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Energy Storage in the Grid: The Holy Grail? Not yet. But Agility and “Tightrope walking” required for the Quest (Part II)

image credit: Source: Smart Phases (www.novacab.us) Complex operation with multiple sources

This item is part of the Energy Storage - Special Issue - 07/2020, click here for more

PART III: Dearth of knowledge

From many items highlighted in the first two parts of this article, we can find that Utilities and Energy Storage have one thing in common. They both key roles in the acceleration of the decarbonization of the energy system allowing for increasing levels of renewable energy (RE) sources.  This is one of the biggest challenges facing the world today, while several challenges remain in achieving large-scale storage deployment.

First, there is a dearth of knowledge on public attitudes toward energy storage technologies. This trend is also translated in the Utility industry. Even if the long-term value of energy storage can be easily demonstrated, existing electricity markets are designed for incumbent systems and market regulation would need to be adapted to reflect the technological, economic, and social value of energy storage to an energy system.

Second, a better understanding of the integration of energy storage technologies is vital to providing information to underpin the future market design and regulation to realize the value of energy storage.

A third challenge is falling under current regulatory and electricity market conditions. For example, conventional solutions, such as fossil fuel-based peaking plants for covering peak electricity demand, are seen as cheaper technologies when compared with energy storage systems (ESS). However, this does not necessarily represent the true cost and value of ESS. This circumstance is expected to change as ESS technologies continue to advance, capital costs reduce, deployment experience increases, and there is the opportunity to reconcile multiple value streams.

All these challenges (and many others not mentioned here) lead to further R&D resources and effort required to move forward more efficiently towards a more sustainable future in the utility industry.

Accelerated R&D is needed

To enable grid-connected energy storage to flourish, an effort is required in a number of areas:

  1. Energy policy decisions must be reviewed and ESS policies must be aligned with those for renewable energy systems (RES) so that the ability of ESS to add RES capacity to the system is rewarded.
  2. Regulatory rules need to be examined; a new asset class and associated regulations specifically for ESS are advisable, and standardized evaluation methods for determining the value of storage in power systems would reduce investor uncertainty.
  3. Updated ancillary services markets to provide adequate compensation for technologies that can respond quickly and with high accuracy.
  4. Operation schemes should be investigated; the capture of multiple value streams is dependent on the ability to control storage in a way that can balance competing requirements appropriately.
  5. Roadmap for ESS deployment on the grid; if ESS is considered as a potential solution, it is important that plans, targets, and goals for the use of ESS are established.
  6. Development of sophisticated modelling tools; the properties of storage media and demands placed by grid control requirements are complex and at times contradictory. Integrated modelling of these will allow the development of schemes that are able to be more cost-effective.
  7. Deployment of projects; an increasing number of storage installations are in operation, but the multifaceted nature of storage means that further novel applications still need to be deployed. Addressing these seven areas will mean that the potential of energy storage for supporting electricity networks can be practically realized.

Recognizing that specific storage technologies best serve certain applications, it is important that stakeholders pursues a diverse portfolio of energy storage research and development (R&D) to assure a continuous, affordable, and sustainable electricity supply.

Key Grid Energy Storage Technologies: it's not just batteries…

As fundamental storage technologies improve in terms of performance and cost their use on electricity networks will become increasingly attractive. It is likely that the business cases that emerge will continue to be sensitive to the ability to capture value streams from delivering more than one service. Successful service delivery will be dependent on the availability of appropriate and effective planning and operating schemes. Validation of these schemes through demonstration projects is an essential step in building the experience and knowledge required to widely deploy energy storage in electricity networks. Advanced methods for integrated storage modelling are important for larger deployment, with examples of the findings that can be made.

These ESS technologies vary in energy density, power performance, lifetime charging capabilities, safety, and cost.

Electrochemical battery. The most known types of batteries include lithium-ion, sodium-sulfur, lead-acid, and flow batteries.  It’s not required to talk much about it, it’s already covered by thousands (millions) of post and articles…

Pumped Hydroelectric Storage. Water pumped from a low reservoir to a high one is later released through a hydroelectric turbine to generate electricity as needed. A “long-established” energy storage approach, vastly used and still with a lot of further potentials.  

Compressed Air Energy Storage. Compressed air is stored in an underground cavern until it is heated and expanded in a turbine to generate electricity. A more recent approach, with some challenges still to overcome for long term operations.

