Navigant Research Blog

Islands Sail into Energy Storage

— March 3, 2015

Saddled with the highest electricity rates in the world (and threatened by climate change more than almost any other communities), many islands and isolated grids have opted to integrate wind and solar to replace expensive, imported diesel fuel. One challenge for these systems is that they do not have the benefit of calling upon neighboring systems to balance their wind and solar against load–leading to instability and insecurity of supply.

As a result, many remote grids are adjusting their technical requirements for connecting intermittent resources like wind or solar to the grid, requiring that these resources be firmed. In late 2013, for instance, Puerto Rico adjusted its technical requirements for connecting wind and solar assets to the Puerto Rican grid. This isn’t a direct requirement for energy storage specifically, but is a good fit for storage.

The Flywheel Option

Other island markets are betting on storage more directly. Aruba has committed to an aggressive plan to become 100% renewable by 2020 and has signed agreements with BYD and Temporal Power, as well as a power purchase agreement with Hydrostor in order to achieve its energy goals.

The typical applications in these markets are wind, solar, and diesel hybrids. In previous years, the most common technology for remote, isolated grid storage was advanced batteries. This was partly a function of availability and technology fit. Very few other storage technologies are modular–underground compressed air and traditional pumped storage require specific geologies–and few vendors were targeting the space. Moreover, the working assumption in terms of technology fit has been that a longer-duration storage system is more valuable than a short-duration storage system. Several flywheel vendors are disproving this assumption, however.

ABB’s Powercorp, for example, uses flywheel technology in remote microgrids, such as the BHP Billiton nickel mine in Western Australia and the Coral Bay community in Northwestern Australia. These are remote diesel-led systems.

Way Up North

Beacon Power has commissioned a demonstration project in St. Paul, Alaska, combining an existing plant, which includes a 225-kW wind turbine and 300 kW of diesel generators, with a 160-kW flywheel system. In this scenario, the flywheel system will enable the host utility to further improve wind utilization and deliver fuel savings of up to 30% over existing (pre-flywheel) consumption levels.

While it is still the case that some amount of long-duration storage is necessary in order to achieve very high renewables penetration on an isolated grid, flywheels are demonstrating that significant diesel savings can be achieved with as little as 30 minutes or less of storage.

 

Utility-Scale Energy Storage: The Next Killer App

— February 10, 2015

In recent years in the power sector, companies like C3 Energy and Space-Time Insight have been introducing groundbreaking applications that can provide powerful data and insights across the utility value chain, from the customer to the independent system operator (ISO). Looking back over the Navigant Research utility transmission and distribution technology forecasts in our syndicated reports—and our 10-year forecasts for those technologies—it’s clear that utility-scale energy storage is among the technologies undergoing the most dramatic transformations, thanks to these applications.

Since 2009, the California Energy Commission (CEC) and the U.S. Department of Energy (DOE) have invested millions of dollars in utility-scale storage through both smart grid demonstration project funds and Advanced Research Projects Agency – Energy (ARPA-E) R&D grants.

Next-Generation Investment

In December, Eos Energy Storage announced that it had won a $2 million award from the CEC to deploy and demonstrate a 1 MW grid-scale battery system at Pacific Gas and Electric’s (PG&E’s) Smart Grid Lab in San Ramon, California. The project, called Aurora, was the only advanced battery storage system recipient of grant funding.

According to Eos, its Aurora battery system “can be manufactured at a fraction of the cost of existing energy storage solutions.” The Edison, New Jersey-based company is joining with PG&E, the Electric Power Research Institute (EPRI), Lawrence Berkeley National Laboratory (LBNL), distributed energy storage technology pioneer Stem, and ETM Electromatic to carry out the project.

“This type of project deployment can meet the requirements of California’s utilities and industrial users at a price that will compete with gas peaking plants, providing both peak generation and infrastructure benefits,” said Philippe Bouchard, Eos vice president of Business Development, in a statement.

Strategy for Scale

Eos’ Aurora direct current (DC) battery, power electronics from ETM, and Stem’s real-time data analytics are being implemented at PG&E’s Smart Grid Lab in San Ramon.  EPRI is managing interconnection and systems integration requirements. LBNL will employ real-time grid simulation to assess “system benefits under dynamic load and renewable integration use cases.”

The Eos Aurora 1000/4000 battery system delivers 1 MW of electrical power for 4 hours, which is more than enough to mitigate peak power demands, thus avoiding costly investments in transmission and distribution upgrades. It also offers fast-response surge capabilities that can manage the intermittency of solar, wind, and other renewable energy grid assets.

Looking further down the road, so to speak, it’s clear that energy storage will advance thanks to major investment from car makers such as Tesla, which is placing its bets with the new Gigafactory in Nevada. Large volumes of mass-produced batteries will be essential to Tesla and other electric vehicle manufacturers. And this mass production strategy for battery technology also brings increased scale that may reduce deployment costs. With clever engineering, this strategy will help expand residential and utility deployments, as well.

 

2015: A Turning Point for Batteries

— January 30, 2015

One of the biggest energy stories of 2014 was the emergence of battery-based energy storage as a reasonable option for grid management.  But the battery industry is just getting started.  This year, the energy news cycle will be led by batteries on all fronts.  This year will mark the tipping point that sees batteries become not only an accepted part of our electricity grid and transportation network, but also a key underpinning to the global economy.

