Fastexy Exchange|All Eyes on Minn. Wind Developer as It Bets on New ‘Flow Battery’ Storage

A Minnesota wind developer is Fastexy Exchangebetting on untested storage technology that will allow it to meet electricity demand at peak periods and improve profits even when the wind isn’t blowing, with implications for all U.S. wind farm operators.

Juhl Wind said it plans to install a 1-megawatt advanced battery system at its 10-megawatt Woodstock Hills wind facility near its headquarters in Woodstock, Minn. The system will store electricity captured during gusty times for up to six hours, giving Juhl the option to sell its wind supply when power demand is highest and charge premium prices for it.

“By adding the storage component, you’re going to be able to store energy and deliver it to the system when the system needs it most,” said Dan Juhl, chairman and CEO of Juhl Wind. “Instead of becoming baseload, it becomes peak power,” which is more competitively priced.

The project will mark a milestone for the system’s developer, Zinc Air, a cleantech company in Kalispell, Mont., which for three years has tested and tweaked the decade-old “redox flow” battery technology to make it economically viable.

“This is the first time we’re throwing it in the field and seeing where the benefits are,” Craig Wilkins, Zinc Air’s executive vice president, told SolveClimate News. “It is huge for us at this point to be able to get a real live test of the battery. Companies are already looking at this with interested eyeballs.”

He added that flow battery technology has gone through 10 years and tens of millions of dollars of research. “We are the first ones to scale up” for commercial use.

Anissa Dehamna, a research analyst with Washington D.C.-based Pike Research, told SolveClimate News that the Zinc Air demonstration is “a good strategy” for getting “the wind industry in line or on board with storage.”

She said that many wind developers are hesitant to shell out hefty sums on emerging energy storage technologies, producing a chicken and egg situation. Without a guaranteed market, it has been tough for cleantech firms to test and refine new systems and ultimately sell their products.

“Storage is not very well understood,” she said. “[Developers] are not sure how it is going to play out, what all the benefits will be and what the rate of return will be.”

‘Writing on the Wall’

The massive growth in recent years in renewable energy capacity across the United States — particularly intermittent wind and solar power — has left the U.S. electrical grid with more spikes and dips, which in turn could put renewables developers at a disadvantage compared with conventional energy producers.

Utilities could eventually decide to pay less for erratic power sources than for stable “firm” power like coal that deliver a guaranteed power flow at all hours, some analysts warn, making it hard for wind and solar to compete in the electricity market.

“I think some of these developers are realizing that they need to find a storage solution,” Dehamna said. “The writing is on the wall in terms of maximizing their assets.”

Global investment in utility-scale storage systems is expected to reach $22 billion in 2021, with a cumulative investment of $122 billion over the next ten years, according to a July report co-authored by Dehamna.

Solutions that seek to store renewable energy to cover peak loads — chiefly wind power — will make up a little less than half of total storage capacity deployed in the next 10 years, as developers and grid operators attempt to match the spectacular increase in wind supply with electricity demand.

Technologies likely to lead in the wind market are flow batteries like Zinc Air’s and compressed air energy storage, or CAES, analysts predict. CAES technologies use excess off-peak power generated at wind farms to compress air, which gets pumped and stored underground. The pressurized air is later released and fed through gas-fired turbines to generate electricity during peak hours.

Sodium sulfur batteries, pumped hydro and advanced lithium-ion batteries are also expected to nab a share of the wind storage market.

Still, while it is widely believed that these technologies can address grid instability, most U.S. clean energy developers don’t have enough incentive to bear the upfront costs of adding storage capacity, Dehamna said.

“The problem is that we don’t have a good way of attaching a dollar figure to the value that storage provides because markets have not caught up yet,” she said, though government policies can help.

Along with regulators offering lucrative rates for stable flows, federal or state legislators could  drive the installation of energy storage systems by mandating that wind farm operators generate a certain percentage of firm power, Dehamna said.

California regulators are evaluating how to implement a policy to incentivize energy storage over the next ten years that would accompany the state’s 33 percent renewable portfolio standard, she noted.

The U.S. Department of Energy has also awarded about $185 million in stimulus funds to nearly 20 grid-connected demonstrations underway across the country, together worth a total of $770 million. “It’s exciting,” Dehamna said of the DOE projects. “We’re going to get to see what [storage] actually looks like.”

For his part, Juhl said he didn’t need convincing that an energy storage system could add value to his firm’s Minnesota wind farm.

“I’ve been in the renewable energy game for 35 years, and I’ve always felt that storage is going to be the key to the long-term success of renewables,” he told SolveClimate News.

His company has completed 19 medium- and large-scale wind farms totaling 150 megawatts, with nearly 450 megawatts’ worth of community-based projects in development.

Juhl said that his firm wanted to test energy storage as part of its plan to increase the company’s economic value. The developer is considering deploying more storage systems at some of its other wind farms. Juhl would not disclose how much it would pay for Zinc Air’s technology, or any financial details of the deal, because they have only signed a letter of intent.

Seeing Wind ‘as a Solution’

Zinc Air’s Wilkins said that in power purchasing agreements, developers with storage capacity can “negotiate with the utility to get preferred pricing for the wind farm, because they no longer see you as a problem but as a solution.”

Juhl said the wind firm chose Zinc Air for the project because the redox flow battery is produced in an environmentally safe manner, composed of zinc, iron and non-toxic proprietary chemicals. That makes obtaining permits easier than with potentially toxic storage systems, such as those that use traditional lithium-ion batteries.

Most of Zinc Air’s materials can be sourced locally, which reduces basic costs, and the chemistry doesn’t include rare earth minerals, whose limited supply is held almost entirely by China.

Once Juhl Wind settles on the amount that a utility buyer or entity within the Midwest Independent Transmission System Operator market will pay for its peak wind power, Zinc Air field will deploy 100 kilowatts of installed storage capacity. Within six months, the system will ramp up to its full 1-megawatt capacity.

Wilkins hopes the field test will be a ticket to success for the battery startup.

“[Juhl Wind’s] reputation, as well as their ability to do an honest third-party evaluation of the technology … will provide us a tremendous amount of economic data to be able to share with other community-scale and large-scale developments,” he said.

“Within nine to 12 months of operational data, we’ll have a proven technology, and we’ll be able to start looking at the capability of project financing.”