Batteries and Energy Storage: Desirable, Emerging, but Currently Marginal and Niche Markets Amidst Related Markets: The Quest for Optimization of Power Supply-and-Demand Balance

Batteries and Energy Storage: Desirable, Emerging, but Currently Marginal and Niche Markets Amidst Related Markets: The Quest for Optimization of Power Supply-and-Demand Balance

Energy Storage Market(s) and Challenges

Commercialization of energy storage is a major R & D focus. By one estimate the global industry is expected to grow from capitalization of $200 million in 2012 to $19 billion by 2017. Another consultant suggested a U.S. energy storage market of $2.5 billion by 2020. The U.S. deployed 65 MW of new storage capacity in 2014 and 221 MW in 2015. Big players like GE and Lockheed Martin are in the game now too. One scenario case that suggests 25% EVs by 2025 from 5% now notes that that would translate to 175 GWh of total battery power potential! Such a case assumes that government subsidies will remain available to such an increase in buyers. IHS projects that combined energy storage will grow from 0.3 GW in 2013 to 6 GW by 2017 and to 40 GW by 2022.The consumer electronic battery market now at $5 billion could make it to $30 billion by 2030. These predictions both indicate high rates of growth. Economies of scale through infrastructure in mass-production “gigafactories” should also lower manufacturing costs. Massive commercialization of EVs is expected to be a major driver of battery demand growth. “By Goldman Sach’s forecast, electricity produced from stored renewable energy should double over the next decade to 14 percent, up from 7 percent in 2014.” Goldman also notes that battery costs have fallen 35% over the last year and are expected to be cut in half in the next decade. Similarly, the World Energy Council predicts storage costs will decrease by 70% over the next 15 years. Those incremental cost changes should lead to gradually more and more penetration of storage and better optimization of renewables. Deutsche Bank predicts incremental energy storage costs per KWh to decrease from 14 cents to 2 cents over the next 5 years but that is a pretty bold prediction and others disagree. Even the super-green Rocky Mountain Institute noted that there is currently no energy storage model that “offers anything close to a cash-positive scenario.” The World Energy Council notes that there is wide variation in energy storage costs due to the immaturity of the industry with respect to generation and grid applications. They expect costs to come down as more penetration of renewables on the grid increases demand for storage. They suggest considering value as well as cost. Energy storage can provide high quality, reliable, secure, quickly accessible, site-specific, and low emissions energy.

Battery storage is one form of energy storage with several different battery technologies in play. Currently, lithium-ion batteries make up 90% of the battery market. Other storage technologies include pumping water uphill in places where significant uphill water reservoir capacity exists in order to store with hydro-power, compressed air, storing in made ice for cooling, and other chemical, biological, gravitational, thermal, and electro-chemical methods. Several storage methods are deep in R & D phases.

Energy storage by batteries is getting less expensive with tech improvements. In some places it can be used in place of gas turbines as back-up temporary base load power for renewables and as a possible replacement for “peaker plants” that come on in times of high energy demand. Significant storage could also cushion the effects of demand spikes with fast frequency response. Tesla’s new battery-packs increase home energy storage options and flexibility but they are expensive per kWh and they just discontinued the 10Kw battery pack. It is a niche market for those who can afford it. The Powerwall can be about $7000 installed and offers 6.4 KWh of storage. It seems to be a mild improvement rather than a revolutionary one but perhaps it will spur further improvements. Rooftop solar is much cheaper and economic with a grid-tied system that basically stores excess energy production by selling it back to the grid, pretty seamlessly. It should also be pointed out that selling directly back to the grid is more efficient for the homeowner as no energy is lost compared to battery storage where some of the energy is lost in the conversions (charge and discharge). The main issue with battery storage is cost but costs have dropped significantly in recent years. Even so, cost is likely to remain a big issue in limiting the overall usefulness of battery storage. Tesla also has a ‘utility’ version of its Powerwall that stores 100 Kw. Although that is a pretty small amount of energy in utility terms the batteries can be banked where there is enough generation. One or two is more of a ‘microgrid’ amount of storage. Indeed, storage is the biggest hurdle to a more widespread use of renewable energy since sources like wind and solar tend to overgenerate at times (inopportune times for wind but more opportune times for solar) and undergenerate at other times. To complicate the matter the intermittent production of both wind and solar is likely to remain unpredictable, or volatile.

Fuel cells were once thought to be the future key to energy storage but thus far have not been adopted due to cost and feasibility issues that have not changed much over the years. Fuel Cells have been deployed on some microgrids but their sensitivity to slight voltage variations has been problematic and their cost is much higher than other storage options. However, they are more reliable than other forms of distributed generation and so may find niche uses in urban settings with their small footprint and low noise. Fuel cells can provide baseload power while solar with battery backup is still mostly intermittent. Fuel cells require hydrogen and the cheapest way to get it is by “reforming” natural gas. Energy generation from fuel cells is still 7 to 8 times the power cost from a diesel generator but is more efficient, quiet, smaller, and makes far less pollution and ghg emissions.

