Flywheel energy storage is making a comeback … sort of. They’re definitely in better shape than the Beacon Power days of old, but that’s not saying much. If you’re familiar with the hype cycle you’ll know that it takes time for the hype to shake out before lasting and real technological progress can be made. And now about a decade later, there are some things worth taking notice.
Some Flywheel History
Beacon Power, at one point, had one of the largest grid connected energy storage systems in the US, its Stephentown, New York, flywheel storage farm. It’s comprised of 200 flywheels, for a total of 20 MW, and still operates today, hooked up to New York ISO’s power grid. It began commercial operations in January 2011, but the company has had a bumpy ride since then.
Back in 2005, the federal government enacted the Energy Policy Act of 2005. It paved the way for the Department of Energy (DOE) to provide incentives for innovative technologies, such as loan guarantees. A couple years later, the DOE funds the Loan Guarantee Program. However, before any loans were issued, the great financial crisis hit, greatly dampening investment in renewables and clean energy technologies.
Then came the American Recovery and Reinvestment Act of 2009 (Recovery Act). The Recovery Act was a stimulus package that, among other sector funding, gave about $27 billion to energy efficiency and renewable energy research and investment. One particular part of the law introduced cash grants in lieu of tax credits. This allowed a solar developer to receive 30% of the cost of a solar farm upfront as cash instead of the investment tax credit (ITC). Tax equity financing significantly dried up after the big crash. So the cash grant became a major capital infusion for these projects.
The Loan Guarantee Program didn’t start issuing loans until after the crash in 2009. When combined, federally guaranteed back loans with cash grants and other incentives like bonus depreciation made a lot of projects worth investing in, even those with riskier technologies. Loans covered anything from wind farms, solar PV manufacturing (e.g. infamous Solyndra), transmission, to electric vehicles. Tesla was a loan recipient in 2010. And yours truly, Beacon Power got their $43 million loan guarantee in August of that year.
Beacon filed for bankruptcy protection on October 30, 2011, less than a year after the Stephentown plant began operations. Revenues were insufficient and it was operating at a loss. However, with the plant’s assets pledged and cash collateral, the DOE reached an agreement with Beacon to restructure the deal so that the plant could continue to operate.
The Stephentown flywheel farm came into existence a year too early. It’s a shame … right before the bankruptcy filing, the Federal Energy Regulatory Commission (FERC) passed a new rule, Order 755, on October 20, 2011. That rule increased compensation for fast responding resources like batteries or flywheels that bid into frequency regulation service markets. A couple years later, FERC issued another landmark ruling, Order 784. This time energy storage systems would now be rewarded for its better performance characteristics than slower responding fossil-fueled gas turbines and coal power plants.
Oh what could have been … Maybe if the timing was right, it could have changed the fortune for flywheels. Sigh …
I remember back in the late 90s following Beacon Power as a college student and an aspiring electrical engineer. I developed a fascination for flywheel energy storage in a class I took on alternative energy. What I loved most about flywheels was its simplicity of operations. It acts as an electric motor during a charge cycle and as an electric generator during a discharge cycle. Pretty much a levitating spinning cylindrical mass inside a vacuum chamber.
So back to basics. Stored kinetic energy in a flywheel is determined by J, the polar moment of inertia, and omega max, the maximum angular speed of the flywheel :
So the key determinant factors of stored energy is mass of the cylinder and the maximum angular speed which depends on the material characteristics of the flywheel. Some are looking at composite materials as opposed to steel for their higher tensile strength.
Cost and Performance
Flywheels are definitely not the cheapest energy storage technology. However, flywheels have advantages in that they can be designed for high power, low duration or lower power, high duration applications. They don’t have daily cycling limitations or degradation over time, unlike batteries. They also have a longer design life and a roundtrip efficiency that can compete with batteries.
In an article by Joule, flywheels are projected to have the highest probability of having the lowest levelized cost of storage (LCOS) for fast frequency regulation for the next 30 years, among different use cases. The projection also shows that flywheel costs for this use case will also drop by about 44% over the 30 year period.
Fast frequency regulation was the only use case that flywheels are shown to be very competitive compared to other technologies. But these projections assume a high power, short duration design. However, there are some other interesting things I’m seeing with flywheels. There are now new designs with longer durations. If you take all the advantages of flywheels and can drive down upfront costs and compete on duration, then flywheels can take a bigger bite from battery market share.
I’ve been following Amber Kinetics for a while now. I’d say they’re a supernova among a bunch of white dwarfs in a fledgling industry. Amber Kinetics has developed a 32 kWh flywheel with a 8 kW power capacity. Each unit can discharge 8 kW over four hours. Because of that, it’s very scalable and versatile. It can be used in a variety of applications, from microgrids to commercial and industrial customers using it to reduce demand charges.
Amber Kinetics started small and have demonstrated their technology across the world in different grid systems. That diverse operational knowledge of having over 250,000 runtime hours will translate into greater innovation down the road. That’s what makes them stand out.
The company’s got some financial backing, completing a Series C venture funding round in 2018. With commercial agreements in place already and actual operating systems deployed, they’re poised to lead the flywheel energy storage space. Beacon took a big swing at bulk energy and has been the face for flywheels for some time despite the shaky past. But Amber Kinetics is thinking long-term. It can fill the gap in a growing market for distributed renewable energy.
If you’re an investor looking at early stage companies, this one’s worth keeping an eye on. It’s a growing fish in a very small pond and flush with opportunity.