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Energy Storage End Uses and Value Streams

The electric industry is going through a period where long prevailing planning and operating assumptions are being upended. Significant, multi-faceted changes in energy supply and demand technology are compelling electric utilities to fundamentally rethink their legacy business models and develop profoundly different visions of their role in the energy market. With expected technological innovation, storage will grow in importance, making it imperative for planners to consider storage for energy, capacity, and ancillary service needs in all parts of the industry value chain.

Join Siemens in an exclusive 4 part mini- series with Energy Collective as we decipher the energy storage value proposition. For a full download of  our whitepaper on the energy storage value proposition, please visit our website.

Introduction

While energy storage has grown rapidly over the past couple of years and several hundred MWs of projects are under development, the value to investors of energy storage remains somewhat nebulous. This series identifies leading energy storage technologies, defines key applications, reviews current leading battery projects, and estimates investor returns for differing applications and markets. Further, this series also discusses the key factors driving storage economics and investor returns.

Today, in the right application and market, battery storage can provide attractive returns. Clearly, there are other applications where the economics today do not meet a minimum threshold. The storage economic proposition will improve in all applications as capital costs fall, which they are expected to do. By its very nature, storage offers multiple value streams. A rational investor would take advantage of all possible value streams, so long as each value stream in practice can be realized and there is no “double counting” of benefits.

Storage End Uses and Value Streams

As mentioned briefly, storage applications can range from very short duration requirements like frequency response and regulation, operating and planning reserves, to longer term needs of energy management (e.g., to store energy from renewable resources generated in off peak periods an consume it during on-peak periods). The graph below indicates the rated power and discharge time for each key storage technology available to meet the system frequency response and regulation, operating and ramping, and energy management needs. As shown, Li-Ion batteries are quite versatile in terms of the range of applications they capture. For example, such batteries can respond quickly (seconds) to cover frequency response and regulation needs with small storage sizes and at the same time cover longer duration storage needs where speed of response is less critical. Flywheels, on the other hand, can provide an even quicker speed of response and hence are ideal for frequency response applications but the storage duration or capability is much smaller.

Rated Power and Discharge Time
Rated Power and Discharge Time

As discussed above, energy storage may serve three generic system needs – frequency response and regulation, operating and ramping, and energy management. By applying storage in either the transmission, distribution, or customer portion of the electric delivery system, the energy storage owner/ operator may solve one or many system issues and in doing so, earn revenues from supplying multiple service to the grid. For example, in some jurisdictions batteries are paired with renewables to supply quick power bursts to network segments thereby assisting in frequency response when, for instance, clouds pass overhead. After that burst, additional slower acting higher power resources step in to maintain system frequency.

Energy storage applications in the transmission and distribution systems are sometimes termed “utility scale” or “in front of the meter” solutions, while those sited with consumer facilities are often termed “behind the meter” solutions. Storage applied in transmission infrastructure support the bulk delivery of electricity, ancillary services, and infrastructure weaknesses. When added in the distribution systems, storage may also support a challenged infrastructure, as well as enhance customer energy management. When applied “behind the meter”, storage may improve energy quality, support local infrastructure, or help to reduce customer energy costs.

The chart below represents the range of potential storage applications (end uses) across the electric delivery system.  A storage system could earn revenues from several sources, depending upon where it is placed in the system (geography), what services the system is designed to serve (design), the market in which the system operates (market), type of owner (owner), and incentives. As the color coding in chart below indicates, there are several common storage value themes including: upgrade deferral, voltage/ VAR support, power quality, reliability, load time shifting, and renewable firming.

Battery Energy Storage End Uses

The table below examines each storage theme in further detail.

Battery Energy Storage End Uses

This concludes part one in our four part mini-series on the energy storage value proposition. Tune in next week as we move to part two and examine the fundamental of economic storage.

For a full download of  our whitepaper, please visit our website.