Modeling by Argonne and MIT suggests that for energy storage systems with a 2 hour capacity the cost exceeds the value but in systems with a longer capacity (ie. 10 hours) the value can approach the low range of pumped hydro. Flow batteries such as the vanadium redox batteries are in this category and can be as much as 1/5 the cost of lithium-ion technologies for utility-scale storage per KWh. They note that battery storage has great applicability in meeting emissions limits but that low carbon energy sources such as the dispatched nuclear utilized in Germany are more valuable. Diversification with a wide variety of generation sources and strategic natural gas peakers is also much more cost effective than battery storage alone. Thus, the authors conclude, widespread grid adoption is not likely until costs come down and/or emissions requirements ramp up considerably. 

    

Frequency Regulation (Grid Balancing), Peak-Load Shifting (shaving and smoothing), and Demand-Side Management

The frequency regulation services market is based on the different values of different energy sources at regulating frequency on the grid. Frequency regulation by fossil fuel plants is expensive, inefficient and carbon intensive. Solar in the grid could offer a small amount of demand response during peak sun times. Wind could potentially be used also where applicable but that is still in pilot stage and not likely to be reliable – evaluating possible wear effects on the turbines through much starting and stopping. Quick-start gas plants have been the most useful for grid supply-demand balancing. However, their frequent starting and stopping also causes wear-and-tear issues and maintenance costs are now commonly being negotiated into their terms of use by providers. This increases costs a little but also increases very slightly the competitiveness of battery backup. Gas is subject to fuel costs and fluctuations in those costs (which currently are more likely to go up than down but are expected to rise only slightly). Battery storage for frequency response offers the lowest carbon emissions and the lowest operating cost to the utility, after the storage is bought and implemented. Energy to charge the batteries can be provided by renewables or the batteries could be charged by fossil fuel plants in anticipation of high demand, reducing the need for peaker plants. However, again cost is the big issue. While battery storage has improved and become cheaper it is still cost prohibitive and gas peakers are still likely to be the way to go for some time to come. Demand response/demand-side-management (DR & DSM) offer much in the future for leveling out the big demand peaks that require the peaker plants but that is probably not going to happen too soon as the costs and complexities of implementing smart grid technologies on the distribution side are daunting. It should, however, be pointed out that it would only take so much targeted demand response (est. 5% of electricity users in a system) to take out many of the peaks on extreme days that require the peaker plants. Thus, the “costs avoided” could be significant to the utilities by lessening the need to run expensive peaker plants and to build new ones. Grid operators may know where best to encourage DR & DSM.  Gas turbine peaker plants are pretty much required to back up renewables and more will be required as more wind and solar is added to the grid. These plants will not run efficiently since they are back-up sources. Thus their operational capacity factors will be low and this reduces the economic viability of the plants. I have actually seen articles promoting green energy that say that wind and solar capacity factors are gaining on fossil fuel capacity factors because of this. Technically this is true, but the extra gas (and sometimes coal) peaker plants are required and used mainly to back-up renewables so they should be considered to be part of the renewable energy system. Thus the renewable energy on the grid is forcing the required back-ups to run inefficiently and at higher cost. It is a misleading argument from the green side. I think a better depiction would be to admit that natural gas is the best current partner for integrating renewables and that natural gas combined with strategic energy storage deployment would be even better. This would increase the ‘flexibility’ of the grid. Peak-load shifting is an application that can be assisted by strategic deployment of storage on the grid so that energy can be moved quickly from one part of the grid to another to smooth out voltage irregularities. Peak shaving refers to significantly reducing and flattening out demand spikes. Peak smoothing refers to smoothing the load curve and smoothing out the load irregularities caused by renewables. Peak shaving and peak smoothing are forms of peak shifting. 

Peak-Load Shifting Example - SOURCE - Wikipedia entry - Grid Energy Storage

  

New Utility Business Models Integrating Smart Grid Technologies, Renewables, and Storage     

   

There are several different functional markets within power generation: The deregulated energy services market in some states sets daily energy prices that can be locked in for time periods by consumers. Ancillary services like frequency regulation are demand side companies that add power when needed and focus on grid reliability. There is also a market for energy service companies (ESCOs) to provide efficiency improvements and to broker or aggregate lower costs for clients. With smart grid technologies, smaller generators, even rooftop solar generators, could help balance the grid with demand response through ‘time of use’ and generate small cost savings. Peter Fox-Penner, in his book, Smart Power, offers two possible future business models for utilities that integrate both renewables and smart grid technologies. These are the “Smart Integrator (SI),” which is separate from generating and transmitting utilities and focuses mainly on the power distribution and demand side. The other model is the “Energy Services Utility (ESO), which is owned by the utility and would empower things like DR/DSM and energy efficiency (EE) through profit incentives based on cost-savings to customers after the technologies are implemented, similar to the somewhat successful California model. The off-grid and home energy markets seem to be more stand-alone. As the grid becomes more distributed and with smaller and more frequent distributed energy source plants there could be a need for small-scale energy storage that could easily and economically be met. Small and versatile gas turbine technology is a competing industry but could be complimentary in the right circumstances and I predict that could end up an up and coming combo for small scale storage applications like microgrids. Small gas turbine plants are being implemented in some places as a hedge against blackouts – recently, a supermarket chain in the U.K. has been adding them. Universities, hospitals, and various industrial plants are other small power generators where gas turbine, combined heat and power (CHP) or co-generation and/or renewables-based microgrids with battery storage could be applicable.