Thermal Storage. Heat is captured and stored in water, molten salts, or other working fluids for later use in generating electricity, particularly when intermittent resources (e.g., solar) are unavailable. Typically for specific applications but it can be used for a grid-size solution when coupled with solar thermal, or other Renewables; the ability to store energy in a compact form can provide a readily accessible source of heat.

Hydrogen. Hydrogen can be stored and used later in fuel cells, engines, or gas turbines to generate electricity without harmful emissions. Still in development, but good potential for grid size implementation, such as some Compressed Hydrogen analysis shows.

Flywheels. Electric energy is stored as kinetic energy by spinning a rotor in a frictionless enclosure. Flywheels are useful for applications such as power management.

Hybrid (Thermal +Electrical) Storage. Hybridization integrating two types of storage working together in symbiosis. Notably Electrochemical storage and Phase change materials (PCMs) that store thermal energy via the latent heat of phase transitions. PCMs can be used to provide district cooling (sub-ambient transition temperatures), to buffer thermal swings in buildings (near ambient transition temperatures), and to store solar thermal energy for short-term or seasonal applications (higher transition temperatures). When thermal energy is from an intermittent source, such as solar radiation or waste heat, the coupling of the Hybrid model such as the Novacab HTEES design gives the best outcomes, thereby promoting the achievement of both climate and energy policy objectives.

Hybrid Hydrogen (Hydrogen or Power to Gas. The increased integration of intermittent renewable energy sources such as wind and solar power is a growing challenge to the new flexible model of energy production. This integration has led to the development and promotion of energy storage systems with new long-term storage options such as power-to-gas. Power-to-gas refers to the chemical storage of electrical energy in the form of gaseous substances such as methane or hydrogen. The term “power-to-gas” is defined as the utilization of (surplus) electrical energy from renewable power sources for the production of hydrogen in an electrolyser and the optional synthesis of methane or other hydrocarbons from hydrogen and carbon dioxide. Power-to-gas technology makes long-term storage of electrical energy possible and makes for a more resource-efficient and flexible energy system. Other long-term energy storage technologies are currently nonexistent in national grids. Power-to-gas enables accelerated integration and continued realization of low- or zero-emission technologies such as wind power and photovoltaics. Furthermore, power-to-gas allows new options in energy transport by shifting load from the power grid to the gas grid. Research is mainly focused on looking at potential reactions between hydrogen and the constituents of the reservoirs (minerals, fluids, and microorganisms).

Off-Grid Energy Storage. The chapter examines both the potential and barriers to off-grid energy storage (focusing on battery technology) as a key asset to satisfy the electricity needs of individual households, small communities, and islands. Remote areas away from urban facilities where the main electricity grid is either not developed or the grid are uneconomical to extend are especially targeted, as well as islands, which may face daunting energy and environmental challenges if grid electricity is reduced. Through a series of discussions and perspectives the reader is provided with an overview of the off-grid challenges at stake; the commonly used energy storage technologies; and clues to compare universal characteristics with context/technology-specific values. This provides a strategy to help identify the overlap between off-grid energy service needs and storage technology capabilities. This can also reduce socioeconomic challenges such as social opposition to power grid expansions.

Photo by Science in HD on Unsplash Workers installing mirrored parabolic trough collectors. Workers construct one of a dozen thermos like molten salt tanks at Abengoa's Solana Plant. Thermal storage will provide up to 6 hours of dispatchable energy to be used after sunset of if cloudy. The molten salt will generate electricity with conventional steam turbines. Solana is a 280 megawatt utility-scale solar power plant (CSP) under construction in Gila Bend, Arizona, USA. When finished it will generate 280MW's providing over 70,000 Arizona homes with clean, sustainable power.

Previous forecasts indicate that an industrial country like the USA or Germany requires storage capacities in the double-figure terawatt range in the long term. Volumes of energy at this scale can only be stored in the form of a mix of many sources of energy storage—in other words, in a mix of electro-chemical, thermal, mechanical and chemical methods. Energy transition to a high proportion of fluctuating electricity obtained from fluctuating wind and solar power generators requires electricity to be stored at various scales and with various sources. Artificial intelligence and Machine Learning will become a necessity in that new and complex (grid) world. Accelerating Research and development, but also more deployment with comprehensive monitoring in the field (grid-scale), in this context (of mixed sources) is of utmost importance.

