A new report into energy storage commissioned by chief scientist Alan Finkel highlights the enormous opportunities for storage in Australia, but underlines how little is actually needed over the short to medium term, even at relatively high levels of wind and solar.

The report, The role of Energy Storage in Australia’s Future Energy Supply Mix, funded by Finkel’s office and the Australian Council of Learned Academies (ACOLA), says the required investment in energy security and reliability over the next 5-10 years will be minimal (see graph above), even if wind and solar deployment moves far beyond levels contemplated by the Energy Security Board.

The contrast with the ESB modelling – and the attempts by Coalition parties at state and federal level to dismiss high levels of renewable energy as “reckless’ – could not be more pronounced.

While the ESB, in arguing for a National Energy Guarantee, speaks of the system threats and urgency to act with a level of “variable” renewables accounting for between 18 and 24 per cent of total generation, this new report says surprising little storage may be needed with 35 per cent to 50 per cent wind and solar.

Even in the 50 per cent variable renewable energy scenario – more than double that contemplated at the high end by the ESB – the new report suggests enough battery storage may be available “behind the meter” – households and businesses – to meet the storage needs.

In one of the most detailed reports into energy storage, the authors point to the huge potential of battery and energy storage in Australia – both in core mineral resources, manufacturing of battery storage, R&D,  deployment, and even renewable hydrogen.

At the same time, the report also warns that Australia needs to develop a recycling strategy for battery storage, and also needs to take into account other social aspects, such as the origins of lithium and cobalt.

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The starting point is that Australia’s electricity sector will get a minimum 35 per cent and potentially 75 per cent of power from ­renewable sources by 2030. South Australia and Tasmania could be as high as 100 per cent by this time.

To achieve it, storage costs alone could top $22 billion.

The report, compiled by the Australian Council of Learned Academies, says this spending will be critical to make intermittent wind and solar power possible at this scale.

Also critical would be “financial incentives” for either states or the private sector to build the level of storage required. Without storage, the council report says, the costs of electricity in Australia will continue to increase with “large negative implications” for the Aust­ralian economy.

There is plenty of political mischief in the projections for renewable energy penetration and potential cost. But, given that global climate change talks limped over the line in Bonn at the weekend there is reason to expect the global fixation on renewable energy generation and how to store it will become only more pressing.

The Intergovernmental Panel on Climate Change talks in Bonn achieved little other than survive US President Donald Trump’s ­declaration of withdrawal.

The more significant meeting will take place in France next month where the Paris Agreement host nation will work to keep the proposed $100 billion-a-year ­climate funding promise alive without US participation.

But lobby groups are already ramping up demands for government’s to increase their “ambition” ahead of next year’s meeting. Storage is the big hope but still poorly understood, ­especially in Australia.

The council report says the most likely forms of energy storage over the coming decade or so are pumped hydro, batteries, compressed air and molten salt.

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Although electrical energy storage is considered the missing link between majority-renewable grids and consistent, sustainable power, the sector is being held back by a lack of standardisation. Clear, wide-ranging standards, in addition to a regulatory environment that recognises the significance of energy storage, are sorely needed.

Creating and following technical standards improves enterprise resource use — no reinventing the wheel —, facilitates penetration of new technologies across regional, national and international markets, and allows faster and more effective integration into existing systems. So what would effective standards look like for the energy storage sector?

Both governments and the private sector have identified several areas where further standardisation is essential. First, to ensure that energy storage terms are referred to using a common language; while several standards committees are working on the issue, as it stands vendors and consumers in separate — and sometimes, even the same — markets can find themselves comparing apples to oranges.

In addition to a common language for system definitions, common standards are needed for energy storage metrics — efficiency, capacity, power ratings, system inefficiencies — and testing methods. Standard testing methods must be outlined not only for proving component functionality but for system functionality at the point of connection to the grid.

Another issue is that current standards can be both too specific and not specific enough. In the first case, initial standards regarding energy storage were too highly focused on the particular technology — with new batterychemistries being developed every year, this way of issuing standards slows the adoption of new innovations. In the second case, vendors looking to develop their own hardware and systems lack incentive to make their proprietary products play nicely with others.

Private and public sector initiatives are taking place to expand and clarify energy storage standards, both regionally and internationally. Potentially the most impactful of these will come from IEC TC 120 (International Electrotechnical Commission – Technical Committee), expected to publish its new standards at the end of 2017. IEC TC 120 has focused on taking a technology-agnostic, systems based approach.

