ELECTRIC UTILITIES HAVE BECOME INCREASINGLY INTERESTED TO TAKE ADVANTAGE OF THE BENEFITS of energy storage systems. This has been influenced by advances in storage technologies as well as an increased need to buffer the adverse impacts of the rapidly increasing penetration of renewable energy resources. Advances in smart grid technologies are also helping utilities to aggregate and control distributed storage units as a very responsive and flexible fleet.

A look at the historical deployment of energy storage in utilities indicates a migratory pattern from large central storage units to broadly distributed smaller systems. For decades, electric utilities have been storing megawatt-hours of energy in central pumped hydro facilities with output capacities on the order of hundreds of megawatts for multiple hours.

With the availability of advanced battery technologies over the last two decades, utilities can now store electricity in large batteries often located in substations and with capacities on the order of several megawatts for a few hours. Distributed substation batteries, when aggregated, enable the deferral of system upgrades and the removal of transmission congestion and other capital expenditures. Renewable generation, solar in particular, is becoming more widely distributed. In like manner, electric energy storage is continuing to migrate to locations much closer to the consumer, and utilities have started to deploy local energy storage units on the order of tens of kilowatts at the edge of the grid where customers reside.


At AEP, we installed a 600-MW pumped hydro energy storage in 1965, and it has served us well. During the 2006?2008 period, we rolled out distributed 1-MW and 2-MW NaS batteries. We now have 7 MW/50 MWh of NaS batteries operational at four different substations with an additional 4 MW/25 MWh to be installed in early 2010. Besides the basic load leveling, NaS batteries are also used to offer backup power to thousands of residential and small commercial loads through a dynamic islanding scheme. This new feature was developed by S&C Electric Co. using its IntelliTeam distribution automation scheme with partial support from the U.S. Department of Energy/Sandia National Laboratories.

Following the migratory trend of moving the energy storage closer to customers, AEP — with the help of EPRI and collaboration of more than 20 other utilities, vendors and manufacturers — has developed a detailed set of functional specifications for what is called Community Energy Storage (CES). These specifications are publicly available (open source) at www.aeptechcenter.com/ces.

While CES can be deployed for groups of single-family houses, multi-family apartments or small businesses, AEP prefers to start with communities of single-family houses where a single CES unit, connected to the secondary of a transformer, can serve three to five houses that are served by a common transformer.

CES is designed to use either new or used electric vehicle (EV)-type batteries. These batteries fit in a cabinet of the same size and shape as a traditional padmounted transformer. CES units are charged, discharged and controlled as a fleet and, collectively, act as a multi-megawatt, multi-hour substation battery.

While CES is a virtual substation battery, it has distinct advantages over a large, one-piece substation battery, including but not limited to:

  • More reliable backup power to customers (closer)
  • More effective voltage and Var support (distributed)
  • More likely to be a standardized commodity (low cost)
  • More flexible and scalable for deployment
  • More synergy with EV batteries (safe, reliable and low cost)
  • Easier installation and maintenance (240 V/ 110 V)
  • Unit outage is less critical to the grid (smaller)
  • Lower resistive loss in wires (closer to customer)
  • More efficient in buffering customer renewable sources (direct dc interface).

Leveraging the intense global competition for the development of batteries to be used in EVs is critical to the fast penetration and extensive deployment of CES systems. CES is designed to leverage this market and its forecast cost, over the next five years is about $1000/kW or $500/kWh, comparing favorably with existing battery technologies today.


In the years to come, we will see an increasing need for energy storage as more wind- and solar-generated energy is connected to the grid. Expect also to see utilities locate grid-connected energy storage units closer to utility customers.

Dr. Ali Nourai (anourai@aep.com) is chairman of the Electricity Storage Association and manager of the energy-storage program at American Electric Power.