Think of water rushing in through the open hatch of a submarine, and you get an idea of the forces at work underwater. Atmospheric pressure and the weight of the water combine to create pressures that compound with increasing depth. At a depth of 400 meters (almost a quarter mile), for example, the pressure is that of 40 atmospheres, one atmosphere being the pressure we experience at sea level. Subhydro envisions installing large concrete tanks at depths of 400-800 meters, and the deeper the better for maximizing energy generation.

When the “hatch” is opened, water is allowed to flow into the tanks through a turbine that drives an electric generator. The more and larger the tanks, the longer the generation can go on. When the tanks are filled, the turbine can be reversed to pump out the water, a process that draws on the power grid and consumes energy. In this way, the pumped storage plant functions like an underwater battery that can be re-charged, much like a hydroelectric plant on dry land pumps water into an upper reservoir after it has passed through a turbine.

According to Subhydro, the efficiency of the underwater plant is about 80 percent, comparable to efficiencies achieved at conventional plants. Integrating the pumped storage plant with wind or solar farms could create a grid storage system that harnesses excess renewable energy generation to pump out the tanks and flood them during peak hours of production.

Another approach to underwater grid storage is in the works at a depth of 80 meters in Lake Ontario, just off shore of Toronto. There, Hydrostor will begin building underwater tanks that will hold compressed air. Surplus energy from renewables (wind, solar) will provide the energy to compress air from the atmosphere and pump it in to the tanks. To put energy back into the grid, the air is allowed to surface, driving generators as it expands back into the atmosphere.

Hydrostor is partnering with Toronto Hydro to build the 1MW/4MWh compressed air energy storage demonstration facility. The system will run at 70 percent efficiency, according to Hydrostor. Earlier this month MaRS Cleantech Fund announced an investment in Hydrostor’s tech.

Clearly, there are still some hurdles to overcome before energy companies everywhere take the plunge. The environmental impact of offshore submerged facilities will need to be considered, as will the building materials themselves. To withstand the underwater pressure, Subhydro is working with research partners to develop thin concrete reinforced with steel fibers, while Hydrostor’s system will use inflatable polyester bags to hold compressed air. Building underwater facilities is itself energy-intensive, so whether the process can be made cost and energy-effective will determine whether cleantech is ready to get its feet wet.

Image via Knut Gangåssæter/Doghouse

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• How energy data will impact the smart grid
• The next generation of battery technology
• How the Energy Storage Market Could Pay Itself Off

Adding energy storage reflects the evolution of the company, which started off as a solar cell and panel maker before it entered the power plant development business. SunPower has carried out pilot energy storage projects in recent years and worked with different energy storage technologies, including advanced lead acid and zinc bromide batteries.

But lithium-ion batteries “will likely be the first technology to have an impact,” said Jack Peurach, executive vice president of products. The emergence of electric cars plays a role in making lithium-ion battery the front runner for being paired with solar, he added.

SunPower & Flextronics Factory in Milpitas, CA

SunPower executives didn’t provide details, such as the timing and battery suppliers, for its energy storage plans. But the discussion puts SunPower on a growing roster of solar energy companies that are offering or plan to offer energy storage.

SolarCity, for example,  has been bundling lithium-ion batteries from Tesla Motors with its solar energy systems and applying for a California program that subsidizes energy storage installations. One Roof Energy is working with battery maker Silent Power to roll out products. Korean conglomerate Hanwha Group, which runs a solar panel manufacturing subsidiary, is an investor in both OneRoof and Silent Power. SunEdison has done a pilot project with a battery system from startup Seeo.

Energy storage will be part of SunPower’s plan to expand its reach in the commercial and residential market, where it sells power purchase agreements or leases via its dealers or its own project development business. The company designs the power purchase agreements for its commercial and government customers and leases for homeowners. Power purchase agreements and leases work in similar ways: business or home owners sign a long-term contract of up to 20 years and pay a monthly fee for the solar electricity from the SunPower solar energy systems on their rooftops.

SunPower’s foray into the energy storage business will prompt more comparison with SolarCity, which started in 2006 as purely a solar installer. SolarCity is most active in the residential and commercial markets, but it scored the first utility project last year. As a result, the two companies have been competing more intensely in recent years.