The brains behind MESA (Modular Energy Storage Architecture), in comparison, are working to develop standards at the component level. Fragmented markets with multiple competing suppliers find that multi-vendor systems are plagued with integration problems.

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Intended to “kick start concrete projects”, the European Commission is set to allocate a further €200 million (US$235.53 million) towards supporting the scale-up of lithium battery manufacturing on the continent.

Under the “strategic work programme” Horizon 2020, the European Commission funds innovation and research in various areas, helping to coordinate the efforts of academics and industry and endowed with around €30 billion in total funding from the European Union.

The commission has already allocated €150 million to battery research and innovation and last week announced the significant top-up. The main thrust behind the extra cash for battery R&D is really in the electrification of transport, with the EC announcing the funding as part of its “Delivering on low emission mobility” document.

However, the document uses terms that encompass the use of batteries as stationary energy storage, both for integrating renewable energy and as a grid asset in their own right. It describes the “transition to a modern and low-carbon economy” as a political priority for Europe and repeatedly says that tackling climate change and air pollution comes with the added benefits of creating jobs and sustainable industries.

The European Commission wants to prepare good conditions and incentives to create a globally competitive, innovative growing industry and employment opportunities around low carbon mobility. At the same time these innovative technologies should be scaled to be “clean, accessible and affordable for all”, the EC said.

While it will introduce specific measures for mobility such as CO2 standards, tenders for clean fleet vehicle contracts and ways for drivers to compare fuel prices easily, the EC said the battery initiative is of “particular strategic importance” to ensure European industry remains competitive.

Volumes of batteries demanded in Europe are predicted to rise significantly, with the EC quoting the work of JRC Science for Policy Support, which forecast demand for lithium-ion batteries to reach 210 to 535GWh by 2025, from 78GWh in the present day worldwide. In Europe, JRC Science for Policy Support said demand could range from 37GWh to 117GWh by 2025, from less than 10GWh annual demand presently.

“From an industrial perspective, the growth in demand will require major investments in the battery value chain between now and 2025, including a massive upscale of battery cell manufacturing,” the EC “Delivering on low emission mobility” paper said.

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Penn State says it is working to advance wind and solar energy through a program offering education and training for energy storage and microgrid systems.

The Energy Storage and Microgrid Training and Certification (ESAM-TAC) program is part of the GridSTAR Center, a smart grid education and research facility at Penn State at The Navy Yard, located in Philadelphia.

According to the university, the large-scale deployment of microgrids and energy storage will require a new approach to how electricity is generated and managed and will include the increased use of batteries and other forms of energy storage.

“A common criticism of renewable energy is that it varies with sun and wind conditions,” says David Riley, a professor of architectural engineering and the director of the GridSTAR Center and ESAM-TAC program. “The electric grid was not built to handle the variable energy created by wind and solar. Smart technologies and batteries can act like shock absorbers on the grid while also improving the economic performance of solar and wind farms.”

Another challenge facing the broad deployment of renewable energy is the lack of a workforce needed to make it happen, according to Penn State.

“The development of new technologies is important, but we have economically viable storage and renewable energy systems already,” Riley continues. “We also need to skill up if we are going design and build energy storage and microgrid systems. The ESAM-TAC program is helping us gain the capability to teach students, engineering professionals and electrical workers what they will need to know to make energy storage affordable and reliable.”

In the last year, five workshops have been conducted by ESAM-TAC partners in Philadelphia, Ann Arbor, Detroit and Los Angeles to help instructors prepare to teach electrical workers about safe and productive energy storage and microgrid construction. Penn State says these instructors will be among the first to implement the ESAM-TAC curriculum and certification program at their institutions.

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AUSTIN, TX and BERLIN, GERMANY–(Marketwired – Nov 16, 2017) – Younicos has completed the installation and commissioning of an upgraded 3 MW battery-based energy storage system on Kodiak Island, Alaska. The company replaced previously deployed lead-acid systems with advanced lithium-ion batteries, significantly extending the resource’s operational lifetime and enhancing performance and reliability.

Darron Scott, President/CEO of Kodiak Electric Association (KEA), commented, “Younicos is a forward-thinking organization with proven technology that shares our belief in clean and affordable energy. As a cooperative, we’re owned by the island’s residents — who care about the environment and electricity rates. This upgraded battery system will ensure continued use of renewable energy, keeping our grid reliable and our costs down.”