Some support for R&D is on the way

A subcommittee of the US House Committee on Appropriations has approved more than a billion dollars in support for developing energy storage deployment, research and manufacturing in a funding bill for the 2021 Fiscal Year.

https://www.energy-storage.news/news/us1.3-billion-funding-proposed-for-us-energy-storage-rd-deployment-manufact

The “FY 2021 Energy and Water Development Funding Bill” was recently approved by the Committee, set to invest a total of US$49.6 billion in programmes to address climate change, improve infrastructure, strengthen national security and take measures to support the revitalisation of the economy in the wake of the coronavirus pandemic.

The Committee noted that this was an increase of US$1.26 billion - or 3% - above the 2020 equivalent Bill. Also included was US$43.5 billion of emergency spending for the repair of water infrastructure and the modernisation of energy infrastructure. The bill now heads to the full committee for markup.

In the section on electricity, the Bill proposed a total of US$3.35 billion of “necessary expenses related to grid modernisation programmes”. Alongside a US$2 billion commitment to grants and demonstration for the enhancement of grid resilience, reliability and energy security of national electricity infrastructure including allowing for the greater adoption of renewable energy, there were specific pledges on energy storage. These were:

  • US$56.5 million to construct the Grid Storage Launchpad, a national energy storage research and development (R&D) facility created by the Department of Energy (DoE), to be hosted at Pacific Northwest National Laboratory (PNNL). It follows the DoE’s identification of the need to accelerate the development of “next-generation energy storage technology as a national priority” which would modernise the power grid and unlock economic and societal benefits, according to the PNNL.
  • US$500 million in funding for energy storage demonstration projects, which would be “across a portfolio of technologies and approaches,” the Bill reads.
  • At least US$770.5 million in grants to US-based manufacturers of advanced batteries and components.

R&D Focus Areas for Energy Storage Materials

Improved energy storage system costs, service life, durability, and power density are made possible by innovative materials that enable new battery chemistries and component technologies, such as low-cost membranes for flow batteries, sodium-based batteries, high voltage capacitors, wide band-gap materials, and devices for power electronics.

Power Technologies.

Storage systems can be designed with a broad portfolio of technologies, each with its own performance characteristics that make it optimally suitable for certain grid services. Established large-scale technologies, such as pumped hydro and compressed air energy storage, are capable of long discharge times (tens of hours) and high capacity. In contrast, various electrochemical batteries and flywheels are positioned around lower power applications or those suitable for shorter discharge times (a few seconds to several hours).

Power Electronics.

Power electronics, such as switches, inverters, and controllers, allow electric power to be precisely and rapidly controlled. Energy storage and power electronics improve power supply reliability and responsiveness.

Grid Analytics and Policy.

Analytical and multi-physics models to understand the risk and safety of complex systems, optimization, and efficient utilization of energy storage systems in the field. Validated data sets support the development of codes and standards to optimize the use of storage resources across the U.S. electricity infrastructure.

Safety and Reliability Testing.

Advanced simulation and modelling and real-world demonstration projects increase the understanding of safety and reliability of energy storage systems.

 

PART IV: Lifting Barriers

Even with all these R&D challenges and objectives for the next few years, there are already many ways utilities can benefit from energy storage:

•  Intelligent energy storage and frequency regulation:

When integrated with the Internet of Things (IoT), energy storage technology can communicate energy usage data at the grid’s edge back to utilities. They can then use this information as part of their strategic planning through forecasting and load balancing. The data generated by IoT-enabled energy storage can even help utilities reduce the need to build peaker plants and substations by helping them streamline energy generation activities through frequency regulation.

• Enhanced efficiency of renewables:

Energy storage technology can increase the usefulness of intermittent renewable energy sources such as wind and solar power. That’s because it enables the power they generate to be stored and used later when the wind isn’t blowing or the sun isn’t shining. This way, utilities can save money and reduce their carbon footprint by relying more heavily on renewable energy sources.

• Increased grid resilience:

Energy storage can provide a backup power system in the event of outages and other unforeseeable downtimes on the grid. It can also quickly communicate outages to utilities when integrated with IoT technology so they can quickly be repaired. As a result, an outage could occur and be repaired without any disruption to power flow and customers wouldn’t know anything happened.

On the other hand, there are also many Barriers to Energy Storage and DER deployment. They can be aggregated in 3 subsets.

