Navigant Research Blog

Innovative Energy Storage Technologies Gain Ground

— October 18, 2014

According to the Navigant Research Energy Storage Tracker 3Q14, the 2007 to 2013 period has seen the commercialization of a number of key technologies in energy storage, including several advanced battery chemistries, flywheels, and power-to-gas.

The Energy Storage Tracker is a database of energy storage projects that tracks announcements and deployments of energy storage across a range of technologies in an effort to identify industry trends.  The chart below shows the deployed power capacity for six advanced storage technologies in utility-scale applications.  There was a peak in installed capacity across most of these technologies in 2011 and 2012 in response to stimulus funding under the American Recovery and Reinvestment Act.  The purpose of this funding was to jumpstart the energy storage market, and while 2013 was a slow year for most battery technologies, preliminary 2014 data (not shown) indicates improved numbers over 2013 levels.  In contrast to advanced batteries, flywheels and power-to-gas saw an uptick in deployed capacity from 2012 to 2013.

Utility-Scale Energy Storage Power Capacity by Technology, World Markets: 2007-2013

(Source: Navigant Research)

Playing Catch-Up

Although no single technology is a clear winner in the global stationary energy storage market, lithium ion (Li-ion) has arguably established itself as a key frontrunner going forward.  Over the past 13 years, sodium sulfur (NaS) batteries, manufactured solely by Japanese power infrastructure giant NGK, have established themselves as the clear leader in terms of installed power capacity in the stationary energy storage space, with 243.7 MW from 2007 to 2013.  However, publicly announced deployments are typically large orders in the tens of MWs, which results in peaks and troughs in NGK’s market activity.

Li-ion sits in second during the same time period, with 231.9 MW aggregated over all its subchemistries.  In 2013, Li-ion had the highest number of MW installed and managed to keep output steady with 2012.  Of this 231.9 MW, lithium iron phosphate (manufactured by A123 Systems, now NEC Energy Solutions and BYD) accounts for at least 114.8 MW, lithium titanate (manufactured by Altairnano and Toshiba) accounts for at least 10.6 MW, and lithium manganese spinel (manufactured by Samsung SDI and LG Chem) accounts for at least 16 MW.

Peaks and Valleys

Other technologies that have seen significant deployments from 2007 to 2013 include advanced lead-acid batteries (71.4 MW), the vast majority provided by Xtreme Power (now a part of Younicos).   More than 58 MW worth of advanced flow batteries were deployed, primarily by ZBB and Premium Power, during the same time period.  In addition, 50.9 MW worth of flywheels were deployed, with 45 MW of that capacity coming from Beacon Power (though 4 MW of Beacon’s installations have since been decommissioned).   Lastly, 11.1 MW of power-to-gas storage capacity was deployed between 2007 and 2013, primarily by ETOGAS and Hydrogenics.

In the early period of commercialization, it’s not unexpected to see strong years and weak years for technology deployment.  Li-ion is maturing and is showing signs of being a fully commercial technology, similar to NaS batteries.  Advanced lead-acid, flywheels, and flow batteries will continue to grow, but in some cases will be limited due to the small number of suppliers in the market.  Power-to-gas is in the very early stages of commercialization, and will likely see growth and decline in deployed capacity in the demonstration stages before commercializing, similar to Li-ion.

 

In South Korea, an Energy Storage Bonanza

— October 14, 2014

South Korea has gone from having little to no energy storage to procuring about 50 MW in the span of a few months.  This procurement makes the early projects in deregulated markets in the United States, such as PJM Interconnection, seem small in comparison.

Korea Electric Power Corporation (KEPCO) is procuring 52 MW of advanced batteries for frequency regulation in 2014 through two installations totaling 28 MW and 24 MW.  Proposals will be evaluated in the coming weeks, and four consortia, including major South Korean lithium ion (Li-ion) vendors and systems integrators, are bidding in the procurement.  Located at the West Anseong Substation and the New Yongin Substation, these installations will handle power supply to Seoul and the surrounding area.  KEPCO estimates the cost for these two projects will be ₩60 billion ($58.3 million).  The total market size for frequency regulation in South Korea is estimated by to be 1.1 GW, and in order to meet this requirement, KEPCO typically requires thermal generators hold back 5% of capacity, for which it pays them ₩600 billion ($583 million) per year.

Less Regulation = Lower Costs

Instead of using thermal generators for all its frequency regulation requirements, KEPCO estimates it can procure 500 MW of energy storage for frequency regulation for ₩625 billion ($607.8 million) between now and 2017.  By investing in these resources, KEPCO would be able to avoid a portion of the yearly payments to thermal generators.

Lessons from existing projects and market reforms in Chile and the United States suggest that these changes will have major effects on the South Korean grid.  First, wholesale energy prices should decrease once thermal generators are not obligated to hold back 5% capacity for frequency regulation.  Although KEPCO is not planning to displace its entire frequency regulation requirement with Li-ion batteries, releasing half the power plants from this obligation (or halving the obligation to 2.5%) would make a difference in energy prices.