Beneath these developments is a single realization that the world is beginning to accept: that high-quality advanced batteries are becoming very cheap.  As Navigant Research’s Materials for Advanced Batteries report explains, a lithium-ion (Li-ion) battery that was priced at more than $1,000 per kWh in 2009 can now be bought for a third of that.  And there is no visible end to the reductions in pricing.  This price decline is caused by three factors:

Manufacturing scale: The world’s battery factories are capable producing some 100 GWh worth of Li-ion cells this year.  While not that much will actually be made (Navigant Research expects that 2015 will see some 65 GWh of Li-ion batteries produced), the manufacturing scale is now in place to enable the enormous growth of the use of batteries that is to be expected as pricing comes down.  And the capacity is only growing with time.  When Tesla Motors and Panasonic build their GigaFactory in Nevada in 2017, global manufacturing capacity will be increased by 50%.

Manufacturing expertise: It’s been 24 years since Sony introduced the first mass-produced Li-ion battery.  It’s taken that long for manufacturers to make these products at high efficiencies and high speeds.  A typical production line can now crank out 4 times the batteries that the same machines were able to produce just 5 years ago in the same amount of time.

Supply chain maturity: The chemicals that go into Li-ion batteries used to be specialty, batch-processed chemicals.  Now that the industry is so large, they have been converted into continuously processed commodity chemicals.  This means cheaper input materials, which in turn translates into cheaper batteries.

Golden Age

Now that these three factors have conspired to result in an environment of cheaper Li-ion batteries, the industries that use those batteries will see dramatically increased demand.  Here are some key events expected in early 2015 that will help usher in this golden year for batteries:

New automotive launches: Three cars will be unveiled in early 2015 that have the potential to be enormous sales leaders.  The 2016 Chevy Volt might make the Volt become a reasonable alternative to other low-priced compacts, even in this age of cheap gas.  The Model X, Tesla’s version of a high-end crossover, has the potential to be even more popular than the launch of the Model S in 2013.  And the BMW 5-series electric vehicle (EV) could hit the sweet spot of a mid-size luxury EV.  Even if only two of these three models turns into a global success, it will mean dramatically higher EV sales in 2015.

The great California grid rush: Each of the major California utilities has now issued requests for proposals for grid energy storage systems.  Combined with the final announcement of the winners of the Hawaiian Electric Company (HECO) bid in Hawaii sometime this spring, these programs will see the most extensive purchases of grid storage systems in history.

Additionally, new products in the e-bike, e-scooter, and portable appliance markets will see dramatic growth in the thirst for batteries in those markets as well.  All told, 2015 is shaping up to be a historic year for the battery industry and for the industries that buy batteries to make their products popular.

 

Vanadium Batteries Await Breakthrough

— January 26, 2015

A remote hillside in the Nevada desert may hold the keys to developing the next generation of affordable energy storage systems.  One of the world’s largest deposits of vanadium, a hard, silvery gray mineral often mixed to create high-quality steel, is located underground on this site.  First discovered in the 1950s, the site is now being developed into a large-scale mining operation, known as the Gibellini Mine, by Vancouver, Canada-based American Vanadium.  The company, which partners with German flow battery manufacturer GILDEMEISTER, requires an affordable and secure supply of vanadium to develop its redox flow batteries.

With the majority of global vanadium supplies coming from China, a domestic source of the metal could be instrumental in reducing battery costs.  Despite the recent success of lithium ion (Li-ion) batteries, alternative technologies such as flow batteries address several shortcomings of Li-ion chemistries.

Stepping Up

There are several types of flow batteries with different characteristics currently competing for market share, including iron-chromium, zinc-bromine, and vanadium redox.  Well-suited to stationary applications, vanadium-based batteries offer several advantages over Li-ion systems.  Vanadium-based batteries can fully discharge with minimal degradation of key components, leading to a longer duration discharge and greater life expectancy.  Additionally, vanadium flow batteries are much safer than certain Li-ion chemistries, as they have no thermal runaway issues, which is a key consideration for systems located on densely populated distribution networks.

Significant improvements to flow batteries have been made in recent years as more companies enter the space and competition heats up.  One area in which flow batteries must improve is energy density; Li-ion and other batteries are much more energy-dense, giving them an edge in any project with limited space.  A recent milestone was achieved by UniEnergy Technologies with its vanadium-based flow battery, allowing a standard 500 kW, 4-hour system to be containerized and installed in a 1,000-square-foot pad.  The system has an expected operating life of 20 years and can be installed for around $750 per kWh.

As with most advanced batteries, makers of vanadium-based systems must reduce costs to fully capitalize on the diverse market opportunities available.  Fortunately, advances are being made in that area as well.  California-based Imergy, for example, claims that it will soon reduce costs enough to offer a vanadium-based flow battery for around $300 per kWh.  One reason for the low price is Imergy’s ability to use lower-grade vanadium, recycled from mining waste and other sources.  While vanadium flow batteries are currently somewhat more expensive than most Li-ion chemistries, they have the advantage of a longer life expectancy, allowing the upfront cost to be spread over several decades.

An Uncertain Future

Navigant Research’s report, Energy Storage for the Grid and Ancillary Services, found that flow batteries are likely to account for 2,357 MWh of capacity in 2020, about 7% of the total market for grid-scale systems.  However, these figures could increase dramatically with breakthroughs in system efficiency and cost.  A consistent, low-priced supply of key components, such as vanadium, could help rapidly reduce costs.  Additionally, greater diversity and competition among suppliers of key flow battery components can drive down manufacturing costs.  Given the very ambitious price reductions being forecast by manufacturers, many may be relying on market developments such as the Gibellini Mine to allow flow batteries to compete effectively with Li-ion.

 

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