State Grants Position Washington as Energy Storage Player

7/9/14Follow @bromano

Washington state is staking a claim in the growing utility energy storage industry, tapping state and federal research, public and private funding, and entrepreneurship to develop and test new batteries that could help transition the electricity system away from polluting power sources.

Gov. Jay Inslee, a Democrat who has made combating climate change a signature issue of his political career, announced state grants of $14.3 million to three utilities Tuesday for large-scale test deployments of battery systems with combined peak capacity of 6 megawatts. The utilities will match the state funding, which comes from the Clean Energy Fund created by the legislature, with $21 million of non-state money.

“We’re now investing [the Clean Energy Fund] in technologies across the clean energy sector to reduce harmful emissions, cut energy costs, increase our energy independence, and create and sustain good family-wage jobs that are happening right here in Mukilteo,” Inslee told an audience at UniEnergy Technologies (UET), the Mukilteo, WA-based battery maker supplying two of the demonstration projects. We profiled UET on Monday.

The Snohomish County Public Utilities District is in line for $7.3 million to support a system including a 500 kilowatt-hour lithium-ion battery and a 6.4 megawatt-hour vanadium redox flow battery from UET. The utility will also use battery control and management software from Seattle-based 1Energy Systems, highlighting another opportunity “to have the state lead the way in the software that will help integrate storage,” said utility general manager Steve Klein.

Bellevue, WA-based Puget Sound Energy, an investor-owned utility, will receive $3.8 million from the state for a lithium iron phosphate battery capable of storing 4.4 megawatt hours of electricity.

Avista Utilities, another investor-owned utility based in Spokane, WA, is getting $3.2 million for a 3.2 megawatt-hour vanadium redox flow battery from UET, which will be installed at Washington State University as part of a campus smart grid system.

Inslee said the state will benefit from these projects through the advancement of “cutting-edge, made-in-Washington technologies, moving us faster up the learning curve.” “These technologies are going to help integrate renewable energy into the grid from rooftop solar panels to wind farms, while ensuring a safe, reliable, and cost-effective supply of electricity,” he said.

Washington utilities—which already provide some of the cheapest, lowest-carbon electricity in the country, thanks to the federal hydroelectric system on the Columbia and Snake rivers—along with private energy developers have added some 3 gigawatts of new wind and solar power over the last 15 years in response to state renewable energy mandates both in the Northwest and California (PDF).

Puget Sound Energy, for example, owns and operates wind projects with a peak capacity of 773 megawatts. It has gone from about two dozen customers with rooftop solar a decade ago to 2,100 today, said utility vice president Andy Wappler.

In addition to helping the local utilities integrate renewable energy and improve the flexibility, efficiency, and resiliency of an aging electricity grid, these demonstration projects could provide valuable proof to show other utilities—particularly in California—as the market for energy storage grows over the coming decade.

“These emerging markets for new grid technologies are truly global in nature, including grid-scale energy storage, as well as the software, information, and communication technologies that will help emerging economies better optimize the use of energy efficiency and distributed resources,” said Assistant Energy Secretary Patricia Hoffman, whose federal office is in charge of electricity delivery and energy reliability.

Inslee gets credit for helping urge Northwest utilities and researchers to develop a strength in smart grids and energy storage five years ago when, as a congressman, he convened a meeting in Seattle ahead of a wave of federal smart grid funding. Inslee said, “We need to win it,” recalled Jud Virden, who heads energy and environment programs at Pacific Northwest National Laboratory.

The Northwest is now home to the largest smart grid demonstration project in the country. “That also allows us to put new technologies on the grid like energy storage,” Virden said.

Additional state and federal funding is set to go to Pacific Northwest National Laboratory, a Department of Energy laboratory in Richland, WA, to continue development of a set of use cases and testing standards for large-scale energy storage technologies. The federal lab plans to work with Washington State University and the new Clean Energy Institute at the University of Washington—also supported by the Clean Energy Fund—on these and related technologies.

Some of the technology underpinning the UET battery was developed at PNNL.

“Two years ago, this technology was a little beaker in the lab,” Virden said, standing in front of five 20-foot containers packed full of UET’s vanadium redox flow battery components. Thanks to federal and state investment, and the risk taken by co-founders Gary Yang and Liyu Li, who left PNNL to found the company, UET “has devices that are ready to sell in the state and throughout the world,” Virden said.

The name of Solyndra still echoes in the ears of any politician putting taxpayer dollars behind new clean energy technologies—as wrong-headed as that may be given that the federal loan program that the solar manufacturer benefited from before going spectacularly bankrupt is succeeding by many accounts, with a lower default rate than originally anticipated, and the solar industry today is thriving.

Meanwhile, the Department of Energy last week announced a new loan guarantee solicitation of up to $4 billion to support projects using “market-ready” technologies in areas including advanced grid integration and energy storage.

Still, Inslee, in a round-table discussion with state and federal energy leaders after the speeches Tuesday, asked what can be done to manage the risk inherent in state investment in new technologies, and how best to communicate the possibility of failure to the public.

Answering his own question on this set of grants, Inslee noted the transparency of decision making, broad range of government and private sector partnerships, and risk spread among multiple technologies and companies.

Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com. Follow @bromano

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