Packing power: The growth and opportunities of energy storage
The recent surge of new energy storage solutions shows no sign of abating with Tesla's Powerwall coming soon in the UK. But what are the potential implications for sustainability professionals?
Here, Shay Misch from ICL-IP - the world's largest bromine producer which aims to drive efficiency developments and improve battery performance - explores what the future holds for the world's burgeoning energy storage market.
Technological solutions that mitigate the impacts of climate change have grown substantially since the international response to the issue began at the Rio Earth Summit in 1992. However, whilst some technologies have been widely adopted, other innovations have faced a number of barriers preventing them from substantial market penetration.
For nations worldwide, the panacea of energy supply is to generate it from sources that deliver against the tripartite challenges of low carbon impact, security of supply and low price. Increasing global energy demand and an increasing global responsibility to prevent climate change are making these demands more pronounced.
Renewable energy sources present one solution to this challenge. However, variable renewable energy sources such as wind and solar photovoltaics, come with their own drawbacks including efficiency and intermittency challenges. Developments in smart grid technology and decentralised electricity generation are also part of the answer, and in parallel stimulate further demand as consumers are brought closer to energy production.
Renewable energy deployment and advances in the electricity grid to reduce inefficiencies are now boosting adoption of related technologies such as battery storage, which improve energy efficiency and reduce environmental impact. This global growth in battery storage in the power sector is translating into revenue - Navigant research said global revenue in 2014 for utility-scale battery storage was $220 million and is expected to increase to $18 billion in 2023.
However, there remain technical, financial, regulatory and geographical hurdles that must be overcome if we are to fully realise the potential benefits of energy storage. These challenges and the potential growth in the market present a huge opportunity for sustainability professionals worldwide.
Electricity is the largest global market but it is also the least efficient, with the utilisation of existing assets along the value chain - generation, transmission, distribution - at less than 50%. In the US, for example, more than $800bn of future US electricity infrastructure will be under-utilised without storage. Energy storage systems present one way of improving electrical efficiency, thereby reducing financial cost and simultaneously carbon impact. In a time of increasing global energy demand, the benefits batteries offer are therefore invaluable.
Energy storage systems involve batteries which are able to store electrical energy, so that the energy can be used at the time when it is most needed. Batteries are not new but are increasingly being integrated into electricity systems worldwide, for example in the US, China and Europe.
Incorporated into electrical grids, batteries allow electrical systems to function without grid tied electricity for a period of time. They can also supply supplementary electricity inside peak hours, together with the regular supply from the grid. This has particular advantages for commercial and industrial energy users as it can be cheaper and more energy efficient to take electricity off the grid outside of peak demand. For example, at our manufacturing site in California, we have installed a bromine based flow battery and anticipate that this ‘behind-the-meter’ battery technology will yield a 16% reduction to the facility’s annual operating expenses, through improved energy efficiency and lower demand charges, and with no impact on the facility’s operations.
Energy storage clearly has the potential to unlock value in existing infrastructure assets by increasing utilisation. In the US, utility companies are aware of this and there is increasing evidence that batteries are being built as an alternative to building new power stations. Storage therefore offers flexibility, deferring the requirement for investment in large infrastructure and also mitigating the risks of power outages.
Changing regulatory frameworks, such as Europe’s target to produce 20% of its energy from renewable sources by 2020, are incentivising the growth of the renewables sector and technological improvements are enabling smart grid applications. Storing energy vastly improves the efficiency and smoothing of variable energy sources when they are deployed at scale and connected to the grid.
According to the International Renewable Energy Agency (IRENA), between 2006 and 2012, solar PV and wind energy experienced an annual capacity growth rate worldwide of 190% and 40% respectively. At the utility scale, IRENA specifically notes that the UK has the third highest share of variable renewable energy sources in the world, after Denmark and Germany, and will have to adopt energy storage solutions in order to integrate them effectively into the grid and achieve its domestic renewable energy targets. With 30% of energy from renewables (mainly wind and solar) Germany is a worldwide leader in solar implementation.
Energy storage growth at the domestic at the household and community level.
Batteries can also enable more effective use of small-scale renewables at the household level and this has been recognised by policy makers worldwide. For example, since May 2013, Germany has been incentivising the adoption of battery installation coupled with solar PV at the household level.
In April 2015, the opportunities for domestic energy storage hit the mainstream media when Tesla, led by Elon Musk, launched the Tesla Powerwall - a rechargeable, lithium-ion battery designed for energy storage at the residential level to maximise the use of solar power. The batteries are sold as a way for domestic customers to reduce their electricity bills, reduce their carbon footprint and give them energy security during outages.
Energy storage application is also growing on island states where off-grid electrification presents unique challenges. Many off-grid locations are powered by expensive and carbon intensive diesel generators, relying on external imports for supply. However, power consumption is not flat throughout the day, causing motors to run at part-load and constantly adjust to the fuel consumption. This is turn is very costly and also damaging to the generators. Energy storage offers distinct advantages to island and off-grid locations, although comes with its own challenges including lack of installation infrastructure and costly maintenance due to travel requirements.
Alongside all of this, technical improvements in battery design are making energy storage more cost-effective and environmentally efficient. Until recently, the chemistry of Bromine-based flow batteries, one type of battery used in large scale commercial and industrial applications, had only limited number of special electrolyte components that are suited to this chemistry.
Now, with investment in research and development and advances in the chemical components of batteries, a wide range of tailor made products, with superior performances - such as improved lifespan, improved kinetics and improved stability - are available to serve these chemistries. With additional improvements in cell design, developers are hoping to extend the battery storage to 4 or 5 hours, and, to achieve higher efficiencies. At ICL-IP, we are working with well-known research institutions, such as Fraunhofer, DICP, Technion and other universities, to drive efficiency developments and improve battery performance. Zinc-bromine batteries are one such flow battery, and according to EY, the cost of flow batteries is likely to fall substantially between now and 2020.
Implications for sustainability professionals
Professional circles in this area are also growing. The UK’s Electricity Storage Network, established in 2008, now has over 30 corporate members and is receiving increasing interest from larger companies, indicative this is becoming more mainstream. November also sees the UK’s second Energy Storage Conference. As the demand for energy storage technologies grows, so, in parallel, will the demand for skilled professionals with a range of expertise from financial analysts to support the financing of projects, to engineers, construction experts, and those with expertise in smart grid management.
There are still many challenges for this growing industry to overcome in order to be successful. With no single type of energy storage application dominating at present, the challenges are often market-specific, related to accessibility - in island states or regulation and incentives, for example. Cost remains the major challenge globally, but as anticipated growth figures demonstrate, advances in battery technology and increasing demand for security, low-carbon and price-efficient electricity place energy storage as a central solution to our future energy needs.
Shay Misch is vice president of business development at ICL-IP.