Why Everyone Is Talking About Energy Storage

Alevo's "GridBank" units are shipping containers filled with lithium ferrophosphate and graphite batteries for energy storage. Each unit has 1MWh of storage capacity and can be strategically placed to connect to the electrical grid. By petrmalinak/Shutterstock

Ever since governments started getting serious about developing renewable energy, naysayers have been arguing that it's a pipe dream — after all, the sun doesn't always shine or the wind doesn't always blow. The questions raised always lead back to energy storage.

We've seen ideas about how to store renewable energy when it's abundant and cheap and use it again when demand is higher — from wind turbines that incorporate battery storage to vehicle-to-grid technology that uses electric cars' batteries as temporary storage to supplement the grid. But those concepts are just the beginning.

In fact, a recent report suggests that revenue from the distributed energy storage market — meaning battery packs and other storage devices located directly at homes and businesses (many of which now generate electricity through solar) — could exceed $16.5 billion by 2024. Another report predicts $68 billion in revenue in the same time frame from the grid-scale storage market. This includes large-scale battery packs, hydro-storage systems that use cheap abundant electricity to pump water uphill to drive turbines later on, or even solar thermal systems that store energy as heat in molten salt.

This is a quickly changing landscape. Here are some of the latest energy storage developments that are worth keeping an eye on.

Former tobacco plant becomes $1 billion battery factory

When the Philip Morris plant near Concord, North Carolina, closed, it left the community devastated. It's no exaggeration to say that news the plant was to become home to a $1 billion grid-scale battery startup was greeted with much fanfare in the Tarheel State. The Alevo company, funded by anonymous Swiss investors and headed by Norwegian entrepreneur Jostein Eikeland, is said to have been in "stealth" development mode for over 10 years. It's now preparing an ambitious rollout, with plans to produce hundreds of its "GridBank" energy storage and analytics units by the end of 2015, and scaling up to provide 2,500 jobs within the first three years.

Each GridBank consists of lithium ferrophosphate and graphite batteries with 1MWh of storage capacity, combined with an analytics system designed to optimize charging. Alevo claims the GridBanks can run 24/7, be recharged within 30 minutes, have a lifespan of 40,000 charges, and have a lower fire risk than lithium-ion batteries. Much of the company's initial focus appears to be on grid operators and owners of conventional, coal-fired power plants by helping them cycle more efficiently. In fact, says Alevo, it could save 30 percent of the energy that utility operators currently waste. Contracts are already in place with grid operators in China and Turkey, and more developments are expected to follow.

North Carolina's fiscal conservatives also cheered the fact that the Alevo plant arrived with zero tax incentives or other financial sweeteners from government.

EOS raises $15 million for cost-effective grid-scale storage

As with any clean energy technology, part of the energy storage puzzle is when and if batteries can compete on a pure cost basis with fossil fuel generation. According to EOS, a company that just raised $15 million of a planned $25 million to develop its grid-scale battery storage technologies, that time is now. Speaking with Forbes, vice of business development for EOS Philippe Bouchard explained that while some companies are focusing on high-tech, space-age materials and technology, EOS has instead chosen to focus on simplicity and economies of scale:

EOS’ battery innovation is grounded in radical cost reduction through simplicity of design and use of inexpensive materials. Our novel zinc hybrid cathode battery chemistry consists of metal current collectors, salt water electrolyte, a carbon cathode, low-cost catalysts, and plastic frames. Though more than 600 claims from dozens of patents contribute to our “secret sauce,” they all involve low cost manufacturing methods.

By using these low-cost materials, says Bouchard, EOS is able to avoid the highly expensive clean rooms used by other manufacturers, instead constructing its batteries "using equipment from the food industry in the equivalent of a machine shop." And with a price target of $160 per kilowatt-hour, that means that it can compete with the costly, inefficient "peaker plants," which often operate for only a few hours a day and yet pollute a disproportionate amount of CO2. (See the CO2 generation illustrations below.)

CO2 generation

Germany makes a major push for distributed energy storage

Germany has already proven itself a world leader in the solar power and renewable energy markets, but skeptics have said this leadership comes at too high a cost. Operating the country's energy grid, they say, is becoming increasingly tricky as intermittent solar and wind energy become a greater proportion of the energy mix. But this is where storage comes in. Following some high-profile experiments with grid-scale battery storage, the German government is also putting its weight behind distributed, residential battery storage. Over 4,000 systems were installed in the first year of a government subsidy scheme, and as subsidies for solar itself gradually scale down, grid-scale storage will help to sweeten the economic equation for home owners by allowing them to use more of their own power. With some Germans playing host to mini-data centers to heat their homes already, the vision of a truly distributed energy system is becoming increasingly tangible to many citizens. Storing your own power is a logical next step.

California utility chooses energy storage over fossil fuels

As the New York Times recently reported, Southern California Edison retired some nuclear reactors and is planning to shut down some natural gas units because of problems with the cooling systems. So the utility issued a call for energy storage projects and gas-fired plants that might help to fill the capacity gap left by these retirements. The results, says The Times, were surprising:

Looking for 2,221 megawatts of capacity, about the size of two big nuclear plants, the utility selected 264 megawatts of storage, a huge amount for what is still viewed as a fledgling technology. “It’s much more than we thought would be likely,” said Colin Cushnie, the utility’s vice president for energy procurement and management. The total is about four times all the storage the company now has in place or under construction, he said.

Alongside traditional battery storage, a company called Ice Energy won a contract for the equivalent of 25.6 MW of storage. Unlike batteries, Ice Energy works by using cheap energy at night to make ice when temperatures are low, and then utilizes that ice to cool buildings during the day when energy prices are high.

Japan announces $779 million to support distributed battery storage

Following the Fukushima disaster in Japan, there was a major push for increased solar power. So much so that utility operators began raising concerns about integrating so much distributed, intermittent energy. As Cleantechnica reports, the result is an interesting crossroads on the clean energy roadmap: Japan is allowing utilities to limit compensation to renewable energy providers if their power is not needed, but it is simultaneously providing a major incentive to increase distributed battery storage. Exactly how this plays out remains to be seen, but I suspect that the long-term impact will be a net positive for clean energy. After all, the cost of solar power is already on a sharp downward trajectory, making subsidies and utility compensation less and less important, while distributed battery storage is at a fledgling stage. But as battery storage becomes more common and more affordable, it will further limit the need for clean energy producers to sell their energy to the grid at all — and give them more power over when and if to do so.

A confluence of technologies

These advancement in energy storage provide the tantalizing promise of a huge increase in renewable energy production, yet they are just one part of a much larger, more promising picture. Whether it's the spread of smart thermostats or the growth in demand response schemes which compensate energy users for not using energy, our ability to limit how much energy we use and control when we use it is evolving by the day. Add these capabilities to increasingly cheap renewables and energy storage, and to the rising costs of conventional fossil fuel generation, and you have all the makings of a significant shift in the entire energy system.

May we live in interesting times.