Trying to compare different types of energy storage is a bit like trying to compare the color green to the color blue. Here we take a stab at defining the market potential for long-duration energy storage and offer considerations for potential buyers of this new technology.
According to a recent report “Beyond Four Hours: The Transition to a More Flexible, and Valuable, Long-duration Energy Storage Asset,” 80 percent of market participants define long-duration energy storage (LDS) as an asset than can provide at least 3 hours of energy storage. But even that definition of LDS was not the same for everyone, according to Jason Deign, author of the report.
“There really is a fair degree of uncertainty right now,” he said, adding, “when you say long-duration storage the field is wide open.”
Deign interviewed energy project developers and key players at utilities to get a sense of what potential buyers of this type of asset were thinking. He wanted to understand if and how soon they would consider purchasing an LDS asset; where they believed LDS already makes sense and where it might make sense in the future; and what their concerns might be about implementing the technology.
Deign began his survey by asking participants about what energy technology they would consider for long-duration storage and found the answers were also unclear.
Flow battery at Stone Edge Farm in Calif.
“You have a lot of people saying they like flow batteries” he said but added “we had one guy say, ‘I hate flow batteries; I wouldn’t touch them.’
“We had people saying thermal, cryogenic, and these are all really viable,” he said. Deign said there is almost too much choice out in the field and not enough operating data to understand what works, how it works and where.
Current Markets for LDS
There are four use case identified in the report in which respondents said LDS might be used:
- To avoid duck curves in areas with a high penetration of wind and solar
- For grid-tied community or commercial and industrial microgrids, where storage can be attached to renewable generation for grid resiliency
- For grid constraint management, especially demand and supply shifting to avoid having to pay for new transmission infrastructure
- For islands or remote microgrids.
Assuming a li-Ion battery storage power plant with the same maximum power and the same storage capacity as a pumped storage power plant (e.g. minimum 8 full load hours in turbine mode). .
For example, Hawaii with its 40 percent solar penetration and lack of net-metering is an excellent test bed for energy storage. AES is currently building a 28-MW solar PV power plant that will include a 20 MW five-hour duration energy storage system on former sugar cane land. The system will be the largest solar-plus-utility-scale-battery system in the state of Hawaii.
In addition, respondents said there could be a use for LDS in the commercial and industrial market for rate-based arbitrage, peak tariff avoidance and reducing demand charges and to counteract net-metering limitations.
Deign found it most surprising that respondents said that already needed LDS or anticipated needing it in the near future.
“I thought people would say there were thinking of needing it in 3-4 years’ time and I had some people saying ‘look I need this stuff now.'”
Biggest Concerns? Usage Data, Business Models and Cost
The biggest obstacle for energy storage providers and potential buyers is determining the business model. Today more questions about LDS exist than answers. What will help answer those questions? Deployment. New entrants into the field are going to have to form partnerships with utilities in order to find test beds where they can deploy technology and understands its benefits, said Deign.
Portland, Oregon based ESS is doing just that. The company announced in late 2016 that it is building a 400-kWh IFB system for UC San Diego where it will be installed in a microgrid test facility. Sempra will be monitoring the performance of the IFB at this site. A second ESS system is destined for a renewable energy test facility in Lubbock, Texas where DNV-GL will perform third party testing on the IFB as it shifts wind power daily.
On the cost side, Dr. Klaus Krueger, Head of Plant & Product Safety and Innovation Management at Voith said no one is comparing the raw material costs of chemical batteries to pumped hydro energy storage but they should be. Krueger has been traveling all over the world giving seminars about pumped storage to those interested in learning about it. When he shows them the the life cycle cost comparisons including CO2 footprints their eyes light up.
“They have a lot of a-ha moments,” he said.
Krueger said that the cost of utilitizing hydro storage capacity can be almost as low as zero dollars per kWh whereas “the rock bottom cost of Li-Ion battery storage power plants is about $70 to $80 per kWh just because of raw materials.”
He added: “For instance Canada has opportunities for storage capacity at almost zero cost. Why? They can connect existing lakes with different elevations and do pumped storage, so the storage is already there in the reservoirs with natural inflows”
Krueger recommends that once a utility decides it needs LDS it should first look to its neighbors to determine if any hydro storage exists or could exist at minimal cost. If neighboring states or countries have significant storage capacity, then building interconnectors is the best course of action in terms of costs and revenues.
“Germany is investing in transmission lines,” he said. Adding that the country is building interconnectors between itself and Norway and Sweden because those regions have massive amounts of hydro storage that can benefit the German grid.
Krueger acknowledged that pumped hydro cannot solve all energy storage issues but does believe it can be used in more places than utilities are currently aware. He said that in the U.S. there is “Tesla hype,” which hinders discussions on pumped hydro as an option for energy storage.
“This is why I give courses,” he said.
According to Krueger medium-sized battery banks will play an important role in megacities; e.g. for emergency cases as backup power for large hospitals or airports or for load leveling and peak shaving.
“You can install them near large consumers or critical infrastructures,” he said, explaining that suitable topology and height variation are necessary for pumped storage, which can complicate permitting. That said, there are other innovative cases where smaller forms of pumped hydro and other renewable energy sources can pair together nicely. He pointed to Gaildorf, Germany where the first wind/pumped storage hybrid power plant in the world is under construction. The project uses the wind farms’ four towers and bases as water reservoirs and three reversible Francis machines with a total capacity of 16 MW for generation.
If there is a surplus of power, the pumped storage power station switches to pumping mode moving water from a lower reservoir to the higher storage basin in the wind towers. If the demand for electricity in the grid rises, water is released from the upper basin to the bottom via a penstock and causes the pump turbines to generate. Within seconds, electricity is fed back into the grid.
Today there is no “one-size-fits-all” long-duration energy storage solution and Krueger believes there probably never will be.
“You will find everything coexisting,” he said. “Utilities will need to consider each project and evaluate the correct solution.”
