAISO.

~~~
wpietri
Interesting!

Looking at what I think is the right PG&E tariff for them [1], I can't quite
figure out what it means. However, I found a helpful guide [2] that includes
an actual hotel electrical bill.

Reading that, their summer difference is $0.07/kWh, so the box only could save
them $3.50 a day on cheaper energy. There they are paying $13/kW for peak
capacity, $8.58 for off-peak, and $2.99 for "partial peak", whatever that is.

So it sounds like being able to level peaks in your power consumption could be
a big win. Even if you level it within peak, therefore saving nothing on a kWh
basis, a little curve smoothing could pay big dividends.

The interesting question for me is how much this is incentive gaming versus
solving a real problem for generators.

[1]
[http://www.pge.com/tariffs/tm2/pdf/ELEC_SCHEDS_A-10.pdf](http://www.pge.com/tariffs/tm2/pdf/ELEC_SCHEDS_A-10.pdf)
[2] [https://sites.google.com/site/greenwrenco/san-francisco-
bay-...](https://sites.google.com/site/greenwrenco/san-francisco-bay-area-
resources/understanding-demand-charges-on-your-business-pge-bill)

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Ellipsis753
Strange. I would honestly have thought that the losses involved in storing
energy in a battery (I would expect at least 20% loss) would have out-shadowed
the savings by avoiding extra charges for high demand. It's surprising to me
that batteries were chosen as the energy storage method and also that the
energy provider themselves is not doing this on a large scale if it's a big
issue to them. A very interesting read.

~~~
greenyoda
Also, there would be a loss when converting the batteries' DC back to AC to
drive the hotel's air conditioning and other systems. And doesn't charging a
battery generate heat, which you would need additional air conditioning to
remove on a hot day?

I wonder whether it would be environmentally sustainable if every home or
business in the world started using batteries for power storage and electric
vehicles. For example, how much environmental damage would be incurred from
mining lithium on a massive scale? Are there even enough known lithium
deposits in the world to make this practical on a large scale?

~~~
toomuchtodo
You can mine lithium out of the ocean cost-effectively. By the time is becomes
scarce, we will have moved on to a new technology.

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pstuart
Flywheels would be a great solution here:
[http://en.wikipedia.org/wiki/Flywheel_energy_storage#Compari...](http://en.wikipedia.org/wiki/Flywheel_energy_storage#Comparison_to_batteries)

Someday they might be commercially viable....

~~~
masklinn
Exactly what I was thinking about reading the article: you've got a huge,
fixed energy storage system to set up, why not use a flywheel? That's pretty
much a best-case situation for them even if you don't need the transient load
ability of a flywheel.

~~~
rwmj
Or even (it _is_ a hotel) pump water to tanks on the roof, making a small
pumped storage hydroelectric system.

Would love someone to do the comparisons of cost and energy density of all 3
solutions.

~~~
masklinn
Pumped hydro scales awesomely and is relatively low maintenance, but it has a
fairly low energy density, wikipedia quotes 272Wh for 1m^3 at 100m (~30
floors). That's 0.272Wh/kg. You either need tremendous amounts of water,
significant height, or both.

By comparison, your ultra-basic low-energy-density lead-acid battery pack is
30~40Wh/kg, 100 times the energy density, and a Li-ion is 130~200Wh/kg.

~~~
maxerickson
It's fun to throw out numbers for pumped storage. The Ludington pumped storage
plant [1] is pretty big at 1.8 gigawatts. At full power, that's 33 million
gallons per minute. The reservoir is 27 billion gallons of water (about 100
billion liters).

[1]
[http://en.wikipedia.org/wiki/Ludington_Pumped_Storage_Power_...](http://en.wikipedia.org/wiki/Ludington_Pumped_Storage_Power_Plant)

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wpietri
Does anybody get why they're going with lithium ion batteries over lead acid?

Looking at a comparison [1], the cost and lifetime look substantially better.
And the technology has been proven out over decades by, e.g., telcos. I'm not
getting why they'd use fancy laptop-style batteries when weight isn't an
issue.

[1]
[http://www.altenergymag.com/emagazine/2012/04/a-comparison-o...](http://www.altenergymag.com/emagazine/2012/04/a-comparison-
of-lead-acid-to-lithium-ion-in-stationary-storage-applications/1884)

~~~
bunderbunder
Just looking at table 2 from the article you link, it looks like lithium ion
has the following advantages over lead acid for this application:

* Greater energy density, which means you need to carve less space out of your existing floor plan to make room for batteries.

* About twice the cycle life, so batteries need replacement less often.

* Can discharge more deeply without harming cycle life, so for applications where discharging happens frequently that means either the effective energy density or the effective cycle life is even greater.

* Better efficiency for <24h charge-discharge cycles.

