The pressures which are creating the perfect storm for the energy storage sector are diverse. One of the main drivers is that the grid, designed to flow one way, now needs to demonstrate greater flexibility to facilitate the integration of renewables and enable more distributed generation. Regulators, as witnessed by announcements from California and New York recently, are also playing a significant role. We cover this in our article California’s Energy Storage Mandate-Will Others Follow?
Drivers are highly dependent on geography and industry dynamics. In some regions, the growth of renewables and the need to balance and integrate variable generation is a significant driver for storage. Another driver is high demand growth coupled with stricter emissions regulation.
It is therefore critical that the government supports its implementation.
Regulation and Policy
Energy storage development relies heavily on the support of appropriate regulations and policies. In California, regulators have approved an ambitious plan to install a significant amount of energy storage projects by 2020 in order to help meet ambitious renewable energy targets. Because, without storage, the immense potential of renewables will never be fully realized.
The mandate requires all investor-owned utilities in the state including Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric, to jointly purchase 1325 megawatts of energy storage by 2020.
The proposed targets increase between 30% and 55% every two years. This will create economic incentives for a number of market players with various technologies to enter the space.
According to Ms Katelyn Buress, Digital and Customer Storytelling – Renewable Energy, GE Power & Water, who spoke to Engerati about the growing need for energy storage, regulation and policies vary from country to country and can have a major impact on the market potential for storage. She says, “As technology advances and regulators learn more about the benefits of storage, we expect to see policy updates that reflect changes in technology.”
Regulators often lag behind in technology developments and this may have a devastating effect on the development of energy storage solutions. Regulators need to give more freedom to encourage innovativeness.
To maintain the high level of reliability of the distribution grid, the distribution system operator has the ability to increase flexibility of the grid by introducing energy storage systems.
Orders and Pilots
This innovativeness is already taking place worldwide and evidence of this is the fact that grid storage demand is set to grow to US$10.4 billion in 2017, according to Lux Research. This is a huge leap in growth since the figure in 2012 was a mere US$200 million in comparison.
A good example of this stride towards innovativeness in the sector is GE ‘s Durathon battery which is based on sodium nickel chloride technology. The high density system provides no significant performance degradation between -40c and +50c and it provides a good balance between energy and power capabilities. It is therefore well-suited to applications that require energy with some degree of power performance.
Since the launch of GE’s Durathon batteries in 2012, GE Energy Storage has received over 30MWh orders. These are being installed and commissioned now for customers in various industries and regions around the world. These range from wind integration projects in the US to transmission and distribution projects in Europe to behind the meter projects in Asia.
GE has coupled this technology with its multi-dimensional safety system and the firm believes that the battery is well-positioned in the market. GE’s Durathon battery is currently being used in various applications in the telecommunications, utility and data storage industries.
The case for sodium nickel chloride
Originating from a pursuit of the ideal power source for hybrid locomotives, GE Global Research evaluated the spectrum of battery technologies and identified sodium nickel chloride batteries as the most versatile and effective solution.
In 2007, GE acquired Beta R&D, a UK-based company that originally pioneered the development of sodium metal halide batteries in the 1980s and had already demonstrated the technology’s reliability and durability through years of research and development.
GE selected the Sodium Nickel Chloride technology as it provides “an excellent balance on the metrics our customers care about: cost effectiveness, performance, footprint, life cycle, safety and reliability.” GE Global Research has evaluated various battery technologies and they have identified sodium nickel chloride batteries as the most versatile and most effective solution for their Durathon battery system.
As power consumption continues to grow, infrastructure ages, and new elements evolve such as renewables and electric vehicles, the grid is being asked to perform as never before. GE says its Durathon battery tech offers an intelligent way to approach these issues.
The business case for energy storage
The business case for energy storage is complex as each scenario calls for a unique solution. “It’s not simply about replacing one technology with another,” explains Ms Buress, “The overall business case is impacted by services , battery lifecycle, operation and maintenance costs, opportunity costs, and potential savings. We are confident that energy storage will be the key technology for the grid as projects begin to move from research based to commercially driven. In addition to this, we believe 2014 will be a key year for storage as markets begin to shift from purely research and development projects to more commercially-driven ones.” Our article Energy Storage in Europe To Move Beyond Research explores this in detail.