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 New Dawn for Lead Batteries

— October 2, 2014

Donald Sadoway, a materials scientist at the Massachusetts Institute of Technology, is considered one of the smartest and most creative battery scientists in the world.  So admired is Sadoway that, when former Microsoft CEO Bill Gates wanted to learn about batteries, he took Sadoway’s course.  Afterwards, he approached Sadoway and the two discussed the topic of how to rethink battery design from a blank page of paper.  That discussion led to the founding of Ambri, a startup company that is based on Sadoway’s ideas for how to build a better battery.  And at the heart of Ambri is Sadoway’s concept of a high-temperature liquid metal battery whose cathode and anode literally float one on top of each other.

Ambri’s first attempt at a prototype involved the metals antimony and magnesium.  The concept worked, but the high melting point of magnesium (650 degrees Celsius) and the relatively high cost of that material made the prototype battery too expensive to compete against lower-cost batteries like lithium ion and lead-acid.  So Sadoway and his research team kept working.  In a paper just published in the journal Nature, the team released the results of their second prototype, which uses an old standby material of the battery industry: lead.

Melting Point

The battery consists of three basic inputs: lithium salts, lead, and antimony.  The lithium serves as the anode, or negative electrode, which holds the energy in storage while the battery is being charged.  Alloyed together, the lead and the antimony form the cathode, or positive electrode, which releases electrons during the discharge of the battery.  Once the battery is heated so that the alloy mixture and the metallic lithium melt into liquids (which requires a temperature of 253 degrees Celsius), the battery can start cycling through charges and discharges.  The lower temperature means that there are fewer parasitic losses during cycling, which makes the battery more efficient (the paper claims a 73% round trip efficiency, which is similar to the efficiency of many flow battery technologies).

More interestingly, Sadoway’s team calculates that the cost of input materials for the battery would be a mere $68 per kWh, which compares favorably to almost every other battery chemistry.  Finally, the Nature paper shows that accelerated testing of the battery predicts that, after 10 years of daily 100% cycling, the battery will still have a usable capacity above 85% of the capacity the battery had when it went through its first charge/discharge cycle.  In that regard, it compares to accelerated testing of other high quality batteries.

Lead Leader

Will Ambri’s new battery take over the market share of the other incumbent battery technologies?  It’s not likely.  Because the battery needs to be kept at a high temperature, it won’t function well in situations that require maximum flexibility and uncertainty.  However, it will be an excellent choice for any application that requires a long-duration and highly consistent charge/discharge cycle.  Although that’s a niche of the overall stationary energy storage industry, it could eventually be a large one.  Decades from now, when people talk about lead batteries, they might just be referring to Ambri’s molten battery, not their car starter batteries.


Distributed Generation Leads Microgrid Investment Opportunities

— September 18, 2014

Without some form of distributed generation (DG), the vast majority of microgrids would not exist.  So, it should come as no surprise that such assets represent the single most lucrative microgrid enabling technologies (MET) segment today.

A prime mover technology for microgrids is diesel generators, which are widely deployed as backup emergency power generators thanks to their ability for black-start.  However, they are also often legacy assets upon which microgrids are layered and, more often than not, microgrids are specifically designed to reduce diesel fuel consumption.

In Navigant Research’s report, Microgrid Enabling Technologies, the amount of DG being deployed within microgrids is forecast in terms of capacity and of annual vendor revenue.  If one looks at new capacity additions, diesel generators have captured the largest market share, followed closely behind by natural gas generators (which also serve as the basis for combined heat and power applications).

DG Capacity Market Share in Microgrids: 2014


(Source: Navigant Research)

An important caveat on these estimates: only systems that incorporate some level of renewables are included in the tally for remote microgrids.   If one were to include all diesel generators deployed cumulatively, Navigant Research’s data suggests that they would represent more than 65% of total microgrid DG capacity.

Decline of Diesel

Another key assumption moving forward with microgrids is that new diesel capacity will decline over time, given the high cost of fuel, tightening air quality regulations, and the emergence of new power electronics technologies, lessening the need for a fossil prime mover.

While fossil DG capacity is still expected to exceed that of renewable capacity deployed within microgrids in 2014, the higher capital cost attached to solar PV, wind, hydroelectric, and biomass translates into higher vendor revenue per megawatt.  Fossil fuel DG (diesel and natural gas generators plus fuel cells) is expected to represent 58% of total DG capacity in 2014, according to our forecasts; renewables will most likely capture the other 42% of the DG market.   On a revenue basis, however, renewables are expected to capture 23% of total MET vendor revenue in 2014, compared to only 9% for fossil fuel DG.

Notably, the largest category of revenue in 2014 is technologies not actually included in the forecast, since they cannot be quantified on the basis of generation capacity (i.e., smart meters, smart switches, and other distribution or building infrastructure).  The majority of microgrids being deployed today incorporate significant amounts of legacy DG.  (Most of the community microgrids under development in New York and Connecticut add no or very little DG capacity.)  As a result, large investments into integration hardware – distribution infrastructure that cannot be quantified on the basis of generation capacity – represent a large piece of the overall investment pie for these retrofit microgrid projects. But this category is likely to decline as an overall percentage of total vendor revenue by 2023 as renewables, energy storage, and software increase in market share over time.


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