“We’re delighted to have worked again with KEA to upgrade this system and help support 100% renewables on the island,” said Jayesh Goyal, Younicos Managing Director. “This implementation of lithium-ion batteries greatly enhances the system’s performance and flexibility, while providing grid services and improved resiliency. We’re grateful for the continuing trust that KEA has placed in our engineering capabilities and storage solutions.”

In 2007, KEA set a goal to produce 95 percent of Kodiak Island’s energy from renewable sources by the year 2020, to greatly reduce reliance on diesel fuel and lower the cost of generation to customers. The utility reached that goal ahead of schedule in 2012. Since 2015, Kodiak Island has been one of only five U.S. cities to achieve over 99% of its generation through renewable resources. The use of increased amounts of wind energy to reach the goal while maintaining reliability was enabled by the intelligently controlled battery system originally designed — and now upgraded — by Younicos.

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Early DRAM engagement success

The expected outcome of utility integrated resource planning (IRP) is the optimum combination of power generation resources that will produce the most cost-effective and reliable generation for the rate-payer. That process is relatively simple for a nuclear and fossil fuel-based system. However, the difficult process of integrating renewable generation has made asset optimization and operational flexibility paramount.

Reaching that goal is often further complicated by external influences. For example, states/nations with Renewable Portfolio Standards often require a set quantity renewable generation to be produced each year.

Others have market-driven rules or have enacted legislation that require placing renewable generation first place in the dispatch queue, thereby pushing conventional assets further down the list, often from baseload to cycling operation. The unpredictability of renewable assets that operate only when the wind blows and the sun shines require more frequent cycling, start/stops, and ramping of assets that accelerates equipment wear-and-tear. Planners have a difficult job optimizing grid efficiency with so many moving parts.

All grid operators want more flexible generation that is available on demand. As additional wind and solar generation come online, some grid operators have elected to rely on market mechanisms to entice developers to construct fast response assets to fill in the inevitable production gaps inherent with renewable generation. Others have installed decentralized “blocks” of gas-fired assets, usually simple cycle combustion turbines or reciprocating engine generators, to provide quick response power when needed. Many utilities are forced to keep assets operating a part-load to satisfy rising spinning reserve margins.

Many utilities have added flexible generation in the form of high-efficiency combined cycle power plants but they remain best suited for operation at or near baseload operation for maximum efficiency.

There is also a steep price to pay in O&M and lost efficiency when cycling or operating a combined cycle plant at part-load. The elegant solution is large-scale energy storage but that technology remains a future promise.

Often these solutions attempt to use fossil generation in ways it wasn’t designed to be used, cycling when renewable energy supplies spike up or down, for whatever reason.

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Tesla (NASDAQ:TSLA) was supposed to be the big name in solar and energy storage, leveraging the Powerwall for homes and Powerpack for businesses and using its SolarCity operations to push systems out into the wild. But Tesla is shrinking its solar ambitions and doesn’t seem to have much interest in being a leader in anything but utility-scale energy storage.

That presents an opportunity for the rest of the industry, and SunPower (NASDAQ:SPWR) is taking a surprisingly aggressive approach to its energy storage ambitions. Long-term, it could be a huge differentiator for the company. 

Rollout strategies matter in storage

It’s easy for a company to say it has an energy storage product, but rolling it out to customers is easier said than done. Tesla’s Powerwall was introduced in 2015, but there still haven’t been a meaningful number of the systems installed worldwide. 

What drives energy storage installations is economics, whic is a big reason the Powerwall has flopped. Outside of Hawaii, there hasn’t been an economic case for home energy storagebecause customers with solar panels can just send their excess electricity to the grid and be paid the retail price for it, a practice known as net metering. 

Where energy storage has been gaining traction for a few years is in commercial markets, where adoption is driven by economics. Commercial customers generally have bills split into usage and capacity components. The usage side of the bill is similar to residential bills, fluctuating based on how much electricity is used in a month. Capacity charges are based on the peak capacity used by a facility, even if it’s only for 10 or 15 minutes during a month. If energy storage can shave the peaks from this part of the bill, it can justify the storage system financially. Any other value adders, like shifting solar energy produced on-site from peak hours to evening hours, are gravy for the system. 

This is why SunPower is investing in energy storage for its commercial projects. Management says it currently has $60 million in storage pipeline, and in 2018 half of its commercial installations could include storage. That’s a big statement for a company with the No. 1 position in the commercial market today.

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