In a field in Central Texas, Aaron Mandell and his crew are running pumping equipment to bring a former oil and gas well back to life. But they’re not trying to extract black gold. Instead, they are developing a way to turn abandoned oil and gas wells into vaults for storing electricity.
The concept behind Mandell’s startup, Quidnet Energy, sounds simple: pumping water deep into the earth to fill up the cracks in-between rocks that previously held fossil fuels. When the pressurized water is released, it acts like a spring as it races through a turbine-generator above ground, powering it to produce electricity.
Mandell, co-founder and chairman of Quidnet, is part of a growing number of entrepreneurs in an emerging market to use batteries or other technologies to bank electricity when prices and demand are low, and discharge it when they are high. The US market installed 221 megawatts of energy storage projects in 2015, up from the 65 megawatts added in 2014, according to GTM Research. The market research firm expects the annual installation to exceed 1 gigawatt in 2019.
The energy storage market is growing fast primarily because of the increasing amount of solar and wind energy being produced across the country, from rooftop solar panels to acres of wind turbines. Storing solar and wind energy for later use circumvents a big disadvantage of these two types of low-carbon energy: they can’t always produce electricity whenever needed because demand fluctuates, reaching a peak in the early evening when people return home and turn on appliances or during hot summer months.
Aaron Mandell (@AaronMandell)
1/3 Modern day Edison “light bulb” test, but now powered by a grid storage battery… pic.twitter.com/OV3DV1bZRl
February 6, 2016
Utilities in states with more renewable energy are starting to pay for energy storage services or build their own. Just last week, AES Energy Storage said it will build two giant lithium-ion battery systems for San Diego Gas and Electric in California, which is the biggest solar energy state in the country.
“Our goal is to allow renewables like solar and wind to penetrate the power market at much larger percentages than we have today,” Mandell said.
Quidnet recently lined up a new round of venture capital, bringing the total amount they have raised to just over $1m. The company previously snagged a seed funding of $500,000 from Clean Energy Venture Group.
Aaron Mandell (@AaronMandell)
2/3 generator is driven by a hydro-turbine w/high pressure H20 from repeatedly “relaxing” a 2K ft deep rock fracture pic.twitter.com/on5U60eH48
February 6, 2016
Quidnet’s other investors include Will and Jada Smith Foundation and the Sorenson Impact Foundation, both of which invested through Prime, a nonprofit advising foundations that want to put money into technology, which isn’t a familiar territory for philanthropic organizations.
Quidnet’s investors are betting on what they believe will be a cheaper alternative to lithium-ion batteries, which have dominated the energy storage projects in recent years, said Daniel Goldman, co-founder and managing director at Clean Energy Venture Group, the Quidnet investor.
“We view Quidnet as solving one of the most important challenges – enabling renewable resources such as wind and solar to penetrate the market while accomplishing an important goal of maintaining grid stability,” Goldman said.
Aaron Mandell (@AaronMandell)
3/3 Decades of O&G technology being applied to the carbon-free energy grid in the form of underground pumped hydro. pic.twitter.com/j40Qadj29C
February 6, 2016
Quidnet plans to build and operate energy storage projects for power plant owners, utilities and industrial companies. The company’s technology is similar to a widely used and cheaper energy storage setup that pumps water from a dam to an upstream reservoir when electricity prices are low. During peak times when electricity is more expensive, the water is drained back down to run through a turbine to generate power.
Instead of an above-ground reservoir, Quidnet stores water underground. The company launched a pilot project this past year in Erath County, Texas, to demonstrate the concept. Mandell and his co-founder Howard Schmidt, an engineer with oil company Saudi Aramco, used an abandoned natural gas well, which runs 2,800 feet deep, into a reservoir that could hold 50k gallons of water. The project showed that after pumping water into the well for 12 hours, their technology could generate six hours of electricity.
Quidnet’s idea is so unusual that it still needs to overcome some technical challenges to make it feasible for a well-run, large scale energy storage operation. “In theory, this idea can be helpful,” said Mark Jacobson, a professor of civil and environmental engineering at Stanford University and director of its atmosphere and energy program. “The technology should work so long as the reservoir does not leak and so long as the outflow can be controlled and is fast enough.”
Choosing well-sealed underground reservoirs to prevent the pressurized water from leaking is one of Quidnet’s biggest concerns. Mandell said the pilot project recorded far lower water losses than anticipated: 1% of the water per week instead of per day.
“We were impressed with the team and ‘pumped hydro’ concept using geologic reservoirs,” said Goldman.
Next, Quidnet plans to run another pilot project, this time at an old geothermal well in northern Nevada. The well is 14 inches in diameter, larger than a typical oil and gas well, making it possible to inject a higher volume of water – and generating more power faster – at any time. The reservoir can hold up to 85k barrels of water, and produce 10 hours of electricity following a 14-hour charge.
The new pilot project will store electricity from a geothermal power plant in Nevada run by AltaRock Energy, where Mandell is also CEO. The power plant sells electricity to NV Energy, the largest utility in Nevada.
Nevada is a good place to be for energy storage service companies. Nevada, along with other Western states like Oregon and Idaho, recently joined the California Independent System Operator (Caiso), which manages the wholesale electricity market in the state. As part of the deal, the member states will receive excess solar energy from California, which they can store and use to provide round-the-clock clean electricity, said Mandell.
Ultimately, Quidnet hopes to build its own wells in locations with a high demand for energy storage. Each of its projects will operate up to 20 wells, with each well measuring between 1000-5000 feet deep and capable of storing 35 megawatt hours of energy. The company is also working on software to automating a storage project’s operation so that a project owner can run it remotely.
An energy storage project could be measured in watts or watt-hours, depending on what information a project owner wants to convey. The term “watts” (a megawatt is a million watts) denotes how fast power can be charged or discharged at any time. A watt-hour refers to the amount of energy that can be stored or released in a given hour.
The cost of building each well varies by depth, said Mandell, and Quidnet aims to build a project at $50 per kilowatt-hour of energy, a cost that will include the well, turbine generator, planning and securing permits. What’s not included is the cost of drilling exploratory wells to identify the proper underground geology for storing water.
“Fortunately, the oil, gas and geothermal industries have already done this exploration work for us – there are hundreds of thousands of wells drilled all over the country that we’ll use to tell us exactly where to install storage,” he said.
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