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By Jesse Berst

 

A new report from Frost & Sullivan details the technological challenges and problems the company says need to be resolved before grid-scale energy storage becomes a real-world option for smart grid, renewables, automotive and back-up power sectors.

 

Although I have not read the full report, I found the press release disappointing and short-sighted. First, it breaks no new ground, essentially restating the drop-dead obvious notion that batteries need to be better and cheaper before they take over the world.

 

Second, it gives no visibility into the path this technology will take. To read the description, energy storage is sitting on the sidelines while it waits for improvement. In fact, storage is finding all sorts of uses. As with all new technology adoption curves, it is finding its way first into specialized, high-value applications that can justify the high cost. Each time that cost comes down, it will open up a new tranche of applications that become affordable.

 

For instance, Spokane-based Demand Energy just placed two of its grid-scale storage systems into two New York luxury high-rises. The systems charge using inexpensive off-peak power, then release power during peak periods.

 

Today, luxury buildings in an area of extremely high electricity rates. Tomorrow luxury buildings in areas with lower rates. Eventually commercial buildings in many areas.

 

Perhaps the full report has more of the information we need to make decisions. Yes, we know that storage is expensive. Yes, we know it has technical hurdles. But when will those hurdles be overcome and in what order? Equally important, what niche applications make economic sense today, and which ones will become viable tomorrow?

 

If you think you have answers to any of those questions, use the Comment form below.

 

Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory's Energy & Environment directorate.

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Current Comments (7)

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Why only batteries?

The summary mentions only CAES and pumped-hydro as alternatives to batteries. If you want to address all opportunities for peak shifting and facilitating distributed energy integration, there are other technologies to consider. With the example of the urban luxury towers, a high portion of the load is needed for environmental control, so thermal storage becomes quite viable, for example. After all, the ultimate goal is to time shift generation with respect to demand to allow more versatility for the least dispatchable sources. Storing energy in its final transition - hot and cold fluids - can be equally viable at certain scales. I haven't seen a thorough study, but surely there is value in hybrid systems - electrical and thermal storage. Not only would this take some of the burden off of battery capacity needs, but it might also impact reliability and service life as there is a non-trivial lifecycle cost with Li-Ion technology. It will also be interesting to see how the study addresses some of the new battery alternatives that may leapfrog the current capabilities. For example, a version of liquid metal batteries (LMBC) is in a commercial scale-up phase, and it is promoted as overcoming some of the cost and performance issues with current dry technology.

John Sullivan - 04/18/2012 - 07:11

grid-scale energy storage

The most interesting thing to me is that a few years ago batteries and other forms of advanced electrical storage for the grid were considered impractical. Now we have analysts like F&S saying "electric energy storage technologies will be an inseparable part of smart grids and distributed energy generating systems in the future." I think that comes from real commercial projects that have found valuable jobs for energy storage in the power sector. We all understand how costs change over time with manufactured goods. In our own industry, scale production has dramatically transformed the number of projects and locations where solar generation is commercially effective. At AES, we have already seen this trajectory from the first projects we did at 1MW scale 5 years ago through the deployment of 72MW of commercial energy storage. The utility and power system operators we are working with are finding smart ways to take advantage of this technology to better manage their reliability needs and bring value to their customers today. John Zahurancik Vice President AES Energy Storage

John Zahurancik - 04/18/2012 - 10:39

Storage

There's no new ground to be broken. I haven't read the F&S report but I did review a report prepared for the CEC last year that outlined some of the technical hurdles storage technologies have to overcome. First-movers like AES and Demand Energy may indeed be able to find profitable uses at today's prices for storage devices and electric energy, but forcing adoption is not going to solve the technology and cost challenges that hinder large scale adoption, any more than contracts for large-scale deployment of solar thermal technologies have led to meaningful reductions in the cost of that technology. There's little doubt storage has a role, but we need to be thoughtful about deployment.

Jack Ellis - 04/19/2012 - 18:47

Energy Storage

An affordable storage system that fills the tech voids would be a hybrid system which include the positive attributes of all energy storage systems while eliminating the cost, placement and environmental concerns of each individual technology. My pat pending VESS system would allow compressed air and pumped hydro to work with batteries and gravity to provide a user defined, expandable ESS which would work across all markets and support many sevices such as time shifting, frequency, bridging and other aspects of ESS. My research has found that while all needs cannot be met with one technology alone (I agree with Jesse), the innovative combination of technologies offers the greatest opportunity to provide an ESS that works for commercial applications at the local end and grid support at the T&D level. And while this is not a sales pitch, I can say I am actively developing a prototype to validate my proposed and patent pending solution (7 years of research). Energy storage will make a profound difference in our future, and I take the challenge very seriously. Thanks for allowing me the space to post my opinion.

Charles E. Hughey - 04/23/2012 - 05:42

Grid Scale Energy Storage

The approach which I think will most likely win for the true grid bulk storage uses Concentrating Solar Power (probably power tower) with thermal storage and backed by natural gas if storage is outrun by weather. It is possible that Compressed Air Energy Storage will become viable - but there is economic concern - again backed by natural gas.

Sol Shapiro - 04/24/2012 - 18:19

Energy Storage & Markets

As a developer of pumped storage and CAES, we feel that very little to no formal market evolution needs to occur in order to make our projects viable. Even in regions without a liquid market for ancillary services, there are costs for such services that can be quantified. The capacity value dimension - which for us is even more important than ancillary services - is pretty clear across every region. It is also clear to us that the "Renewables + Storage" approach, at least with good pumped storage and CAES sites within Gridflex' portfolio, is less expensive than the default "Renewables + Gas" approach. Regarding Sol's statement regarding "economic concern" about CAES - not sure what that is. CAES is today a viable alternative to pumped storage in certain areas with the amenable geology. Gas consumption is far lower than conventional turbines, capex about the same as CCCT, and operational flexibility far greater than CT's.

Matthew Shapiro - 04/25/2012 - 18:28

Battery storage

Then the report is wrong as they haven't looked at all the systems. I have been following a company that has Battery tech that not only will allow for base load but will change the way we look at the whole energy model. They are already tripling density of the best Li-on and at a fraction of the cost.

Robb Benson - 04/26/2012 - 09:14

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