The past decade has seen growing adoption of energy storage technologies, with the likes of Elon Musk betting on the potential of batteries. This change signals a promising future for the integration of renewable energy sources into grids across the world. The question is no longer if, but how rapidly utility-scale storage will be adopted. The answer is likely down to the evolution of the underlying technologies.
While the costs of solar and wind power technologies continue to fall, there still exist major logistical challenges when matching availability of electricity supply with times of peak demand. In the case of Southeast Asia, domestic demand peaks in the evening at a time when energy generated from solar power falls. This fluctuating demand creates a challenge in a region where solar power is projected to contribute the largest share of renewable energy capacity over coming decades.
Innovations in energy storage technologies provide the means to store excess electricity generated, then release that energy when demand is high. That makes it possible for excess solar energy generated during daylight to be released at night, offering a more flexible electricity network which can better match supply and demand.
Energy storage technologies provide the means to store excess electricity generated
Utility-scale energy storage (also known as large-scale storage) is one power resource that can support these varying demands. Energy storage has been around for decades, but has traditionally been dominated by pumped hydro storage. A pumped hydro storage system operates by using cheap electricity at times of oversupply to pump water from one reservoir to another reservoir located at a higher elevation. At times of high demand, electricity can be generated by water flowing down to the lower reservoir through a hydroelectric turbine. The round-trip efficiency of these systems is typically around 70-85%.
There was an estimated 153GW of pumped hydro storage capacity installed as of 2017, but the adoption of this energy storage technology is restricted by the need for specific geographic conditions. Battery storage provides an important solution to the problems faced by traditional pumped hydro storage, sidestepping the issue of geographical constraints. Battery storage can be positioned at a point of need, regardless of local terrain. The efficiency of these storage technologies varies from ~60%-95%, depending on the battery technology used.
Today, utility-scale batteries offer storage capacity from several megawatt hours up to 150Mwh. This is significantly less than the 24,000Mwh stored at the world’s largest pumped hydro storage, the Bath County Pumped Hydro Storage in Virginia, USA.
While battery storage does not have the maximum capacity of pumped hydro storage, the flexibility of utility-scale battery storage unlocks opportunities to bolster existing grid infrastructure. This is because the batteries are designed to be connected to established grid infrastructure and can be co-located with renewable energy generation assets such as large scale solar or wind farms.
Utility-scale batteries can also play an important role in managing network congestion and power flow. During times of high demand, transmission and distribution networks are often disrupted. While this congestion can be tackled with upgrades to grid infrastructure, battery storage can be used as an alternative without the need for sweeping investments. These storage systems can act as virtual power lines at congestion points, and may offer instantaneous response to peaks in power demand.
a 4MW battery storage system demonstrated 400 hours of reduced grid congestion
A study for the New York Independent System Operator into the benefits of utilising a 4MW battery storage system demonstrated 400 hours of reduced grid congestion, helping reduce fuel costs by USD2 million. Such systems have seen widespread adoption of battery storage technology in South Korea, China, United States, Germany, and Australia, amongst others. Asia is taking a leading role in this expansion, with South Korea the pioneering leader in battery storage deployment, and renewable powerhouse China set to overtake it in coming years.
By 2017, there was an estimated 10 GW of battery storage deployed globally, but by 2040, Bloomberg New Energy Finance (BNEF) projects global battery storage will reach 1,095 GW.
Meeting this projected growth will require a US$662 billion investment, and will be further enabled by the rapidly falling costs of key lithium-ion battery technology. Indeed, the same technology which powers your mobile phone could come to play a vital role in the energy with which you charge it.
Lithium-ion technology accounted for just 30% of newly deployed utility-scale battery storage capacity in 2012, but grew to account for almost 90% of new additions by 2016. Lithium-ion technology boasts attractive efficiency benefits over alternative battery technologies, with efficiencies between 85-95%, compared to the 80-90% efficiency of lead-acid batteries, a major rival technology.
The cost of lithium-ion technology is fundamental in the growing battery storage market, having experienced an 85% drop in price in the period 2010-2018. BNEF predicts these costs per kilowatt-hour will halve again by 2030. This drop in price is being driven by rapid manufacturing growth resulting from the electric vehicle market, which also relies on lithium-ion technology for power.
Innovations in battery technologies could boost electricity networks
Innovations in battery technologies such as zinc-based or flow batteries—currently under development—could provide an important boost for electricity networks. These new technologies tease the potential for both operational improvements and economic benefits over existing lithium-ion batteries. However, they will face substantial challenges in beating the economies of scale enjoyed by lithium-ion technology, supported by the growing electric vehicle market.
Despite falling costs, battery storage still faces the issue of affordability when it comes to large-scale deployment. The largest battery in operation today, a 100MW/129MWh lithium-ion battery located at Hornsdale Wind Farm, Australia, provides a fraction of the power required to fully cover the electricity needs of the regional grid. That issue of capacity stands alongside the issue of durability, as the lifecycle of a utility-scale lithium-ion battery is only guaranteed for roughly a decade.
Analysis of the United States’ energy market in 2018 revealed that reliably meeting 80% of the nation’s electricity demand with wind and solar power would require a US$2.5 trillion investment in battery storage, or massive upgrades to the national electricity grid. While that figure would fall if predictions of plummeting battery costs are realised, it nevertheless highlights the economic challenges still inherent in widespread adoption of this technology.
Battery storage provides valuable new flexibility to power systems
Utility-scale battery storage may well provide an invaluable tool in supporting flexible adoption of renewable energy technology, particularly in providing rapid response to periods of peak demand. With falling costs, it is a technology which will see growing use in energy ecosystems in Southeast Asia, and the wider world. The evolving efficiency and durability of new emerging battery technologies could further support this expansion.
What remains to be seen is how those economic costs can be managed on a widespread national scale as renewable energy adoption accelerates. Battery storage provides valuable new flexibility to power up power systems in a world of growing electrification, but whether battery technology is charging forward to solve all our renewable energy integration challenges, may yet be a question of balancing the books.
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