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Thermal Energy Storage Solutions Are Heating Up

Alex Eller
Jun 16, 2017

While the new generation of battery energy storage systems have captured the attention of the global electric industry and media, more traditional forms of energy storage have been quietly operating for decades. Thermal energy storage is already a well-established technology that has been utilized in large buildings to reduce energy expenses by freezing water overnight and using lower priced off-peak electricity to offset air conditioning (AC) compressor needs during daytime peak demand periods. These systems allow building owners to generate significant savings on their utility bills with no effect on comfort or daily operations.

Despite limited media attention, thermal energy storage theoretically has many advantages over battery-based storage systems, including generally lower costs (both on an upfront and total cost of ownership basis), longer system life expectancy, non-toxic designs and materials, and ease of recycling at the end of a project’s life. These advantages and the maturity of the technology have allowed thermal storage to play a critical role in district heating and cooling systems around the world. However, in recent years, new thermal storage solutions have been commercialized, targeting new markets and providing competition for lithium ion and other battery technologies.

Thermal Storage Solutions Expanding

In late 2014, utility Southern California Edison (SCE) announced awards for a landmark procurement of energy storage capacity to optimize grid reliability, support renewable energy integration, and fulfill local capacity requirements. While most contracts were awarded to battery energy storage providers, up and coming thermal energy storage provider Ice Energy won a contract to provide 25.6 MW of capacity. Although Ice Energy’s technology operates similar to many other thermal storage systems, its approach to the market—targeting utilities with peak demand reduction solutions—provided SCE with a cost-effective way to reliably reduce customer demand and strain on its distribution system. The key to Ice Energy’s offering is the ability to virtually aggregate its distributed systems and give utilities control, providing a reliable, location-specific form of peak load reduction. Ice Energy continues to land contracts with utility customers, and it has expanded its product line to target residential customers in addition to commercial and industrial buildings.

Thermal storage solutions are expanding from an early focus on managing AC loads to target other building systems that require large amounts of cooling power. One of the more successful innovators in this market to date has been Axiom Energy. The company’s refrigeration batteries are being installed by major retailers, including Walmart, and through a partnership with New York utility Con Edison. Axiom Energy’s technology works on a similar principle as AC-based storage systems and can be installed on existing refrigeration systems without major modifications or reprogramming. These systems offer both utilities and customers a reliable, non-disruptive way to reduce their peak power consumption and the associated expenses.

Best of Both

The recent advances made in thermal energy storage technologies are heating up the debate over the merits of these systems versus battery storage. Both technologies have certain advantages and disadvantages, and both should play important roles in the modernization of building energy management and power grid operations. However, battery storage continues to grow in popularity and market share in the storage industry. The ability of battery systems to provide both peak demand reduction and backup power in a more compact physical footprint is a key advantage over thermal storage. As the industry progresses, there will likely be increasing opportunities for both technologies. In fact, for many customers, the best approach may be to utilize both thermal and battery storage, taking advantage of the best of both to maximize their potential savings.