CLASS OF 2015
WORLD-GENERATION FEBRUARY/MARCH 2015 V.27 #1
18
AES launched its energy storage busi-
ness six years ago with the commercial
operation of AES Los Andes ES, a 24MW,
lithium–ion based energy storage system
located in the Atacama desert in northern
Chile. Acting as flexible capacity, the spin-
ning reserve function it performs is a com-
mon one. To many, it seemed like a techno-
logical leap yet the primary technology
employed was far from new, lithium–ion
batteries and IGBT based power conversion
systems, both developed in the 1970’s,
began broad commercial adoption in the
early 1990’s.
Utilities that need new sources of reli-
ability and flexibility today have a valuable
“new” resource to turn to in energy stor-
age. With open and competitive bids where
flexible capacity is needed, storage can win
competitively based on its merits. But
today’s challenge isn’t limited to providing
reliable electricity cost–effectively, but to do
so sustainably. California, Hawaii, New
York, and others are showcases for recogni-
tion of this need, each acknowledging the
value of energy storage in their recent
capacity requests.
This more recent mandate of sustain-
ability adds tough criteria to an already
restrictive set of filters. The underlying
technologies must be proven ones and com-
panies supplying those solutions must have
financeable balance sheets that banks and
insurers are comfortable with. Utilities seek
to deploy resilient systems that can handle
circumstances planners may not be able to
model or anticipate. This will translate to
robust networks that are ready to absorb
renewables at any level and to withstand
unanticipated disruptions.
As an owner and operator of eight utili-
ty companies and over 30GW of generation
in 20 countries, AES has served utilities
and grid operators reliably and dependably
for over 30 years. AES has a proven record
of developing and financing power projects,
matching appropriate technology to meet
customer needs.
Consistent with this experience, AES
has developed and operates over 200MW of
lithium–ion battery based energy storage
resources and, as the leader in utility scale
commercial energy storage, continues to
develop and offer energy storage solutions
to utilities globally.
STORAGE ISTHE ENABLER
According to the US Energy
Information Administration (EIA), in the
next 10 years the US electric sector will
spend over $25 billion on new resources to
meet needs for reliability and increased
needs for flexibility. Most of these capacity
additions will come in the form of natural
gas fueled simple–cycle combustion tur-
bines which typically operate for fewer than
7% of all hours in a year due to their rela-
tively high operating costs.
Energy storage—as a cost competitive
provider of flexible capacity—can be dis-
patched immediately, has no emissions
when operating, has no standby costs, can
be located to strengthen natural weak
points, and can be operated to manage and
balance supply and demand since it is a
source of both generation and load. No
other resources in any combination can
accomplish these critical tasks as quickly,
reliably, and cost effectively.
When located strategically, utility scale
energy storage systems can dramatically
increase grid reliability and eliminate the
possibility of large, and potentially, cascad-
ing blackouts caused by transmission faults
and generator trips. AES Los Andes ES pro-
vides evidence of this. Since beginning
operations, the 24MW facility has helped to
eliminate an entire layer of load shedding in
SING, the northern grid of Chile.
Today, lithium–ion battery based ener-
gy storage solutions exist, built on mature,
technology with costs under $1000/kW—
on par or better than a prior generation of
solutions—due largely to the scale and
maturity of their manufacturing.
Batteries differ significantly. Battery
based energy storage systems are free from
the constraints of peculiar geologies and
pre–existing conditions and can be located
exactly where they are needed to support
grid stability. They can be scaled to any size
needed, quickly, or over time to match
changing needs. Built in factories for
decades, batteries are not new, but are
emerging as the star of commercial energy
storage.
While new technology development
must continue, much of it does so against
an ocean of R&D in the lithium–ion indus-
try which already has massive revenue
from consumer electronics and transporta-
tion and several decades head start in scale
and practical experience.
Prudent, progressive, and smart utilities
are choosing lithium–ion based energy stor-
age solutions because, as a technology, lithi-
um–ion has nearly 25 years of commercial
use and is approaching nearly a half–century
of research and development. It is estimated
that between 2 and 3 billion dollars per year
are spent on lithium–ion R&D which is like-
ly to increase over the next decade thanks to
the combined interests of consumer elec-
tronics, automotive, and power industries.
Lithium–ion is established, yet its research
is broad, with academia and the private sec-
tor both contributing significantly. No other
power technology is available which shares
its development costs with similarly massive
global industries.
Of the choices among battery based
energy storage, only lithium–ion is mature,
cost competitive, produced at scale, and
financeable.
While lithium–ion technology is
mature, solutions from experienced power
industry companies are needed. Solutions
must be integrated with existing utility
operations, not only technically, but in a
manner consistent with existing operational
practices.
BRETT GALURA
Vice President
AES Energy Storage
