The transition to renewable energy is characterised by its being founded upon a multitude of technological, economic and and legislative components. Just as there is no single renewable energy that can fulfil all our needs, there is no single piece of technology upon which we can place our hopes and aspirations for a cleaner world. There is however one aspect to renewable energy that warrants awareness and consideration – storage. Simply put, without efficient storage of electricity derived from renewable energy, we cannot transition to a fossil-free energy market.
While at face value talk of batteries and storage is perhaps less enchanting than news of revolutionary ways of converting the Earth’s renewables into cheap, clean energy, the development, innovation and significance of energy storage is fundamental to a sustainable future. The energy storage industry is fast paced, growing exponentially and introducing critical technologies that will one day be common place. For the time being though, they remain the silent partner to renewables; one we explore here with a view to better understanding the broader picture of our transition to renewables.
Some Context to Energy Storage
The renewable energy technology revolution is swiftly underway across the world. Our capacity to generate electricity from clean, renewable resources, such as the wind or solar energy, in an efficient and cost-effective manner is paramount to this revolution; and critical in sustainable energies reaching cost parity with oil and coal power industries.
And to be sure, research and innovation is making a massive contribution to the progression of renewables; they are becoming more affordable to manufacture, flexible to install, and more efficient in generating electricity. All of this results in lowering costs, and further propagation of clean energy.
Innovation and growth has also fostered a growing trend of customers generating their own electricity (mainly through solar photovoltaic (PV) panels) and selling surplus electricity back their utility provider (by way of so called feed-in tariffs). This represents a major paradigm shift for energy markets, and it’s contributing greatly to the growing competitiveness, and appeal, of residential renewable energies systems. The full extent and analysis of this more dynamic, two-way transmission of electricity is subject for another discussion; one that would more ideally be addressed in the context of smart grid solutions.
This being the case, a critical adjunctive technology necessary to allow for renewable energy to reach its full potential is found in energy storage systems (ESSs). The ability to efficiently store energy has significant consequences over a wide set of contexts. The electric vehicle revolution hinges on battery technology for instance. Equally consequential are the impacts on the storage of renewable energy generated at residential, industrial and utility scale sites.
This is about making the electric grid more robust and function even better, especially as more renewables are added to it. We see a future in which renewables become cost-competitive with fossil fuel and traditional generation everywhere. But there is a limit. You can’t make renewables 100 percent of your energy mix without storage. That’s intuitive.
Tesla co-founder and CTO JB Straubel
To be clear, when we refer to energy storage, this includes battery technology. Due to the incredible scalability of batteries, the technology can applied from small vehicular batteries to larger stationary batteries applied on household (i.e. residential generation and storage (RGS)), industrial, and utility scales.
The importance of efficient storage for renewable energy is straight-forward; it allows us to overcome one of the fundamental constraints of renewable energies such as solar and wind power – their intermittency. Being able to store energy when conditions are suited to wind and solar power generation, allows for later use of renewable energy when those generating conditions aren’t present. In almost all cases presently, traditional power plants (coal, oil etc.) are recruited to provide electricity when renewable output drops. Accomplishing efficient energy storage therefore removes this reliance on non-renewables. In this way energy storage provides stability to the electrical grid – allowing for renewably-produced energy reserves to be rapidly tapped in response to intermittent drops in power (or increases in demand). This process is referred to as frequency regulation and it’s an important component in utility energy distribution.
In short, energy storage is the second key aspect to the renewable energy solution (where the first would be low-cost, efficient power generation). Storage massively extends our ability to maximise temporal and geographic use of renewables, and is ultimately necessary if we are to realise scenarios in which we’re no longer dependent on carbon-based energy production.
Recent Developments in the Energy Storage Industry
Presently, lithium-ion battery technology represents the most mainstream and refined storage technology; they are found in everything from mobile phones and laptops, to electric vehicles (EVs) and ESSs. In 2013 global lithium-ion battery production totals around 34 GWh annually (Tesla).
Lithium-ion batteries are comparatively lightweight, energy dense and can be re-charged many times over. They are at least three times lighter than equivalent lead acid batteries (of the type found in most vehicles); and approximately three times more powerful whilst also offering three times the cycle life.
Costs of production of lithium-ion batteries have fallen by some 90% in the last twenty years; and EV lithium-batteries fell 40% between 2010 and 2012 (Cleantechnica). Current lithium-ion costs are about $500 per kilowatt hour (kWh), compared to $1000 per kWh in 2009/2010. Forecasts see this cost falling considerably in the coming years – Navigant Research predict costs falling to $300 by 2015; others predict about $200 kWh by 2020 and $160 kWh by 2025 (McKinsey & Company, 2012). Whatever the final figure, and there are varied projections, that there will be drastic reductions in price in the very near future is a certainty.
