Electric Utility Load Leveling: U.S. Technology and Markets

Report Highlights

• The U.S. load leveling market is estimated at $11 million in 2001 as companies begin to bring products to market.
• By 2006, explosive growth exceeding an AAGR (average annual growth rate) of 100% should result in a market that tops $1.2 billion.
• The market for compressed air energy storage is expected to lead growth, and exceed $900 million in 2005
• Within the five-year scope of this report, a small hydrogen economy should develop, and this will create a $60 million niche market for fuel cells and hydrogen production and storage equipment.
• Pumped hydro, the only widely used load leveling technique in the U.S., should experience a small revival, reaching $200 million in 2006.

INTRODUCTION

Electrical generating utilities are faced with a paradoxical problem. On one hand, they are confronted by projected increases in electricity demand. On the other, their plants often are operating at much less than capacity. Any power generated but not consumed or sold is wasted. This is particularly serious because power consumption drops dramatically each night, during the off-peak hours.

It has long been recognized that this unused capacity represents a wasted financial investment. In fact, many kinds of utility generation plants can't completely cut back their operations and are forced to produce unused power at a dead loss. This is why they encourage municipal lighting and nighttime industrial operations with lower off-peak electricity prices and promote peak shifting, for instance, via electric vehicle use.

An obvious solution that has been around since the days of Edison, is to store the power produced at night for use during the day. This BCC report examines a variety of proposed load leveling energy-storage technologies including electrochemical batteries, compressed air and water, flywheels, ultracapacitors, and superconducting magnetic energy storage. Indirect load leveling schemes like charging electric vehicle batteries or producing hydrogen or other fuels also are considered.

Estimates vary, but a perfectly flexible load leveling system could improve certain utilities effective generating capacity by as much as 40%. Even a 10% improvement in effective capacity would be significant. With this in mind, the goal of the electric load leveling industry is to store or otherwise recover this off-peak power so it can be consumed during high demand periods.

SCOPE OF STUDY

This report provides coverage of:

• Storage approaches, including electrochemical batteries, compressed air, pumped hydro, flywheels, capacitive, superconducting magnets and fuel cells
• Four possible deployment scenarios: utilitybased, user-based, hydrogen economy, and electric vehicle peak shifting
• Commercial, regulatory and technical environments, as well as regional aspects
• Companies involved in the load leveling industry.

METHODOLOGY

This report is based on a literature review, patent examination, and discussions with commercial and government sources. Throughout the report, past market data is expressed in current dollars, and estimates and predictions in constant Year 2001 dollars. Estimated wholesale markets for year 2000 and predicted 2001 and 2006 market figures are provided. Most market summaries are based on a consensus scenario, and optimistic and pessimistic scenarios are also discussed. Totals are rounded to the nearest million dollars. When appropriate, information from previously published sources is identified to allow a more detailed examination by clients.

ANALYST'S CREDENTIALS

This report's project analyst, Donald Saxman, was a long-time editor of the BCC monthly Battery/EV Technology News and has founded several other BCC newsletters. Saxman has over 18 years' experience in market analysis, technical writing, and newsletter editing. Since 1983, he has operated as a technical market consultant and subcontractor to BCC. Previous experience includes supervision of a quality control laboratory at a major secondary lead refinery, experience as an analytical chemist at a hazardous waste testing service, product assurance manager for a space station life support system project, and an information technology analyst and project manager.