Utility-Scale Storage 

Many projects are currently underway to test battery storage at utility-scale. While it is cost-prohibitive to adopt at a big scale there are niche areas where it can be useful to shave more local energy peaks. The energy used to charge the batteries can be from fossil fuels or renewables. In late 2015 Invenergy announced that it would utilize 31.5 MW of battery storage from BYD’s lithium-iron phosphate battery systems for the PJM interconnection frequency regulation market – for short-time scale grid balancing. Apparently, other types of ‘utility-scale’ battery storage such as Tesla’s 100kWh units are not thought to be well-suited to the frequency regulation market. Lithium–ion batteries have limitations for grid-scale storage and transmission but they are great for short-term storage. It is likely that eventually multiple battery technologies will be deployed by grid operators. The Invenergy project was the biggest since a 2012 36 MW storage project in Texas. California has a mandate of 1.3 GW of battery storage by 2020 to help meet their robust renewables goals. More renewables on the grid means more battery storage will be required to balance the additional imbalances - more wind and solar sources to the power grid increases demand for grid balancing since outputs from renewables are intermittent and often unpredictable. Batteries are the ideal for instant grid balancing but are still prohibitively expensive. Thus, many of the current projects are niche projects and pilot projects. Battery backup for utilities can be of different types based on needs, materials cost, applications, and size of plant.

In China it was recently announced that an 800 MWh flow battery will be built in northern China. This is slated to be the largest energy storage battery system in the world. They plan to deploy this as a bank of 10 20 MW/80MWh Vanadium Flow Battery Systems. This is a collaboration between U.S. based UniEnergy Technologies and Chinese company Rongke Power. Secretary of State John Kerry was in Beijing for the signing of the US-China EcoPartnership. This massive system is expected to be able to peak-shave about 8% of system load during extreme weather events in 2020. The batteries will be built in Rongke’s new GigaFactory which will be opened this fall. This is a major announcement and a major project. The vanadium flow battery, or vanadium redox battery, can be quite bulky due to electrolyte storage tanks and low in energy density compared to other battery types, but they are quite applicable for grid-scale storage. They can respond very quickly to load changes and can handle overloads. Thus they can offer “black start” capabilities. They can recharge from total discharge (0% charge) while lithium-ion batteries would be damaged below 20% charge (so they can only utilize up to 80% of their nameplate capacity). In 2013, a 5MW, 10MW (20MWh) system was connected to the grid in China to balance local wind power so the technology has been successful. 

 

Finding Niche Applications for Battery and Energy Storage

Finding niche uses for different types of storage is a current area of research. This can apply on any scale. On the consumer end there may also be niche preferences. For instance, I like my rechargeable lithium battery cartridges for my electric weed eater. Energy cost is low. No buying gas and oil and mixing them, no gas system maintenance, no oil changing, no startup troubles, no hydrocarbon smells, and lower noise. String replacement is the same. However, it is also a bit less powerful than ICE versions. This is applicable to me because I do just enough weed eating at a time (1/2 hour max) and I don’t need power. Those who do more weed eating or do it commercially would likely require fossil fuel versions. Considerations for niche uses include size of storage, size of area, power need, peak shifting requirements, noise, emissions/pollution, depth of discharge of batteries, cycling capabilities of batteries, and more.

“Load leveling devices {LLDs} are of several types: rotational energy in flywheels, chemical energy in electrochemical cells, gravitational energy in hydro pumped storage, elastic energy in pressurized containers and springs. All are applicable somewhere, while some not useful in particular applications”

Comment by Robert I. Price – Assistant Professor of Physics (retired). He goes on to say:

“The only universal statement possible: Each energy production (conversion) application requires its own (well designed) LLD or LLDs.”

Load leveling devices refers to anything that adjusts power, at any scale: on the grid or in a product.

Non-battery technologies and certain battery technologies are more applicable for the storage needs of utility-scale generation. They are typically larger, less portable and less modular and often require more space. Batteries are more deployable on smaller scales due to their modularity which is more of a requirement for transmission and distribution systems. Optimal placement of battery storage on transmission and distribution systems can help to optimize costs. Operators are developing ‘optimization algorithms’ for charging/discharging batteries on distribution grids with a high penetration of renewables. Siting and sizing are the two main optimization inputs. The right amounts of storage capacity in the right places can optimize energy availability and system costs. 

  

Another example is finding niche storage applicable to concentrated solar power (CSP). One recently proposed method is thermal energy storage utilizing latent heat from graphite foam infiltrated with magnesium chloride salt. This composite with high thermal conductivity can make use of the high temperature power cycles required for CSP plants. In other words, it works well where there is available heat, as in CSP plants. 

An example on the microgrid scale involves the use of Aquion Energy’s AHI deep cycling saltwater chemical batteries combined with Ideal Power’s power conversion system. This combo is being used at Sonoma Winery in California. It is grid-tied but capable of “islanding,” or running off-grid. It seems likely that storage markets will differ by scale which is basically to say the same as where they are in the system from generation to distribution – generation requires larger-scale storage systems and distribution requires smaller-scale systems. Each requires their own optimized power control systems. 