In fact, a lawsuit filed by SunPower against SolarCity and five people last year highlighted that rivalry. The lawsuit accused five former SunPower employees of stealing confidential data and brought the data with them when they went to work for SolarCity. The two companies settled on Dec. 31, 2012, and a judge dismissed the lawsuit in January, SolarCity said in its 2012 annual report. It didn’t disclose the amount of the settlement.

SunPower executives didn’t say whether they will sell energy storage in the United States first or in other regions. Werner said that, for now, energy storage makes financial sense only in markets that offers government incentives. That would include California, Germany and Japan.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• After Solyndra: analyzing the solar industry
• A 2011 Green IT Forecast
• Opportunities for the future of batteries

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• A near-term outlook for big data
• Connected world: the consumer technology revolution
• Ups and downs for cleantech in Q1

Alas the cleantech sector has yet to see its own Moore’s Law, though the closest might be that solar cells and panels have dropped dramatically over the past 18 months. But even if Sandalow couldn’t promise a Moore’s Law for energy, he laid out some of the most important trends that the DOE is paying very close attention to in the energy sector in 2013.

1). Grid resiliency and modernization: Both the Superbowl blackouts and hurricane Katrina have highlighted how important it is to make the grid much more resilient to blackouts as well as cyber events. The threat of cyber attacks “is real,” and it’ll be the private sector who mostly will lead the response against these situations, said Sandalow. Having a much more robust grid will also be needed as utilities add more clean power, like wind and solar, onto the grid.

2). Low cost natural gas: Cheap U.S. natural gas, which has emerged through horizontal drilling and hydraulic fracturing, is the “hottest topic in the energy area,” said Sandalow. The DOE is accepting comments right now for whether or not the U.S. should export liquid natural gas. We have 16 applications for companies that want to export it, said Sandalow.

3). The dropping cost of solar: The DOE has its SunShot program, which looks to lower the cost of solar panels, but there’s a lot more work left to do. Germany has a 50 percent lower cost to install solar panels because it removed a lot of the red tape, said Sandalow. He explained, “I want to know when solar will become viral in the way that cell phones did, and what will it take, energy storage?”

4). Electric vehicles: The DOE has done a lot of work with electric vehicles and charging infrastructure, and we plan to do a lot more, said Sandalow.

5). High performance computing and big data: The trend of big data analytics and the most powerful computers in the world will no doubt help crack the problems with energy innovation. They are already being used heavily in the energy and climate change monitoring sectors.

6). Clean energy financing: There’s a lot more work to be done to finance clean power projects, though some milestones passed recently like the tax credits for wind projects. For startups clean power financing is actually a pretty hot area for investment.

7). China: Sandalow says he’s been to China 13 times while he’s been in office. The relationship between the U.S. and China over energy has at times been challenging, says Sandalow, but the trend of Chinese investments being made into cleantech companies in the U.S. is really interesting, and “I expect to see more of it.”

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• How energy data will impact the smart grid
• Locating data centers in an energy-constrained world
• Cleantech and investment in 2013

As of Tuesday morning, around 7.5 million customers were without power across 15 states and Washington D.C. according to CNN. New York Mayor Michael Bloomberg said Tuesday morning that he expects power to be out for the next two or three days in New York, “or maybe even longer than that,” and he also said that getting the power grid back up and running (along with getting the transit system online) will be the city’s “biggest challenges.” New York Governor Andrew Cuomo publicly told New York utility ConEd that its initial estimates of restoring power within two weeks were “unacceptable.”

The stark contrasts between the resiliency of our data communication networks and our power grid in these situations is unnerving. The power grid is highly vulnerable — it’s still largely a centralized system, with little energy storage capacity at the edges of the network, and it still lacks a lot of the intelligence that Internet architecture has that can deliver self-healing and re-route around damaged systems. And that’s a problem.

