Finally! An Energy Storage Market Emerges

The development of energy storage and emerging markets is starting to take shape with emerging markets offering the biggest opportunity
Published: Thu 16 Jan 2014

Energy Storage is expected to grow dramatically and investors are flocking to grab their share of this emerging industry. According to Andrew Jones, MD at S&C Electric Company, energy storage has developed significantly, thanks to various research and development (R&D) and demonstration projects. “Up until now there hasn’t been a market but we believe that one has finally emerged,” he says.

He goes on to explain that this has been mostly due to developments in California where utilities are working towards a 1300MW energy storage target by 2020. He adds, “Californian utilities are technology agnostic. They aim to create a level playing field for storage to participate in the smart grid.” Many regulatory barriers have also been removed which has encouraged development. Businesses in the US are highly regulated-much like their EU counterparts. As a result, distribution companies experience difficulties in owning assets, particularly storage assets.

They have therefore created a level playing field where utilities can now own storage assets. The regulator has also given independently-owned utilities targets to install storage technology and a capital budget which should cover also cover transmission, distribution and consumer concerns.

Energy Storage in the EU and UK

Two EU countries stand out-Italy and Germany. In Italy, the regulator is willing to give distribution and transmission operators the potential of earning EUR1 Billion for energy storage as part of the capital investment plan. Pilots are in progress and if they prove successful, deployment will be the next step. Germany’s energy storage plans are also expected to trigger the market.

Africa will be at the forefront as far as energy storage goes

In the UK, Mr Jones points out that his firm has been lobbying for the government to set a 2000MW storage target by 2020. “We think we are close to attaining this,” he says.

Various storage technologies

Although Mr Jones describes S&C Electric Company as technology agnostic, the company has been focusing mainly on battery technologies for storage solutions. This is due mainly to the fact that batteries seem to be the most acceptable option from a commercial perspective. However, the firm is also exploring various other energy storage technologies:

  • Sodium-based
  • Lithium-ion
  • Lead acid
  • Zinc air
  • Liquid metal
  • Super-capacitors (this has the potential to cost less than flywheels)

Although most of the technologies appear to be promising during the research and development stage, proof of scalability continues to take precedence, explains Mr Jones.

The UK has a number of promising storage solutions such as cryogenics and liquid air. Mr Jones makes mention of a firm that is currently researching lithium sulphur which shows a great deal of promise and could potentially cost half the price of lithium-ion.

Cryogenics, heat pump solutions and compressed air technologies are popular solutions as they are scalable, very responsive and have the ability to absorb energy. Mr Jones points out that pilots are needed and that firms are currently applying for government funding for this purpose.

“Outlandish ideas” for energy storage

When asked about other peculiar energy storage solutions, Mr Jones points to a Pumped Hydro technology which uses old slate quarries. Other technologies include:

  • Compressed air generators
  • Flywheel cell
  • Hydrogen
  • Thermal storage (which is gaining more recognition now)

Says Mr Jones: “A lot of what you think is undergoing the research and development process is actually at the pilot stage already.” He adds: “There is a great deal of technology out there. Energy storage technology is no longer a barrier. Policies and the market will now make a difference to energy storage development and deployment.” Regulatory issues

S&C Electric Company is busy with a market regulatory pilot in the UK which identifies and examines regulatory barriers. The firm is also currently in talks with the UK government to make the licensing process easier for applicants. “This would be a quicker way to stimulate the UK market.” Key Investments and Market Place

Energy Storage is attracting a great deal of investment interest. Even funding calls have been oversubscribed. Mr Jones reckons that the industry is close to a tipping point for investment and regulatory issues. He also adds that investors should focus their attention on Africa as the next big energy storage market.

“Africa will be at the forefront as far as energy storage goes. The lack of infrastructure and the large number of people without energy means that they have to do something different. There are more micro-grid and off-grid projects in Africa than in the rest of the world currently. That is where optimism should come from. They have a real problem which needs solutions now.”