Having been subject to discussion for years within the academic sphere, energy storage projects have become a topic of high interest to energy sector focused investors in recent years.

Decreasing cost curves, changing regulatory environments within the energy markets such as deregulation and shifts away from subsidised renewables to market pricing modes, and evolving software capabilities, are increasing investor confidence in energy storage investments and result in increased demand for investment opportunities.

While this seems to be true especially for more mature renewable energy markets like Europe, the United States and several others, investors are facing the problem that energy storage projects as investments are – in most cases – discussed on a very abstract basis. Only considering the “big picture” and seeing the project as a future pillar of the energy market leaves out details such as the complexity coming with energy storage investments in practice.

In my opinion, the propensity to drastically reduce complexity by discussing energy storage as high-level topic has developed based on two major factors:

Firstly, energy storage is still a new topic in the market compared to the long history of energy generation and transmission. Hence, while accumulators and especially batteries seem to be part of consumers’ lives ever since, the discussion about energy storage as a viable part of the electricity market structure is relatively trendy and new. In addition, due to the high diversity of technology types and their evolution, economies of scale and market consolidation (as seen currently in the photovoltaic market) are not yet reached. This leads to different potentials, resulting in an ultimate mess of investment cases. Supported by the fact that storage investments are often declared as a “venture capital topic”.

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At Massachusetts Institute of Technology’s (MIT) EmTech conference last week, Italian luxury car manufacturer Lamborghini unveiled a new concept electric supercar — and they weren’t kidding when they called it “the future of sports cars.”

The Lamborghini Terzo Millennio (which is Italian for the “third millennium”) certainly does look like it belongs to a future era. The product of a unique collaboration between MIT and Lamborghini, the Terzo Millennio doesn’t just lookthe part of a futuristic car, it’s  packed with next generation technology.

One of the highlights is its energy storage capacity. According to Road Show, the Terzo Millennio uses supercapacitors instead of regular batteries. Coupled with high storage capabilities, supercapacitors are also capable of receiving and delivering a charge faster than standard batteries. Plus, it carries more charge cycles than most batteries, which can supply power to the supercar’s four electric motors — one for each wheel.

Its energy storage capabilities don’t end there, though. The car’s carbon fiber body allows the entire vehicle to work as one big energy storage medium — almost like a battery on wheels.

“If I have a super sports car and I want to go the [race track], I want to go one, two, three laps without having to stop and recharge after every lap,” Mauricio Reggiani, head of R&D at Lamborghini, told CNN. 

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Utilility Integrated Resource Plans (IRPs) are beginning to catch up with the growth of energy storage.

Utilities across the country from Duke Energy Carolinas to Southern California Edison have implemented energy storage projects for a variety of reasons, but until now few have included energy storage in their IRPs. Now, utilities in states ranging from Indiana and North Carolina to Arizona, New Mexico and Oregon have included energy storage in their long term planning processes.

Portland General Electric’s 2017 IRP proposes five storage projects in a range of sizes and applications. The utility’s IRP is, in part, a response to a state law passed in 2015, HB 2193, that required PGE to procure at least 5 MWh of energy storage and up to 1% of 2014 peak load (38.7 MW) by 2020.

PGE’s rationale for including storage in its planning process is the need to support grid flexibility as its use of variable renewable resources grows. Last year more than 40% of the energy PGE delivered was from carbon-free sources. The state’s renewable portfolio standard mandates that 50% of electricity sales come from renewable sources by 2040. PGE says that if hydropower resources are included, it will hit 70% carbon-free energy by 2040.

In its 2017 IRP, PGE says it plans to install a microgrid battery storage pilot project at existing solar and biomass facilities to improve resilience; a battery at a substation to provide energy and capacity and other ancillary services; a storage asset at the existing 1.75 MW Baldock solar facility; up to 500 residential behind-the-meter batteries that would be controlled by PGE to pilot the development of a residential storage program; and a 4 MW to 6 MW transmission-connected storage device that would create a hybrid plant at PGE’s Port Westward 2 facility.

Despite the fact that some of the projects are called “pilots,” they will all be commercial scale, PGE spokesman Steve Corson told Utility Dive. An explicit part of PGE’s strategy, he said, is “to explore a diverse range of technologies in a diverse range of applications and sites so we can learn in addition to having the assets themselves.”

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This morning, the Energy Storage Association released its whitepaper “35 X 25: A Vision For Energy Storage,” which lays out a plan for deploying 35 gigawatts (GW – a gigawatt equals 1,000 megawatts) of storage by 2025. The report – developed in collaboration with Navigant Research – outlines a number of developments that argue in favor of energy storage, including:

• a growing need for grid reliability and resiliency, especially as more critical networks like transportation, HVAC, manufacturing, and data become increasingly electrified and demanding on our aging infrastructure;
• an economy that is becoming more dependent on sophisticated computer networks and society becomes increasingly automated and interconnected;
• a rapid increase in deployment of cost-effective renewable resources, which will benefit from having storage as a dance partner;
• an increasing need for a more flexible and adaptable power grid that will benefit from storage resources that are modular and require short development lead times;
• a dynamic of continuing improvements in storage technologies; and
• a steady and rapid decline in costs – especially for lithium ion batteries, which are expected to shoulder much of the burden

A view from the bridge

It is by ESA’s own admission, an ambitious plan. However, in a conversation prior to the report’s release, ESA CEO Kelly Speakes-Backman expressed confidence that these trends are aligning to help realize this vision. A large infusion of storage can add tremendous value to the grid and to society.