Electrical explosion

To witness just how vulnerable the power grid can be, watch this YouTube video:

CNN reports that the video is of a tranformer that blew in lower Manhattan Monday night. As Nicholas Abi-Samra, chair of the IEEE Power & Energy Society’s San Diego chapter, explained in an interview with IEEE about how utilities were preparing for Hurricane Sandy, there’s no way to completely protect the grid against extreme flooding, winds, rains, downed trees and flying debris. In particular, when a substation filled with transformers (like the one that blew last night in New York) is damaged, it can take months to fully repair it.

It’s the intelligence of a utility’s grid that matters in the wake of a disaster like Hurricane Sandy — how quickly can they identify outages and how quickly can they repair them? For many utilities in the U.S., the process of identifying who has lost power and where is only partly automated. Until very recently, the standard way of finding grid outages was by getting a phone call from the customer saying their power was out.

Some utilities are starting to employ smart grid technologies that can help more quickly automate the process of healing the grid. For example, SmartGridNews points out that Chattanooga, Tennessee-based utility EPB has started installing a self-healing grid that can cut the length of power outages by 40 percent. Long Island Power Authority was also in the process of installing a new outage detection computer system, but given it won’t be working until next year; little good it did them through Hurricane Sandy.

The underlying architecture

But beyond adding computing capacity and smart software to the power grid to make it smarter, the internet is more resilient than the power grid by its very nature.

The power grid has traditionally been built so that utilities have to balance demand for energy (buildings and industry consuming energy) and the supply (centralized power plants burning mostly fossil fuels to produce electricity) at all times. When there are large fluctuations in demand or supply, created by things like a power plant shutting down or a transformer blowing, the cascading effect can bring down whole chunks of the network.

The internet doesn’t work that way. When data centers, servers and network devices fail, oftentimes web sites and service providers can shift traffic to other data centers and servers or route traffic to network gear that isn’t suffering from problems. If there’s heavy traffic, service providers can rapidly ramp up and down capacity through services like Akamai’s CDN. Data network outages can also usually be discovered immediately and most often times resolved shortly — hours in the most extreme cases (some of the outages at Amazon’s Web Services have been the exception).

The internet is a distributed system. It was designed that way (by DARPA) at its core to be resilient to attack. The power grid is not (yet) distributed. When the power grid has a massive spike in energy consumption (like during a hot summer afternoon), the network can potentially go down if it’s not quickly matched by expensive (and dirty) backup power generation from peaker power plants.

Energy storage

It should be noted that it’s easier and cheaper to move bits than electrons — it’s more an analogy for how a network should be designed. To make the power grid more resilient, smarter and more distributed, it will require a massive investment in power generation, transmission, distribution, smart grid software and energy storage.

A truly de-centralized power grid would require local power generation through solar panels or other means like fuel cells, microgrids that can isolate a neighborhood in the event of disasters, and energy storage systems (like batteries) that can bank power for buildings. Critical systems and buildings like data centers and hospitals have emergency backup power (when it works), mostly from diesel-power generators, but these are inefficient, dirty, costly and not widely used (or needed) by much of the population with reliable grid power.

It’s not as weird as it sounds to move to a more distributed power grid. Large companies in India are so used to rolling blackouts there that many of the largest have their own storage and backup systems and the biggest weren’t effected by the massive blackouts in India earlier this year. Solar panels are also cheaper than they have ever been, and are being installed on the roofs of U.S. homes and businesses at a rapid rate. Of course, solar panels won’t help in a nighttime storm, but if they’re matched with energy storage, they can bank daytime power for the nighttime critical use.

STILL, distributed power systems and energy storage units need to be far cheaper for this decentralized power grid to actually be viable. When fuel cell maker Bloom Energy launched years ago it painted the picture of a Bloom box in every home providing a mini power plant to all homes and businesses — but that’s a distant dream until the price of its fuel cells drops dramatically.

Clean power

There’s also another part of the story of the power grid and Hurricane Sandy. And that’s the need for a transformation of the grid to next-generation

Aerial view of Apple’s solar farm

energy technologies, like adding in more carbon emissions-free power generation and energy efficiency technologies. Leaders like Governor Cuomo are already describing Hurricane Sandy as an example of a new era of extreme weather, without even mentioning the politicized word climate change.

