The Coming Electricity Storage Revolution
AgMRC Renewable Energy Monthly Report
retired Iowa State University Extension agricultural economist
A major problem with renewable energy technologies is they generate electricity “intermittently”. In other words, wind turbines only generate electricity when the wind blows and solar panels only generate electricity when the sun shines. How can these technologies provide electricity on calm, cloudy days, or night? The answer is electricity storage – storing electricity from the time it is generated until it is needed by the user. So, renewable electricity generation is driving the need for electricity storage.
Another important aspect of electricity storage is for the emerging electric vehicle (EV) industry and will be addressed in a future article.
Types and Trends of Electricity Storage Capacity
The figure below outlines the types of electricity storage and their growth over recent years. Total storage capacity in the U.S. is about 22 gigawatts (GW) of electricity. Pumped hydroelectric storage is by far the largest type of electricity storage comprising about 98 percent of U.S. electricity storage as shown on the left side of the figure below.
Source: U.S. Energy Information Administration, EIA-860 Survey; http://www.eia.gov/electricity/data/eia860/ Sandia National Labs, DOE Global Energy Storage Database; http://www.energystorageexchange.org/
Pumped Hydroelectric – Pumped hydroelectric facilities are typically part of a hydroelectric dam where water is pumped into a retaining pool behind the dam and then released to run through a turbine to generate electricity when additional electricity is needed. These are large-scale facilities and are generally grid-level energy storage. Pumped storage is expensive to build and siting is a restriction. As shown above about 98 percent of current energy storage is pumped hydroelectric.
Compressed Air – Compressed air energy storage (CAES). CAES can be thought of as similar to an air compressor to increase the air pressure in your car tires. CAES is used for large grid-scale storage and small-scale storage. CAES storage capacity has remained constant over recent years at slightly over 100 megawatts (MW) of capacity. CAES has recently been surpassed by battery storage capacity.
Flywheel – A flywheel is a rotating wheel that can be used to store rotational energy. Anyone familiar with the old, two-cylinder John Deere tractors understands a flywheel. A flywheel for this purpose is usually made of steel using conventional bearings and driven by an electric motor. When energy is needed, the rotational force of the flywheel generates electricity which gradually slows the revolution speed of the flywheel. Modern flywheels are made of carbon materials and contained in a vacuum enclosure and can be used at speeds up to 60,000 revolutions per minute.
Thermal – Thermal energy stores energy in the form of heat or cold. Solar thermal plant (the other solar power technology apart from photovoltaics) will store heat from the sun during the day, often in molten salt, to be used at a later time. Another approach is to use electricity during low usage periods to make ice which is utilized in the cooling system of a building during periods of peak energy demand during the day.
Batteries – Batteries have received the most attention as an electricity storage device during recent years. As shown above it has grown over recent years and is expected to be the major form of electricity storage in the future.
A battery consists of one or more electrochemical cells that convert stored chemical energy into electrical energy. Each cell has a positive terminal and a negative terminal. Ions move through electrolytes from one terminal to the other. This movement allows electricity to move out of the battery.
Although a number of battery technologies are being explored, lithium-ion is considered to be the prominent technology at the present time.
Flow batteries are a type of rechargeable battery. It is a relatively new technology and not expected to have much impact in the near future. The basic different between flow batteries and conventional batteries is that conventional batteries storage energy in the electrode but in the electrolyte in the flow batteries. Flow batteries have the advantage of being almost instantly recharged. Flow batteries are suited for large-scale utility storage.
The electricity storage industry
Electricity storage is an emerging industry, a few years in development behind the PV solar industry. The storage industry may see growth over the next few years that is similar to the growth seen in the solar industry over the past few years. Bloomberg New Energy Finance (BNEF) forecasts that by 2020 there will be 2,660 megawatts (MG) of battery storage capacity in the U.S. and 9,825 MG of storage globally. As a comparison, the largest coal-fired power plant in the U.S. is 3,499 MG. According to Citigroup, the investment bank, the global battery storage market (not including electric vehicles) by 2030 will grow to 240 GW.
Examples of energy storage include California’s energy storage mandate that requires 1.3 gigawatts (GW) of storage to be added to the grid by its three largest investor- owned utilities by 2020. Also, Oncor Electric Delivery of Texas has proposed to install up to 5 GW of battery storage capacity beginning in 2018. Puerto Rico has set a 30 percent storage requirement for any new renewable capacity.
For what’s happening in your area, the DOE Global Energy Storage Database http://www.energystorageexchange.org/ provides free, up-to-date information on grid-connected energy storage projects and relevant state and federal policies.
Energy storage is occurring around the world as shown below. China has the most energy storage capacity, followed by Japan. Although the U.S. has almost half of the energy storage projects, it has only 17 percent of the capacity of the top ten countries.
|Top 10 Countries by Energy Storage Capacity|
|Country||Number of Projects *||Power (MW)||Percent of Total MW|
|* Includes operational projects and those under construction|
Source: DOE Global Energy Storage Database, BBC News, Energy storage paves way for electricity independence, Richard Anderson Business reporter, March 3, 2015
Although electricity storage is currently not cost effective to become widely used, most analysts believe it has a bright future. During the last twenty years, the cost of storage has dropped dramatically as shown below.
