Project Management Institute

Grid 2.0

battery energy storage projects are reshaping power networks

The dream of being able to easily store energy for later use in businesses and homes is approaching reality. With the cost of battery energy storage dropping faster than anticipated, the market is on the verge of massive growth that could help make humanity's relationship to electrical power more efficient and stable. By 2019, the U.S. energy storage market is expected to increase to US$1.5 billion, up from US$128 million in 2014.

As increasingly affordable battery projects enter utilities’ portfolios, they'll need practitioners who can overcome their challenges on the fly.

Next-generation lithium ion batteries, such as those unveiled by Tesla Motors in April for consumers and utility companies, can be charged with power from traditional or renewable energy sources. The stored energy can be used when electricity costs are highest (to save money), when there's a strain on traditional grid networks or during blackouts. By decreasing the chance of outages during peak demand periods and obviating the need to build additional transmission and distribution networks, utilities benefit.

“It's such flexible technology,” says Nick Heyward, project director, UK Power Networks, London, England. He is managing the utility's £18.7 million Smarter Network Storage project, Europe's largest battery energy storage project to date. “The basic ability to shift energy from periods when it's not helpful to when there are constraints, congestion and high demand is very useful.”

By 2019, the U.S. energy storage market is expected to increase to US$1.5 billion, up from US$128 million in 2014.

Utility-scale battery projects could particularly benefit places like Hawaii, USA, which generates a significant amount of energy from solar, but has nowhere to put its excess energy. That energy often gets dumped back on infrastructure not equipped for it, causing overloaded circuits, burned lines and blackouts.

Sub-Saharan Africa, where more than 600 million people lack access to electricity, also stands to benefit from battery projects. Even in areas with widespread power grids, such as Nigeria, Ghana and South Africa, electricity from utilities is often unreliable.

Africa has the highest reserves of renewable energy sources, meaning that, in theory, batteries could provide millions with first-time access to electricity and allow others to unplug from unreliable utility companies. The dynamic is analogous to how the arrival of inexpensive mobile phones allowed some Africans to “leapfrog” landlines.

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Tesla's Powerwall

While the cost of energy storage remains out of reach for many consumers—Tesla's home battery runs as much as US$3,500 for 10 kilowatt-hours of storage—utilities are moving ahead with projects that promise big benefits. And project managers are learning how to handle first-of-their-kind initiatives.

“The process and bidding for funding was unlike anything else I've experienced,” Mr. Heyward says. “We had intense deadlines. There was a lot of detail covering budgets, resourcing plans, timeline and milestones, and technical design—all within about a six-month period. It was tough, I'm not going to lie.”

UK Power Networks’ Smarter Network Storage project launched in January 2013 with a consortium of tech companies. When complete in December 2016, it could save UK Power Networks and its customers as much as £6 million on traditional grid reinforcements.

An energy storage project in California, USA brought different challenges. In 2013, the state mandated that utilities create approximately 1,300 megawatts of energy storage (excluding pumped hydro storage projects) by 2020. To comply with the new regulation, in September 2014, utility Southern California Edison (SCE) completed one of the largest battery energy storage projects in North America, a US$50 million, 32-megawatt-hour lithium-ion facility in Tehachapi, California, USA.

The company's next step toward compliance, the US$5 million Distributed Energy Storage Integration (DESI) project, was its first distribution-level energy storage project. The Orange, California-based project, which was scheduled to finish in June 2015, will help harness energy on a local level and improve reliability during hotter months.

Identifying key stakeholders such as local government agencies and establishing major milestones for DESI was new territory for the company.

“We didn't really have a good feel for that when we were planning the project, and there's been a few hiccups along the road,” says Darcy Skaggs, PMP, Electric Vehicle Technical Center operations manager, SCE, Los Angeles, California, USA. “It's definitely been a learning process.”

One of the critical milestone tasks, Mr. Skaggs says, was the geotechnical engineering analysis. “Whenever we're doing civil engineering work, we need to know the environmental impact. We need to have a clear understanding of any regulatory requirements before we start out there digging and preparing the site,” he says.

That involves taking core samples and soundings of the area and having that data analyzed and mapped out. Civil engineers need to have all those geotechnical parameters so they know how to design the site, Mr. Skaggs says. “That was one of the key critical tasks that we didn't realize was going to take as long as it did.”

As energy storage projects at utilities become more common, sharing lessons learned will play a critical role in future success. Mr. Skaggs has been working as a consultant on a second permanent SCE installation with hopes that future projects will be more timely, cost-efficient and streamlined, he says.

“One of the key takeaways is to involve all the groups affected by the project early in the planning process and to discuss potential issues,” Mr. Skaggs says. “Do a lot of ‘what ifs?’ to mitigate risk. Early communication is essential to the process.” –Matt Schur

RECIPE FOR SOFTWARE SUCCESS

With mobile, social and cloud platforms being rapidly adopted around the world, software development capabilities are increasingly valuable—even at organizations outside of the technology sector. What sets some companies apart from the laggards when it comes to software success?

For starters, a more agile approach to project management. —Imani Mixon

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Source: 3Pillar Global and the Robert H. Smith School of Business at the University of Maryland, Product Development Success Index Study, 2015. Results based on a survey of 204 U.S. software product development managers, directors and executives across a variety of sectors in 2014.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK AUGUST 2015 WWW.PMI.ORG
AUGUST 2015 PM NETWORK

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