Storage wars: Everybody wins

Three or four decades ago, before the winds of change swept through the energy markets and renewables besides hydro became a force to be reckoned with, the world was more predictable – at least if you were a utility manager or system planner. Given the variable nature of solar and wind power plants compared to dispatchable conventional power plants, the best answer is to strengthen transmission and distribution grids physically. In addition, Smart Grid technologies make them more flexible. Previously, the only significant grid-integrated energy storage to deliver flexibility had been pumped-hydro power plants. But now large- and small-scale battery storage is taking off in a big way and restores some systemic predictability and stability by creating buffer reserves of electricity. The main technology driver of battery storage is unquestionably the growth of electromobility. Together with consumer electronics, battery cells being used in cars represent roughly 90 percent of manufactured Lithium-Ion battery cells. The market has settled on the Lithium-ion battery technology for the foreseeable future, since they have very good power and energy density at high efficiency and robustness. This makes them very suitable for cars.

Another new factor is the empowerment of an increasingly active consumer base to install and operate grid-connected rooftop photovoltaics (PV). In some countries, we already see a massive deployment of PV and battery storage combinations behind the meter. In Germany, for instance, roughly half the systems newly installed on residential premises feature batteries with a typical storage capacity of 5-10 kWh.

In a decentralized grid, these smaller market players can team up in swarms. Distributed power generation and storage capacity allows individuals to join forces and be part of an energy community. In addition at the residential level, some degree of energy independence is sometimes as much a lifestyle choice as a technology choice. This is driven not only by economics, but also by emotional momentum. Like rooftop PV, storage systems are now built in a way to be easily installed by an electrician, and with varying designs for every taste and requirement.

In addition we also increasingly see batteries used in conjunction with conventional power plants for faster ramping and peaking capability. Storage enhances the stability of the grid by supplying frequency support – as a source of primary control power, for example. Battery storage is also deployed to provide peaking power, like in the 100 MW / 400 MWh Li-ion-based system being built in California by Fluence. Stacked business models provide multiple income streams by addressing several energy markets in parallel. Of course, this depends on the local market regulation. 

On the load side, the rise of electromobility will lead to a massive deployment of charging infrastructure. Aside from feeding the grid from car batteries, this infrastructure is already able to provide flexibility to the grid simply by varying the charging power to the car battery. These vehicle-to-grid services do not necessarily require energy flowing from the car battery back to the grid. Besides superchargers along the freeways with power ratings up to 400 kW, and maybe even more in the future, we will see electricity being supplied via streetlight posts, for instance, using existing infrastructure to tap into the grid for charging. The resulting power flows may exceed the available grid capacity. Therefore, besides coordination of charging power, physical grid upgrades in combination with stationary battery storage will also be necessary. We will see further improvements in energy and power density as Li-ion technology matures and scales. All these developments will pave the way for new business models, such as the battery rental services already offered by some car brands. 

Energy storage is here to stay. Now, the challenge is to understand the technology and the business models as well as the underlying process of digitalization that makes all these developments possible. With the Internet of Things (IoT), we are no longer dealing with an isolated electricity system. Optimization across infrastructures will have to harmonize the charging infrastructure of cars with the usage pattern of households, with forecasted renewable intake, and with forecasted grid usage. Robust and flexible smart grids as well as intelligent control systems will be required to enable all these solutions and usage patterns to work together with maximum efficiency.

As far as the hardware is concerned, just like crystalline silicon for PV, Li-ion looks set to remain the dominant technology for storage up to a couple of hours, which makes it more difficult for other technologies to carve out a place in the market. Over the next five to ten years, maybe liquid electrolytes currently in use may be surpassed by advances in solid-state electrolytes providing even higher power and energy density. But I’m convinced that what really matters is not having fancy technology in place. It’s about having the right technology for a given scenario. What could that be? We’ll have to see what the future holds in store.

2018-08-10

Michael Weinhold, CTO, Siemens Energy Management Division

Picture credits: Michael Weinhold, Siemens AG