Analysts believe the cost of battery storage will continue to decline through the development of new technologies and other factors. Citigroup predicts a reduction in cost to $230 per megawatt-hour (MWh) within the next 7 to 8 years. When combined with storage demand from the growing solar market, costs will eventually drop to the neighborhood of $150 per MWh. Deutsche Bank predicts that energy storage will be cheap enough and technologically ready to be deployed on a large-scale within the next five years. The bank believes that lithium-ion batteries will decline in cost by 20 to 30 percent per year.
Blended Battery Price Projections
Source: Rocky Mountain Institute
Increase Efficiency and Lower Cost
Electricity storage can increase the efficiency and lower the cost of electricity generation in a number of ways. For example, it can reduce the need for “peak power”, allowing the storing of electricity during low demand periods for use during high demand period, leveling out production and negating the need for “peak demand” generating capacity. This storage allows the system to function at a more stable and efficient level of electricity production.
For example, a typical household demands little energy late at night and early in the day. But in late afternoon demand tends to rise substantially when people return home from work, turn up the air conditioning, turn on the dishwasher and put a load of clothes in the washing machine. So electricity utilities must be ready for these “peaks” in power demand as shown below by having generating capacity on hand to meet the additional electricity demand. The red line represents the needed generating capacity. This “peak demand” electricity generating capacity is not needed most of the time and consequently is expensive per kilowatt generated. It is similar to urban freeways that need the capacity to not only meet average traffic demand but “rush-hour” traffic demand.
Storage can greatly reduce the generating capacity needed by the utility. The utility may generate and store electricity from its normal sources during low demand periods (e.g. night and early morning). Or the utility may generate and store power from a combination of renewable sources like solar and wind early in the day when the sun is shining and the wind is blowing. Or the electricity user may provide the energy generation (e.g. solar) and also provide the storage, thereby reducing the demand for electricity from the grid, or possibly eliminating the need to be connected to the grid..
Impact of Solar + Storage on Electricity Utilities
Electricity storage technology may have a profound impact on electricity utilities. As indicated earlier, electricity storage will better allow the integration of intermittent renewables like wind and solar into the grid. Conversely, end-user owned solar facilities, when combined with storage, may eliminate the need to be connected to the grid. Many analysts believe solar plus storage will be cost competitive with purchased electricity from utilities in the next several years. The ability for users to be “off-grid” has serious implications for utilities. The loss of individual electricity users or an entire community of users, when replicated across a utilities trade territory, can greatly impact the utility both operationally and financially.
New business models need to be developed on how utilities will meet this new challenge. A business model of utilities providing storage either through large centralized storage or distributed storage may be a first step. Furthermore, moving away from the business model of utilities as providers and customers as users to a business model of utilities and users working together to provide reliable and cheap electricity is being discussed. Individually or community owned solar and storage, combined with base load from utilities and managed by the utility, can provide cheap and reliable electricity. To be viable, utilities will need to upgrade their grids.
The grid transports electricity from generation facilities and distributes it to a wide range of users. It is made up of poles, wires, transformers, substations, etc. It has changed little in recent decades. However, technology is available to substantially improve this grid. It is called the “smart” grid and the magnitude of the transition is similar to the change from the traditional telephone you used to have sitting on your desk to a smart phone.
The smart grid is transforms the grid with the application of computers, sensors and other technology to provide two-way communications. The smart grid allows the utilities central office to automatically monitor and control millions of devices across its grid network, allowing the utility to be much more efficient. For example, under the old system more voltage was pumped into the grid than was needed to be sure that any weak spots had sufficient voltage. With the use of the smart grid’s sensors, the utility can monitor voltage in all parts of the grid and provide only the minimum amount needed for the system. On the user’s side, consumers will be provided the exact price of electricity throughout various times of the day which will allow them to adjust their electricity use to reduce their utility bill.
Improvements in the grid will impact the role of storage. Some analysts believe the smart grid will be sufficient to incorporate fluctuations in the intermittent electricity generated by wind and solar into the utility grid without the need for storage. However, as storage technology evolves, utilities may find it feasible to utilize both the smart grid technology and electricity storage. By using the smart grid, utilities may find that they can incorporate residential solar systems in their electricity generation and storage system.
Electricity storage has the ability to greatly increase the adoption of intermittent renewable energy sources like solar and wind by storing electricity when the sun shines and wind blows for usage during cloudy and still days. Although not yet cost effective, many analysts believe electricity storage will achieve cost effectiveness within the next few years. When it does, the electricity storage industry will have the potential to transform the way we generate and use electricity. Electricity utilities may be in for big changes as users may have the ability to become self-sufficient (off grid). Conversely, utilities have the opportunity to utilize electricity storage, along with other technologies, to provide better products and services for their customers. All of this points to a myriad of changes coming in the electricity industry that will lead to more renewable electricity generation and more efficient generation and distribution.
1 Energy Storage Association, Energy Storage Technologies
2 Energy Storage Association, Application of Energy Storage Technology
3 U.S. Energy Information Administration, Today in Energy, April 3, 2015
4 Citigroup Report: 240 GW Global Battery Storage Market By 2030, Cleantechnica, James Ayre, February 5th, 2015
5 BBC News, Energy storage paves way for electricity independence, Richard Anderson Business reporter, March3, 2015
6 Reneweconomy, Energy storage to reach cost ‘holy grail’, mass adoption in 5 years, Sophie Vorrath, March 3, 2015