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How Smart Batteries and Heat Storage Will Enhance DSM

Updated: Feb 27, 2019

The main idea behind Demand Side Management (DSM) is to shift energy consumption away from hours when energy production is more expensive, by deploying measures in homes and businesses, but without placing schedule restrictions on the end user. This implies that energy generation and consumption will not always occur at the same time, and this in turn means that some form of energy storage is needed in order to make DSM feasible.

Currently, two technologies are promising candidates to drive forth the large-scale adoption of DSM in residential applications:

  • Lithium-ion batteries

  • Insulated thermal storage tanks

Electricity and heat are the two most useful forms of energy for most homeowners, and these technologies allow their direct storage. However, to achieve true demand-side management, any form of storage must be complemented with a monitoring and control system to determine the best time for charging and discharging.

In commercial and industrial applications, a wider variety of storage technologies becomes viable for DSM systems due to the large scale involved. Some examples are the use of bulk ice storage to shift industrial process cooling loads, or the combination of hydrogen electrolysis and fuel cells for applications where heating and electric power are required simultaneously.

Lithium-Ion Batteries

Stand-alone renewable energy systems typically use lead-acid batteries for energy storage, but these are held back by several limitations that make them unpractical for demand-side management:

  • A service life or around 500 cycles, which is only between 16 and 17 months if the battery is charged and discharged on a daily basis – the norm in DSM systems.

  • Limited depth of discharge: Even deep-cycle lead-acid batteries are limited to around 50%.

  • A round-trip efficiency of around 80%, which means one unit of energy is lost for every four units stored and retrieved.

  • Considerable space requirements and weight.

Due to these factors, a DSM system based on lead-acid batteries would have a high cost of ownership, negating any potential savings.

On the other hand, current lithium-ion batteries last for around 2000 cycles, and the International Renewable Energy Agency estimates this could rise to 6000 cycles by 2020. These batteries are also characterized by having an efficiency of over 90% and a depth of discharge of 80% or more. All of these characteristics make lithium-ion batteries are much more suitable option for DSM systems. They do have a higher upfront cost than lead-acid batteries, but their operating costs could reach values as low as 0.05 £/kWh/cycle by 2020.

Figure 1. Lithium-ion batteries in an electric vehicle.

Even though batteries are installed at the point of consumption, an Internet connection allows them to be monitored and controlled remotely, creating collaboration opportunities between utility companies and their clients. For example, the utility company can instruct batteries to absorb energy from the grid when demand is low or when there is a peak in production from a solar or wind farm. The opposite also applies: batteries across multiple households can be instructed to release all of their energy during peak demand hours, reducing the need for peaking power plants. In both cases, there are economic benefits for utility customers as well – they are maximizing their consumption of cheap energy and minimizing their consumption of expensive energy.

Smart Heaters with Thermal Storage

Heating can represent a considerable portion of residential energy expenses, especially in locations far to the north or south of the planet, where winters are longer and colder. Water is an excellent heat storage medium: it can hold large amounts of thermal energy in a relatively low volume and can be used directly for most heating requirements in households.

If a heater is equipped with an insulated storage tank and configured to store hot water when electricity rates are lower, it becomes an effective DSM measure, accomplishing the same function as batteries in the previous example:

  • Surplus energy production capacity is absorbed by heating water.

  • Peak demand is reduced by using previously heated water instead of drawing power from the grid.

RealValue, a project led by Glen Dimplex and funded by Horizon 2020, is testing this concept with smart heating systems in 1200 households in Germany, Ireland and Latvia. A key element of this project is a monitoring and control system that integrates technology from Logic Energy for measurement and data aggregation for SSE Airtricity, combined with a control system by Intel to establish optimal operating conditions in real time.

DSM with Energy Storage in Commercial and Industrial Applications

residential DSM applications. However, there are other technologies that are not viable in small scales but become feasible in commercial and industrial applications.

Just like residential DSM measures, these technologies create opportunities for collaboration between electric utilities and their clients: large commercial and industrial facilities reduce their energy expenses when they eliminate peaks in demand, while also reducing operating expenses for their utility company.

Hydrogen Electrolysis and Fuel Cells

Electricity can decompose water into hydrogen and oxygen through a process called electrolysis, and these elements can then react in a fuel cell to provide simultaneous electric power and heat. It is important to note that fuel cells only have around 40% efficiency when used exclusively for electric power, but this increases to over 90% when their heat output is also used.

Figure 2. Basic operating principle of a hydrogen fuel cell

If deployed as part of a DSM system, an electrolysis hydrogen generator can be instructed to absorb surplus energy from the power grid during low-demand hours, and use it to store hydrogen. Then, it can be used to power a fuel cell for heating and electricity needs during peak demand. Some applications where fuel cells can be an effective DSM measure are the following:

  • Large hotels and touristic complexes, which are constantly using electricity and hot water.

  • Industrial processes that involve electrical machinery and water or steam.

Unlike a traditional battery, a fuel cell is not bound to a charge and discharge cycle: as long as there is a supply of hydrogen and oxygen, the reaction can continue.

Bulk Ice Storage

In principle, bulk ice storage is very similar to hot water storage: in both cases, energy is stored as a temperature difference between an insulated container and its surroundings. The difference lies in the applications of each – ice storage is compatible with air conditioning, refrigeration and process cooling.

A DSM system deploying ice storage instructs chiller plants to freeze water during nighttime, when cooling loads are typically lower. Then, the ice can be melted when cooling demand is higher to reduce the load on compressors, pumps, and other electrical components. Multiple chiller plants deploying bulk ice storage can achieve demand reductions in the scale of megawatts.

Importance of Having the Right Partner for Monitoring and Control

Regardless of the storage technology deployed, every demand-side management system must be capable of assessing several key variables in real time:

  • The available storage capacity distributed among many facilities, and its current state.

  • Power grid operating conditions, especially if there is a large surplus in generation capacity or a sudden peak in demand.

  • Potential issues that might impede normal operation of the DSM system.

For more than a decade, Logic Energy has been successfully deploying monitoring systems for energy efficiency and renewable energy projects of all types. Our company is built on the knowledge of industry experts, and we offer integrated solutions that offer top performance in terms of both software and hardware.

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