Cuomo said:

“There has been a series of extreme weather incidents. That is not a political statement. That is a factual statement. Anyone who says there’s not a dramatic change in weather patterns, I think is denying reality.”

Whatever combination is leading to more extreme weather (Mother Jones has a good take on the Sandy climate change argument), reducing the world’s carbon emissions is widely believed by scientists as something that can help address the problems of climate change. That means developing and deploying next-generation energy technologies that reduce energy consumption overall, and deliver low cost and viable clean power.

Even if you’re still not convinced about climate change, it’s actually an argument about infrastructure. The power grid needs a massive investment — at even a greater degree to the investment that’s been made in Internet infrastructure — to make it a more modern, digital, and resilient network. And hopefully, a cleaner network, too.

Image courtesy of NCDOTcommunications, and NASA.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• How energy data will impact the smart grid
• The fourth quarter of 2012 in cleantech
• Cleantech and investment in 2013

• Cleantech investor Vinod Khosla made news last summer when he told a meeting at the Energy Storage Association that the smart grid was more “smart hype than smart grid.” Importantly for that audience, he noted that all of the fundamental efforts of the smart grid geared at the demand side—smart meters, demand response, real time pricing, smart electronics—would become irrelevant and unnecessary if energy storage got price competitive. They’re starting to . . . Read the rest of GigaOM Pro cleantech analyst Adam Lesser’s take on The Future of Battery Storage on the Grid (subscription required).
• Owning physical items — cars, apartments, office space — has both lost some of its luster and will be increasingly inefficient for a global market. It is shifts like these, combined with catalysts like mobile technology, that are driving a greater interest in the share economy, which can broadly be defined as a marketplace where business models are built around consumers choosing access rather than ownership. Check out our report on the Opportunities and Risks in the Share Economy (subscription required).
• Around the world, data centers consume around 1.5 percent of total electricity demand, a figure that is expected to increase significantly. Greenpeace predicts power consumption will grow 19 percent by 2013 to 31 gigawatts. To cut power and, with it, costs, tech titans like Google, Apple, and Facebook are aggressively pursuing strategies to cut electricity use by greening their data centers. Read our report on The Economics of Clean Data Center Innovation (subscription required).

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Opportunities and risks in the share economy
• The economics of clean-data-center innovation
• How energy data will impact the smart grid

The staff of California Public Utilities Commission is recommending a “no” vote for two power purchase agreements in which SCE will buy power from BrightSource’s yet-to-be-built Rio Mesa solar project. The staff said the two agreements are too expensive and noted that the power plants for the contracts won’t have ways to store electricity for later use. The three remaining power purchase agreements between the two companies involve other power plants that will have energy storage, which will give Edison more flexibility to manage supply and demand.

The commission was originally scheduled to vote on the five power purchase agreements today but opted to postpone the decision until next month. The postponement request came from commission president Michael Peevey, who often pushes and wins approval for controversial projects from his fellow commissioners by coming up with alternative proposals that contain compromises.

The commission staff said in the report that storage is a “unique attribute” that “decreases renewable integration risk and provides more value to ratepayers.” With energy storage, a utility could bank electricity when demand is low and release the power when demand is high. It makes a solar power plant act more like conventional fossil fuel power plants, which can produce power any time of the day. California utilities are under mandates to increase the amount of renewable energy they serve to their customers, and they are turning to solar and wind energy to meet the requirements.

Solar and wind farms only produce power when the sun is out or the wind is blowing, so they won’t be able to send electricity to the grid consistently in ways that fossil fuel power plants can. An electric grid runs smoothly when there is a balance of supply and demand, however, and that makes managing solar and wind energy a tricky business. The ability to bank solar or wind electricity will help solve this dilemma. In fact, the commission is considering whether to require utilities to pay for energy storage as more solar and wind energy flows into the grid.

The cost of adding energy storage doesn’t always make sense, especially in the case of using newer storage technologies, such as batteries. But it does for BrightSource, which announced last August that it would start designing storage into its power plants. The Oakland company then revealed last November that it would add energy storage in some of the power plants that would serve Edison’s customers. The announcement mentioned three contracts to sell power to Edison, the same contracts that are now under review by the commission.

