The startups that have teamed up to build a transmission hub to connect the U.S.’s three major grids in the east, west and Texas are adding another startup player for energy storage. This afternoon, Tres Amigas, the Santa Fe, N.M-based company behind the transmission project, announced that they have partnered with Xtreme Power, a startup which provides groups of batteries for energy storage for the power grid. In June, Tres Amigas also signed on startup Viridity Energy, which makes software that dynamically manages loads on the grid in terms of energy pricing, renewable energy generation and energy storage.
Tres Amigas’ plan is to build a so-called “SuperStation” — the mother of all substations — that would use superconducting cables from American Superconductor Corp. that can carry 5,000 MW of electricity, are super-chilled to minus 300 degrees Fahrenheit, and can boost the lines’ carrying capacity. The substation itself would act as a hub and balancing authority, and would convert the alternating current (AC) from the three grids into direct current (DC) and then back to AC in order to move the electricity back out onto the three grids in an efficient and reliable way.
Xtreme Power’s batteries would provide storage for the SuperStation to help balance the flow of electricity, and importantly, to enable the addition of more clean power, which is variable, depending on the wind and sunlight, which aren’t always available. Xtreme Power’s batteries would store and release power in response to fluctuations in demand and supply at the hub.
Six-year-old Xtreme Power is building this type of storage system for other clean power projects, including a 10-megawatt storage system meant to back up a 30-megawatt wind farm planned for the Hawaiian island of Oahu. The developer of the wind project, First Wind, recently received a $117 million Department of Energy loan guarantee for the project, and Xtreme Power said it will be managing not only its battery, but the entire wind farm’s output via its own smart grid network. Xtreme has also tested a 1.5-megawatt battery system at another 30-megawatt wind project on the island of Maui.
For its batteries, Xtreme uses a PowerCell battery chemistry that it calls a “chemical capacitor,” which it says can beat lithium-ion batteries in terms of energy storage, efficiency, cycle life and cost. CEO Carlos Coe told us back in March that Xtreme’s PowerCell battery tech acts more like capacitors: charging and discharging at high speeds, while at the same time, maintaining the qualities that make batteries better than capacitors for long-term energy storage.
The storage technology was born out of a joint venture between Ford Aerospace and defense contractor Tracor in the 1990s that was shelved after its target market — California’s zero-emissions vehicle fleet — collapsed in the wake of the state’s decision to back off its ZEV mandate. Xtreme bought the technology in 2004 and put its first 500-kilowatt PowerCell in place at the South Pole Telescope — an extreme environment to be sure — in 2007.
Sam Jaffe, analyst at IDC Energy Insights, estimated that Xtreme has been targeting around $500 per kilowatt-hour as a profitable price point for grid storage systems, though he expects early projects to exceed that, given its novelty. At $500 per kilowatt-hour, the Xtreme tech would compare well to costs of about $800 per kilowatt-hour for sodium-sulfur batteries, the primary battery technology now widely deployed for grid backup, or between $622 per kilowatt-hour and $1,500 per kilowatt-hour for flow batteries, another technology competing for grid-scale markets.
Xtreme has raised at least $43 million from investors including Sail Venture Partners and the state-run Texas Emerging Technology Fund. But Xtreme told us earlier this year that it’s been seeking financing for a $425 million plant that would roll out an eventual 2 gigawatts of batteries per year to be used to provide energy storage for the power grid.
The Tres Amigas business model — envisioned by the founder and CEO, Phil Harris, who was the CEO of PJM Interconnection — is to charge a fee for use of the SuperStation. The Wall Street Journal reported last year that the project could cost a whopping $1 billion to build, so the company will need to raise a lot of funds.
Creating partnerships will be key to getting the project approved, financed and built. Tres Amigas did say today in its announcement that in March the Federal Energy Regulatory Commission (FERC) approved Tres Amigas to sell transmission services at negotiated rates.
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