Here's an important new development. American Electric Power, one of the nation's largest coal-burning utilities is spending $27M to buy six one-megawatt batteries. The story in the New York Times starts with these double-decker bus-sized one-megaWatt batteries, then quotes AEP President Carl English as saying that the same objective could be achieved via "vehicle-to-grid" (V2G) use of car batteries. AEP Chairman Michael G. Morris points to all the applications V2G advocates see: "reliability improvement, peak-load shaving and the use of stored energy from renewable sources like wind to supplement available generation resources."

The reporter calculates that each $4.5M battery could be replaced by 1,000 PHEVs -- implying that the utility could value each PHEV, or perhaps in some way provide a subsidy, of $4,500 toward each vehicle's purchase.

Below is the New York Times report followed by excerpts from the AEP press release.

The New York Times September 11, 2007 Utility Will Use Batteries to Store Wind Power By MATTHEW L. WALD http://www.nytimes.com/­2007/­09/­11/­business/­11battery.html

WASHINGTON, Sept. 10 — American Electric Power, a coal-burning utility company that is looking for ways to connect more wind power to its grid, plans to announce on Tuesday that it will install huge banks of high-technology batteries.

The batteries are costly and their use at such a big scale has not been demonstrated, but they may be an essential complement to renewable power, experts say.

“We’re looking at what we believe the grid of the future is going to be,” said Carl L. English, president of A.E.P. “We’re going to need a significant amount of storage if for no other reason than to take greatest advantage of alternative energy sources like wind power.”

The investment would position the company well if any of the 11 states in its service territory establish a minimum quota for renewable energy, or if Congress sets a national standard, company executives said; it would also help if carbon controls were instituted and wind power were to gain a financial advantage over coal.

An expert not involved in the program, Edgar DeMeo of Renewable Energy Consulting Services, said, “They must think there’s enough potential there so they want get a better handle on how it works.” But Mr. DeMeo and others said that wind energy had substantial room to grow before storage became necessary.

American Electric Power’s batteries will be used to smooth the power delivery from wind turbines. They can charge at night, when the wind is strong but prices are low, and give the electricity back the next afternoon, when there is hardly any wind but power prices are many times higher, company officials said. That strategy would reduce the amount of power generated from inefficient peak-demand units.

The batteries can also insert energy into the grid during brief voltage drops, reducing the chance of a blackout and stabilizing the grid for all users. They may also delay or eliminate the need for transmission upgrades in some areas, the company said.

At least at this stage, saving money by storing a windmill’s production for peak-price hours will be difficult. The cost is very high, $27 million for six megawatts of capacity, or about $4,500 a kilowatt, including the price of substation improvements. Building a gas turbine of that size to meet peak needs would cost substantially less. But the battery system would be able to store power made from wind, a form of generation that does not produce any carbon dioxide.

The batteries can each deliver one megawatt of power — enough to run a medium-size shopping center — for a little more than seven hours. Replenished nightly, they give back about 80 percent of the electricity put into them. Each is the size of a double-decker bus, and installation is not permanent; they can be moved to another site as the need arises.

The batteries will be built by NGK Insulators Ltd. of Japan. They use a sodium sulfur chemistry and operate at temperatures of more than 800 degrees Fahrenheit.

And while the batteries are large by the standards of previous installations, they are small relative to wind production; one battery would hold about as much energy as a single large wind machine could produce in a day, Mr. DeMeo pointed out. And they are small relative to total energy demand.

But, he said, “If we ever really do get cheap storage, and that’s a possibility, that’s a game changer.”

A.E.P. intends to have 1,000 megawatts of energy storage on its system in the next decade, according to the company, and at least 25 megawatts from batteries of this type.

A range of options is available for the remainder of the storage, including the use of plug-in hybrid cars, Mr. English said. The idea behind plug-in hybrids is that the owner of a car would charge the batteries every night when demand and cost of electricity were low. The next day, under a contract between the utility company and the driver, the car would be left plugged when not in use, and the power company could reverse the flow of electricity and draw power out of its batteries during times of peak demand. Enough power would be left in the batteries to start the engine, so that a driver returning to a drained car could still run it on gasoline until the batteries could be charged again at night. It would take more than 1,000 such vehicles to equal one of the sodium-sulfur batteries, however.