Edison actually sought approval for all five contracts back in 2009, when energy storage played no part. Then it re-negotiated the contracts with BrightSource in 2011 after BrightSource had modified those power plant proposals to reduce their environmental impact.  This time around, energy storage made its way into three of the contracts.

The two contracts that won’t benefit from storage are part of the proposed Rio Mesa project, which is under review by California Energy Commission. BrightSource applied for Rio Mesa’s approval last October, and ideally it would have approved contracts to sell power from the project in hand once it gets the permits to build it. Lining up those contracts also will be important for convincing investors to finance the project.

BrightSource plans to use tanks of molten salt for storing the thermal energy produced by its fields of mirrors. The mirrors concentrate and direct sunlight to heat up a water-containing boiler atop of a tower. The steam from the heated water runs the turbine and generator to produce electricity. If the steam isn’t going to be used to generate electricity, then it will be piped to heat the molten salt, which is good at trapping heat. Power plant operators can then use the hot molten salt to produce steam for electricity generation whenever that is needed.

BrightSource isn’t alone in finding out the necessity of offering storage to attract utility customers. Areva Solar told me a few months ago that it had finally decided on using molten salt for storage for its power plants. Areva also uses mirrors to harness the sun’s heat to produce electricity, but the mirror and power plant design is quite different from BrightSource’s.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• After Solyndra: analyzing the solar industry
• How energy data will impact the smart grid
• Key steps for successful renewable-energy permitting

California lawmakers passed a bill in late 2010 that fell short of requiring utilities to invest in energy storage but did  give the California Public Utilities Commission the task of looking into whether a mandate is a good idea and what that mandate should be. The commission on Thursday approved a proposal that identified 20 ways that electricity storage could benefit the grid and consumers. That decision then kicked off a new round of discussion that could eventually lead to an energy storage mandate and turn California into a prime market for many types of battery and other storage technologies.

Similar to the existing state mandate that requires investor-owned utilities to buy or produce more and more renewable energy over time, an energy storage mandate could very well require the same utilities to put money into technologies that could store electricity for short and long-term use. For example, utilities could build their own energy storage systems or buy services from owners of energy storage farms. Ultimately, the costs of investing and using energy storage will be passed on to consumers.

The idea is to use energy storage to complement the growing amount of solar and wind electricity that is flowing into the grid. Solar and wind energy production can be intermittent because it depends heavily on weather conditions. That intermittency worries utilities and grid operators because an electric grid runs smoothly only when there is a balance of supply and demand — it’s something that is easily achieved with fossil fuel power plants because they can produce electricity around the clock. The grid now is not well equipped to handle big surges or quick declines of solar and wind energy.

Electricity from an energy storage system can help to maintain that supply-demand balance in minutes at a time, become a go-to power source when demand is particularly high (such a hot summer day), or serve as a backup power supply during blackouts (see the 20 uses identified by the commission).

The energy storage bill signed by then Govt. Arnold Schwarzenegger in 2010 was apparently the first legislation in the country to look at how energy storage might be necessary for meeting a state’s goals to increase its use of renewable electricity. The new law (PDF) was a watered-down version of an initial effort to require the state’s investor-owned utilities to use energy storage. Instead, the law requires the commission to start the process of determining whether energy storage is necessary for the investor-owned utilities by March 1, 2012. The commission has until Oct. 1, 2013 to adopt an energy storage procurement target if it deems storage necessary. If that happens, utilities will have until the end of Dec. 2015 to meet the first target, and the end of 2020 for the second target. Municipal utilities and public utility districts, which aren’t regulated by the commission, also have to follow similar deadlines.

Understandably, the state’s three biggest utilities – Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric – oppose setting energy storage targets. And so does the Division of Ratepayer Advocates within the commission.

The utilities argue that public subsidies can actually slow down the development of better and cheaper technologies. The Division of Ratepayer Advocates noted that “Picking arbitrary procurement levels, such as a MW [megawatt] level or a percentage level would most likely result in sub-optimal market solutions and increase costs to ratepayers without yielding commensurate benefits.”

