The next big thing in the power sector is undoubtedly energy storage – however there is also no doubt that it is a ‘next’ big thing rather that the ‘now’ big thing.
Despite a multitude of test projects globally, the road to large-scale commercial deployment still faces many hurdles, as evidenced in a report published this month.
The study states that developers and investors face “an unsolved Rubik’s Cube of technologies, regulatory frameworks, revenues and costs”. And the report – which focuses on the UK energy sector – finds that Britain could have 10 GW of energy storage by the 2030s… but only if the government can deliver “a clear, long term policy and regulatory framework” to support the technology.
‘Energy storage – towards a commercial model’, has been compiled by four firms: renewable energy advisors Regen SW, finance company Triodos Bank, low-carbon developer Green Hedge Energy and law firm TLT.
It explores the alternative business models that will make clean energy “the subsidy free backbone” of Britain’s electricity system.
Regen SW director Johnny Gowdy said that although energy storage is “developing rapidly and the flexibility it provides can reduce the need for expensive new energy generation projects, developers and investors face an unsolved ‘Rubik Cube’ of technologies, regulatory frameworks, revenues and costs”.
He said in the short term, battery storage projects will tend to focus on rapid response services to support the network. “As costs fall, storage will play a key role in providing reserves of energy to balance supply and demand and could become ubiquitous in our homes, workplaces and in transport. A UK energy storage sector in excess of 10 GW power capacity in the 2030’s is achievable.”
Philip Bazin, environment team leader at Triodos Bank UK, said: “It is clear that proven sustainable electricity storage solutions exist and that their cost is fast reducing. What we now need to make these solutions more financeable is a clear, long term policy and regulatory framework to support the demand for these solutions and create an exciting sizeable new market in the UK.”
Bazin said that the deployment of energy storage solutions in the UK “is one of the key pillars that is required to achieve an energy system that is 100 per cent sustainable – a low carbon, resilient and balanced energy system. It’s essential that financial institutions work closely with developers and policy makers to create a conduit for energy storage technology that will support the wider strength of renewable energy production.”
The diverse nature of potential energy storage technologies was highlighted by another report this month.
Analysts from Bloomberg New Energy Finance state that there is huge energy storage potential in repurposing used electric vehicle batteries.
BNEF senior analyst Claire Curry calculates that there will be 29 GWh of used EV batteries coming out of cars by 2025 – a capacity that she says “far exceeds the size of the current stationary storage market”.
Of this 29 GWh, around 10 GWh will get a second life as stationary storage. Curry states that today, a new stationary storage system can cost up to $1000/kWh while, in contrast, repurposing used EV batteries could cost as little as $49/kWh in 2018, with an additional $400/kWh cost to convert to stationary use.
She highlights the fact that the auto industry is divided on the issue. “While Tesla won’t be involved in second life, BMW, Nissan and Mercedes Benz already have second-life stationary storage projects in place.”
The report states that this year there will be “very few used batteries available for second-life applications, but volumes will increase significantly beyond 2020. Whether these batteries are suitable for second-life storage applications depends on the energy remaining in them; whether the car company warranties them outside the vehicle; and the price of commodities.”
While both of the above reports involve ‘what if’ scenarios, they highlight the fact that energy storage is one of the major talking points in the energy industry. It was analyzed at POWER-GEN Asia this month in South Korea and will be discussed again at POWER-GEN Russia in October.
And we will be covering the topic in detail later this year in the pages of this magazine, where we will spotlight and examine the latest trends and thinking. So watch this space.