In the next three to four years there will be more progress in battery development than in the previous 100 years.
BMW board member Ian Robertson
The driving force behind this massive surge in development is easily understood – improving battery efficiency carries positive consequences to virtually every corner of consumer and industrial electronics. It’s easy to imagine the significant implications of batteries that charge faster, and that then hold charge for longer. In other contexts, it is the amount of charge that’s of interest (in EVs and ESSs); or producing batteries that can deliver large amounts of power over sustained periods (notably in the case of EVs).
Multiple consumer markets driving innovation being the case, we see the EV industry as a particular strong force for progress. Take Tesla Motors for instance, manufacturers of the most successful EVs to date. In September 2014 they announced plans to build an enormous lithium-ion battery production facility – named ‘Gigafactory’ – in Nevada, US. The facility’s scale can’t be overstated – it’s truly massive. Once complete, not only will it be the largest factory in the US, but its output – in the region of 50 GWh of annual battery production by 2020 – will be larger than sum production output of all other lithium-ion battery factories in the world (Tesla). The delivery of these batteries is vital to Tesla’s goal of mass-produced, affordable electric cars – in point of fact, the the Gigafactory’s output will be enough for some 500,000 Tesla cars.
Since global lithium-ion battery annual production is in the region of 34GWh, the factory’s construction can be seen to be born of pragmatism and necessity. Nevertheless it spells good things for continued virtuous cycles that stem from economies of scale because as more investment is made in the battery industry, we’ll see energy densities and efficiencies of batteries increase, and costs coming down – all of which will have positive consequences for energy storage industries beyond EV.
Integrating Electric Energy Storage into Utility Grids
There are already available, commercially and technically viable stationary storage technologies. For instance, durable, safe and economically working examples are often found in hydro power plants and allow for significant reliable energy storage.
More specifically, consider Younicos – a world-leading energy storage company that utilise multiple battery types in hybrid variants together with in-house software to deliver state-of-the-art storage solutions.
Younicos developed Europe’s first commercial battery park; it’s a fully automated battery power plant for a north German green utility company and when it came online in September 2014, it marked the first time in Europe that a battery system was providing primary frequency regulation to a grid without back-up by a conventional power plant. The system has a rated-power of 5 MW and a capacity of 5 MWH. Larger Younicos systems (6 MW / 10 MWH) are also currently under development in the UK.
The Younicos system uses a variety of battery types; but what makes Younicos special is the software it’s developed. As it turns out, connecting batteries to a grid is easy enough; but getting them to function efficiently as frequency regulators is highly complex. The outcome of their work is that the Younicos system achieves much faster and more precise levels of frequency regulation than spinning reserves of fossil fuel power plants can. These are early days for integrating electric energy storage into utility grids, but it’s an exciting model of what’s to come.
The Future of Energy Storage
So how does this situation translate to the storage of renewable energy? As noted in earlier, transitioning to renewables creates a massive demand for ESSs because they are needed to overcome the current inherent need for fossil-fuel plants to meet electrical demand if and when renewable power generation drops.
The deployment of residential, industrial scale and utility scale ESSs offers boundless scope for development. A practical solution across these domains requires three types of storage: hourly, daily, and seasonal. To deal with these in order is also to consider scales of storage in progressive increments.
We can consider the immediate future, relating to the transition to renewables (i.e. our present circumstances), to require the capacity to store reasonably large amounts of energy for short periods of time, in the realm of minutes or hours. This capacity ensures that at any given point in time we have flexible and demand-driven access to renewable energy, that balances supply and demand. This level of storage is what’s found already present in RGS systems.
There are several manufacturers supporting development and application of short-term ESS technology. Navigate Research measured total annual revenue for the RGS market as $54.7 billion in 2013. In late 2013, SolarCity CEO Lyndon Rive and Chairman Elon Musk (also CEO, Chief Product Architect, and Chairman of Tesla Motors) announced that SolarCity and Tesla are teaming up to produce a battery system – ‘DemandLogic’ – that would complement SolarCity’s rooftop solar power system. Ambitiously enough, they plan to have the battery going into every new residential installation within the next 5-10 years (Cleantechnica, SolarCity release). DemandLogic integrates software with Tesla battery technology to reduce domestic and businesses’ peak demand, provide backup power during outages and aims to allow for potentially very large savings on energy costs.
Precise specifications of the system aren’t available yet unfortunately; but Tesla co-founder and CTO J.B. Straubel described the DemandLogic in an interview with EnergyBiz this way: “It’s a stationary product that connects with the building. Utility customers profit from it based on a direct reduction in their utility bills. Control software inside the product lets it charge and discharge at the right time of day so users get a lower demand charge on their electric bills.” (EnergyBiz).