Barrier one: Costs

High costs are the primary obstacle to widespread energy storage adoption. Although many storage technologies have low operating costs, upfront investment costs for most are often prohibitively high compared to other available options. Economies of scale have not yet been fully achieved for many energy storage technologies because of limited deployment.

 “Soft costs” are another barrier to accelerated clean DER deployment at scale. These costs reflect the fraction of a final product sale that is neither equipment, installation, nor profit. While this big bucket encompasses other barriers, soft costs are usually dominated by red tape and customer acquisition costs.

Taking rooftop PV as an example again, former Sungevity CEO Andrew Birch laid out a damning explanation of how soft costs contributed to the expense of distributed solar systems installations in the U.S., where systems cost almost three times as much as those in Australia—almost $10,000 more for a typical five-kilowatt system. A 2014 study from Lawrence Berkeley National Lab comparing soft costs for residential solar in the U.S. and Germany estimated that customer acquisition cost differences were around $3,000, or nearly a third of the U.S.-Australia difference. These cost differences could just be due to the more fragmented U.S. market and lack of public education, but red tape also has a clear effect on customer acquisition costs.

The residential solar market’s well-documented challenges are echoed in the experiences of most clean DERs. EV chargers face complicated siting and permitting rules, as well as widely varying electricity rate pricing structures. Energy storage faces different rules and rates for interconnecting batteries while meeting fire codes. Electrified appliances face siloed incentives that promote replacing older gas furnaces with newer more efficient gas units without considering alternatives like heat pumps; energy-efficiency codes and programs might not recognize the benefits of new electric loads replacing dirty fuels.

These challenges all fall on the soft-cost spectrum, and while progress has been made in reducing them, much room remains for progress through standardization and streamlining of permits and requirements in an environment with clear policy targets for installations.

Barrier two: Markets and financing as well as hostile incumbents

The market presents a range of obstacles. For example, storage solutions compete with other flexible energy provision technologies, as well as smart grids, and many alternatives currently have much lower costs. Financing is needed in many quarters, but financing approaches themselves are often barriers to energy storage research and adoption, with a lack of sufficient project financing for demonstration projects and deployment. Perhaps the biggest challenge is the market’s lack of experience and confidence in energy storage performance and technical capacity at large scales. Market environments also have outdated compensation structures based on traditional power system technologies, which may not be relevant to storage solutions.

Energy storage and DERs have to contend with hostile incumbents on their path to scale, and these incumbents take many forms. For instance, vertically integrated electric utilities establish new rules and requirements governing new customer products, natural gas utilities use their regulatory influence to slow down the transition from domestic gas use to clean electricity, and gasoline distributors mount public campaigns or foster anti-EV legislation.

Hostile incumbency comes from three sources:

Incumbents see energy storage and DERs as an existential threat to their business and use their considerable muscle to resist the clean energy transition.

Regulators may have legitimate concerns about consequences of change because some incumbents have an obligation to serve the public, and regulators worry the clean energy transition might harm vulnerable customers or undermine safety and reliability standards. While these arguments are often used disingenuously to preserve corporate interests, the core concern of public service is valid and must be accommodated.

The clean energy transformation spells radical change for incumbents. An electric utility might go from providing end-to-end electricity supplies to becoming a platform provider allowing multiple entities to transact with each other while maintaining a secure and reliable system.

Because change is hard, corporate inertia is real, and investors have set expectations for any given corporation, hostile incumbency is a significant barrier to clean energy adoption. Fortunately, either voluntarily or under the threat of regulatory action, utilities like Xcel Energy and Green Mountain Power leaning into the transition by investing in new solutions.

Standards and Regulatory constraints are also holding back the market for energy storage systems. As with the market, regulators have had difficulty classifying and compensating the services provided by energy storage. In addition, international standards and schemes are lacking for certifying energy storage system quality, safety and operational performance

To overcome this barrier the industry will need workforce development, new business models, and forcing functions like new and updated incentives and standards to accelerate progress.

Barrier three: complicated technologies and deployment environment

Because energy storage and RE must be deployed at scale to achieve the requisite economic impact, they are best sold as a standardized product. But every city, neighborhood, home, and business has different physical and transactional requirements—the opposite of standardization.