Speakes-Backman noted that while the storage addressed in the report includes all energy storage technologies, many stationary storage deployments will utilize lithium-ion technologies, and that associated costs are dropping steadily, benefiting from economies of scale resulting from their use in consumer electronics and electric vehicles. Over time, she observed, supply chains will continue to become more efficient, further driving down battery costs. And – similar to the experience in the solar industry – affiliated costs, ranging from customer acquisition and financing to inverters and balance of system, will plummet as well.

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Solar power is potentially the greatest single energy source outside of controlled nuclear fusion, but the Sun is literally a fair weather source that relies on daytime and clear skies. To make solar energy a reliable, 24-hour source of energy, a team of scientists at Sweden’s Chalmers University of Technology in Gothenburg is developing a liquid energy storage medium that can not only release energy from the Sun on demand, but is also transportable.

The Chalmers team has been working on variants of its system, called a MOlecular Solar Thermal (MOST), for over six years, with a conceptual demonstration in 2013. It differs from other attempts to store solar energy in things like heated salts and reversing exothermic reactions in that the MOST system stores the energy directly in the bonds of an organic chemical.

In this case, the scientists exposed a hydrocarbon called norbornadiene to light. This alters the chemical bonds, turning it into quadricyclane. Altering the temperature of the quadricyclane or exposing it to a catalyst reverses the effect and energy in the form of heat is released and carried off by a water jacket.

According to the team, the present system converts 1.1 percent of sunlight directly into chemical bonds, which is 100 times more efficient than the 2013 version that could only manage 0.01 percent. In addition, the new liquid storage system replaces ruthenium, a rare metal, with carbon-based elements that are much cheaper. Additionally, it can go through over 140 store and release energy cycles without noticeable degradation.

“The technique means that we can store the solar energy in chemical bonds and release the energy as heat whenever we need it.” says team leader Kasper Moth-Poulsen. “Combining the chemical energy storage with water heating solar panels enables a conversion of more than 80 percent of the incoming sunlight.”

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Scientists in China and the United States are working on a novel way to kill two birds with one stone: capturing carbon-dioxide pollution to use in an energy-storage system that can back up clean sources like solar and wind.

Compressed air is already employed in one of the cheapest forms of energy storage. When windmills are spinning and the sun is shining, excess energy is used to compress air that later, when the air is still and the sky dark, is blasted through turbines mixed with natural gas. But that method produces a lot of waste heat and its own carbon footprint.

Using CO2 in a different way could avoid those problems.

“Now, we have been thinking about how to use CO2 for energy storage,” Curtis M. Oldenberg, a senior scientist at Lawrence Berkeley National Laboratory, told me via email, “and came up with the idea of using it as the working fluid in a closed loop and having the gas spin a turbine without combustion.”

Working with colleagues at LBL and the North China Electric Power University in Beijing, Oldenburg proposed a system in which captured CO2 is compressed—when the wind is blowing or the sun is shining—to a supercritical fluid state and pumped into a reservoir in a deep saline aquifer. When there’s no wind or the sky is dark, the CO2 can be released to a more shallow, low-pressure reservoir. As it rushes from the high-pressure reservoir to the low-pressure reservoir, it spins a turbine, producing electricity.

Their model achieved higher energy-storage density than conventional compressed-air systems, the scientists contend in a paper they published last July in the journal Energy Conversion and Management.

Chinese scientists had already considered using CO2 to smooth the intermittency of Chinese wind farms. In 2015, scientists from Xi’an Jiaotong University published a performance analysis of a system using liquid carbon dioxide.

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China’s deployment of energy storage looks set to continue an upward trajectory, with almost 600MW in the pipeline as of the third quarter this year.

According to figures released by the China Energy Storage Alliance (CNESA), 14 new projects were announced in Q3 2016 totalling 587MW. This includes projects that are in planning stages, under construction and that have gone online in the quarter. This appears to represent a significant boost to the sector, and is a vast 586% increase on the same period of last year. Up until the beginning of the quarter, CNESA found, 170.6MW of energy storage was in operation in the country.  

The bulk of this large figure is contributed by a single project, a touted 400MW supercapacitor storage station with storage duration of four hours in Guazhou County, in the northern Gansu province, a couple of hundred kilometres south of the border with Mongolia. This project will be used to demonstrate the use of storage in preventing wind power capacity curtailment on a microgrid. The project, by Shidai Jiahua Co, requires US$680 million in investment and has an expected payback time of 16 to 18 years.

There was also a 160MW local government project in Inner Mongolia, another microgrid to be used for renewables integration. The local authority of Xilin Gol, one of Inner Mongolia’s 12 sub-divided regions, is keen to trial retail sales of electricity from independent suppliers and this project represents a major step forward in this regard.

While these two huge projects are in northwestern regions of China, Jiangsu in the east will get some significant new projects including a 1.5MW/12MWh project from partners including battery maker Narada Power, inverter maker Sungrow and project developer GCL Power, which is an arm of one of China’s biggest PV groups, GCL Poly. Narada Power was also involved in a 15MW/120MWh project in Jiangsu’s Wuxi City Xingzhou Industrial Park.

Overall, renewables integration appears to be the biggest application driver for energy storage in China, as seen in the diagram below. While big announcements were plentiful, only 1.5MW of storage actually came online in Q3, which was nonetheless a 50% increase on the same period of 2015.

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