An alliance between SolarCity and Tesla makes perfect sense: the former provides solar PV installations and is offering affordable financial packages for installation; the latter brings state of the art battery technologies and expertise; while both hold a commitment towards a sustainable and renewable energy future.
We always have had a deep expertise in energy technologies. It was part of our founding focus. We are pushing into different product bases and probably will continue to do that. It’s still early for stationary storage. It’s a small part of our business, but we see a huge potential. It’s something that both Elon Musk and I are excited about and quite committed to.
Tesla co-founder and CTO J.B. Straubel
Does this mean that households could move off a grid entirely? Theoretically yes, but there are good reasons for remaining connected. When asked about the possibility of “the economics of consumers defecting from the grid” SolarCity CTO Peter Rive noted: “I hope it doesn’t happen. I don’t think it makes sense for someone to remove themselves from the grid. If you think about the load on a circuit as opposed to an individual home, an average home on a circuit is maybe 3 kW peak. But you may find that any given home will go up to 10 kW at any given time. […] That means the battery would have to be sized to 10 kW.” (Quoted from Cleantechnica).
Returning to the three levels of energy storage, daily storage capacity is considered required when the proportion of electricity being generated by renewables is considerably higher than we have today; Younicos suggest around 60%. This is because only at such levels can enough renewable energy be stored to compensate for solar energy at nights, and shift storm weather energy to calmer days.
Ultimately, we may envision storage on a seasonal scale too, allowing distribution over weeks and months. Younicos have described one battery system with 100 MW capacity that has the potential to replace a whole coal-fired power plant; while 2 GW of Younicos batteries, providing ~1 hour of backup capacity, could replace all thermal power plants in Germany that are currently used for frequency regulation. Such a scenario would allow the country to move to 60% renewable generation of electricity and remove the need for about 25 conventional power plants (Cleantechnica).
So the global demand for battery storage, be it for EVs or ESSs is massive; and it’s on an exponential increase. With projects such as the Gigafactory, we’re beginning to see how that demand might be met. Reports of ‘breakthroughs’ in battery technology are common-place; not of all of which hold true significance. For the time being and the near future, it’s likely lithium-ion batteries will hold dominance; but there’s great developments to be made in their cost-reduction and energy specifications. It’s this innovation, together with their effective application into small to moderately sized storage systems, combined with domestic renewable energy generation, that’s driving major changes in the energy market at an ever increasing pace.
Market Drivers for Residential Generation and Storage
A variety of economic, technological and regulatory developments are shaping the RGS market: affordability of generating technology (especially, solar PV); innovation in generation and storage (especially, efficiency of ESSs); consumer engagement and acceptance of RGS; appropriate business models supporting financing of capital (i.e. upfront payment) costs of RGS; and government incentives and subsidies for RGS – all of which is worthy of discussion, but for which there isn’t time for here.
Concluding Thoughts
Review of the current landscape and recent advances in energy storage is very encouraging. Considering the Gigafactory, it’s plain to see that Tesla are thinking about the long game in respect to the need for massive battery production – and fortunately so. But as Musk said in a recent interview with MIT, they don’t need just one Gigafactory, they probably need many, many more. Consider it this way: the Nevada facility is pitched to produce at least enough batteries for Tesla’s anticipated yearly production of 500,000 Tesla vehicles. But it’s intuitive that Tesla would need far greater production capacity in the very near future if it’s to expand the number of vehicles it’s getting onto the road – which is most certainly the plan. In all likelihood also, the Gigafactory will be producing batteries for SolarCity’s DemandLogic scheme too – again, increasing production pressures greatly.
But this scenario barely scratches the surface if we’re to begin considering on a global scale, and in view of the totality of a truly renewable energy market. All things considered, it’s not just Tesla and SolarCity that need more Gigafactories; equivalent production facilities are going to required the world over to keep up with demand from consumer electronics and energy markets. Precisely how this story unfolds remains to be seen, but it’s most certainly going to be as interesting to witness as it is fundamental to a renewable future.
A Brief Acknowledgement of Environmental Concerns
All this talk of exponential production of batteries might beg the question of the sustainability of lithium-ion battery production. Fortunately, and perhaps despite common misconception, lithium-ion batteries are not detrimental to the environment – they don’t contain heavy-metals (such as mercury or lead); and the metals used – namely, cobalt, copper, nickel and iron – are even considered safe for landfills or incinerators. As it happens however, battery recycling is one of the great success stories of recycling. Currently Tesla recycle up to 60% of their batteries components but hope to see this bar raised to 90% as production increases (See this post from Tesla for an interesting read on their batteries and recycling).
Resources
Cleantechnica (specific articles are linked above)
Tesla Motors; Tesla battery production & recycling; Gigafactory
Resource on Electric Vehicles
Energy Biz article ‘Tesla’s Power Play‘ (includes interview with Tesla co-founder and CTO J.B. Straubel)
Phlebas 