The falling price of renewable energy has been dominating the headlines, but more dramatic change is happening behind the scenes, where battery storage is disrupting the way utilities provide power.

The change is driven not just by cheap renewables and cheap batteries, but by the electronics that link them together, said Mark Ahlstrom, the president of the non-profit Energy Systems Integration Group.

“Unlike all the old spinning generators that were electromechanically coupled to the grid, these are using power electronics, computers, state-of-the-art technologies that scale really well, as we’ve seen with other industries,” said Ahlstrom, who also serves as vice president for renewable energy policy at NextEra Energy. “And it really is the digital revolution finally hitting the power industry.

“We saw it coming a little bit with wind and solar and what we’re really doing with storage is going to push it over the edge in a big way.”

In the past, utilities had to “take what they could get” from slow, inflexible fossil-fuel plants, Ahlstrom said. Their primary concern was having enough energy to meet peak demand.

Now, utilities will have abundant cheap power from renewables. Paired with batteries, that power can be deployed by computer in microseconds to ensure reliability or fulfill other ancillary services.

“What really surprised me—this is all I work on now—is hybrid projects,” Ahlstrom said at a workshop hosted by the National Academies of Sciences, Engineering and Medicine. “What happens when you tightly couple storage with solar PV, what you end up with of course is a solid-state computer-controlled power plant. When you really step back and think about this means, we’re really talking about virtual power plants becoming real. It’s very dramatic.”

The rise of electromobility and demand for stationary storage will drive lithium-ion battery costs down by a further 50% by 2040, according to Bloomberg New Energy Finance’s latest Energy Storage Outlook report.

With costs for the technology having already tumbled 85% from 2010 to 2018, the business intelligence firm predicts 1,095 GW/2,850 GWh of energy storage will be installed in 21 years’ time, up from 9 GW/17 GWh last year.

By that point, China and the U.S. will dominate, according to the Energy Storage Outlook 2019 study, with significant markets in India and Germany and only slightly lower volumes in Latin America, Southeast Asia and France.

Australia, the U.K. and Japan will also have significant markets, as will current world leader for energy storage South Korea.

The role played by solar in the energy storage revolution was highlighted by BloombergNEF’s head of energy storage Logan Goldie-Scot in a press release issued by the firm to promote the report, published yesterday.

Solar-plus-storage

“In the near term, renewables-plus-storage – especially solar-plus-storage – has become a major driver for battery build,” said Goldie-Scot. By 2040, however, BloombergNEF predicts energy storage will have become a practical alternative to newly built generation assets of any kind.

In a significant indicator of the rapid rate at which stationary storage is altering the energy market, the 2019 report now predicts utility scale batteries will make up the majority of storage deployment by 2040. Until now the analysts have expected behind-the-meter batteries – whether in homes or businesses – to take the lead.

BloombergNEF also revised up the amount of investment energy storage will attract over the next 21 years, adding $40 billion for a predicted $662 billion.

The analyst has predicted solar and wind energy will supply almost 40% of the world’s energy by 2040, up from 7% today and driving demand for the energy shifting/peaking services available to grid operators through battery storage. The study also predicts electric vehicles will make up a third of the global passenger transport fleet in 21 years’ time, up from less than half a percent today.

Noting the explosion in demand for energy storage will be good news for lithium, cobalt and nickel miners, the release issued to promote the annual report made no mention of attempts to develop battery chemistries with less ecologically damaging materials.

Siemens Gamesa Renewable Energy (SGRE), known for its wind turbines used in both large onshore and offshore projects, in June began operation of an electric thermal energy storage (ETES) system in Germany (Figure 1). The technology is designed to store large quantities of energy, using volcanic rock as the storage medium.

“The technology employs an electric heater to charge the storage and a conventional heat recovery steam cycle to discharge the storage,” Veronica Diaz Lopez, who handles external communications for Siemens Gamesa, told POWER. “For charging, electricity is converted into hot air and blown through the storage, which is filled with volcanic rocks.”

The project includes about 1,000 metric tons of volcanic rock. The electrical energy is converted into hot air by means of a resistance heater and a blower that heats the rock to 750C/1,382F (Figure 2). “In the storage the heat is transferred from the air to the rocks and stored,” said Lopez. “During discharging, the flow direction through the storage is reversed and cold air enters the storage from the opposite end. In the storage, the air is heated up by the rocks and leaves the storage as hot air. The hot air is guided through a boiler where the energy is used to produce steam. The steam runs a steam turbine, which in combination with an electric generator, produces electricity.”

