Ubiquitous and diverse energy storage is key to grid decarbonization.
Energy storage technologies have come a long way since the first large-scale pumped hydro system was deployed nearly a century ago. Today, lithium-based batteries are deployed in a wide range of applications, both behind the meter, in residential and commercial sites, and at massive grid scale.
But the evolution of energy storage is not a story of one technology replacing another. In a warming world, we need to tap into a whole toolbox of technologies—and muster up massive political will—to create an energy ecosystem that can rely on intermittent generation sources such as solar and wind. There’s reason to hope we can do this, as we look at what’s unfolding in 2022 and beyond.
Issues driving energy storage
Across the globe, climate change mitigation efforts are focusing on generating as much energy as possible from renewable sources. To meet their goals, governments have realized that they need to encourage maximum deployment of every available generation technology. This includes intermittent generation systems, such as solar PV and wind turbines, which were historically dismissed as unreliable for baseload generation.
The problem with intermittent generation is not just that the energy resources might not be available when they’re needed, but that excess supply must be offloaded, typically to the grid. The unpredictable nature of this offloading makes it very difficult for independent systems operators (ISOs) and regional transmission organizations (RTOs) to balance grid supply and demand in real time.
Energy storage provides grid operators and power producers a place to divert excess electrons, smoothing out the peaks in supply. Energy storage also serves as a standby energy resource for spikes in demand, reducing reliance on gas-fired peaker plants, which are not only emissions-heavy but also costly to maintain. Prevalent energy storage technologies include pumped hydropower storage and lithium-ion batteries, the latter of which can be deployed both at utility scale and behind the meter at customer sites (commercial and residential).
To better meet the needs of more use cases, the energy storage industry is still evolving, with new technologies under development and in various stages of commercialization. These include thermal energy storage (such as molten salt), geomechanical pumped storage, flow batteries, flywheels, solid state batteries, and hydrogen fuel cells.
It is an open question whether all of these technologies are up to the task of meeting our growing energy needs while avoiding a climate catastrophe. It’s also hard to make apples-to-apples comparisons between the technologies, but there seems to be a consensus around several key requirements for emerging energy storage solutions.
Our wish list for 2022 and beyond
1. Make it last longer. Current lithium-ion battery-based grid-scale storage can respond quickly to provide, on average, four hours of discharge at full power, making it a good fit for sporadic, short-duration applications such as peak shaving, solar firming, and power quality management. With increasing volatility in demand, there is a growing need for energy storage systems with much greater capacities, which can make power available for days, or even weeks. The Long Duration Energy Storage (LDES) Council sees rapid acceleration in four new classes of thermal mechanical, electrochemical, and chemical LDES that will result in the installation of 30 to 40 gigawatts of power capacity and 1 terawatt-hour of energy capacity by 2025. Another way utilities, municipalities, and communities are keeping the lights on is by building microgrids. These local aggregations of generation and storage can isolate themselves from the grid in the event of a power outage, while continuing to provide power to users for days. Even school districts—like Santa Barbara USD—are finding cost effective ways to build microgrids with solar and storage.
2. Make it less expensive. As with most technologies, new energy storage technologies face steep hurdles in scaling cost-effectively to compete with incumbent solutions. Complicating technology comparisons are the diverse properties of the different storage modalities. How does one compare storage that’s based on pressurizing water in rock fissures to one that relies on a flywheel or a chemical reaction? Lazard’s Levelized Cost of Storage (LCOS) is widely accepted metric that helps compare the cost per capacity (in kilowatts) or cost per energy output (in kilowatt-hours). Recent work by Schmidt et al. published in Joule breaks down the LCOS by technology and application, revealing a bewildering array of cost trends between 2015 and 2050. Still, the overall trend is a definitively downward. Another industry source, American Clean Power, cites an 89% cost decline between 2010 and 2020.
3. Make it cleaner. New technologies, such as flow batteries, rely on water and a non-flammable electrolyte, such as iron or vanadium, reducing the fire risk, as well as toxicity. Zinc air batteries work by oxidizing zinc using oxygen from the air rather than water, making them non-corrosive. Among lithium-based batteries, lithium iron phosphate solutions are gaining traction for their more stable chemical structure. These new technologies, paired and optimized with renewable generation, help batteries fit comfortably into visions of a safe and sustainable energy future.
4. Make it more feasible to deploy. What used to be a years-long timeline for planning and deploying any kind of grid-scale storage system has now been compressed to a matter of months. Even the world’s largest planned battery storage construction project to date—a CEP.Energy project in New South Wales with a capacity of up to 1200 MW—can be completed in about a year. These shorter timelines are due not only to improvements in engineering and construction processes, but also to the streamlining of permitting processes and regulations.
5. Make it more manageable. Like computing and networking technologies, energy storage systems must be integrated with adjacent generation systems and with the larger grid to optimize charging and discharging cycles. As energy generation and storage systems become more technologically complex and diversified, data and communication standards will be needed to ensure interoperability and cost-efficient integration between the systems. Much like the cellular communications market, we can expect this process to be fraught with technical and political hurdles. But we believe that all the players have a deep vested interest in integration and interoperability; each of the components is optimized when it is synchronized with the others.
6. Make it biddable into every energy market. Energy generators now realize a significant portion of their revenue by bidding surplus capacity into the wholesale energy market. In 2018, the Federal Energy Regulatory Commission (FERC) formally recognized energy storage for its role in delivering capacity on demand with Order 841. It required operators to enable energy storage owners to bid into the market, sparking strong opposition from incumbent interests. But a federal appeals court upheld the ruling in 2020. Still, ensuring compliance is an uphill battle, with some ISOs pushing to delay implementation of Order 841 citing reliability and cost issues. Pro-storage coalitions, such as the Energy Storage Alliance (now part of the American Clean Power Association) continue to work to bring all players to the table, to the benefit of generators, operators, equipment vendors, and consumers.
Much of this effort to drive energy storage forward revolves around information and education. Companies in the energy storage and adjacent markets have their hands full communicating the nuances of technology, policy, financing, and sustainability to myriad audiences. NAVAJO specializes in helping companies find the right way to do this, through narratives and immersive experiences that bring these pivotal solutions to the fore.
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