Changes in regulatory requirements, market structures, and operational technologies have introduced complexities that traditional ratemaking approaches can’t address. Poorly designed rates lead to...
The Efficiency Mandate: Storage Goes Mainstream
New business models make energy storage attractive.
lines between its ice makers and the end user’s rooftop AC units. During off-peak hours, the ice makers go to work making ice, and during peak hours, the ice cools the refrigerant and reduces or eliminates AC compressor cycling. The system can shift up to six hours of cooling load each day.
Ice Energy has sold most of its equipment as a cost-saving device for end users. Utilities, including PG&E and Southern California Edison, have offered rebates for customers who purchase the equipment—as they do for other types of energy-saving gear. Now, however, Ice Energy is taking the next step, aggregating cooling capacity at numerous facilities and marketing it on a wholesale basis as fast-reacting, dispatchable power.
“We bid head-to-head in RFPs with gas peakers,” Hickman says. “But because we’re a distributed resource, we have the opportunity to affect overall system efficiency. We work with the jurisdictional utility or the city, and talk to their planning group to identify constraints on their system.”
Hickman says the company has standing agreements with about 30 nationwide commercial hosts, which allows it to identify local site prospects quickly—and to target its deployments most effectively for the utility. For example, if feeders are operating near their limits, Ice Energy will install its machines at customer facilities served by those feeders. This serves more than one goal for the utility—reducing system peak, and relieving stress on specific circuits.
Additionally, Hickman says Ice Energy’s approach saves energy overall. Because the technology shifts cooling load from hot, peak-demand hours to cooler, off-peak periods, Ice Energy claims its system is effectively “lossless”— i.e., it delivers 1 kWh worth of cooling for every 1 kWh of AC load that it offsets. Of course the ice makers themselves aren’t 100-percent efficient; Hickman says thermal losses account for about 12 or 13 percent of electricity used. But by running ice-machine compressors at night when ambient temperatures are lower, the round-trip process consumes about the same amount of electricity that the conventional AC units would use during the hotter daytime. “We use what nature gives us—a temperature differential from day to night,” Hickman says.
In the bargain, the system uses off-peak capacity that’s more energy efficient—by virtue of power plants operating with a lower heat rate, and cooler T&D systems transmitting power more efficiently. And of course the shifted load consumes less peak-priced electricity. Rate structures determine whether that’s money saved by the utility or the end-use customer.
“The capabilities of the product create a wide variety of options to help utilities manage the grid, from a very granular level to a large system level,” Hickman says. Such options include optimizing the potential of variable generation sources, such as wind turbines that reach their peak output at night, like they do in Texas. Another example is rooftop PV—which itself can reduce peaking-capacity requirements (see “ Net-Zero Neighborhoods ”), but only when the sun shines. As a result, several states have classified Ice Energy’s solution as a renewable resource.
The company sells this package of capabilities in two ways. First, a utility can