The system is installed at the Trimet SE aluminum smelter site in Hamburg-Altenwerder. The ETES pilot plant can store up to 130 MWh of thermal energy for a week, and its storage capacity remains constant throughout the charging cycles, according to SGRE. The company said the plant has a generator rated at 1.4 MW that produces energy for up to 24 hours. SGRE wants to use the storage technology in commercial projects, with plans to increase the storage capacity and power output as the technology is developed. SGRE said its goal is to store energy in the range of several GWh in the future. “Currently we are planning to do the commercial rollout in the mid 2020s,” said Lopez.

“Decoupling generation and consumption of fluctuating renewable energy via storage is an essential contribution to implementing the energy system transformation,” said Andreas Feicht, state secretary at Germany’s Federal Ministry of Economics and Energy, which funded the project known as Future Energy Solutions (FES). “We therefore need cost-effective, efficient, and scalable energy storage systems.”

A new report released July 31 details continued growth in global energy storage, driven by lower costs for lithium-ion batteries.

Research company BloombergNEF (BNEF) in its latest forecast published Wednesday said energy storage installations worldwide will grow across the next two decades, from the 9 GW/17 GWh of capacity deployed as of last year, to 1,095 GW/2,850 GWh by 2040, as battery costs fall by half by 2030 compared to today’s levels. It said two markets—stationary storage and electric vehicles—will drive demand for batteries.

BNEF said most of the new energy storage capacity for the power market is likely to be grid-scale.

Yayoi Sekine, a co-author of the report, in a news release said the latest research has “two big changes,” noting that “this year … we have raised our estimate of the investment that will go into energy storage by 2040 by more than $40 billion,” with BNEF forecasting $662 billion will be invested in storage over the next 20 years. Sekine, an energy storage analyst for BNEF, said, “We now think the majority of new capacity will be utility-scale, rather than behind-the-meter at homes and businesses.”

‘Energy Shifting’
BNEF’s analysis points to how less-costly batteries can be used in more applications, including “energy shifting,” or moving in time the dispatch of electricity to the grid, often during periods of excess solar and wind generation; peaking in the bulk power system, or using storage to deal with spikes in demand; and programs enabling customers to pay less for their electricity, by enabling the purchase of power at times when it’s cheaper, and storing it for later use.

Several speakers at Storage Week Plus, a July 23-25 energy storage conference in San Francisco, California, attended by POWER, noted how growth in storage likely is dependent on a continuing decline in battery cost, advancements in battery technology, and more applications for storage. Legal and regulatory mandates for storage also will play a role.

Thom Byrne, CEO of the clean energy investment group CleanCapital, told POWER his company is investing in “new markets and new renewable energy asset classes, with a specific focus on distributed solar and energy storage.” Byrne’s group earlier this month announced its largest acquisition to date with the purchase of Olympic, a 75.2-MW solar portfolio comprising 15 operating solar projects in New Jersey, from KDC Solar, a private, non-utility-affiliated owner and operator of large-scale commercial and industrial solar power generation.

CleanCapital’s investments are part of the growth forecast by BNEF. CleanCapital recently closed on a $300 million debt warehouse facility with Credit Suisse, leveraging funds managed by CarVal Investors, a global alternative investment fund manager.

Brandeis University is launching a new energy storage project that is projected to save the campus upwards of $50,000 annually in electricity costs.

The Massachusetts university is partnering with AMS and FirstLight Power to install and operate a 780-kWh battery-based energy storage system that will connect with the school’s electrical power system. According to Brandeis, large enterprises like college campuses typically pay variable rates for electricity that are set in part by supply and demand – the more demand for electricity, the more the utility charges. By charging overnight when the price of electricity is at its lowest, the battery will be able to send electricity into Brandeis’ system during the day when prices peak – enabling the university to buy less electricity at the most expensive times.

Increasing Use of Energy Storage
Energy storage installations around the world will multiply exponentially, from a modest 9GW/17GWh deployed as of 2018 to 1,095GW/2,850GWh by 2040, according to the latest forecast from BloombergNEF (BNEF).

This 122-fold boom of stationary energy storage over the next two decades will require $662 billion of investment, according to BNEF estimates. It will be made possible by further sharp declines in the cost of lithium-ion batteries, on top of an 85% reduction in the 2010-18 period.

And in national news, energy storage deployments in the United States during the first quarter of 2019 were up 232% year-over-year, Wood Mackenzie Power & Renewable’s latest US Energy Storage Monitor shows. The market saw 148.8 MW deployed in Q1 of this year.

Each quarter, Wood Mackenzie Power & Renewables and the Energy Storage Association (ESA) gather data on US energy storage deployments, prices, policies, regulations, and business models. This information goes into the report.