Raw Materials Availability and Pricing

Another issue with battery storage is availability of required raw materials. The required lithium for lithium-based batteries is relatively secure in availability but price fluctuations are not uncommon. The required cobalt for Li-ion batteries has some potentially very significant uncertainties. This is because most cobalt is derived as a byproduct of nickel and copper mining, both of which have been declining and are predicted to continue to be in decline in the near future. This could affect availability and price of cobalt, especially if a big ramp-up of EVs from new facilities like Tesla’s giga-factory in Nevada takes off or if a breakthrough in Li-ion battery tech leads to mass production. This is debatable as others predict copper mining to increase due to its use in solar and wind technologies. Another raw material is graphite and since more graphite is used in batteries than lithium there could be some price/availability issues. All three can be mined in traditional mining operations but most lithium is derived from brines that are evaporated to increase the lithium percentages and then chemically separated out. Lithium is one of very few commodities that increased in price in 2015, it basically doubled on the spot market. Demand for lithium has doubled in the past decade. Elon Musk recently quipped, “In order to produce a half million cars per year … we would basically need to absorb the entire world’s lithium-ion production.” There is plenty of lithium to be had but costs of some supplies are higher. Currently, Argentina is a major source and the “Lithium Triangle” area (Argentina, Chile, Bolivia) is currently being extensively explored for those cheaper sources. The only American lithium production is in Nevada about 3 hours from Tesla’s Gigafactory and more exploration is currently underway there with wells being drilled for lithium-rich brine. Producing lithium carbonate from brine is cheaper than producing it by traditional mining methods.  Lithium mining has been suspended in Bolivia due to opposition. It is unclear what will happen to lithium prices as demand picks up but more lithium drilling and continued higher prices do seem likely. This is likely to keep EV prices up. Both solar and wind are more copper intensive than fossil fuel energy (about 12 times more) so ramping them up subsequently ramps up copper mining. Copper mine expansions are planned in Australia, Chile, Mongolia, and Peru. Mining companies are expected to meet the increasing demand but temporary shortfalls could keep copper prices high.

Battery and Non-Battery Energy Storage Methods and Current Research

There are several categories of energy storage: biological, chemical, gravitational, latent heat, kinetic, electro-chemical, and physical.

From Wiki:

“Energy storage involves converting energy from forms that are difficult to store to more conveniently or economically storable forms. Bulk energy storage is dominated by pumped hydro, which accounts for 99% of global energy storage.”

Methods of mechanical energy storage include pumped hydro, compressed air, flywheel energy storage, gravitational potential, hydraulic accumulator, and liquid nitrogen. Methods of electrical energy storage include capacitors and superconducting magnetic energy storage. Biological methods include glycogen and starch. Electrochemical methods include flow battery, rechargeable battery, supercapacitor, and ultraBattery. Thermal methods include brick storage heater, cryogenic liquid air or nitrogen, eutectic system, ice storage, molten salt, phase change material, seasonal thermal energy storage, solar pond, and steam accumulator. Thermal methods can be divided into sensible thermal and latent thermal. Chemical methods include biofuels, hydrated salts, hydrogen, hydrogen peroxide, power to gas, and vanadium pentoxide. This list shows that there is quite an array of possible energy storage methods and some may be favored in certain applications. In all cases the two main issues come down to feasibility and economics: Can it be done and can it be done cheaply? Scalability is another issue: Can it be done at a large enough scale to make an impact. So far, pumped hydro (but only where applicable) and battery storage (due to its modularity and portability) have the biggest market share. Other methods have more niche uses but all are being researched aggressively with many pilot projects ongoing. One new one is the ARES (Advanced Rail Energy Storage) which is in a pilot project to study the feasibility of using a rock-filled train to go up and down a hill in response to energy storage and discharge needs. (the simplicity is appealing.) This is for utility-scale storage needs, of course. When there is excess energy the very heavy train on special made tracks goes uphill and when energy is needed it goes downhill generating energy via regenerative braking (like a Prius). The current project has a power capacity of 50 MW and can generate 12.5 MWh of energy. However, as in all other energy storage schemes cost is the big issue and cost per KWh for this tech is quite high. However, if it would be scaled up quite a bit the costs would go down as economy of scale kicks in, say the project managers. It is unclear, however, how much energy storage would be needed for ancillary services. Each storage mechanism would need to be sized appropriately for the need.

One form of “thermal storage” where energy is stored by making ice which is utilized and melted during the day to aid in cooling buildings may have applicability in tropical and other warm areas. Unfortunately, many of these other storage methods are not very efficient – energy is lost during transmission and conversion. But it would be a good way to utilize excess energy that would otherwise be wasted.

As mentioned earlier, several utilities are testing out grid-scale battery storage. While it could be cost-prohibitive to adopt at a big scale there are niche areas where it can be useful to shave more local energy peaks. The energy used to charge the batteries can be from fossil fuels or renewables and gas and renewables could be strategically integrated for optimization. Most modeling assumes renewables charging batteries, especially during times of overgeneration.

MIT researchers have noted that longer duration storage (like vanadium flow batteries) has more value on the grid than short duration storage (like lithium-ion batteries) since it can store overgeneration longer - such as when wind overgenerates at night when demand is low and when solar generation peaking exceeds the 2-hour storage limit of lithium-based batteries as is typical.   

