Energy storage

Overview

Energy storage, especially of electrical energy, has become one of the most dynamic technology sectors and is now universally recognised for its ability to fundamentally improve everyday life.

In particular, the scale-up of batteries, from portable electronics to electric vehicles and now to very large, or utility-scale applications, has empowered both consumers and companies. Today, for the first time in history, every company has a choice to proactively control its energy use rather than remain at the mercy of energy markets or supplying utilities. Not only does this allow companies to reduce their costs but also it allows them to accurately forecast their future energy expenditures.

  • Bushveld energy [photo]
  • Bushveld energy [photo]
  • Bushveld energy [photo]
 

Five questions to know about energy storage

  1. What is it and why is it important?

    Energy storage is a process by which energy created at one time is preserved for use at another time. While there are many types of energy storage, such as the increase in the potential energy after lifting a mass or the potential energy for heat trapped inside a piece of wood or coal. Electricity by its very nature cannot be stored in the form of electricity, however, it can be converted into another form of energy and stored for later use.

    Many different processes exist to convert electrical energy into other forms of energy, including mechanical, thermal, electrical, chemical, etc. The latter is the most common in electronics and automobile applications. This process is now increasingly being deployed through novel technologies in much larger, utility scale applications as well.

  2. What are the applications of utility scale energy storage?

    There are many important applications for energy storage
     
    ApplicationDescription
    Off-to-on peak intermittent shifting and firming Charge at the site of off peak renewable and/ or intermittent energy sources; discharge energy into the grid during on peak periods
    On-peak intermittent energy smoothing and shaping Charge/discharge in seconds to minutes to smooth intermittent generation and/or charge/discharge in minutes to hours to shape energy profile
    Ancillary service provision Provide ancillary service capacity in day ahead markets and respond to ISO signaling in real time
    Black start provision Unit sits fully charged, discharging when black start capability is required
    Transmission infrastructure Use an energy storage device to defer upgrades in transmission
    Distribution infrastructure Use an energy storage device to defer upgrades in distribution
    Transportable distribution level outage mitigation Use a transportable storage unit to provide supplemental power to end users during outages due to short term distribution overload situations
    Peak load shifting downstream of distribution system Charge device during off peak downstream of the distribution system (below secondary transformer); discharge during 2-4 hour daily peek
    Intermittent distributed generation integration Charge/discharge device to balance local energy use with generation. Sited between the distributed and generation and distribution grid to defer otherwise necessary distribution infrastructure upgrades
    End-user time of-use rate optimisation Charge device when retail time-of-use (TOU) prices are low and discharge, when prices are high
    Uninterruptible power supply End user deploys energy storage to improve power quality and /or provide backup power during outages
    Micro grid formation Energy storage is deployed in conjunction with local generation to separate from the grid, creating an islanded micro-grid

    Power requirement versus discharge duration for some applications in today’s energy system

    Energy storage applications vary by their power requirement and discharge duration

    Source: Modified from IEA (2014), Energy Technology Perspectives, OECD/IEA, Paris, France. Battke, B., T.S. Schmidt, D. Grosspietsch and V.H. Hoffmann (2013), "A review and probabilistic model of lifecycle costs of stationary batteries in multiple applications", Renewable and Sustainable Energy Reviews Vol. 25, pp. 240-250. EPRI (Electric Power Research Institute) (2010), "Electrical Energy Storage Technology Options", Report, EPRI, Palo Alto, CA, United States. Sandia National Laboratories (2010), Energy Storage for the Electricity Grid: Benefits and Market Potential Assessment Guide, A Study for the DOE Energy Storage Systems, Albuquerque, NM and Livermore, CA, United States. IEA-ETSAP (Energy Technology Systems Analysis Programme) and IRENA (2013), "Thermal Energy Storage", Technology Brief E17, Bonn, Germany

  3. Why are batteries the most flexible type of utility scale energy storage?

    Batteries are the most flexible type of energy storage (see chart below) because they can be placed almost anywhere without special geographical or topographical requirements. This “distributed nature” allows them to be integrated into the grid or used off-grid.”. Furthermore, batteries are modular, meaning that energy storage amounts can be built in small or large quanties and increased or decreased with ease over time.

    • Unsuitable for application
    • Possible use for application
    • Definite suitability for application
    ApplicationCAES1Pumped HydroFlywheelsLead- AcidNaSLi-ionFlow Batteries
    Off-to-on peak intermittent shifting and firming Possible use for application
     [icon] Possible use for application
     [icon] Unsuitable for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon]
    On-peak intermittent Energy smoothing and shaping Unsuitable for application
     [icon] Possible use for application
     [icon] Possible use for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon]
    Ancillary service provision Possible use for application
     [icon] Possible use for application
     [icon] Possible use for application
     [icon] Possible use for application
     [icon] Possible use for application
     [icon] Possible use for application
     [icon] Possible use for application
     [icon]
    Black start provision Possible use for application
     [icon] Possible use for application
     [icon] Unsuitable for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon]
    Transmission infrastructure Unsuitable for application
     [icon] Unsuitable for application
     [icon] Unsuitable for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon]
    Distribution infrastructure Unsuitable for application
     [icon] Unsuitable for application
     [icon] Unsuitable for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon]
    Transportable  distribution level outage mitigation Unsuitable for application
     [icon] Unsuitable for application
     [icon] Unsuitable for application
     [icon] Possible use for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon]
    Peak load shifting downstream of distribution system Unsuitable for application
     [icon] Unsuitable for application
     [icon] Unsuitable for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon]
    Intermittent distributed generation integration Unsuitable for application
     [icon] Unsuitable for application
     [icon] Unsuitable for application
     [icon] Definite suitability for application
     [icon] Possible use for application
     [icon] Possible use for application
     [icon] Possible use for application
     [icon]
    End-user time of-use rate optimization Possible use for application
     [icon] Possible use for application
     [icon] Unsuitable for application
     [icon] Definite suitability for application
     [icon] Possible use for application
     [icon] Possible use for application
     [icon] Possible use for application
     [icon]
    Uninterruptible power supply Unsuitable for application
     [icon] Unsuitable for application
     [icon] Possible use for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon]
    Micro grid formation Unsuitable for application
     [icon] Unsuitable for application
     [icon] Unsuitable for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon] Definite suitability for application
     [icon]

