The arrival of energy storage as a mature technology at both grid-scale and residential and business levels is opening the way for the large scale integration of wind and solar energies and a more distributed, prosumer-driven grid. It is also enabling the opportunity to provide new grid and energy management services.
Energy storage applications
In its 2014 renewable energy roadmap (REmap 2030) the International Renewable Energy Agency (IRENA) estimated that in order to avoid the worst effects of climate change and accelerate sustainable energy transformation and economic growth, the share of renewables in the electricity sector should double to 45% by 2030. To achieve this, it was estimated that 150GW of battery storage and 325GW of pumped-storage hydroelectricity will be needed. [Engerati-Storage Rollout Mapped To 2030]
Other estimates quoted by IRENA are in the range of 240GW by 2020 to 460GW by 2050, and illustrate the vital role of storage in the expansion of renewable energy.
There is a misnomer that storage is simply about backing up renewable energy when it is generated and releasing it when it is needed. The power of energy storage is that it offers much more than that.
For example, ancillary grid services such as frequency regulation, reactive support and voltage control, as Ontario’s system operator is currently investigating with 50GW of storage allocations towards different technologies to determine their potential. [Engerati-Ontario System Operator Procures 34MW Storage To Test In Grid Operation]
Storage is also key for microgrid operation, especially when operating either hybrid power or in in remote or island locations. [Engerati-Microgrids Now Available As A Service]
As it is also central to the electrification of transportation a new use case is being proven in ‘second life’ batteries that are no longer suitable for powering electric vehicles which are showing demonstrable potential for use in grid applications. [Engerati-Grid Storage Brings Second Life To Electric Vehicle Batteries]
Milestones for energy storage in 2014
2014 proved to be a major year for the global energy storage industry. According to Navigant Research an estimated 697MW of projects were announced, including some of the largest single contracts in history awarded to storage companies. Leading the pack were North America, primarily California, Asia Pacific and Western Europe.
In California, utility Southern California Edison (SCE) awarded a record 261MW to five companies, including 100MW of in-front-of-meter battery energy storage to AES. [Engerati-SCE Leads Energy Storage With Record 261MW Purchase] In 2014 SCE also opened North America’s largest battery storage project to date – a 32MWh lithium-ion installation in Tehachapi, which will integrate wind to the grid. [Engerati- Largest Battery Energy Storage Project in North America]
In Europe, British network operator UK Power Networks opened the region’s largest storage project, the 6MW/10MWh Smarter Network Storage (SNS) facility in Leighton Buzzard, which will trial renewable integration to the grid. [Engerati-UK Distribution Utility Reveals Financial Viability of Energy Storage]
And finally in Australia, MPower has been contracted to build that country’s largest storage system, comprised of around 800kWh of lithium-ion batteries. [Engerati-Australia’s Largest Energy Storage System To Be Built]
As a final proof point showing the levels of investment the first mapping of energy storage projects in Europe (in 2013) found that almost €1 billion had already been invested in 391 distinct projects over the past 5 years. The US Department of Energy global energy storage database details 1,240 projects with a combined capacity of almost 185GW.
Storage technology choices
The choices for grid scale storage technologies are complex, dependant on use case and location. The most widespread storage, with the longest history, is pumped hydro and this will continue to form the backbone of many utilities’ storage needs - particularly as it provides hi-ramp power which is an essential characteristic for balancing the grid.
Of the other technologies batteries are the ones making the running, in particular lithium-ion. Other storage like thermal, compressed air and flywheels are in development, with significant and interesting pilots.
Molten salt storage, in which reflectors image sunlight onto a heat exchanger with molten salt, is also garnering growing interest and is thought to offer good potential in hotter regions such as Africa (particularly South Africa) and the Middle East. [Engerati-Concentrated Solar Power Highly Beneficial for Africa] Hydrogen storage via power-to-gas is another fast emerging technology. [Engerati-Power-to-Gas – An Opportunity Utilities Should Be Thinking About]
Storage characteristics for grid scale
For grid services fast acting storage is required. Pumped hydro and compressed air storage, the two commercial long duration storage technologies, require specific geologic/geographic conditions to implement, whereas batteries can be containerized for easy deployment or portability. Multi-use systems can for example store excess wind energy generated during the night, when in many areas the potential is greatest, and then be used for grid management during the day.
John Zahuranick, president of AES Energy Storage, says that energy storage can provide value in different markets. “We have worked in the north of Chile with a small islanded grid and found value for storage there, and we’ve worked in PJM with a highly marketized, large interconnected grid and found value there. Most other markets fall between these two poles,” he says.
This development of the storage sector is enabling a new industry, one that leverages the need for real time control of these interdependent storage systems. One such company, Greensmith, has developed a system to optimize the management of batteries based on their charge/discharge profiles and envisages a centralized control dashboard to manage a fleet of systems. [Engerati-“Energy Storage Is There”]
Greensmith’s SVP Business Development, Andy Tang, who previously led Pacific Gas & Electric’s smart grid effort, says that maximizing the use of batteries is a key concern with utilities. In the long term, he suggests, the winning storage technology will be the one that gets the price down and does as many as possible of the multiple use cases competently. “It may not be the best at any one but will be a hybrid across many.”
The story of distributed storage - a game changer
Globally there are tens of vendors in the energy storage market but the one that is attracting most attention currently is Tesla with its visionary CEO, Elon Musk.
This is due to a fundamentally different play rather than one massive grid scale solution. Tesla are banking on distributed energy where business and houses will have battery packs behind the meter and are hell bent on using scale to drive down the cost of these batteries. [Tesla Gigafactory to lower battery costs]
In April, Musk announced the Powerwall and Powerback Li-ion battery ranges, respectively for home and business uses. [Engerati-Powerwall For All] To date there has been little activity at these levels because of the costs, but fast falling costs not only of the storage but also of PV panels will significantly change the self-generation value proposition.
Across the globe, from the US to Europe to Australia, companies have been lining up agreements, both as users and distributors, and the Powerwall is reportedly sold out until at least mid-2016 - this while the batteries are on test and shipments have yet to start. [Engerati-Tesla Batteries Trial In US and Engerati–Tesla Storage Goes Down Under].
In the middle of this once again innovative SCE is showing how the utility sector can adapt and play. In addition to testing both versions of the batteries, the batteries will be deployed as part of the 2014 261MW procurement by Advanced Microgrid Solutions (AMS) in a ‘hybrid electric building’ concept, which proposes to use storage to peak demand manage the aggregated load of multiple buildings. [Engerati-Gridding Buildings For Storage] AMS has contracted to install up to 500MWh of Tesla batteries in its projects, which also include a fleet of hybrid electric buildings with 20MW of storage for Shell Energy in California.
Distributed storage will fundamentally change the game and bring in new actors such as car manufacturers who are increasingly pursuing hybrid and electric vehicle technologies. In fact since Tesla’s announcement, Daimler has announced that Mercedes Benz branded batteries will be made available for home and commercial use and it is probable other auto manufacturers will follow.
Advancing storage and the regulatory dimension
A key to the advancement of grid-scale storage is regulatory support and the recognition as having value in the power system value chain. In Europe, for example, there is a lack of clarity on the rules under which storage can access markets.
Again California is at the forefront, with a mandate for 1,325MW of storage procurement by the investor-owned utilities by 2020. [Engerati-California's Energy Storage Mandate-Will Others Follow?]
At the residential and business level the uptake of storage as part of the self-generation proposition at any scale will require offers by private companies such as SolarCity and incentive schemes, both for retrofits and in new installations. [Engerati-Home Energy Storage Is Here and Home Energy Storage Gets Incentivized in South Australia]