The graph below notes that energy capacity and discharge time or energy to power ration (E2P) are the variables that determine applicability of type of energy storage system 

SOURCE: World Energy Council

New Models at the Energy Provider/Energy Customer Interface

New interfaces between utilities and home energy users could also accelerate battery storage adoption. One case involves Green Mountain Power in Vermont who offers their customers (presumably those with rooftop solar) installation of Tesla Powerwall batteries to be leased at $37.50 per month. That comes to $450 per year for about 6.4 Kwh of battery storage. This is mostly a niche market for those wishing to hedge against power outages. I am guessing there is also an installation charge but I am not sure. I think at that rate it would be about a 7.5 - 8 year payout for one Powerwall if it was lease to own, which is somewhat faster than typical rooftop solar payout. However, it may just be a continuous charge. If so, it would not be economic at all. Significant battery storage on the distribution end of grids could potentially contribute to “peak shaving,” or lowering the magnitude of demand peaks in energy usage during cold and hot spells, which could benefit utilities as well as consumers. It seems likely that other energy storage offerings like this will happen. Perhaps a ‘Solar City’ model of battery storage rental will happen. Some people are willing to pay more just to be green.

In order to aggregate and control multiple storage sources on the grid, operators need new software and software platforms so that DERs can be optimally integrated. Advocates note that aggregated 'behind-the-meter' storage can effectively become utility-scale storage (front-of-the-meter) if managed effectively. Software can optimize storage and aggregated DER integration so that distribution system upgrades can be deferred as has happened on PG&E systems in California. Established companies like GE and many new ones are coming into the grid operating software market

Used Electric Car Batteries for Energy Storage

EV batteries are no longer useful when they can’t meet the specified needs of the EV. However, at this point they can apparently still store up to about 80% of their original capacity. One recent case is that of an off-grid nature area in the western U.S. that transitioned from fossil fuel generator power to a bank of used Toyota Camry nickel-metal hydride battery packs to make up an 85kWh storage system. I am not sure how efficient the used batteries are at storing energy. I do know that with battery storage some energy is lost in both charging and discharging. Compared to grid storage in grid-tied solar arrays where in many places one is paid going electric rates to sell back to the grid - any loss of energy is a comparative loss of income. However, the energy lost in the storage conversions is generally small but still significant, about 10-25% I believe.

Climate hawk Joe Romm notes in his article that EV makers BMV, GM, Nissan, and Toyota are exploring the potential of post-EV-usage battery value. He notes that since these batteries can offer significant post-EV-usage storage potential the carmakers could lower the costs of the cars assuming they can retrieve and re-sell the batteries. These batteries may also be sold at lower cost than current energy storage batteries. He suggests that this will be a big factor in ramp-up of renewables in the 2020’s when the EV batteries being used today need to be replaced. He also gives a life of the batteries of 8-10 years. I found this surprising as we have a Toyota Prius hybrid with 11 years on it (and hope to get at least 15). An 8-10 year full vehicle life makes the economics of EVs less attractive, although with cheaper car prices one might be able to afford to replace the battery I suppose. Battery replacement may be a good option for a hybrid owner since the gasoline system gets far less use than that of a gasoline vehicle. The repurposed EV batteries could be said to offer a much lower cost per kilowatt-hour but they are also limited at present and it is as of yet uncertain how available they will be in the 2020’s due to lackluster EV sales these days (in spite of record orders for the Tesla Model X). In combination with cheaper battery prices (they are still coming down), this is likely to be a major factor in the late 2020’s into the 2030’s, assuming battery life in the EV would be a little longer than 8-10 years – as consumers should hope. 

     

Electric Car Batteries for Demand Response

Another long-proposed method is to utilize energy stored in EV batteries to power the grid in times of high demand in order to effectively serve as peaker plants in times of high energy use. For this to be useful would require a much more massive influx of EVs as well as a pricing structure for “time of use” energy management as part of the smart grid technologies. The idea is simply that EV owners could sell to the grid at high ‘time of use’ prices while charging overnight when the ‘time of use’ prices are low. Used, or ‘second-life’ EV batteries may also be used for demand response as has been done in an 18-month test project in California with BMW and PG & E. Germany does not think these vehicle-to-grid technologies will be viable for widespread grid balancing there till about 2030.  

Integrating Renewables: The Conundrum of Energy Supply-Demand Imbalance that Grows with Renewables Growth

The intermittency and frequent supply-demand mismatch between renewable energy generation and consumer energy demand grows proportionately with the amount of renewables hitting the grid since solar and wind exhibit variable generation. Germany, now at 31% renewables (actually about 23% wind and solar – the rest is biomass which is much like fossil energy) is increasingly facing this issue. It is actually the volatility (second-to-second changes due to clouds and wind speed changes) of solar and wind that make a renewables powered grid potentially unreliable. Intermittency (hour-to hour changes such as darkness or avg. monthly generation) can be fairly predictable while volatility cannot. That is the main issue with integrating renewables onto the grid in a balanced way. Better integration of renewables involves cooperation between all local power generators and their ancillary services. Voltage transients, frequency deviation, and harmonics are power quality concerns with integrating renewables. These problems can be solved best with battery storage. So one may also conclude that some utility-scale battery storage becomes a requirement for renewables integration. Energy storage can also be used to shift power generation from fossil or renewable sources to storage sources. Peak smoothing, another form of peak shifting, is used to smooth short-term renewables variability from cloudy days and wind gusting. The storage system is used to smooth these irregularities which affect the quality and reliability of power generation.