Pumped-storage hydropower represents the overwhelming majority of deployed storage capacity, with the deployment of other technologies still relatively minimal. Though these technologies are quickly maturing, they are also widely diverse, resulting in difficulties understanding and categorizing solutions. Chemical battery storage is a rapidly growing area, but other technologies must be considered to increase flexibility and address the variety of market needs.

Simple versions of NEM are becoming less viable as solar penetration increases in early-leader states: Hawaii is limiting new systems because distribution circuits have become saturated and California has moved to mandatory time-of-use rates to encourage consumption outside the solar maximum window.

In the commercial sector, distributed solar has struggled to take off because recovering capital is more complicated while ownership structures and rooftop configurations are more diverse. For example, while the overall U.S. solar market is expected to grow in 2019, the commercial solar market is expected to shrink 13% due to less favorable rate structures and incentives.

To some extent, fast-falling battery prices may help solar deployment by allowing solar generation to be consumed whenever it is most valuable, but this is just the tip of the iceberg. Getting to net-zero buildings and low-carbon transportation means electrifying vehicles and buildings to add new charging load that soaks up larger amounts of renewable electricity, while shaping total power consumption so it can be offset by DERs and consume the cheapest utility-supplied renewable power. This means integrating energy-efficiency upgrades, adding new appliances like heat pumps and inductive stoves, and installing batteries and EV chargers, leaving citizens with a bewildering landscape of choices without many trained professionals to help navigate them.

Building sufficient energy storage capacity is equally daunting. If we look at the challenge of converting the world’s gas- and diesel-powered passenger vehicles to battery-electric propulsion. Even after making appropriate allowance for the far greater “tank-to-wheels” efficiency of electric motors, they find that to replace the energy storage capacity now held in the vehicles’ fuel tanks, we would need battery storage equivalent to 142 TWh (TeraWatt hours).

Also, as shown in Palmer and Floyd’s illustration below, the key material requirements for that many batteries are vast, in some cases greater than the entire current world reserves. To match the deliverable energy stored in the fuel tanks, battery production would consume huge quantities of key materials – in some cases exceeding the current world reserves. And that is to say nothing of the energy costs of acquiring the materials and building the batteries, or the even more difficult problems of electrifying heavy freight vehicles.

Material requirements for batteries for world’s fleet of passenger vehicles (Source: Graham Palmer and Joshua Floyd, from Energy Storage and Civilization: A Systems Approach)

Barring unknown and therefore unforeseeable possible developments in storage technologies that might provide order-of-magnitude improvements, then, it is highly unrealistic to expect that we can simply replace current world energy demands from renewable energy sources. Far greater changes are likely: combinations of changes in technologies, trading practices, regulations, social practices, ways of life. The layers of interacting complexity are beyond the capacity of simple computer models to predict. Artificial intelligence will definitely be required to be able to achieve that goal.

Many examples from utilities and grid operators to follow

There are already many examples of organizations that have went through these barriers, overcome them, and made a successful application of energy storage.  Indeed, we can easily find that Energy storage can be used to shift electricity demand from on-peak to off-peak periods, which alleviates peak demand charges - resulting in savings for customers while reducing strain on the grid.

These arguments aren’t merely hypothetical. In fact, there are several examples of how utility companies are currently realizing the benefits of energy storage for their own operations:

• American Electric Power has emerged as one of the first utilities to invest heavily in energy storage and has installed facilities in West Virginia and Texas. In addition, it has invested $5 million into Greensmith, an energy storage software company. Nearly two-thirds of Greensmith’s customers are electric utilities, including Hawaiian Electric, San Diego Gas & Electric, and Sacramento Municipal Utility District.

• National Grid commissions a battery-plus storage solution to defer a costly cable installation and potentially support local grid and market operations. National Grid ruled out the third undersea cable option in the near term because of the complexity and cost, while the stand-alone gas-combustion generation facility was not a good option from an environmental perspective. In addition, the stand-alone storage option was too expensive to install. Therefore, National Grid opted for a hybrid approach, installing a 6-MW Li-ion battery manufactured by Tesla and a 10-MW combustion turbine generator sited on the island. This solution enabled the utility to defer construction of a third underground cable until 2045. It also gave the utility an opportunity to explore use cases for DER with support from a storage resource. National Grid completed construction and commissioned the 6-MW/48-MWh Nantucket BESS in October 2019.

