At the Energy Storage Europe conference and exhibition in Düsseldorf this week, PV Tech Storage sat in on a number of conference sessions and talked to experts and industry figures as they tackled some of the biggest issues facing storage and renewable energy.
Good news, bad news
First, the good news. The widespread adoption of energy storage is considered by many experts to be inevitable and could allow us as a species to take greater strides toward finally doing away with nuclear, coal and gas as the main sources of our power. It can not only store solar and wind-generated power for later use – that much is obvious – but it can also help to keep grid networks stable. With subsidies for renewables along the lines of feed-in tariffs (FiTs) becoming increasingly rare, especially in the developed world, households can still be persuaded to make the jump to install solar if they can save themselves significant sums of money by “self-consuming” their PV power onsite. Batteries can enable them to do this if the regulatory conditions are right.
Now for the slightly less palatable news for storage developers and environmental groups. That widespread adoption is likely to come in a timeframe which varies massively based on regional, technical and economic need. Nations such as Germany, which have well developed electricity transmission infrastructure, do not as yet need the grid-balancing aspect of storage, at least not on any grand scale. Meanwhile, battery system prices and regulatory policy, including still extant support schemes in other regions for residential solar, mean that the self-consumption business model that is gradually taking off in Germany may not find a home in a vast number of other countries as yet.
This too is not to mention the other great barrier to adoption – the threat posed by this potentially disruptive technology to utility company revenues and old-fashioned power generation, an argument we have already seen played out in the solar space for a number of years.
However, as many at the Düsseldorf event said, if nations are truly serious about adopting renewable energy at the scale required to stave off climate change catastrophe, they will start to think about deploying storage in a way that will help them reach much higher levels of renewable energy capacity than they rely on today. Jose Etcheverry of York University in Canada said at the event that despite the enormous challenges faced, taking responsibility for tackling these issues is “how I can sleep at night”.
Jose Etcheverry of York University said that tackling climate change, although a massive problem, is "how I can sleep at night". Image: wikimedia user: Arturo de Frias Marques
“If governments across Europe and elsewhere are still looking to add more renewable energy to their energy mix, but also have a shared concern as to how the electricity network will cope with this added generation, then mandating certain proportion of storage alongside that [renewable energy capacity], could certainly be a route forward."
Logan Goldie-Scot, Bloomberg New Energy Finance.
Let’s push things forward
So how do we use energy storage as a tool to take high levels of renewable energy adoption from lofty ambition to reality? Logan Goldie-Scot, an analyst with Bloomberg New Energy Finance told PV Tech that it could be a question of reconfiguring energy market regulation, rather than the industry demanding direct financial support.
“If governments across Europe and elsewhere are still looking to add more renewable energy to their energy mix, but also have a shared concern as to how the electricity network will cope with this added generation, then mandating certain proportion of storage alongside that [renewable energy capacity], could certainly be a route forward,” Goldie-Scot said.
“If that combined cost is sufficiently low for a developer to still make a reasonable return, potentially not the returns that they used to make in certain markets but still essentially to make a profit, that is a potentially solid route for industries, governments and network operators.”
Currently, only island territories such as Puerto Rico that already have a high penetration of PV and other renewables on their grids are mandating that a certain amount of energy storage is added to each new renewable energy facility. This could change if policy makers start to look more closely at the issues and act accordingly.
That other big piece of the puzzle, how to make storage affordable, will be a question of the industry taking on responsibility for cost reduction, for the most part. Here, lessons could be learned from solar, not least of all from strides taken in Germany since the country’s Energiewende (‘energy transition’) began.
“We are probably in storage where we were in PV 10 or 15 years ago, when PV was still very expensive but we already had a learning curve and if we use it cost and prices will come down and this is the same with storage,” said Prof Eicke Weber, director of the Fraunhofer Institute for Solar Energy and a founder of the German Energy Storage Association (BVES).
“Actually as in PV it might come down faster than we had expected 10 years ago.”
Weber believes that there is a real difference when we talk about the adoption of energy storage at individual level as opposed to at a global scale. Perhaps prompted by further adoption of self-consumption models and smart energy management systems in other key PV markets like Japan, household energy use will continue to migrate towards decentralisation, regardless of whether grid networks deem it an absolute necessity.
“Storage will come, no matter what, regardless of if we have discussions that ‘we don’t need storage until we get to 50% or 80% renewables in the grid’ but it [storage] comes anyway, in a decentralised way, and it will quickly help bring down the cost and to further improve the market,” said Weber.
Coupling with storage is the best way for Germany's homeowners to get value from their PV installations.
"We are probably in storage where we were in PV 10 or 15 years ago, when PV was still very expensive but we already had a learning curve and if we use it cost and prices will come down and this is the same with storage."
Prof Eicke Weber, Fraunhofer ISE / BVES
The Tesla factor
Tesla Motors sent Greg Callman from its charging infrastructure and stationary storage team to make a presentation on its soon-to-be ramped up stationary storage business. With the company’s much-vaunted ‘Gigafactory’ under construction and intended to deliver 500,000 battery packs annually by 2020, Eicke Weber said the “Tesla Factor” could yet have tremendous consequences for efforts to reduce overall storage system costs.
Popular press reports have made much of a rumoured linkup between Tesla and tech-giant Apple, rumours which we must point out, are entirely unsubstantiated as yet beyond Apple CEO Tim Cook recently talking of his admiration for Tesla and its EVs. While Callman did not refer directly to a deal of this nature, he was at pains to point out that Tesla is pledging to be more forthcoming with technical information in future and was “very excited” to be “taking part in these conversations”.
So while there are undoubtedly challenges ahead, the industry can learn from where solar left off, even if cost reductions might not ultimately be as rapid or as dramatic in PV. Meanwhile, in the current economic climate regulatory reform of the kind asked for by storage advocates seems the more preferable option to asking governments to put their hands into public funds and offer direct subsidies, for all concerned.
The second part of this blog will be published next week on PV Tech Storage, dealing with the perceived threat storage poses to the incumbent energy industry and its stakeholders and how reconciliation remains a more favourable outcome than a fistfight.
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