Ratepayer Returns

Second, the overall amount of frequency regulation that KEPCO must procure should decrease with the addition of fast, accurate resources such as Li-ion batteries.  Fast and accurate resources correct the deviation in frequency more quickly, meaning that less frequency regulation is required overall.  Therefore, 5% (52 MW) of fast-response resources could deliver more than 5% of the regulation required on the South Korean grid.

Ultimately, the South Korean ratepayer will benefit because these savings should be passed on to the customer.  Keeping energy prices low is an economic and political issue in South Korea, where many key industries rely on energy-intensive exports.  Manufacturers are keen to keep their products priced competitively, and the government is under pressure to keep improving economic growth.

 

A Comeback for Community Storage

— August 20, 2014

Two years ago, community energy storage (CES) was heralded as the most promising distributed storage market.  The market subsequently stalled when demonstrations failed to take off.  Originally, most utilities in the United States pared back on ambitious pilots due to high transaction cost.  Although the business-to-business model of community-level systems was appealing, North American utilities struggled to secure permission from homeowners to install systems and transaction costs skyrocketed.  System development for distribution transformers in North America was also costly, and this, combined with the high cost of customer engagement, killed all large-scale projects.

Now this model could be staging a comeback.  Toronto Hydro, along with eCAMION Inc., the University of Toronto, and Dow Kokam LLC, recently installed a CES system at the Roding Arena and Community Centre in Toronto, Canada.  The pilot project will allow Toronto Hydro to monitor the technology and will help validate its benefits to Toronto’s electrical grid.  This system uses 250 kWh/500 kW Dow Kokam lithium polymer nickel manganese cobalt cells, along with thermal management and controls from eCAMION.  The University of Toronto is managing the control, protection, and power management.

Small Is Beautiful

Situating storage near the customer provides several benefits.  First, it allows a utility to correct power quality where it matters most – near the customer.  Community storage can also help utilities maintain service during grid outages, at least for a few hours.  Finally, CES gives the utility information about what is happening at the edge of the grid, which is an important management tool.

More interest is developing in Europe, where distribution system operators are experiencing difficulty with behind-the-meter solar PV and instability from intermittent renewables upstream.  The United Kingdom is especially bullish, with several departments funding community storage.

Sharp Laboratories of Europe was awarded a grant of £396,541 ($661,858) from the United Kingdom’s Department of Energy & Climate Change to develop and scale up a new battery technology for residential energy storage and CES systems.  Electrovaya began delivering systems to Scottish and Southern Energy Power Distribution (SSEPD) in the second quarter of 2014 as part of an order for 25 distributed and independent energy storage systems.  The systems range in energy capacity from 12.5 kWh to over 80 kWh.  SSEPD has a separate community storage demonstration with S&C Electric that consists of three 25 kWh lithium ion units on the low-voltage network.

Europe is emerging as a leader in community storage by launching small pilots to test and prove the concept, instead of ambitious 80-unit projects.

 

Power-to-Gas Comes to North America

— August 14, 2014

Ontario has emerged as hub of clean energy innovation.  The province has rapidly changed its energy mix from coal to renewables in the past 10 years, and Ontario’s latest Long-Term Energy Plan, finalized in 2013, calls for 50 MW of energy storage to be procured in 2014.  Ontario is also home to several innovative storage companies, including Electrovaya, Temporal Power, Hydrostor, and Hydrogenics.

In addition to the 50 MW storage plan – split between 35 MW announced earlier this year and 15 MW slated for the second half of 2014 – Ontario also has a number of storage demonstrations underway.  A 250 kWh/500 kW lithium ion community storage system is being tested by Toronto Hydro, and Temporal Power has two projects: one for wind integration with Hydro One and one for frequency regulation developed by NRStor.  Hydrostor is testing a 4 MWh/1 MW demonstration facility to showcase the firm’s underwater compressed air system, 80 meters underwater.

First the Old World

In addition to batteries, compressed air energy storage, and flywheels, Ontario is adding hydrogen energy storage.  Hydrogenics has announced a 2 MW power-to-gas project in Ontario as a part of the 35 MW procurement.  Power-to-gas systems use surplus electricity and an electrolyzer to generate hydrogen for direct injection into the natural gas grid, or to generate hydrogen and then syngas for direct injection into the natural gas grid.  Ancillary benefits include using the electrolyzer for demand response (including frequency regulation).

In Navigant Research’s recent white paper, The Fuel Cell and Hydrogen Industries: 10 Trends to Watch, one of the trends examined is power-to-gas.  Specifically, the white paper suggests that the power-to-gas concept will be proven in Europe.  In the near term, Navigant Research estimates a $100 million market for power-to-gas in Europe in 2015.  The European power-to-gas market is expected to grow to as much as 665 MW in 2018, representing $850 million in revenue, according to Navigant Research estimates.  This base scenario equates to 4% of the wind capacity to be installed in Europe that same year, with a total installed capacity by 2018 equivalent to 1.9% of the installed capacity of wind from 2014 to 2018.

Although North America has a smaller grid system and the advantage of cheap natural gas – which makes it difficult to make a business case for any alternative technology to gas turbines – there is clearly room for power-to-gas.  Hydrogenics intends to find out how much.

 

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