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Just 3–4% of electricity generated by utilities globally is stored today, according to the International Energy Agency. This is despite the fact that storage can help overcome the energy ‘trilemma’ of curbing rising energy prices, the need to ensure the security of supply and creating a low carbon economy. So, what’s the hold-up?

Myth 1 – Wind and solar power is too unpredictable
This isn’t the case. We can accurately predict how windy or sunny it will be in two days’ time. It makes sense to store excess solar and power energy for release during the day when demand is highest and spot prices rise rather than letting it go to waste. Power companies rely on the same weather forecasts to assess whether consumers will be turning up their heating or air conditioning units to create demand spikes and work to just-in-time supply cycles with both conventional and renewable power generators.

Myth 2 – Energy storage is expensive

Currently, expensive coal-fired “peaking power” stations, which sit idle for the majority of the time, are used to address energy shortfalls, costing around £0.7–£5m/MW (US$1.06-US$7.56m/MW) according to analysis by McKinsey. In contrast, power from proven and safe battery systems costs £0.5–1.8m/MW – a saving of up to 50%. If the volume of storage deployed grew from 2GW in 2020 to 15GW and 25GW in 2030 and 2050 respectively, the savings to the UK energy industry from energy storage could rise from a modest £0.12bn per year in 2020 to £2bn in 2030, reaching over £10bn per year in 2050. We also stand to benefit from reductions in interconnection, transmission and distribution network investments and operating costs by locating energy storage systems closer to the end-user. The batteries take up relatively little space inside a standard shipping container which can even be buried to avoid planning objections from residents.

Myth 3 – We can meet rising energy needs with traditional generation capacity alone

With the rapid growth of emerging economies and rising populations in the developed world due to longer life expectancies, electricity demand is forecast to double to close to 30,000 terawatt hours a year from 2000 to 2030 according to the International Energy Agency. We’d need to build a one gigawatt power plant and the accompanying grid infrastructure every week for the next 20 years to meet this demand. Clearly this is unfeasible. Storage can help to massively reduce the need for investment at this scale and meet rising demand for energy.

Dispelling energy storage myths

To accomodate more renewable energy, we must recognise that wind and solar, while obviously variable are not "unpredictable", argues Roger Lin. Image: NEC Energy Solutions.

Myth 4 – Energy storage can’t support baseload energy generation

Utility companies can increase the utilisation rates of their existing generation assets – be that solar, wind or conventional plants – by storing excess energy and using it for a variety of revenue generating applications rather than letting it go to waste. As I’ve already outlined, energy storage can support baseload time-of-use price arbitrage. This means grids can be sized closer to average energy flows across the day and night, avoiding investments in costly, under-utilised “peaker plants”. Energy storage systems have a fast ramp time and can be easily called upon in four-second intervals for frequency regulation, emergency backup power and even black-start applications. In comparison, Combined Cycle Gas Turbines (CCGTs) have slow ramp times of 10 to 20 minutes and poor resilience to the wear-and-tear of frequent starts and stops which makes them unequal to these tasks.

Myth 5 – The centuries old model of centralised energy generation with distribution to the edge of the grid will continue as it is

It’s unsustainable for the electricity sector to continue to be the only supply chain industry that doesn’t “warehouse” its product at scale. Regulators need to review the role of distributors who could take on multi-dimensional tasks, receiving and absorbing “wrong-time” green energy and then redistributing it when needed. We could even see the advent of virtual power plants that package up power from renewable power generators and residential solar panels and sell it on under longer-term power purchase agreements. It’s more efficient to produce power where it’s consumed because this reduces transmission losses.

Myth 6 – Batteries currently fade after too few charge cycles to be viable for grid-scale energy storage
The latest generation of lithium-ion batteries has an extremely good round-trip efficiency when it comes to charge and discharge cycles and a long lifespan before fading, which means mass market utility-scale energy storage is now possible. Li-ion batteries are 90% efficient and can go more than 8,000 cycles while maintaining over 80% efficiency. They’re also manufactured and managed using software monitoring systems to ensure they’re incredibly safe.

Dispelling energy storage myths

The myths abound, but energy storage is progressing from more than just a bright idea. Image: NEC Energy Solutions.

Myth 7 – The Internet of Things (IoT) represents a near-term solution to curbing energy demand
Demand-side response systems will be important to help manage energy usage in the future. Equipment used by heavy energy users in the commercial sector, ranging from fridges to furnaces, will be internet-enabled and switched on and off to free up capacity in the grid. However, we’re a long way off convincing manufacturers that internet-enabled M2M devices will not affect production output and for the technology to reach maturity and be widely adopted. In the consumer sector, many people still like the idea of having air conditioning systems, fridges or heating switched on continuously and may be reluctant to pass on control to their utility company.

Myth 9 – We can reduce our carbon emissions, which are a major contributor to climate change, with renewable power alone

Energy consumption is responsible for 75% of carbon emissions, 45% of which originate in fossil-based power plants according to PA Consulting. Governments are already taking urgent action. Renewables will hold a 60% share in the electricity generation capacity in Europe by the end of 2030, up from 40% in 2012 according Bloomberg, while the share of fossil-fuel sources, such as coal and gas, will fall from 48% to 27%. There is a risk that a large part of this renewable energy will go to waste without parallel investments in energy storage. There are perverse financial incentives for generators to turn off turbines and solar panels just when it’s windiest and sunniest. By using storage to reduce transmission losses, manage distribution networks more intelligently and use electricity more productively, we’d be able to meet our carbon reduction targets around the world.

 

Breakthroughs in battery technology and software management systems mean the business case for energy storage now makes financial sense, with the gains outweighing the initial capital investment required. Now it’s just a case of overcoming the regulatory barriers to allow energy generators, distributors and users to tap these multiple opportunities to allow the market to grow at a rapid rate.

Tags: baseload, carbon emissions, internet of things, battery lifespan, centralised energy generation, variable generation, renewables integration