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Energy storage – new views, Part 2

By Dave Elliott

In addition to its large-scale grid balancing role, which I looked at in my last post, energy storage may also play a role at the consumer level, with batteries allowing solar PV-using ‘prosumers’ to provide their own backup. Some see this as a possible new type of distributed storage capacity and also, more radically, as further challenging the market power of the big utilities (much of the 75GW of wind and PV in Germany is now owned by local consumers and energy co-ops), even to the point when grid systems are redundant. This may be overstated, but some more movement in that direction may be occurring in Germany and the US as batteries get cheaper.  

An IGov paper from Exeter University, looking at the household level, says ‘The combination of rooftop solar PV and cheaper storage is seen as the next big threat to the market and income of the utilities. Until recently, individual storage units were not seen as a viable option, but prices have fallen rapidly (from $500/kWh in 2013, to $360/kWh in 2014) and financial institutions, such as UBS, are predicting further cuts, with prices as low as $100/kWh within 10 years. On this basis they assume the payback time will be as low as 6-8 years for a combined Electric Vehicle + solar + battery investment by 2020 – unsubsidized’. It goes on ‘This accelerated expected decline in storage costs is a reflection of the confidence in the development of batteries for Electric Vehicles (EVs). Batteries are now ubiquitous and there is clear cross-over between the technology developments in the different sectors. It was the drive for lower costs for laptop batteries that accelerated falling prices in the EV sector. However, now it is EVs that are driving down storage costs. The most graphic example is the Tesla company, one of the world’s leading EV manufacturers, which announced in September 2014 that it will build a $5 billion ‘Giga factory’ that will double the global annual production of EV batteries and potentially half their production costs’. http://projects.exeter.ac.uk/igov/wp-content/uploads/2014/09/Post-stuttgart-1-final-paper.pdf

There are counter views: batteries are still pricey, and, given lucrative FiT export tariffs, there is no incentive for prosumers to store excess power: www.renewableenergyworld.com/rea/news/article/2014/10/viable-battery-backup-for-rooftop-solar-still-years-away. Despite being unsure of whether large-scale bulk storage would be very relevant in the immediate future (see my last post), the German Agora group nevertheless said there may be a role for distributed small-scale battery storage, with domestic PV providing some domestic consumers with a way to become full prosumers. And others have agreed: http://reneweconomy.com.au/2014/energy-storage-generators-biggest-losers-50615. But they would still presumably need grid links for balancing and it’s not clear if small-scale storage of this type is optimal in overall system efficiency terms compared to large-scale bulk storage. Certainly there are limits, though also attractions: www.renewableenergyworld.com/rea/news/article/2014/10/is-distributed-energy-storage-the-energiewendes-missing-link

So the jury is still out on domestic-scale applications. Wolfram Walter, CEO of Freiburg-based ASD Sonnenspeicher, says that the purchasers of the current generation of batteries are just ‘burning money.’ He calculates that the per kWh cost of stored power generated from roof-top PV installations is anywhere from twice to five times the market cost of electricity:‘ lead-acid batteries can’t store enough power over their entire life spans to make them worthwhile.’ For the moment, rather than investing in storage, it’s cheaper to import power from the grid when needed, and also, under most Feed In Tariffs, more profitable to sell any excess power to the grid, rather than store it. Longer term, the balance may change to favour domestic storage more. FiTs are likely to be reduced, and, with new battery technology, storage costs will continue to fall. So it might then be that consumers can, at times, export stored power at a profit, and thus help with grid balancing. In simple cost terms, a Citigroup analysis cites $230/kWh as the point where battery storage (e.g. for domestic PV) wins out over fossil generation and says that will be reached by the broader market within 2 to 3 years, and will then likely fall to 100/kWh. A UBS report said that could be in ten years. https://neo.ubs.com/#article/research/ues45625

Adding yet another dimension, there’s also the heat storage option. With big stores, the surface to volume ratio (and hence energy loss) is less than with small stores. So heat storage done on a large scale in large stores can be cheap and efficient and is being explored by some developers:www.windpowermonthly.com/article/1320266/siemens-developing-thermal-energy-storage-system That could be linked with community scaled district heating systems, fed by CHP plants with large heat stores, which can help balanced variable renewable inputs. District heat stores have certainly been seen as a potentially major balancing option by the Energy Technologies Institute, far more so than batteries or any other storage option: www.eti.co.uk/wp-content/uploads/2014/05/All-Energy-Storage-May-14-Phil-Proctor.pdf   and www.eti.co.uk/wp-content/uploads/2014/06/Energy-Storage-The-Engineer-Conference-v3-CLEAN.pdf

Although less efficient, there are also smaller-scale domestic level possibilities, including running PV power into immersion heaters: e.g. www.immersun.co.uk There is an interesting debate on what night be possible and over whether it makes sense: http://openenergymonitor.org/emon/mk2

As can be seen from my two-part review, large and small, the whole field is in flux with many ideas being promoted and new markets emerging. Certainly the financial opportunities are immense. A report by KEMA concluded that the energy storage market should quadruple over the next few years in the United States alone. And globally, the industry is positioned to grow by 10% from 2013 to a net worth of $10.8 bn by 2018. See the Red Mountain Utility Energy Storage Market Forecast report (if you can afford $895 for a PDF!): http://redmountaininsights.com/Utility-Energy-Storage-Market-Guide-I3550?ref=cc  Failing that, if you want more, see: http://www.electricitystorage.org/ and http://www.theiet.org/factfiles/energy/energy-storage-page.cfm

The bottom line? Focusing on large scale storage, the German DENA agency makes the good point that ‘it is often ignored that 80% of our power supply is based on stored or storable energy sources such as natural gas, coal and biomass. If we use less of these energy sources, we must combine the new energy forms, wind and solar energy, with storage.’ As well as providing flexibility for grid balancing, storage plants, like pumped hydro, can also ‘relieve the strain on the grid in the event of bottlenecks and contribute to re-establishing the power supply after faults, as they can also start up without external power supplies’.www.dena.de/en/press-releases/pressemitteilungen/dena-fordert-stromspeicher-muessen-zuegig-ausgebaut-werden.html. And some see batteries playing a similar role, helping with grid balancing: http://cleantechnica.com/2014/11/16/where-battery-storage-will-provide-most-peaking-capacity/

However, in its Energy Technology Perspectives 2014, the IEA says ‘Electricity storage is expected to play multiple roles in future energy systems, but it is unlikely to be a transformative force itself. At current costs and performance levels, particularly for high-power and high-energy applications, it falls short of delivering the conceptual flexibility potential when compared with competing options’.

While it is possible for storage systems, large and small, to help with short-term balancing of peak demand on a significant scale, there are other options. And it’s not clear if bulk electricity storage can cope with long-term grid support, for example if wind etc. are unavailable for some while (days or even weeks), when renewables make up a large proportion of supply. You would need a lot of it – and it would not be used often. Backup supply and gas stores may be cheaper, and in time the gas can be green gas. Although, depending on location, CHP/DH-linked heat stores might be even better balancing options at least for the medium term. Certainly, as my next post explores, CHP/DH is increasingly being seen as a key option within a low carbon future.

*For a good overview of the balancing options, including storage, see the World Bank’s new ESMAP report: www.worldbank.org/en/news/feature/2015/03/18/the-renewable-electricity-grid-the-future-is-now and http://documents.worldbank.org/curated/en/2015/02/24141471/bringing-variable-renewable-energy-up-scale-options-grid-integration-using-natural-gas-energy-storage

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