California currently favors renewable curtailment when overgeneration occurs (primarily due to solar on sunny days) rather than turning down natural gas plant production. The excess energy production is lost – whether one calls it from renewables or from natural gas. If the gas plants could be turned down at these times, argues the Union of Concerned Scientists, then saving the excess renewables would lead to less emissions, although idling gas plants cause emissions too. However, that would also require a more detailed grid balancing strategy. Integrating a certain amount of battery storage could be the best option there – either storing the excess renewables and/or storing the excess gas-fired power. Thus, battery storage may well have local niche applications anytime and anywhere there is predictable overgeneration. The UCS suggests that they be combined with “load-shifting technologies” and that power be exported to other grid regions. However, in Germany such overgeneration has been problematic as they have tried exporting energy to neighboring countries like Poland. This is been wrought with problems in those neighboring countries due to their own grids and grid-balancing capabilities. Germany favors DSM and power-to-heat as more cost-effective than battery storage. Once a grid system gets to a point where renewables generating capacity commonly exceeds 100% during peak wind and/or solar generation then the excess energy will be lost if not stored or exported to another grid system. Both of these “solutions” are expensive so it lowers the value of renewables generation going forward from that point. This is why Germany is implementing a ‘slow down’ of renewables penetration. In their DSM they are having to deal with management of a massive number of individual power generation sources or points.

In places with less than ideal grid operation control, power surpluses (from wind and solar) can damage equipment so that commercial and industrial consumers in some places need to add fossil fuel generators for back-up. They could add battery storage to deal with these grid disruptions but generators are far cheaper. Battery storage is best on systems with a high degree of grid operation control. 

Many favor better connection between regional grids. Since exporting power requires long distance transmission they call for more efficient long distance transmission such as large DC power lines for supply from the wind fields of the plains states. DC lines are one-way lines but can carry a large amount of power more efficiently than AC lines. Such infrastructure upgrades could access economies of scale but state to state and region to region agreement on costs and regulatory requirements are big hurdles and such projects take time. They are favored to transmit power from remote high-wind areas to population centers. Consolidation of regional power authorities has allowed temporary grid penetration of up to 60% on some grid networks such as the SPP Southwest Power Pool in the Great Plains states with the best wind resources. Larger regionally cooperative grids can also do better forecasting for renewables generation. However, such regionalization also requires significant transmission buildout.

   

A Battery Storage Cost Breakthrough Could Offer a Panacea 

If battery costs could come down to an affordable level then renewables could be preferentially employed for charging batteries so as not to further unbalance the mixed grid. Also, more battery power would be available as the preferred method for DR and peak shaving. This could create a feedback loop that would allow much greater penetration of renewables. Many different things would need to come together as well: raw materials availability, widespread smart grid tech adoption, efficient geographical planning, utility company innovation and cooperation, better integration of multiple power sources, and more functional government, regulator, utility company, and community interactions. Perhaps such a possibility helps to embolden renewable energy advocates and ‘keep-it-in-the-grounders.’ But until something viable comes along (which could take decades or more) it would be detrimental to over-ramp renewables.

Energy Transition/Decarbonization Strategies

Energy storage can be seen as a major feature of the transition to cleaner energy and in making cleaner energy cheaper. Salvatore Scaglianini sees three broad market trends for the transition: 1) decarbonization; 2) decentralization; and 3) EVs. Each requires the use of Battery Energy Storage Systems (BESS). Storage can be divided into “front-of-the meter” apps like utility scale storage and “behind-the-meter” apps like customer distributed energy. Utility business models’ potential conflicts of interest come into play here as well. Frequency Regulation can be seen as front-of-the-meter application that requires a certain amount of available power generating capacity in MW. Other apps may require energy generating capacity in MWh. Who should own energy storage is a big issue: utilities or ancillary service providers. Utilities could have a ‘conflict of interest’ if the business goal is weighted too heavily at selling more power. Germany is one place to look for business model history but their regulatory structure is both market-based and pro-energy transition. Frequency Regulation is the primary market for battery storage there and is likely to be anywhere it can develop. Secondary applications may include “black-start, renewables integration, peak shifting, capacity reserve/peaking, {and} off-grid/islanding.” On the demand side there is also some data from Germany which has implemented nationwide energy trading on a P2P (point-to-point) sharing platform for DERS (distributed energy resources). Issues with this have been the necessity of dealing with massive amounts of new Points-of-Delivery (PoD) and related dispatching and distribution costs and integration with existing feed-in-tariffs (FiT) and net-metering policies. Utility ConEdison along with SunPower is testing a pilot DER time-of-use with demand-response pricing market in New York City. California is also ramping up tests of time-of-use pricing for DERs. In NYC individual solar with battery backup generators would basically offer ancillary services to the larger ancillary services provider or the DSO (distribution system operator). 

Assessing the Value of Energy Storage vs. the Cost of Energy Storage

According to the World Energy Council, the usual means of comparing costs of different sources of energy: the levelized cost of energy (LCoE) is inadequate in determining the value of storage. Storage has more or less value depending on how and where it is deployed. Chair of the study group, Hans-Wilhelm Schiffer notes that: 

“There are four different elements in the energy system: conventional and renewable generation, grids, customers, and storage.”

He notes that each must be considered and valued separately. Storage, when added to renewables, can increase reliability and flexibility and reduce dependence and pollution/ghg emissions. These are not valued into LCoE analyses, they argue. Increase of flexibility, more choices in reacting to power supply/demand imbalances, can be seen as a market unto itself: the flexibility market. This is one in which storage plays the major role since adequate storage for an application increases flexibility better than anything else.

