How can you tell that storage has become a hot topic? For those who read The Economist, the lead article in the Aug. 12 issue entitled, Electrifying Everything, was devoted to batteries, with projections of massive investments and rapidly falling costs.
Even more telling, however, was a sold-out energy conference recently organised in San Diego. As described in an article in San Diego Union-Tribune, the event, fifth in a series, was attended by over 2,000 delegates and ran out of space for exhibitors eager to showcase their latest products. A couple of years ago, the same event at the same venue would have struggled to attract 400 attendees, with plenty of exhibition space left unused. Why the rising interest in storage? Two obvious reasons come to mind:
- First, with so much variable renewable generation coming on line virtually everywhere, the need to store the excess output is already large and rapidly growing; and
- Second, as the technology to store ever-larger amounts of energy improves and costs fall with massive investments and large economies of scale, there will be even more demand for storage, utility-scale as well as distributed.
Energy Storage follows the Solar trends
Just like with Solar PV, battery technology, of course, has also been known for a very long time but have been used to date mainly in high-value-added applications- think of the battery in your mobile phones or camera.
But if the lesson of solar PVs is any indication, the price of storage technologies – not one but a myriad of technologies – is now on the brink of plunging, which will give rise to more applications and greater demand.
How can one be so sure? One indicator, as The Economist explains, is the ranks of giant companies – Panasonic, LG, BYD, Samsung and others – that are making massive investments to expand energy storage capacity – mostly in batteries, but also in myriad other technologies, from super-capacitors to pumped hydro.
Storage, after all, is not just chemical as in batteries. Energy can be stored in other forms such as pumped storage, flywheels and compressed air as well as in simple forms such as hot or chilled water/ice or in super-capacitors, which can store energy more or less instantaneously and release it quickly though not for sustained periods of time. Each type and application, of course, meets a particular need.
Price continues to fall
How likely is that storage prices will fall? The experts who follow energy storage at Nature Energy, reckon the cost of lithium-ion batteries, will drop from the $10,000/kWh in the early 1990s to $100/kWh by 2019. The indicators that storage is moving mainstream as prices fall are everywhere. In early August 2017, Ikea announced that it is expanding its solar homes partnership with London-based Solarcentury by offering energy storage to its customers in the U.K.
The collaboration will see Ikea will offer home solar battery storage packages starting at £6,925 (US$9,157), and retrofit battery prices will start at about £5,000 (US$6,612).
What’s most exciting is that Ikea’s advance into the market is likely to be just the start – distributed storage promises to get crowded as others are set to enter the market in 2018.
All told, the storage market that could generate as much as $40 billion in investments by 2024, according Bloomberg New Energy Finance (BNEF).
BNEF says the size of the market will grow exponentially from roughly 790 MW this year to as much as 45GW in seven years driven by the dire need of electricity grids virtually everywhere to cope with the rise of variable renewable generation
Opportunities for Energy Storage
The opportunities for energy storage are global; BNEF estimates that roughly 4 percent of wind energy generated in Germany is given away at negative prices.
In China, the situation is even more pressing – since there is no way to get rid of the excess renewable generation but to curtail. It has been estimated that China curtails as much as 17 percent of its renewable generation for lack of adequate transmission capacity to get the juice to major load centres.
Figures like these make it abundantly clear why batteries are going to be the next big game changer in electricity markets around the world. How much, how soon, and at what cost can be debated, but there can be little doubt about the trend any longer.
- The Electricity Journal – Volume 30, Issue 9, November 2017, Pages 65–66