Search quickens for 'holy grail' (storage)
Interest in utility-scale storage technologies is keen, as it should be, considering how they could resolve so many issues for grid operators. That interest is reflected in a survey of Energy Central readers, who recently ranked storage as their top interest for our editorial coverage.
A new report from Pike Research spells out the potential for grid operators:
"Energy Storage on Grid (ESG) technologies perform a number of applications, including load following, renewable energy time shifting, renewable energy grid integration, conventional energy time shifting, transmission and distribution upgrade deferral and time-of-use energy cost management," wrote author David Link, senior analyst at Pike Research.
It's not as if this is a big surprise. Federal stimulus funding through the American Recovery and Reinvestment Act (ARRA) has quickened the pace of research-and-development in the United States with hundreds of millions of dollars, drawing participants' matching funds and intense interest from venture capitalists.
"We await the results the various demonstration projects that ARRA funded," Link told me yesterday. "ARRA enabled a critical mass of activity that could jump-start the industry, depending on the results of those projects."
"Venture capital firms are showing their interest by pouring record dollars into clean technology, specifically energy storage," Link added.
Legislation at the state level in California and at the federal level in the U.S. (see this hugely popular column by my colleague, Kate Rowland) has attempted to establish tax credits and other support for the pursuit of ESG solutions. And in a handful of cases around the country, energy storage projects are being treated as transmission assets to enable cost recovery—one of the current hurdles to market penetration, in Link's view.
According to Link's report, this perennial need and the investments being made now to meet it will drive the market for ESG to nearly 25 times its current size in 10 years. Link warned that assessing the annual, global value of this market is difficult. Yet he pegged it at about $1.5 billion today, exploding to about $35 billion by 2020—an uptick, he acknowledged, that resembles the proverbial hockey stick in investors' dreams.
In Link's view, much of that growth will be driven by and benefit the United States. (He modeled the market based on an aggregate national renewable portfolio standard of 20 percent by 2020-2025 and extrapolated from there.) He noted that China's market is famously opaque and that, in Europe, grids are so well integrated and mutually supporting that energy storage isn't a priority.
"Today, utilities are building a significant portion of new capacity with natural gas and coal to meet peaks in electricity usage that could occur in small time intervals. It is expensive and inefficient to size capacity to these peaks," Link wrote in "Energy Storage on the Grid." "Moreover, as renewable energy, particularly wind, is added to the grid in greater numbers, utilities are adding natural gas spinning reserves to compensate for the variability of these resources."
To illustrate his point, Link cited a U.S. Department of Energy estimate that for every gigawatt of wind energy added, 17 megawatts of spinning reserves must also be built to account for the system's variability.
The other huge driver for energy storage on the grid (ESG), a subset of the umbrella topic of energy storage systems (ESS), is transmission support, according to Link. With the U.S. facing what Link characterized as nearly $100 billion worth of transmission system upgrades, "if energy storage on the grid displaces just a small portion of that cost, that's a huge market" he told me.
Currently, mechanical means of energy storage—that is, pumped hydro and compressed air energy storage (CAES) have the greatest scale—in the hundreds of megawatts—the most solid foothold and biggest future potential, according to Link. In contrast, batteries of various sorts hold in the tens of megawatts. Expanding batteries' scale and duration of discharge can run into costs that outweigh benefits, though that may change through R&D, he said. That said, Link's market assessment reflects that more than 40 percent of the current market is held by sodium sulphur (NAS) batteries.
"Scale is an issue," Link said. "Duration of discharge is an issue."
The "sweet spot" for discharge is about four hours, the analyst added.
(Link clarified that ESG technologies typically have discharge durations in the 1-2 hour range, whereas ancillary services technologies have discharge durations in minutes or seconds.)
"The principal technologies in the ESG category are pumped hydro, CAES and NAS batteries, as well as zinc bromine (ZnBr) and vanadium redox flow batteries (VRBs)," Link wrote in his report. "Lithium-ion batteries are poised to be the leading technology in the ancillary services market, as unprecedented worldwide investments are focusing on this versatile battery chemistry. However, in order for Li-ion to gain share . it will need to deliver lower-cost energy on a $/kWh basis."
I'll follow up with a closer look at energy storage projects. Readers: any suggestions?
Phil Carson
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com
303-228-4757
Comments
Storage
Mr. Link will probably be able to cross off grid integration as a driver for storage if NERC's Reliability-Based Control (RBC) experiment is successful. RBC increases the allowable deadband around Area Control Error (ACE) excursions to the point where at least some grid operators have been able to nearly eliminate the 4 second dispatches associated with Automated Generation Control (AGC). The notion of a fast regulation product that might otherwise drive adoption of certain forms of storage becomes unnecessary.
As he and others have pointed out, cost is also a huge issue. Storage, other than for short duration applications, is still far too expensive, and the mechanical forms (pumped storage and CAES) are difficult to site for two reasons: lack of suitable geology, and local opposition.
Jack Ellis, Tahoe City, CA