AEP to Deploy Additional Large-Scale Batteries on Distribution Grid Installations Will Boost Reliability, Integrate Wind Generation, Prepare for Future; New Batteries a Step Toward AEP's Goal of 1,000 Megawatts of Advanced Storage http://money.cnn.com/­news/­newsfeeds/­articles/­prnewswire/­CLTU05611092007-1.htm

COLUMBUS, Ohio, Sept. 11 /PRNewswire-FirstCall/ -- American Electric Power, as part of the company's comprehensive effort to integrate new technologies for reliability, renewable energy and energy efficiency to meet customers' future needs, is expanding its use of large-scale battery technology on its electricity grid.

AEP, the only U.S. utility currently using advanced energy storage technology as part of its electricity infrastructure, will be adding stationary sodium sulfur (NAS(R)) battery technology in its West Virginia and Ohio service territories next year.

The company will also work with wind developers to identify a third location within AEP's 11-state service territory for NAS battery deployment next year, using the storage capability to help offset the intermittent nature of wind generation.

AEP has placed an order for the three new NAS batteries with NGK Insulators Ltd. of Japan, the manufacturer and co-developer, along with the Tokyo Electric Power Co., of the technology. AEP anticipates delivery in spring 2008.

The six megawatts added to AEP's system during this deployment is a step toward the company's goal of having 1,000 megawatts of advanced storage capacity on its system in the next decade.

"We are extremely impressed with both the performance and the potential of this technology after using it in real-world applications and from experience we've gained through our long relationship with NGK," said Michael G. Morris, AEP's chairman, president and chief executive officer. "These new installations will move us a step closer to the full potential of advanced energy storage technologies in areas like reliability improvement, peak-load shaving and the use of stored energy from renewable sources like wind to supplement available generation resources.

"We're first movers on advanced storage among U.S. utilities, a position we've held on a wide number of technologies in our century of existence," Morris said. "Our near-term goal is to have at least 25 megawatts of NAS battery capacity in place by the end of this decade. But this is just a start. Our longer-term goal is to add another 1,000 megawatts of advanced storage technology to our system in the next decade. We will look at the full spectrum of technologies -- flow batteries, pumped hydro, plug-in hybrid vehicles and various other technologies in early stages of development today -- to determine their feasibility and potential for commercial application.

"In our view, advanced storage technologies, like NAS batteries, and other emerging technologies to increase customers' ability to benefit from energy efficiency will play equally important roles in delaying or avoiding costly future investments in new energy delivery or generation infrastructure," Morris said. "I believe other companies will begin deploying storage technologies in the coming years."

AEP plans to add two megawatts of NAS battery capacity near Milton, W.Va., to enhance reliability and allow for continued load growth in that area. AEP will also add two megawatts of NAS battery capacity near Findlay, Ohio, to enhance reliability, provide support for weak sub-transmission systems and avoid equipment overload.

A specific site for the third NAS battery, which is expected to be integrated with wind generation, will be announced in the coming weeks.

The combined cost for the three installations, including associated site preparation, equipment and control systems, will be approximately $27 million.
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The deployment of additional advanced storage capacity is part of a comprehensive AEP initiative focused on preparing the company's 11-state distribution system to meet future needs of customers.

"We're looking at where we need to be in the year 2020 and will be making changes to transition our system to the grid of the future," Morris said. "We have teams of employees examining the current and likely future needs of customers as well as the variety of technologies under development that could meet those needs. We're looking at ways to improve reliability and efficiency of our system as well as ways to reduce consumption, which delays or avoids the need for additional generation.

"Some elements, like additional large-scale storage systems to enhance reliability, advanced metering systems to provide customers with options for reducing energy use and further integration of renewable resources, are among the likely solutions customers will see in the near term," Morris said. "We're also testing distributed energy resources and 'smart grid' or 'self- healing grid' technologies designed to seamlessly separate sections of the distribution grid when problems develop elsewhere, with customers seeing no disruption in power supply or quality in situations where outages would be likely today. But implementation of these technologies is a bit further off."

American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation's largest generators of electricity, owning more than 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation's largest electricity transmission system, a nearly 39,000- mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP's transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP's utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP's headquarters are in Columbus, Ohio