Is Demand Energy onto something in New York?

Glenwood will use Demand Energy EnerSys battery systems for energy storage in New York apartment buildings and take part in Con Edison and NYSERDA’s Indian Point Demand Management Program. Photo credit: Demand Energy Networks

Glenwood will use Demand Energy EnerSys battery systems for energy storage in New York apartment buildings and take part in Con Edison and NYSERDA’s Indian Point Demand Management Program. Photo: Demand Energy Networks

Demand Energy’s recent announcement of 1MW of battery systems in Manhattan residential high-rises could herald the advent of a significant new niche for energy storage.

Earlier this month the Washington State, US-based storage system developer confirmed its customer Glenwood was including behind-the-meter battery systems in buildings across its portfolio of properties, starting with 10 systems immediately.

The move comes as New York utility Consolidated Edison (or ‘Con Ed’) and the New York State Energy Research and Development Authority (NYSERDA) set about introducing measures to cope with the possible closure of a nuclear power plant.

The Indian Point Energy Center delivers up to 15% of Con Ed’s 13.2GW peak power but is currently reaching the end of its original life span. One reactor has already shut down.

The plant operator, Entergy Nuclear Northeast, is applying for licence extensions for two remaining reactors. The licence for the second unit expired in 2013. The licence for the third expires at the end of this year.

The demand side of the problem

Faced with a mismatch between falling generation and continued increases in New York’s energy consumption, Con Ed and NYSERDA have put together a package of measures that attack the demand side of the problem.

Importantly, these are helping to put a value on resources such as energy storage, which Con Ed clearly sees as a viable alternative to new generation capacity.

And the value is trickling down to developers such as Glenwood, a leading owner and builder of luxury rental properties in New York.

The developer is intending to use Demand Energy’s EnerSys battery-equipped storage systems to take part in Con Ed and NYSERDA’s Indian Point Demand Management Program this summer.

The programme requires four hours of continuous load reduction, five days a week, for the four months that make up the peak-load season.

Glenwood will also use the energy storage systems to manage building loads and save on expensive demand charges the rest of the year.

Essentially, the systems will store off-peak power and then use it to power air conditioning and other peak-time building loads at points when the utility is asking major energy users to reign back their consumption.

Glenwood has prior experience of Demand Energy’s systems from an installation carried out two years ago at Barclay Tower, a luxury apartment block in Tribeca.

Deploying across the entire portfolio

“We are eager to deploy their technology across our entire portfolio,” said Josh London, vice president of management for Glenwood, in a press note.

“In our mission to expand sustainable practices within the Glenwood portfolio, energy storage is an ideal solution that helps Con Ed and NYSERDA solve real and pressing problems in managing the grid, while elevating the quality of life at our properties.”

New York’s experience could well serve as a template to other energy-strapped metropolitan areas.

Germany and its nuclear shutdown offers a striking parallel, although Bloomberg New Energy Finance associate Logan Goldie-Scot sees more potential in the US due to the building designs involved.

“The US has a different type of property model from Europe,” he said. “You have large buildings with peak demand largely driven by air conditioning, for instance.”

Another great application for storage

Nevertheless, he said: “If Glenwood believes that by adding storage to their sites it can save money then that’s another great application for storage. All of this is about managing different building loads.

“Storage and demand response are both very effective at doing that.”

Goldie-Scot believes that “arguably one of the most interesting markets globally at the moment is the commercial segment in the US, whether it is for demand charges, standby charges or simply load management.

“These are all great ways for storage to establish itself.”

For now, there is likely to be significant further demand for energy storage within New York alone.

A new energy market

“New York State, with the leadership of Governor Cuomo and The Public Service Commission, is moving forward with the development of a new energy market,” explained Demand Energy.

“Reforming the Energy Vision represents a bold approach to bringing utility regulation and management of the grid into the 21st century. The focus of the initiative is on the distribution side of the grid where the goal is to manage overall demand.”

Demand Energy continued: “This dynamic new market of incentives and tariffs will encourage customers to deploy assets like energy storage to help align system/network peaks with building load reductions and improve the overall efficiency of the grid.”

Doug Staker, Demand Energy’s vice president of global sales, told Energy Storage Report: “With any grid operation, storage changes the mode of the grid from being a just-in-time inventory model to a managed inventory system.”

Clearly, Glenwood thinks that managed inventory could be worth something. It will be interesting to see how many other building owners agree.

Written by Jason Deign

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