• Pacific Gas & Electric partnered with an energy storage company to deliver grid services in California from distributed energy storage. Part of the program includes the installation of a 1MW/2MWh energy storage system at a university in California that could save some $800,000 in its lifetime. The university anticipates the energy storage system will improve its performance in the utility’s demand response program.

• Florida Power & Light, which built a 10-megawatt pilot system and now is following up with a planned 409-megawatt system. That project, due by the end of 2021, will be bigger than any other lithium-ion battery system in the world.

• Duke Energy experienced a similar growth in appetite; a handful of sub-megawatt-scale pilots encouraged the utility to call for 300 megawatts across its Carolina territory.

• Dale Withers, the university’s facilities director, said, “While our main motivation for installing energy storage is saving money through peak demand shaving, we are pleased that energy storage is a way to enhance the reliability and performance of our power supply.”

• Consolidated Edison, New York City’s electric utility, responded to a projected energy shortfall by creating an auction for demand response capacity and awarded contracts to several energy storage and efficiency startups. As a result, it reduced a potential $1.2 billion investment in building a new substation to a $200 million investment in energy storage technology.

• Consumers Energy, a utility company in Michigan, has partnered with university researchers to determine how energy storage can be implemented throughout its territory and distribution system. Nancy Popa, Consumer Energy’s executive director, said the purpose was to provide customers enhanced value by making the grid more responsive and interactive to changing loads while recording energy usage data at the same time. Popa also said they’re interested in the economic benefits that energy storage can provide, and that they’ll use the data to improve power quality while potentially deferring system upgrades and outage mitigation.

• Utility companies E.ON North America, Louisville Gas & Electric, and San Diego Gas & Electric all recently revealed energy storage projects. Some of the benefits they hope to realize include maintaining the reliability of their infrastructure while reducing costs for their customers

And to close this list with some “global” example.

• The World Bank has stepped up its catalytic role in boosting battery storage solutions. There is a clear need to catalyze a new market for batteries and other storage solutions that are suitable for electricity grids for a variety of applications and deployable on a large scale. In 2018, the World Bank Group announced a $1 billion global battery storage program, aiming to raise $4 billion more in private and public funds to create markets and help drive down prices for batteries, so it can be deployed as an affordable and at-scale solution in middle-income and developing countries. The World Bank has already financed over 15% of grid-related battery storage in various stages of deployment in developing countries to date. By 2025, the World Bank (WB) expects to finance 17.5 GWh of battery storage – more than triple the 4-5 GWh currently installed in developing countries. With the right solutions, it can be possible to build large-scale renewable energy projects with significant energy storage components, deploy batteries to stabilize power grids in countries with weak infrastructure and increase off-grid access to communities that are ready for clean energy with storage.

• In Haiti, a combined solar and battery storage project will ultimately provide electricity to 800,000 people and 10,000 schools, clinics and other institutions. An emergency solar and battery storage power plant is being built in the Gambia, as are mini-grids in several island states to boost their resilience.

• In India, a joint WB-IFC team is developing one of the largest hybrid solar, wind and storage power plants in the world, while in South Africa, the World Bank is helping develop 1.44 gigawatt-hours of battery storage capacity, which is expected to be the largest project of its kind in Sub-Saharan Africa

Energy storage will continue to develop as a boon for utilities and energy consumers alike. Utilities can give themselves numerous strategic advantages by implementing energy storage technology to benefit their operations while saving their customers’ money. In the end, everybody wins.

PART V: The only conclusion is that it is just the beginning

Utilities are beginning to reap economic benefits by implementing energy storage systems. One of the main ways they are doing this is by providing opportunities for money savings to customers through peak demand shaving. If they act quickly and efficiently, Grid operators and Utilities can get a substantial portion of the opportunities if they integrate one or more of the 3-fold key items in their organizations as early as possible in the next 5 years.

First, for utilities, energy storage (grid-size and demand-side levels) is the key to realizing the potential of clean energy

Renewable sources of energy, mainly solar and wind, are getting cheaper and easier to deploy in developing countries, helping expand energy access, aiding global efforts to reach the Sustainable Development Goal on Energy (SDG) and to mitigate climate change. But solar and wind energy are variable by nature, making it necessary to have an at-scale, tailored solution to store the electricity they produce and use it when it is needed most.

Batteries are a key part of the solution. However, the unique requirements of developing countries’ grids are not yet fully considered in the current market for battery storage – even though these countries may have the largest potential for battery deployment.