You can be sure to hear a lot more debates about whether a mandate will help or hurt storage technology development and deployment. A lot of federal and private money has gone into energy storage technologies, particularly in the field of rechargeable batteries, because they are betting that electric cars and renewable energy storage will become big business. Just earlier this week, the U.S. Department of Energy announced a new round of battery technology funding.

The commission plans to hold a workshop on energy storage on Aug. 20, and another meeting is scheduled for Sept. 4.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• How energy data will impact the smart grid
• Cleantech and investment in 2013
• The next generation of battery technology

The trade show and conference is expected to attract over 22,000 attendees over the next four days. Aside from the usual deep dive into various types of solar technologies, regional market analyses and project financing models and policies, there will be a series of panel discussions on energy storage technologies and how to pair them with solar energy projects.

Solar panel maker Hanwha SolarOne announced Monday that is has invested $8 million in a B round for Silent Power, an energy storage equipment company in Minnesota. With the investment, Hanwha plans to market a package of its solar panels with Silent Power’s energy storage products for residential and commercial markets. The companies expect to launch their first product by September this year. Silent Power says it can use different types of batteries – from lithium-ion to lead-acid – to build its battery systems.

Energy storage systems are handy because they can serve several purposes, from banking solar power for later use to balancing the supply and demand of an electric grid. That’s the concept, at least. Given energy storage isn’t widely used, energy storage tech companies still need to demonstrate, usually through pilot projects, that their equipment and software can perform as promised over time. Some of the energy storage technologies, such as the use of advanced batteries, also remain too expensive for mass adoption.

Given the high price tag, the conventional belief is that energy storage will take off with larger clean power projects first. Eventually, it will be cheap enough where it will show up at homes that have solar panels on their roofs.

Already, we have seen more co-marketing partnerships between solar and energy storage companies for the residential market over the past year. We wrote about SolarCity’s quiet marketing of solar panels and Tesla Motors’ battery systems to take advantage of an incentive program in California a few months back. Solar panel maker Kyocera is teaming up with Nichicon to roll out a set of solar energy system-cum-battery products for the Japanese market. The Fukushima nuclear power plant disaster from a year ago generated a heightened interest in solar energy and backup power systems.

Energy storage won’t be the only key theme at Intersolar, which showcases manufacturers of a variety of solar energy equipment. Solar manufacturers have been experiencing tough times since early 2011, when an oversupply of solar panels began to cause their prices to crash. What will it take to get through this period, which isn’t ending as quickly as many companies had anticipated? That will be the underlying theme for many of the discussions.

To underscore the impact of this gross imbalance of oversupply and demand, we are updating our list of solar companies that have filed for bankruptcy since 2011:

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Cleantech first-quarter 2013 analysis and outlook
• The fourth quarter of 2012 in cleantech
• Cleantech and investment in 2013

The sector is emerging, and grew just 8 percent over the first half of 2012, says Pike. While there are now 649 energy storage projects that have been announced, of those, there are only 514 projects deployed.

So what’s the hold up? Energy storage has long been considered the key to adding more clean power onto the grid. Because solar and wind only generate power when the sun shines or the wind blows (called variable energy) they need to be connected to energy storage projects to level out that generation. Storage projects can bank, say, the extra power from a wind turbine on a windy day, and then release that energy when the wind stops blowing. Power companies can also use energy storage projects to better manage the grid for a variety of applications.

According to Pike, here’s three reasons for the slow moving sector:

1). The technology is still too expensive: The costs vary a lot between different types of energy storage technologies. Pumped hydro is one of the cheapest forms, as is compressed air energy storage, but lithium ion batteries are far more expensive. A report from EPRI last year found that if energy storage prices dropped to $500 per kilowatt hour that could boost the market.

2). The market is overstated: There are more projects that have been announced — and are even inactive — than are deployed. Some of these announced projects might not ever get built. Inflating the market isn’t good because it creates hype around a sector that still has substantial hurdles.

3). Advanced energy storage tech is dependent on government support: Many of these projects have relied upon government support in terms of grants. The flow battery project in Modesto that I detailed this week is being built with a Department of Energy grant.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Opportunities for the future of batteries
• AEP: Deploying the Future of Backyard Batteries
• Green Data Centers: Batteries Included