Energy storage mandate creates mega market for storage solutions

Energy storage mandate creates mega market for storage solutions

Storing electricity on a large scale has long been pursued by electric utilities in hopes of using the power to cover periods of peak demand. The ability to store large amounts of power would help power producers fill the production gaps created by growing amounts of intermittent generation such as solar and wind power.

During the first half of 2014, the amount of wind and solar capacity added in the U.S. more than doubled versus the first half of 2013. The U.S. added 2,478 MW of residential, commercial and utility-scale solar capacity during the first six months of 2014 while wind power accounted for 675 MW of new generation capacity. In California, state law requires power providers to generate 33 percent of their power from renewable resources by 2020.

Utilities and grid managers are struggling to maintain a balanced load amid the growing amount of intermittent generation. A capable system for storing large amounts of power could bring more balance to supply and demand, making the grid more resilient and efficient.

But efforts to develop cost-effective, grid-scale storage solutions have yielded limited progress. The technology is still grounded in the demonstration stage, although companies are accelerating their research and development efforts amid a historic mandate in California.

The market for large scale energy storage technologies received a big boost in October 2013, when California adopted the nations first energy storage mandate. The measure requires the states investor-owned electric utilities to buy 1.3 GW of energy storage capacity by the end of 2020.

The California mandate has accelerated the development of storage technologies and may yield a workable solution. The most promising technology is the lithium ion battery, a rechargeable battery used in electric vehicles.

Last month, Southern California Edison unveiled plans to build one of the largest battery storage systems in the world. The $53 million project will use lithium ion batteries to store excess wind power. Nearly 11,000 battery modules will be housed in a 6,300 square-foot facility near Californias Tehachapi Mountains, where 4.5 GW of wind capacity is under construction and expected to be online by the end of 2016.

This installation will allow us to take a serious look at the technological capabilities of energy storage on the electric grid, said Imre Gyuk, energy storage program manager for the U.S. Department of Energy. It will also help us to gain a better understanding of the value and benefit of battery energy storage.   

Worldwide, the demand for large-scale energy storage solutions, particularly lithium ion batteries, is significant.

The grid-scale energy storage market continues to develop in a piecemeal fashion, but there are signals that it is poised for significant expansion in the coming years, says Anissa Dehamna, senior research analyst with Navigant Research. In particular, after several years of faltering growth, lithium ion batteries are emerging as the breakout technology in this sector.

 According to a new report from Navigant Research, worldwide revenue from batteries designed for utility-scale storage will grow from $164 million in 2014 to more than $2.5 billion in 2023. During the same period, storage capacity from advanced batteries will grow from 412 megawatt-hours (MWh) to more than 51,000 MWh, the report shows.

Other states may follow Californias lead and adopt similar requirements. Texas and New York are aggressively pursuing several initiatives to promote the development and commercial application of grid-scale energy storage.

Home to more than 10,000 MW of wind power capacity, Texas has become a major testing ground for storage technology. Duke Energy built a large lead acid battery storage facility near a wind farm in west Texas. Dresser-Rand plans to build a 317-MW storage facility for compressed air in east Texas. In New York, state officials announced a $23 million public-private investment to build a battery storage test and commercialization center in partnership with NY-BEST.  

Source: Power Engineering

Smart Grid Bulletin May 2018

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22 June 2018