NRG Energy and Ice Energy have partnered to provide 25.6 megawatts of behind-the-meter energy storage to reduce power consumption during peak periods in Southern California.
Last fall, Ice Energy of Glendale, Calif. won 16 contracts from Southern California Edison to deploy its Ice Bear units over the next six years, as part of the utility’s 250-megawatt storage procurement.
Ice Bears offer a unique solution for peak-load management by freezing ice at night when power demand is low and electricity is cheap, and then using that ice to provide cooling to power-intensive air conditioning units during the heat of day. Each Ice Bear can defer about 10 kilowatts of power use per day, and reduce carbon dioxide emissions by up to four tons per year.
To meet the 25.6-megawatt contract, Ice Energy expects to deploy roughly 1,800 of its Ice Bears on commercial rooftop AC units, starting in July 2016. The storage company will be responsible for manufacturing the Ice Bears, managing site acquisition, installation and providing maintenance to the units. SCE will buy the capacity over the 20-year contract period, which is roughly the lifespan of an Ice Bear unit.
NRG Energy will serve as a financial partner, covering 100 percent of the capital costs for the deployment, the total cost of which has not been disclosed. The company will also be involved in site acquisition and marketing the program.
“This is really a multi-pronged partnership,” said Mike Hopkins, CEO of Ice Energy. The agreement, announced Tuesday, has been in development for the past year and marks the first time the two companies have worked together.
“The major requirement we had here was a financial partner to help with the large upfront cost and earn money over time, and NRG is obviously very well equipped to bring the financial capacity and resources needed for this project,” he said.
For NRG, which is making a strong push in the clean energy sector, the partnership is an opportunity to expand its existing portfolio.
“As one of California’s largest providers of renewable and traditional energy generation, as well as electric-vehicle fast-charging solutions, energy storage is a natural next step for NRG to help meet the state’s energy needs,” said John Chillemi, president of NRG Energy’s West Region, in a statement.
Last fall, NRG was awarded contracts from SCE to install 178 megawatts of “preferred resources,” including demand response and energy-efficiency products, as well as a 2-megawatt-hour battery storage system. That agreement is separate from Ice Energy’s 25.6-megawatt commitment.
SCE’s overall 2.2-gigawatt grid modernization plan, that includes deploying a mix of central power plants and distributed grid-edge assets, was launched to address strain on the grid around Orange County caused by the closure of the San Onofre nuclear facility, as well as pressure to retire aging once-through cooling plants.
Ice Bears serve the grid a bit differently than conventional energy storage. Rather than deliver power back to the grid when needed, Ice Bears are designed to cut down power use from 5- to 20-ton commercial rooftop AC units and shift that load to another time. This is more than a niche service in SCE territory, where air conditioning makes up 30 percent to 40 percent of the utility’s peak load in summer.
Building owners participating under the SCE contract won’t be able to control when the Ice Bears are turned on and off, but they will still benefit from reduced electricity bills, especially customers that are on a time-of-use plan. The Ice Bears will also extend the life of AC units, by allowing them to work less. Furthermore, the Ice Bears can continue to provide cooling during the worst heat waves, when conventional AC systems max out their ability to cool the hot outdoor air.
“Once you have Ice Bears, your building will be as cool as you want it to be, no matter how hot it is,” said Hopkins.
Ice Energy has deployed around 11 megawatts of its Ice Bear units to date on a wide range of buildings, from corner stores to Disney Studios. Since its founding, the company has raised about $90 million, and will direct funds under the NRG partnership toward ramping up its manufacturing capabilities ahead of the first installations next year.