With just over 3 GW deployed worldwide, grid battery storage remains a small business today, but recent developments demonstrate that the sector is thriving. In the United States in 2018, more than 300-MW battery storage was deployed, led by California. Globally, network operators are testing projects in Italy, the United Kingdom, Spain, and other regions. In Australia, China, United Arab Emirates (UAE), and the United States, large energy storage projects are ready to deliver more than 100 MW of capacity for up to six hours.

While the benefits of deploying battery technologies for grid management are clear, there has been limited development of the global grid-battery market because of three main reasons:

1. Costs

Costs of batteries are still too high for most grid applications to be viable, other than where local regulations incentivize deployment. However, cost of battery storage continues to drop year after year, largely because of battery manufacturing for electric vehicles (EVs). We expect the cost to fall within the US$100/kWh range by the mid-2020s. This cost decrease, combined with a stacking of revenue streams and battery applications, will lead to a significant proliferation of positive business cases.

1. Regulations

In most regions, regulatory barriers prevent network operators from owning and operating battery storage, except in Italy, where the regulatory framework has been amended. System operators are therefore restrained from developing battery-storage solutions beyond pilot projects. It is imperative that clear regulatory frameworks and market mechanisms are established to allow the development of storage assets with clear targets for deployment. For example, the California Public Utilities Commission (CPUC) requires utilities to build energy-storage capacity and has clarified the market rules for battery aggregation. Following these moves, California’s largest utilities have procured or are seeking approval to procure almost 1500 MW, as of summer 2018.

There is also a strong argument for providing direct incentives for use of battery storage to catalyze development and lower costs which has worked in the renewables sector. Consider the contrast between Germany and Spain, two European countries with relatively high renewables penetrations. In Germany, where incentives are provided, the residential storage market is booming and reducing stress on the grid. In Spain, battery deployment remains very limited.

1. Alternatives

Batteries are far from being the only option for balancing supply in a distributed energy grid with high renewable use. Other approaches include:

Good regional and international interconnectivity decreases the intermittency of renewables over large areas and allows for a greater mix of power sources to be used.

Fast-start and rapid ramp-up fossil-fuel plants have also played a key role in meeting peak power supply requirements and will remain important in the future.

Demand side response (DSR) has already been widely tested as a way to balance the grid by incentivizing end-consumers to reduce their consumption or switch to behind-the-meter generators in response to grid requirements.

Part IV of Solar Builder’s excellent Countdown to 2020 series about California’s new home solar mandate included this statement: “Speakers at the California Solar Power Expo… expect homebuilders to skip solar-only systems to comply with the Title 24 mandate and go straight to solar + storage systems.” Is that expectation realistic or are those industry experts looking through rose-colored glasses?

The answer is an unwavering “maybe.” Remember how long it took consumers to believe that solar energy systems actually pay for themselves. Now we’re trying to convince builders that consumers are ready to believe that solar + storage is an even better value proposition than solar alone? That shift won’t happen overnight. People are innately skeptical when an offer sounds too good to be true. It also will require considerable education considering that most builders and consumers know very little about solar energy storage today.

Whether or not builders and their customers buy into solar + storage depends mainly on how well the solar industry conveys the benefits of energy storage systems. And, while it sounds callous to say, the truth is that the wildfires and power outages ravaging California are going to goose the adoption rate for solar storage.

The value equation for storage
Absent power outages, the primary selling point for solar energy storage in markets (such as California) where you have tiered electricity rate structures is its ability to offset utility rates during peak demand times, when power from the grid is priced at a premium. That is still a compelling benefit.

However, the greater value of battery storage in California today is its ability to provide some electricity during a power outage. With Pacific Gas & Electric on the proverbial hot seat for having caused the 2018 Camp Fire—the deadliest wildfire in the state’s history—the company has taken the proactive step of cutting power during high-risk, red-flag warning times to minimize the risk of contributing to wildfires (and no doubt to avoid future liability).

As of this writing, Pacific Gas & Electric has cut power numerous times in recent weeks. Southern California Edison and San Diego Gas & Electric have also recently implemented forced outages for their customers.
Since hot, dry and windy weather is a given in California, it’s safe to assume these rolling blackouts will be implemented again and again, and that solar energy storage systems will become more valuable and popular as a result. The media picked up on this trend during PG&E’s planned outage in mid-October. The San Jose Mercury News reported how homeowners and businesses ranging from the Fremont fire station to Apple turned to energy storage to keep critical functions operating.

At its seventh annual conference and expo, Energy Storage North America (ESNA) last week announced the winners of its innovation and champion awards, inducting them into the organization’s hall of fame.