These are all things that are more advantageous in this kind of application,
where you can expect to see a lot of repeated cycling during hot summer
months. For a telco application, where you're presumably only expecting
infrequent use during occasional power outages, they'd be of negligible value.

Keep on reading to figures 5 and 6, where they look in more detail at cycle
life, and the lead acid batteries start to look like a straight-up bad choice
for this kind of application.

~~~
wpietri
Oops, I read the first table wrong. You're exactly correct on the deep
discharge stuff. Thanks!

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ISL
It's very interesting to see rumors circulating that public utilities are
worried about solar energy adoption cutting into their business.

Is this actually true? Is the total cost of ownership becoming sufficiently
low as to drive adoption?

~~~
SwellJoe
Yes. Even without subsidies, a grid-tied solar power system will pay for
itself well within the lifespan of the cells (the lifespan of solar panels is
25-50 years). A battery-backed "off the grid" system is not there yet, because
the batteries are expensive. How soon it pays off will depend on how cheaply
you obtain the panels and how much you pay for installation; these vary
_wildly_ depending on the location and vendor.

I did my own solar installation for about $1000, and it's enough for me to
live lightly on (no AC, no microwave, no electric heater, but laptop and phone
and hotspot stay charged, and fans can run indefinitely). Fridge runs on
propane, when I'm off-the-grid. I'd need to quadruple that to turn on the AC
or electric heat for any length of time, and would need a lot more batteries
(I have three group 27 deep cycle batteries and a 3000 watt inverter).

Anyway, I got sidetracked a bit. We're currently at the point where a DIY
installation can pay for itself in under 9 years. Maybe even as little as 7.
Professionally installed systems, with subsidies, are probably around the 10
year repayment mark. And, the panels get cheaper every time I look into it.
The batteries stay pricey, though.

~~~
Egregore
I'm also off the grid, and fortunately it's sunny now so I can write this
message :)

Can you please explain what kind of batteries are you using?And what are your
usage patterns? For example I'm using two 12V 200A lead batteries, I'm trying
to use then only on 30% discharge so that they will last longer.

~~~
SwellJoe
I have three Interstate group 27 deep cycle marine lead acid batteries. They
are rated for 65 amp hours (more at lower amperage draws...which is why having
more batteries is helpful); which is enough to where I _almost_ never have to
run my generator, unless it rains for a couple of days.

They're nothing special, just heavy as hell lead acid batteries. I also try to
never discharge too low...my rule of thumb is 50%, though I've run them until
the inverter shut off due to low power. So, I've obviously gone below 50% a
few times. They're three years old, and starting to show signs of degradation.
I bought them at Costco for, I think, $98 each, and I'm pleased with the
return on investment, given that they've gotten me out of being stranded on
more than one occasion (I'm in a motorhome, and the chassis battery has been
an interesting component, having more than it's fair share of failures, always
in very bad places to have a motorhome that won't start).

I should point out that when I am off-the-grid, I am extremely _conscious_ of
my power usage. I charge _everything_ during the day, religiously, so that I
don't even have to turn the inverter on, some nights (lights, fans, water
pump, and fridge igniter are 12V). It's a ritual...actually, it's a really
satisfying ritual that I miss when I'm living plugged in. I need to go get
lost in the desert or in Mexico this winter; been parked too long.

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revelation
Come on, journalists. What is a 54 kW battery pack? Is that the peak power it
can provide? What about the far more interesting capacity?

It is like failing to mention the range of a car but insisting it can produce
plenty of torque.

~~~
benp84
I await the day when a single article is published with a proper unit of power
or energy. If it's not a 54 kW battery it's a windmill that generates 3 MW per
year.

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greglindahl
Odd that it costs more than a Tesla but holds less energy.

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ck2
Or you could have a fleet of electric cars for the business that plug back in
and charge up in time to run the electric load during peak demand.

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nikatwork
As well as recharging these things with solar, hotels could hook their gym
treadmills into the system and turn their guests into power-generating
hamsters:
[http://www.californiafitness.com/sg/en/node/587](http://www.californiafitness.com/sg/en/node/587)

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sjtgraham
Imagine charging these at night, and selling back to the grid at peak demand.
Granted, it'd probably kill these things very quickly.

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Egregore
Now in Europe, there are solar batteries for less than 1Eu/Watt, on E-Bay for
less than $1.6/Watt, you can buy for these money more than 60kWatt of solar
panels, but with bulk prices you could buy even more, and all this energy will
be available during peak hours during day, to power condition systems.

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Gravityloss
This is a symptom of degraded infrastructure and dysfunctional energy
policies. It is not a smart move considering total resource efficiency.

It's like how you see lots of individual bypass solutions in countries with
bad infrastructure.

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spoiledtechie
Whats the shelf life on these?

