Amidst all the batteries, fuel cells, flywheels and other technologies trying to bring energy storage to the building scale, there’s one technology that’s as simple -- well, almost as simple -- as an icebox.
Thermal energy storage is its name, and the basic idea has been around since the 1920s. Put a device on your roof that makes ice at night when power’s cheap, then uses that ice during hot days to augment air conditioning operations, and avoid buying expensive peak power.
This form of storage can’t do everything that batteries can do: it can’t pump power into the grid, for instance. But it does serve one function very well, which is cutting down on the peak power demand seen by utilities in hot climates, where up to half of a typical summer afternoon’s peak load can come from AC load.
That’s why Ice Energy has made the utility, rather than the building owner, the focus of its business model. In simple terms, the startup sells its Ice Bear rooftop units to utilities, and then goes out and finds the customers willing to have them installed as a utility asset on their rooftops.
The building owner gets cheaper power, and the utility gets a solution to its peak power problems, said Mike Hopkins, executive vice president of corporate development. That all comes at a cost of roughly $2,200 per kilowatt of installed capacity, a figure that's quite competitive with other forms of distributed energy storage, he said.
It’s a growing business. Ice Energy is now roughly halfway through fulfilling the 53 megawatts of Ice Bear units it has contracted to provide its biggest customer, the Southern California Public Power Authority, which buys power for municipal utilities around the SoCal region. That relationship also led the company to relocate from Windsor, Colo. to Glendale, Calif. last month, and to decide to focus on California as its key market, Hopkins said.
On Wednesday, Ice Energy announced a second big deal with the municipality of Redding, Calif., which voted this week to expand its current 1-megawatt project with the startup to a full 6 megawatts of installations over the next five years. So far, the Ice Bear units that have been installed for the municipal utility have managed to cut air conditioning peak power use by 95 percent, basically taking the AC load out of the utility’s equations for peak power management.
It’s also a profitable business. Ice Energy, which has raised about $90 million since its 2003 founding, most recently with a $24 million Series C round in 2010, has been able to turn a profit this year, Hopkins said, though he wouldn’t provide any figures on how much money the company is making on its projects.
One of the ways Ice Energy has turned the corner to profitability is by partnering with contract manufacturers for its Ice Bear units, he said. That includes Mercury Corp., a former aircraft parts maker that’s now churning out Ice Bear units using some of the startup’s robotic manufacturing systems, he said.
It also includes local light manufacturing partners, which is the case for its Redding project, he said. Ice Energy has also contracted out installation and maintenance to third-party HVAC contractors and the like, instead of doing that work in-house, he said.
So far, municipal utilities have been Ice Energy’s best customers. That’s partly because they can move faster than investor-owned utilities, and partly because they happen to be parts of city governments that have their own buildings to outfit with Ice Bear units and their own power bills to shave, Hopkins said.
To grow its business, Ice Energy will need to convince a lot more utility customers that they should install a utility-owned thermal storage asset on their rooftops. So far, Ice Energy hasn’t had a problem finding enough building owners to agree to the deal, Hopkins said.
After all, utilities tend to bring incentives to the table that make it a low- or no-cost option that leads directly to lower utility bills, and because the units don’t actually alter the operation of air conditioning during the hottest parts of the day, there’s no concern with reduced comfort for building occupants.
Ice Energy isn’t the only game in town when it comes to ice-based thermal energy storage. Several other startups are exploring different variations on the essential model of creating and storing coldness at night and using it during the day.
On the big property owner side, CALMAC is the king of ice energy storage, with large-scale projects for the likes of The Bank of America Tower in New York, a Nordstrom department store in Hawaii cooled by 43 tons of ice produced a night, and the Bangalore offices of Indian conglomerate Tata Consultancy Services.