Sources:

  1. http://www.utilitydive.com/news/coned-awards-22-mw-of-demand-response-contracts-in-brooklyn-queens-project/424034/
  2. http://www.minnelectrans.com/documents/Grid-Modernization-Report-NSP.pdf
  3. http://www.utilitydive.com/news/nec-energy-solutions-plans-60mw-of-storage-for-pjm-market/398142/
  4. http://aesenergystorage.com/category/pressreleases/
  5. http://www.utilitydive.com/news/pge-completes-battery-system-performance-pilot-project-in-caiso/430336/
  6. https://www.greentgreeechmedia.com/articles/read/aes-puts-energy-heavy-battery-behind-new-kauai-solar-peaker
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Discussions

Rex Berglund's picture
Rex Berglund on Oct 12, 2017 3:43 pm GMT

“Now MIT researchers have developed an “air-breathing” battery that could store electricity for very long durations for about one-fifth the cost of current technologies, with minimal location restraints and zero emissions.”

“The battery’s total chemical cost—the combined price of the cathode, anode, and electrolyte materials—is about 1/30th the cost of competing batteries, such as lithium-ion batteries. Scaled-up systems could be used to store electricity from wind or solar power, for multiple days to entire seasons, for about $20 to $30 per kilowatt hour.”

“The energy density of a flow battery like this is more than 500 times higher than pumped hydroelectric storage. It’s also so much more compact, so that you can imagine putting it anywhere you have renewable generation,”

Read more at: https://phys.org/news/2017-10-storage-renewable-energy-greatest-challengethis.html#jCp

Engineer- Poet's picture
Engineer- Poet on Oct 13, 2017 12:55 am GMT

As I’ve been saying for 11 (almost 12) years, it only takes one.

Flow batteries are uniquely suited to vehicles, because it’s far faster to pump out depleted liquids and fill with energized ones than to reverse the cell reactions.  But this is going to have the knock-on effect I warned about:  enough dump-load on the grid eliminates the negative grid pricing that is killing nuclear, and replacing petroleum with electricity shifts so much demand that it can’t help but firm up grid prices 24/7 and year-round.  If it knocks the peaking plants off the grid and replaces them with all base-load (nuclear and CCGT) plus whatever the unreliables can contribute, it’s going to be as big an economic jolt as the current gas glut.

FWIW, these things may not be safe for EVs in enclosed parking.  Dumping large amounts of oxygen as they do during charging is a serious fire hazard.

Rex Berglund's picture
Rex Berglund on Oct 13, 2017 2:05 pm GMT

Yes I think there’s going to be lots of grid buffering w/ vehicle charging and V2G, imagine in the US 100M vehicles @ 100 kWh apiece.

There’s no free lunch but a shrewd marketer will say you can “drive for free“:

Roger Arnold's picture
Roger Arnold on Oct 14, 2017 10:44 am GMT

I haven’t taken the time to read the technical papers and figure out exactly how the new MIT flow battery works. Offhand though, I’m a bit skeptical as to just how practical it will end up being.

I could be wrong, but it looks much like a water electrolysis cell, except that instead of evolving hydrogen at the cathode when charging, it changes the valance state of sulfur. That’s cool, but it means it’s relying on the same oxygen evolution reaction (OER) that plagues PEM hydrogen fuel cells and electrolyzers.

At near ambient temperatures, the OER requires a large over-potential to drive it. That’s what limits the round-trip efficiency of paired water electrolyzers and hydrogen fuel cells to about 40%.

I hope I’m wrong, but if the round trip efficiency of MIT’s flow battery turns out to be only 40 to 50%, it won’t really matter how cheap and abundant its raw materials are. It still won’t be economical for large scale load shifting.

Engineer- Poet's picture
Engineer- Poet on Oct 16, 2017 1:03 am GMT

imagine in the US 100M vehicles @ 100 kWh apiece.

10 TWh is only about 22 hours of average US grid load.  It makes a good short-term buffer, enough to allow plants to stay in cold shutdown and not much more.

Rex Berglund's picture
Rex Berglund on Oct 16, 2017 1:29 pm GMT

Joule’s article on MIT’s work describes the evolution/reduction mechanism which I’ve excerpted below.