Based on public, online voting, the ESNA sought innovators in the fields of front-of-meter storage, behind-the-meter storage, and microgrids. Additionally, they recognized utility and policy champions that have made significant efforts to enhance energy storage. Respectively, these efforts honored work on the energy storage ecosystem, services supplied to customers and the grid, unique technology solutions, financing, or partnerships.

“The individuals and organizations we’re recognizing with this year’s ESNA Awards have made significant contributions to the growth and maturation of energy storage as a mainstream grid resource,” Janice Lin, ESNA Conference Chair, said. “Their dynamic leadership and skillful execution serve as greatly needed role models for the global clean energy transformation.”

For front-of-meter efforts, the Goderich Advanced Compressed Air Energy Storage Facility as powered by Hydrostor was named the winner. On the other side of the meter, Connected Solutions — as powered by National Grid — took home the award. Nantucket Battery Energy Storage System, as powered by National Grid, received top honors for its microgrid technology.

The champions of the day were Martin Adams, general manager and chief engineer of the Los Angeles Department of Water & Power, along with Alicia Barton, president and CEO of the New York State Energy Research and Development Authority. Adams was the utility champion, while Barton was the policy champion.

The researchers propose that a motorized system similar to a ski lift could pull containers full of sand to a crane at the top of a mountain. The sand can then be sent back down the mountain propelled only by the force of gravity, generating electricity in the process.

The basic concept is similar to a gravity storage technology proposed by the Swiss company Energy Vault, which recently received a greater than $100 million equity investment from SoftBank’s Vision Fund. That technology generates electricity through gravity by lowering concrete blocks in a tower.

Lithium-ion battery storage is the fastest-growing storage type and utilities across the U.S. have procured battery storage as a way to back up intermittent renewable energy. But the length of time that they can deploy energy — typically four hours or shorter for — may not be long enough for the greater and greater amounts of solar and wind resources needed to come online to meet emissions reductions goals.

“High-renewables grids, as mandated by many states, will require extremely long durations of storage, potentially on the order of 10-20 hours to shift variable solar power to cover nights and cloudy days, and weeks or even months to shift energy from high-wind months to lower-wind periods,” Wood Mackenzie head of energy storage Daniel Finn-Foley told Utility Dive. He noted that lithium-ion batteries “scale up poorly,” with costs effectively doubling every time the duration of a lithium-ion battery system doubles.

The authors of the IIASA study claim that mountain gravity energy storage (MGES) can open up possibilities for long-term storage in new locations. Pumped hydropower storage, one of the most common forms of energy storage currently in service, is an example of long-term storage and can deploy stored energy for around 6 to 20 hours.

As California goes, so goes…the world?

Earth’s 5th largest economy has put forth its 2019-2020 Integrated Resource Plan (IRP) – Proposed Reference System Plan (173 page pdf), and it suggests that solar and energy storage will “dominate” through 2030 and beyond. The purpose of the document is to lay a path, based on hard research of both costs and technical feasibility, to move the state toward 100% renewable electricity and, net negative CO2 by 2045.

On the slide titled (below), ‘Summary of Annual Resource Buildouts from 46 MMT “Default”‘ the model shows exactly how much volume was considered in an annual basis from various resources. In another area, the 46 MMT model as suggests that by 2030, ~11 – 19 GW of battery storage will be deployed for the main purpose of shifting solar generation into the nighttime. The total (baseline + selected) battery storage RA capacity contribution is ~13 – 16 GW.

In the document are multiple modeled cases, with the 46 million megaton (MMT) of emissions as the current recommended model. It was noted, that while not equivalent, the state’s 60% renewable portfolio standard by 2030 and the 46 MMT model had similar procurement outcomes.

Per the document, all batteries considered in the IRP are 4 hour batteries, though it suggests that lithium ion will transition into 6 to 8 hours batteries by 2030. A battery recently approved by the New York State Public Service Commission is a 316 MW / 2528 MWh 8 hour energy storage facility.

Part of the reason for the very large increase from prior IRPs for solar and energy storage is that both technologies have decreased in pricing much faster than projected (below image) – modeling that utility scale costs are roughly half of the 2017 IRP values. As well, in 2018, the preferred IRP noted that the Marginal GHG Abatement Cost was $219 per metric ton, and had fallen almost 50% to $113 per metric ton.

GHG emissions are modeled higher in 2024 relative to 2023, in large part due to the retirement of the Diablo Canyon Nuclear Power Plant. A capacity shortfall in 2021, followed by retirement of the 2 GW of capacity from the plant in 2024-5, results in all available gas power plants being retained for CAISO ratepayers through 2026 in all core policy cases.

Batteries are rapidly becoming less expensive and might soon offer a cheap short-term solution to store energy for daily energy needs. However, the long-term storage capabilities of batteries, for example, in a yearly cycle, will not be economically viable. Although pumped-hydro storage (PHS) technologies are an economically feasible choice for long-term energy storage with large capacities — higher than 50 megawatts (MW) — it becomes expensive for locations where the demand for energy storage is often smaller than 20 MW with monthly or seasonal requirements, such as small islands and remote locations.

