Batteries for the Grid

As natural gas prices rise and state policies push utilities to add more renewable energy to their portfolios, batteries might benefit.

That’s because sources such as wind and solar are intermittent -- that is, electricity is sometimes needed when the wind isn’t blowing or the sun isn’t shining -- and utilities need to back up the power.

While that’s usually accomplished today via power plants, which stand by ready to dispatch extra electricity during times of high demand, there are small signs that might be changing.

Take Xcel Energy (NYSE: XEL), an electric and natural-gas utility in Minneapolis. The company said Thursday that it plans to use a 1-megawatt battery pack from NGK Insulators for a test to store wind energy for the grid.

The company claims it will be the first use of the technology in the United States for "direct" wind energy storage, meaning the battery will store wind energy before its moved to the grid.

The sodium-sulfur battery system, which the company says can store enough energy to power 500 average homes for more than seven hours, will be roughly as large as two semi trailers and will weigh approximately 80 tons, according to Xcel.

"Energy storage is key to expanding the use of renewable energy, Xcel CEO Dick Kelly said in a written statement. "This technology has the potential to reduce the impact caused by the variability and limited predictability of wind energy generation."

Xcel isn’t the first utility to use batteries to smooth the intermittency of wind power.

In September, American Electric Power (NYSE: AEP) said it was installing 6 megawatts of NGK’s batteries to support its wind operations and also said it planned to install "at least" 25 megawatts by 2010, according to a report from Sara Bradford, industry director for the energy and power systems group at research firm Frost & Sullivan.

The company already had installed a 1.2-megawatt battery system in Virginia in 2006 after having run a demonstration system since 2002. And the Tokyo Electric Power Co., which had partnered with NGK to develop the batteries, already had two 6-megawatt storage systems operating in Japan by 2001.

Still, the announcement shows some movement toward a new market for batteries that also could boost renewables, Bradford said.

Traditionally, some of the challenges have included the difficulty of reliably handling large power fluctuations over a long period of time, the need for energy density high enough to store large amounts of power without taking up enormous amounts of space and high cost.