The World Energy Council (WEC) predicts significant cost reduction in battery storage, sensible and latent thermal storage, and supercapacitor storage over the next 15 years. Sodium-sulfur (NaS), lead-acid, and lithium-ion technologies are leading the cost drops. Pumped hydro and compressed air are considered mature technologies so significant cost reductions are not considered likely. WEC also thinks that storage is not getting the policy and subsidy support that renewables are getting. They recommend that value be determined not by levelized cost of storage (LCoS) but by individual cases: ex: daily storage model for solar and a 2-day storage model for wind.

Different Battery Types are Suited to Different Purposes

How often a battery is charged and discharged and how deep a battery is discharged (depth of discharge, DoD) affect the life of the batteries, particularly lithium-based ones. Performance guarantees by manufacturers and 10-year warranties are being favored by utility-scale purchasers. DoD is why certain battery types (non-Lithium-ion) are more suited to frequency regulation – since they would have to cycle very frequently which would shorten battery life. Lithium-based batteries have flooded the small electronics market and the market for some power tools and lawn care equipment. Do-It-Yourself very small solar systems and RV systems still tend to utilize 12Volt DC batteries. These can lead to voltage problems and affect equipment as some inverters can’t always match the exact power requirements of devices. A Tesla Powerwall or 2 might do OK for an RV if pre-charged at home. There are actually quite a variety of lithium-based battery types including lithium-nickel cobalt manganese oxide (the current choice for EVs and PHEVs since 2010), lithium iron phosphate (used in the PJM FR project mentioned previously), lithium-nickel cobalt aluminum oxide, lithium manganese oxide spinel, lithium cobalt oxide, and lithium titanate oxide. Each has advantages and disadvantages according to how it is deployed.

Storage and Deployment Strategies in Fossil Fuel Systems

In fossil fuel systems there are energy transport, storage, and availability requirements. Different fossil fuels are stored differently according to their natures. What is being stored here is the fuel that makes energy rather than the energy itself, although there are some supply/demand balance similarities. Oil and other heavy hydrocarbons are transported and stored as liquids in tanks and pipelines. These liquids usually need to be pumped, typically at intervals along interstate pipelines. Storage hubs are typically near refineries and export terminals. Natural Gas is often stored in underground “storage fields” which may be dissolved out salt caverns or depleted but porous and well-trapped oil and gas reservoirs. They are preferentially stored near population centers where demand is highest and gas can be supplied quickly for heating. Natural gas is now increasingly being stored near power plants, mostly in the large supply pipelines being built to deliver the gas. Storage is ideally near point of use, or point of departure in the case of exports. Natural gas liquids (NGLs) are increasingly being delivered to export terminals where some is stored before new loads depart. The same is true for the natural gas that is cryogenically liquefied to become liquefied natural gas (LNG). Storage hubs in these oil & gas systems become the index markets that set prices. Coal has to be stored in adequate quantity at power plants and industries where it is used. It is stored above ground. Coal is transported by barge, rail, and to a lesser extent by truck. Coal transport is a major user of energy: at one point it was estimated that transport of coal uses 6% of the energy produced in the U.S.! Gas storage facilities may use various means of increasing the “deliverability” of the gas – which refers to the ability to meet peak demand on cold days by being able to deliver more gas faster (basically, demand response). Larger diameter wells, horizontal wells, positioning of injection and delivery wells, and holding significant field pressures are some of the strategies for increasing deliverability. Storage fields are refilled in the late spring, summer, and fall and drawn out seasonally, usually with net draws from November to the end of March and net fills from April through October. There were some regional shortages during the polar vortices in 2013-2014 and there are typically some supply shortages with accompanying price spikes in high winter demand times in certain areas where there is a dearth of pipeline access. There was also a rare propane shortage in the same winter. Propane, or LP gas, is a major home heating source with some transport by pipeline and some storage hubs but it is trucked from the local distribution points (LP Gas/Propane companies) to customers’ home tanks. Thus there tends to be a slow reaction time to an unexpected widespread shortage. Customer wait times were increased. This can be an issue in remote areas where snowstorms may delay truck deliveries.

References:

Invenergy adds 31.5 MW battery to booming PJM frequency regulation market – news story by Herman K. Trabish, in Utility Dive (Brief), Nov. 4, 2015

Smart Power: Climate Change, the Smart Grid, & the Future of Electric Utilities – by Peter Fox-Penner, Anniversary Edition, Island Press, 2014

Five Energy Trends Driving Climate Progress in 2015 – by Ben Ratner, in EDF Voices: People on the Planet, Oct. 29. 2015

How Battery Technology and Crowd-Sourced Energy Can Save Our Aging Grid – by Karin Rives, in EDF Voices: People on the Planet, Jan. 6, 2016

Renewable Energy is Necessary but Insufficient – by Andrew Scobie, posted on Faraday Grid, April 27, 2016

World Energy Council: Storage is Less Expensive Than We Think – by Karel Beckman, posted in energypost.eu, Feb. 1, 2016

Energy Storage Business Models in the Energy Transition – by Salvatore Scagliarini, originally published on LinkedIn, accessed from cleantechnica.com, Feb. 4, 2016

EV Batteries and the Cobalt Cliff: The Biggest “Oops” in the History of Supply Chain Management – by John Petersen, posted at investorintel.com, March 25, 2016