The researchers proceeded by using a so called Techno-Economic (TE) model to guide their search. A set of low cost cathode candidates was identified, one of which being potassium permanganate. An experiment to prove an assumption about a potassium permanganate cathode was initially deemed a failure, but upon investigation this serendipitous failure guided the researchers to their key discovery.

(In the following, Li is also the name of a researcher.)

‘We expected that upon discharging (reduction), the permanganate solution would precipitate MnO₂, a process that is normally irreversible. However, by employing the percolating electronic conductor concept, we hoped that the precipitation reaction might be rendered reversible. Li prepared an electrochemical cell comprised of a suspension of carbon in dissolved Li₂S as the anode and a suspension of carbon in dissolved KMnO₄ as the cathode, separated by a LiSICON (Li-conducting) solid electrolyte membrane. He found the cell charged and discharged reversibly and had a high charge-storing capacity (300 mAh/g-S). However, given that mistakes in electrochemical interpretation are not unheard of, we decided to verify the cathode reaction product using X-ray diffraction. The analysis showed that the permanganate cathode had indeed precipitated MnO₂, but surprisingly, the process was irreversible—the precipitate did not re-dissolve upon charging. Therefore, the experiment had failed.

But the result left unanswered a new puzzle:

What was the source of the high reversible capacity? Upon further investigation, Li had the answer: the cathode was instead undergoing reversible oxygen reduction and oxygen evolution due to the charge imbalance created as Li⁺ ions were added to and removed from the cathode solution, ions were added to and removed from the cathode solution, respectively.

The “ah ha!” moment occurred during our weekly project meeting in Yet-Ming’s office: the “failed” experiment uncovered an aqueous sulfur-based reaction couple for which no cathode compound was required—the ultimate in low-cost battery electrochemistry!’

http://www.cell.com/pb-assets/journals/research/joule/stories/battery-ba...

Now, I agree that as to the cost, this is not a panacea. If however this becomes a commercial reality, in cases where power is already costly then using revenue stacking and as always a carbon tax there will likely be business cases for it.

Rex Berglund's picture
Rex Berglund on Oct 16, 2017 1:33 pm GMT

Yes of course it’s not a complete standalone solution, but it is another welcome tool in the fight against climate change.

Engineer- Poet's picture
Engineer- Poet on Oct 16, 2017 4:14 pm GMT

I think I found the money quote:

Using the acidic catholyte and dual catalysts (IrO2 for OER and Pt black for ORR), the voltage efficiency reaches 71%–74% for both Li and Na solutions at low current density (0.065 mA/cm2). Here, efficiency is limited by the OER/ORR reaction. Using a less efficient, Pt mesh, single cathode rather than the dual cathodes with IrO2/Pt black catalysts, and holding all other cell parameters constant, the voltage efficiency at 70°C is about 20% lower…

If we’re talking 80% of 71%, that works out to about 56-57%.  This is a vast improvement over Al-air.  On-going improvements in catalysts are likely to yield fruit both on reaction rates and overpotentials.

I note that this battery likes to run at 70°C or so.  This pairs with nuclear power a lot better than with anything intermittent.  Even running flat out, a nuke plant can spare some steam at 70°C to keep something else warm.

Engineer- Poet's picture
Engineer- Poet on Oct 16, 2017 4:30 pm GMT

10 TWh is 200 Gigafactory-years of production, no mean feat.

Even 1 TWh could make a serious dent in emissions if properly used.  If you had 100 million vehicles packing 10 kWh apiece, you could replace about 80% of the liquid fuel they’d consume as ICEVs and replace it with electricity.  The key would be making that electricity (a) carbon-free and (b) deliverable on demand.

The flow battery detailed here is an interesting case.  Given that the anolyte and catholyte are potentially as cheap as $0.40/kWh and are liquids, it would be quite cheap to store them in bulk external to vehicles and regenerate them overnight and on weekends.  Stockpiling 500 kWh of energy per vehicle (1000 kWh worth of solutions at 50% average SoC) would only add a modicum of cost.  Last, unless the stationary portion was going to go fully into the energy-arbitrage business, you’d only need the OER catalyst.

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