In a study published in the journal Energy, IIASA researcher Julian Hunt and his colleagues propose MGES to close the gap between existing short- and long-term storage technologies. MGES constitutes of building cranes on the edge of a steep mountain with enough reach to transport sand (or gravel) from a storage site located at the bottom to a storage site at the top. A motor/generator moves storage vessels filled with sand from the bottom to the top, similar to a ski lift. During this process, potential energy is stored. Electricity is generated by lowering sand from the upper storage site back to the bottom. If there are river streams on the mountain, the MGES system can be combined with hydropower, where the water would be used to fill the storage vessels in periods of high availability instead of the sand or gravel, thus generating energy. MGES systems have the benefit that the water could be added at any height of the system, thereby increasing the possibility of catching water from different heights in the mountain, which is not possible in conventional hydropower.

“One of the benefits of this system is that sand is cheap and, unlike water, it does not evaporate — so you never lose potential energy and it can be reused innumerable times. This makes it particularly interesting for dry regions,” notes Hunt. “Additionally, PHS plants are limited to a height difference of 1,200 meters, due to very high hydraulic pressures. MGES plants could have height differences of more than 5,000 meters. Regions with high mountains, for example, the Himalayas, Alps, and Rocky Mountains, could therefore become important long-term energy storage hubs. Other interesting locations for MGES are islands, such as Hawaii, Cape Verde, Madeira, and the Pacific Islands with steep mountainous terrain.”

If energy and transportation planners stop seeing their sectors as separate markets for batteries—a World Resources Institute researcher argued last week—there will be more than enough energy storage to go around.

“An electric vehicle, because of the battery, is really both a mobility asset and an energy asset,” said Camron Gorguinpour, WRI’s global senior manager for electric vehicles, “and so we really want to start looking at the duality of electric vehicles rather than really just trying to focus on one thing.”

Vehicle-to-grid technology is not a new idea—China jumped on it early—but it looks like an increasingly promising idea as electric-vehicle adoption takes off.

The International Energy Agency’s most conservative estimate puts 130 million electric vehicles on the road by 2030, and Gorguinpour said those vehicles will contain almost ten times the amount of energy storage needed by the grid.

The IEA’s most aggressive estimate, 250 million EVs, would mean 6 percent of the batteries in the automotive fleet could meet all of the grid’s energy-storage needs.

“When we talk about the dual nature of electric vehicles as energy and mobility assets this is really what we’re talking about,” he said.

If the energy and transportation systems can share batteries, it will reduce demand on resources such as lithium, critical minerals and rare earth elements, Gorguinpour said last week in a webinar hosted by Climate Action.

“If you don’t use vehicles for this purpose, you’re going to have to create stationary batteries which would then put pressure on the available resources to provide the necessary energy services,” he said, “so part of the strategy is again coupling different activities using common resources so that we’re not really putting a lot of pressure—well, more pressure than necessary—on available natural resources.”

Navigant Research has released a new report providing market forecasts for newly installed distributed energy storage systems (DESSs) in terms of power capacity, energy capacity, and revenue across 26 countries. The report forecasts the sector to grow twentyfold by 2028 due to cost declines, government incentives, and increased solar PV integration.

The distributed energy storage industry has seen significant growth over the past five years. Breakthroughs in adjacent digital technologies, including artificial intelligence, blockchain, and predictive analytics, are facilitating the emergence of DESSs as a key enabling technology for aggregated distributed energy resources (DER) solutions.

“DESSs are inherently flexible, can be deployed rapidly, and have the potential to generate multiple value streams,” says Ricardo F. Rodriguez, research analyst with Navigant Research. “They can also provide multiple grid and customer benefits, like reducing congestion on the network or limiting the need for peak capacity resources.”

Utility involvement, along with cost declines, government incentives, and increased solar PV integration are the primary growth drivers responsible for increased DESS deployments.

Yet despite increasing momentum, long-standing uncertainties concerning feasible uses and cost-effectiveness remain. Consequently, DESSs are expected to remain concentrated in select markets in the near term before spreading to new areas as system costs decrease and business models continue to be refined.

The report, Country Forecasts for Distributed Energy Storage, provides forecasts for distributed-scale ESSs deployed globally in terms of power capacity (MW), energy capacity (MWh), and revenue generated from the development of new projects in 26 countries.

These forecasts cover systems providing all major distributed-scale energy storage services and applications. The report details developments in 16 major countries.

Forecasts include the most common technologies for distributed-scale energy storage for 2019-2028. An Executive Summary of the report is available for free download on the Navigant Research website.