Is Storage the Future of Energy, Especially Renewable Energy? – by Abhinav Raghav, CEO Trilig Energy, posted in LinkedIn Renewable Energy Group, April 1, 2016

Tesla and Other Tech Giants Scramble for Lithium as Prices Double – by James Stafford, posted at oilprice.com, April 12, 2016

Press Release: Aquion Energy AHI Batteries and Ideal Power’s Power Conversion System Bring Energy Independence and Resiliency to Sonoma Winery – by Elizabeth Pond, posted at Aquion Energy Blog, April 26, 2016

Report: Batteries Will Not Be the Future of Grid Balancing in Germany – by Mike Stone, posted on Green Tech Media, April 26, 2016

The Humble Battery Leads Charge to Go Green – by Hardeep Walia (CEO of Motif), posted on LinkedIn, May 4, 2016 

Utility Installing Home Batteries That Stockpile Power, posted in PennEnergy, May 5, 2016

The Energy Storage Market is About to Boom – by Lindsey Gilpin, in Forbes, Sept. 9, 2015

Why Used Electric Car Batteries Could Be Crucial to a Clean Energy Future – by Joe Romm, in Climate Progress, May 9, 2016

Energy Storage, entry at Wikipedia.org

Vanadium Redox Battery, entry at Wikipedia.com

Storage Solutions for Renewables- Application Suited Solutions – by M. V. Radhakrishna, posted at LinkedIn, May 24, 2016

Renewables and Reliability: Grid Management Solutions to Support California’s Clean Energy Future – Factsheet by Union of Concerned Scientists, March 2015

Fuel Cells Are a Good Partner for Microgrids, But Costs Limit Deployment – by Peter Maloney, posted at Utility Dive, May 10, 2016

The Low Carbon Economy: Goldman Sachs SUSTAIN: An Equity Investor’s Guide to a Low Carbon World 2015-25 – by Goldman Sachs

Enabling a Revolution: Structural Growth Opportunities in Resource Equities from Changing Battery Technologies – investment analysis by Baring Asset Management, London, January 2016

Energy Storage Business Models in the Energy Transition – by Salvatore Scaglianini

Forget Elon’s Batteries – Fix the Grid with a Rock-Filled Train on a Hill – by Aarian Marshall, in Wired, May 16, 2016

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SPE CEO: Regionalization, Transmission Help Push Renewables Penetration Near 50% - by Gavin Bade, in Utility Dive, May 26, 2016

Energy Storage’s Role in Decarbonization Will Depend on Duration, Cost Cuts – by Peter Maloney, in Utility Dive, May 31, 2016

The Value of Energy Storage in Decarbonizing the Electricity Sector – Abstract – by Fernando J. de Sisternes, Jesse D. Jenkins, and Audin Botterud, in Journal of Applied Energy Vol. 175 pgs. 368 – 379, May 14, 2016

We’re Wasting Solar Energy Because the Grid Can’t Handle It All. Here’s a Solution – by James Fine, in EDF Voices, Environmental Defense Fund (Climate/Energy), April 14, 2016

BHP Sees Copper Shortage in 2019, at Bloomberg.com, May 26, 2016 

World Energy Council: Bright Future for Energy Storage

World Energy Resources: E-Storage: Shifting from Cost to Value – Wind and Solar Applications – by World Energy Council, 2016

Grid Energy Storage, entry at Wikipedia.com

How Energy Storage Could Change Everything about Renewables – by Scott Nyquist, in Fortune, September 24, 2015

Flow Battery Developer to Build World’s Largest Battery Storage System – by Peter Maloney, in Utility Dive, June 2, 2016

Load Peak Shaving and Power Smoothing of a Distribution Grid with High Renewable Energy Penetration (Abstract) – by E. Reihani, M.Motalleb, R. Ghorbani, and L.S. Saoud, in Renewable Energy, Vol. 86, pgs 1372-1379, Feb. 2016

Optimal Placement and Sizing of the Storage Supporting Transmission and Distribution Networks (Abstract) – by Mahdi Motalleb, Ehsan Reihani, and Reza Ghorbani, in Renewable Energy, Vol 94, pgs. 651-659, August 2016

Development of Graphite Foam Infiltrated with MgCl2 for a Latent Heat Based Thermal Energy Storage (LHTES) System (Abstract) – by D. Singh, T. Kim, W. Zhao, W. Yu, and D. France, in Renewable Energy, Vol 94, pg. 660-667, August 2016

Energy Management at the Distribution Grid Using a Battery Energy Storage System (BESS) (Abstract) – by E. Reihani, S. Sepasi, L.R. Roose, and M. Matsuura, in International Journal of Electrical Power & Energy Systems, Vol. 77, pgs. 337-344, May 2016

Greater than the Sum: How Aggregation is Making Storage into a Software Business - by Herman K. Trabish, in Utility Dive, June 13, 2016

Energy Storage Isn't Necessary for a Cleaner Grid - But We'll Need It If We Want a Higher Share of Renewables, Say MIT Researchers - by Julian Spector, in Green Tech Media, June 13, 2016

The Value of Energy Storage in Decarbonizing the Electricity Sector - by Fernando J. de Sisternes, Jesse D. Jenkins, and Audun Botterud, in Journal of Applied Energy 175, pgs 368-379, 2016