Forbes tells us The Energy Revolution Of 2018 Will Be Electricity Storage and will impact the entire energy value chain, including changing the way we transmit and distribute electricity in our economies.

“Energy storage will transform the entire electricity value chain as it enables an ever richer mix of large-scale renewable energy sources in the electricity generation stack, creates a more modular, flexible, and localized transmission and distribution system, and delivers increased value for customers.”

“Energy storage will replace peaking plans, alter future transmission and distribution investments, reduce intermittency of renewable energy sources, restructure power markets and helps to digitize the electricity ecosystem. For utilities, battery storage will become an integral tool for managing peak loads, regulating voltage and frequency, ensuring reliability from renewable generation, and creating a more flexible transmission and distribution system. For their customers, storage can be a tool for reducing costs related to peak energy demand.”

“To take advantage of some of these opportunities, utilities will have to adjust their operating models. For example, as energy storage shaves peaks and flattens the load curve, utilities may forgo some investments in peaking capacity and defer investments in transmission and distribution infrastructure. Also, because energy storage can come in much smaller increments and can be mobile, the investment comes at a lower cost. In this way, storage not only becomes a tool to meet system needs but can also reduce system costs as it pushes unnecessary capacity and waste out of the system.”

Some are not as hopeful about the future of energy storage. The former head of the US energy department, Professor Stephen Chu, believes energy storage will remain too expensive to meet long term urban power storage needs. He notes that Tesla’s recently constructed lithiun-ion plant in South Australia cost about 40 times as much as an equivalent power plant using an existing hydro-electric dam. He said while the costs of building battery plants were likely to drop by 50% over the next decade, this approach would never be cheap enough to accommodate the big seasonal shifts in renewable power production.  Batteries could prove viable for storing power produced during the day for use during night hours, and “maybe” up to a week later, but not over entire seasons. He thinks fuel cells are more promising for urban power storage — particularly those based on liquid hydrocarbon.

“We won’t get there through batteries, but one is hoping to get there through some innovative electrochemistry…You need other new technologies to convert cheap re­new­able energy into chemical fuel when the Sun is shining or the wind is blowing. If you make really cheap hydrogen from renewables and store it underground, then you have something very different.”

The head of the US Energy Storage Association concurs with Professor Chu’s observations. In response to his remarks the association’s CEO, Kelly Speakes-Backman, agreed batteries today can only provide daily storage and potentially even multi-day storage but not seasonal storage. The latter will require different technologies, which could include power-to-gas storage. She and her industry members are hopeful new research and development can resolve the seasonal barrier. However, she sees energy market demand leading to a greater drop in battery storage costs than Professor Chu has suggested.

“It is important to note that the cost of storage has dropped much faster than most predictions, and so evaluators and observers of this market must be nimble in their assessment of storage costs. The installed cost of battery grid storage fell 50 per cent in the last four years, and this rate is likely to continue for the next several years. The result, of course, is that storage project economics are increasingly competitive….New megawatt-scale battery storage projects are arriving with longer durations. In fact, battery storage is being deployed economically without subsidies today, in durations up to 8 hours.  Battery installations are already economic across the US, as evidenced by states as diverse as Arizona, North Carolina, and Hawaii selecting battery storage as an economic resource.”

A study by the US Department of Energy’s National Renewable Energy Laboratory (NREL) reveals that more integrated solar photovoltaic (PV) and battery storage projects could make economic sense if the value of avoiding power outages is taken into account in project economics. Putting a value on economic losses suffered by customers during a power outage (opportunity cost) can even make solar+storage projects feasible where the technologies would not be economically viable otherwise.

Results of a market auction in the US this past week has caught the attention of the North American energy storage world. Colorado electricity utility Xcel put out tenders for wind and battery and solar and battery storage and received several low bids. Median bids (meaning half of the bids were lower) for combined wind & storage came in at $21/megawatt hour (MWh) and combined solar & storage came in at $36/MWh for delivery before 2023.  The previous lowest bid for solar plus storage came out of the state of Arizona in May 2017 at $45/MWh. Of the 430 individual bids Xcel received, more than 350 propose some combination of wind, solar and battery storage. Carbon Tracker reports the prices for wind plus storage in Xcel’s auction are lower than the operating cost at all Colorado coal plants.

Work started last week on India’s first grid-scale energy battery storage project. The 10 megawatt project will support the network operated by Tata Power that serves the North and North-West parts of Delhi and its 7 million customers. It will integrate rooftop solar power into the local electrical grid. This is viewed as a pilot project by the country’s government which is currently working on a national battery storage policy.  See India’s largest energy storage project is of ‘strategic importance’ for regulators.

The World Bank is looking at creating funding for utility-scale tenders that pair solar PV with battery storage technology in developing countries and emerging markets. The Bank has contracted with Italy-based technical advisory RINA to explore the feasibility of such tenders. The program would be of most benefit in regions which suffer from grid capacity constraints at peak times. Until now the Bank has been focused purely on facilitating large-scale solar tendering, predominantly in Africa.

In Australia, the Australian Capital Territory (ACT), is offering home owners up to $4000 in rebates if they connect a storage battery to their existing or new solar installations.  The purpose of the program is to reduce peak demand and help power companies avoid costly transmission and distribution infrastructure upgrades. The ACT has estimated a successful program could save the territory AU$220 million.

The US state of New York announced it will provide public funding to install 1.5 gigawatts of energy storage by 2025. Presently about 800 megawatts of battery energy storage is deployed across the US, according to the US Energy Storage Association.

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