Navigant Research Blog

Storage Technology Enables Energy Transformation

Peter Asmus — June 26, 2012

Solar energy technology has now overtaken wind power as the darling of the investment community, heralding – according to some – an era when distributed generation technologies help make our energy system look more and more like the Internet.  With more than $137 billion flowing into the solar sector over the past year, the Solyndra debacle has clearly not deterred investors from betting on the sun as a strategic fuel of the future.

Though large-scale wind and solar facilities need to be part of the solution of any credible effort to reverse climate change, which many scientists now claim is nearing the point of irreversibility, the most radical energy system reforms are occurring in our own homes and communities, as well as in the developing world.

Today, large-scale solar PV plants that can produce as much power as small nuclear reactors are popping up in deserts throughout the western United States and other parts of the world.  Things get really interesting when these generation units are installed at the point of power consumption, with systems so small they can be measured in terms of watts.

Thanks to archaic rules, some of which date back to nearly a century, most of these micro-generation sources can only serve one customer.  They also become useless when the larger grid goes down –unless they include some form of energy storage.  If one wants to think beyond the boundaries of one’s private property and collaborate with neighbors during times of an emergency by networking, then one needs to look to a microgrid that can actually separate from the larger utility grid – and run as an island.

Solar Integration Energy Storage Revenue by Technology, World Markets: 2012-2018

(Source: Pike Research)

Advanced forms of energy storage and microgrids will be featured at the 5th annual Storage Week conference, being held in San Jose, California this week.  Advanced energy storage will also take a center seat in my next report, on microgrid enabling technologies.

Unlike smart digital switches, energy storage is highly relevant to both grid-tied and remote microgrids.  Companies such as Powercorp — now a part of ABB – deploy a flywheel to provide frequency regulation and related ancillary services within the microgrid.  ZBB Energy, which just raised $12 million in a common stock offering by MDB Capital Group, sells a zinc bromide flow battery that can store variable renewable energy for up to 8 hours, and then supply power at times where either the sun doesn’t shine (or the wind doesn’t blow.)  One of the most interesting storage vendors to eye the microgrid market is the Japanese firm GS Battery (a subsidiary of GS Yuasa Group), one of the top battery manufacturers in the world, which offers four kinds of lithium ion storage devices as well as portfolio of lead-acid based products.  The company believes the slower than expected growth of plug-in and hybrid electric vehicle markets means a drop in price, which also translates into a more competitive value proposition for microgrids.

Like storage, microgrids have yet to be fully understood by regulators.  Contrary to what I reported in my last blog, Connecticut has become the first state to enact a microgrid policy this past May, committing $15 million in grants and loans to support microgrids at police stations and hospitals in response to two major power outages last year that wreaked havoc with the economy.  The state government has reportedly identified 300 viable microgrid sites.  It is hoped these microgrids will create local jobs by tapping regional fuel cell manufacturers to generate a significant portion of distributed power generation.

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