    Source: US DoE - Grid Energy Storage report 2013


  4. How should the cost of energy storage be calculated?

    The correct way to calculate energy storage is by using the levelised cost of energy storage (LCOE of storage or LCOES), which is what it will cost a battery to provide each watt of electricity, on average, over the course of the battery’s lifetime. The unit for this is cost / watt hour supplied (in utility scale applications, a kilowatt hour, or kWh, is usually used).

    Today, most utility scale battery costs are stated only in terms of the purchase costs, usually expressed in cost / kWh of energy capacity. This could be misleading and inaccurate and akin to comparing the cost of a solar power plant and a gas power plant only on the basis of their construction costs. In fact, the purchase cost may not even be the most significant factor. Similar to how the unit cost of energy is calculated for power generation, other factors must be considered when evaluating battery costs.

    • The expected usage of the battery, which includes the number of full or partial discharge and recharge cycles will it perform per day and year on average (e.g. how many watt hours will it discharge per day on average)
    • The lifetime of the battery (both in years and in full cycles)
    • The expected performance of the battery over time (since some batteries reduce their ability to dis/recharge due to cycling, deep discharge and time)
    • The purchase price of the battery
    • The round-trip efficiency of the battery (thus should include not just the energy lost during the conversion process but also the use of any parasitical systems, especially heating and cooling above / below the expected ambient temperatures)
    • The delivery and installation of the battery (including any components that were not included by the manufacturer, such as a power inverter)
    • The expected cost of maintaining the battery (this is lower than the purchase costs but is still quite high)

    All of these 7 factors need to be considered and factored to create an “apples to apples” comparison. The cost of the stored energy is then added to the cost of the generated energy (which supplied the battery) to yield the final cost of each unit of energy that comes out of the battery. For example, if the LCOE of a solar photovoltaic system is $0.08/kWh and the LCOES of an accompanying battery is $0.12/kWh, the final cost one kWh is $0.20/kWh. This figure can then be compared to the price of an alternative option, such as diesel, or a PV+diesel hybrid, or a grid generated kWh, to decide whether storage makes economic sense.

  5. How large is the market?

    Global energy storage market forecasts vary significantly, but suggest a very large opportunity

    Billions of USD per annum, real

    Africa offers a unique and immediate opportunity

    Africa presents an immense opportunity for energy storage because it suffers from insufficient energy

    • Applications Africa [thumbnail]

      Continuous load shedding in South Africa, despite growing tariffs and billions of Rand spent on diesel Open Cycle Gas Turbines (OCGTs)

    • Applications Africa [thumbnail]

      Eskom operating with just a 2,000 MW spinning reserve rather than 15% (6,000 MW) reserve margin

    • Applications Africa [thumbnail]

      Addition of renewables will make operation of SA’s power system even more challenging due to intermittent supply

    • Applications Africa [thumbnail]

      Across sub-Saharan Africa, ~600 million people now live without electricity and grids are too weak to support major industry

     

    However, demand is growing rapidly and sub-Saharan Africa will demand nearly 1,600 terawatt hours by 2040

    Electricity demand in Sub-Saharan Africa1
    Electricity demand in Sub-Saharan Africa [graph]
    1. 1.Excludes island countries. 2010 reflects actual consumption, whereas 2020, 2030 and 2040 are unconstrained demand forecasts
    2. 2. Industrial/commercial autogeneration and backup power supply.
    3. 3. Compound annual growth rate.
    4. 4. Figures may not add up to due to rounding.

    Source: International Energy Statistics (2013), US Energy Information Administration; Non-OECD Energy Statistics, © OECD/IEA 2013; McKinsey & Company “Brighter Africa” report


    Our analysis suggests that the addressable market in Africa for utility-scale storage over the next 5 years is 80-90 GWh, or $25-$30 billion

    In Africa, VRFBs have 6 possible market segments with a combined addressable market2
    In Africa, VRFBs have 6 possible market segments [graph]
    1. 1. The System Stability market, which includes time shifting transmission and distribution (T&D) losses, deferring T&D CAEPX expenditure, intermittency and load smoothing and ancillary system operation services, overlaps with the Peak Shaving market.
    2. 2. Remote Industrial & Commercial segment ‘s potential is included in daily storage market calculation, as most of these users rely on thermal power generation from liquid fuels, such as diesel of heavy fuel oil

    Source: Bushveld Energy