Today’s market for batteries is driven mainly by the electric vehicles industry and most mainstream technologies cannot provide long-duration storage nor withstand harsh climatic conditions and have limited operation and maintenance capacity. Many developing countries also have limited access to other flexibility options such as natural gas generation or increased transmission capacity.

Second, boosting a mix of energy storage solutions is a major opportunity

Global demand for energy storage is expected to reach 2,800 gigawatt-hours (GWh) by 2040 – the equivalent of storing a little more than half of all the renewable energy generated today around the world in a day. Power systems around the world will need many exponentially more storage capacity by 2050 to integrate even more solar and wind energy into the electricity grid.

For various energy storage solutions to become an at-scale enabler for the storage and deployment of clean energy, it will be imperative to accelerate the innovation in and deployment of new technologies and their applications. It will also be important to foster the right regulatory and policy environments and procurement practices to drive down the cost of batteries at scale and to ensure financial arrangements that will create confidence in cost recovery for developers. It will also be essential to find ways to ensure sustainability in the ESS value chain, safe working conditions and environmentally responsible recycling.

With the right enabling environment and the innovative use of batteries, it will be possible to help developing countries build the flexible energy systems of the future and deliver electricity to the 1 billion people who live without it even today.

Third, battery storage can be transformational for the new energy landscape in developing countries

Today, ESS technologies are not widely deployed in large-scale energy projects in developing countries. The gap is particularly acute in Sub-Saharan Africa, where nearly 600 million people still live without access to reliable and affordable electricity, despite the region’s significant wind and solar power potential and burgeoning energy demand. Catalyzing new markets will be key to drive down costs for batteries and make it a viable energy storage solution in Africa.

Already, there is tremendous demand in the region today for energy solutions that do not just boost the uptake of clean energy, but also help stabilize and strengthen existing electricity grids and aid the global push to adopt more clean energy and fight against climate change.

And as the "final-final" conclusion, let me share Six forecasts for a thriving future for the grid with energy storage

  1. The reduction of energy storage system cost is a top item. Continued RD&D and, correspondingly, sustained attention and financial investment by governments and stakeholders are needed to make energy storage cost-competitive with other flexibility options.
  2. Through public-private cooperation, governments and manufacturers would reduce costs and encourage commercialization, but better coordination is needed.
  3. All types of energy storage technologies would be considered. Notably, Thermal storage, Hybrid Storage and a variety of battery technologies hold great promise, sometimes in combined thermal electricity systems, but there are other storage options that can address different market needs.
  4. Optimization of systems integration and systems perspectives should be emphasized in technology development, market formation and regulatory frameworks.
  5. In collaboration with other stakeholders, governments would take steps to support the establishment of international standards and certification schemes.
  6. Experimentation and project financing proves to be vital to improve energy storage system cost and performance and reach economies of scale. Niche markets in which energy storage is currently cost-competitive would offer near-term opportunities.

It’s no more time to wait for the Holy Grail to appear by itself.  The next 5 to 7 years will define those who will survive and those who will thrive. Agility and “Tightrope walking” will be good quality to develop for the industry leaders.

Photo by Casey Horner on Unsplash; Taft Point, United States

Read Part I

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Discussions

Matt Chester's picture
Matt Chester on Jul 28, 2020 10:41 am GMT

Previous forecasts indicate that an industrial country like the USA or Germany requires storage capacities in the double-figure terawatt range in the long term. Volumes of energy at this scale can only be stored in the form of a mix of many sources of energy storage—in other words, in a mix of electro-chemical, thermal, mechanical and chemical methods. 

When looking at the total storage capabilities that a country might need, is this looking specifically at energy storage capacity that the utility sector will have reliable access to (utility-scale storage, residential storage options that opt-in to utility load management programs, etc.) or does it also consider the storage that is sometimes walled off by the user (EVs that aren't reliably included in load shifting, industrial storage capacity, etc.)?

Stephane Bilodeau's picture
Stephane Bilodeau on Jul 28, 2020 2:35 pm GMT

Matt, This is an aggregated number including both the grid side storage and the demand-side storage (e.g. EVs energy storage capacity, energy storage for Chillers load/peak shaving, etc.) as soon as they are included in a structured load shifting (or similar) program and not only a wishful thing.  Because, you're right, reliability is the key here.  It needs to increase the grid's reliability and resilience, not reduce it.

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