A pale orange-and-gold sunset bathes the macadamia plantations and avocado orchards that sweep down to Australia’s Byron Bay. The coming dusk is a cue for two sleek Tesla battery packs in the garage at Amileka, a secluded holiday villa nearby. They stir silently into action—powering the appliances in the five-bedroom home’s twin kitchens, recharging a $100,000-plus Model X SUV, driving a filter pump for an 18-meter swimming pool sparkling in the shade of a century-old native black bean tree.

From first light on this Southern Hemisphere autumn day, a bank of 33 rooftop solar panels has been capturing the sun’s energy. At times, the electricity is directed back to the local grid. But mostly it’s funneled into the garage and stored in Powerwall units, in the same type of rechargeable cells that fuel the automaker’s vehicles. The batteries—as tall as refrigerators, as thin as flat-screen TVs—will power this unusually energy-hungry villa deep into the evening.

But not all night. The solar array and batteries meet just half of Amileka’s average energy needs. So after a few hours, the 25-acre, $1,160-a-night miniresort that Tesla Inc. uses to promote its products must tap into the local electricity grid.

The photogenic demonstration on Australia’s eastern coast presents a vision of what some see as the most significant shift in the energy sector since the late 19th century: rechargeable batteries—in electric vehicles, homes, industrial plants, and power grids—that will make the transition to renewable energy possible.

The actual future of energy may be less postcard-worthy. It may look more like a fleet of electric school buses. And the end of utility companies as we know them.

By 2050 solar and wind will supply almost half the world’s electricity, bringing to an end an energy era dominated by coal and gas, according to forecasts by BloombergNEF, Bloomberg LP’s primary research service on energy transition.

It can’t happen without storage. The switch from an electricity system supplied by large fossil fuel plants that run virtually uninterrupted to a more haphazard mix of smaller, intermittent renewable sources needs energy storage to overcome two key hurdles: using power harvested during the day to supply peak energy demand in the evening and ensuring there’s power available even when the wind drops or the sun goes down.

Continuously falling battery costs, and rising capacity and usage of clean energy are set to result in booming global stationary energy storage over the next two decades, which will require total investments of as much as US$662 billion.

That’s one the key findings of the latest report on new energies by research company BloombergNEF (BNEF) published this week.

Energy storage installations across the world are expected to soar to 1,095GW, or 2,850GWh, by 2040, compared to a modest current deployment of just 9GW/17GWh as of 2018, according to BNEF’s latest forecasts.

Unsurprisingly, the key driver of the energy storage installation boom will be additionally plunging costs of lithium-ion batteries, which will give financial rationale to additional uses of storage and surging installations of stationary energy storage.

Costs of lithium-ion batteries dropped by a whopping 85 percent between 2010 and 2018, BNEF says, as it expects battery costs to further halve per kilowatt-hour by 2030, thanks to rising demand in two markets—stationary storage and electric vehicles (EVs).

In the energy storage report this year, BNEF has raised its estimates of global investments in storage by more than US$40 billion, said Yayoi Sekine, energy storage analyst for BNEF and co-author of the report. The other major change in BNEF’s predictions this year is that the analysts now think that most of the energy storage capacity will be “utility-scale, rather than behind-the-meter at homes and businesses.”
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Geographically, South Korea is the current market leader, but it will soon cede the crown to China and the United States which will be the two major energy storage markets two decades from now. India, Germany, Latin America, Southeast Asia, France, Australia, and the UK will be the other major energy storage installation hotspots, according to BNEF.

Energy storage is the glue that holds the renewable energy revolution together, and if the latest forecast from the firm BNEF (aka Bloomberg New Energy Finance) holds true, there are more fireworks to come. BNEF has just revised its forecast for global energy storage upward to a 122-fold increase, from the current marker of 9 gigawatts globally to 1,095 gigawatts by 2040.

By way of comparison, just last November BNEF was anticipating 942 gigawatts by 2040, though the underlying result is the same: “Cheap batteries mean that wind and solar will increasingly be able to run when the wind isn’t blowing and the sun isn’t shining.”

There’s plenty more energy storage news outside of the new BNEF report. It focuses on lithium-ion battery technology and it doesn’t even count pumped hydro, which is by far the major form of utility scale energy storage currently available in the US and other markets.

Alternative battery materials and alternative systems like thermal energy storage and renewable hydrogen are also coming on strong, but for now let’s focus on that thing about lithium.

There was supposed to be a shortage of lithium, but the world’s top lithium producer, Australia, has been on a mine-opening tear. The second place producer, Chile, is also planning to ramp up output.

Lithium recovery from brine and recycled batteries will also be contributing to the pot.

All of this activity has already contributed to a drop in the global price of lithium in recent months, and the bottom is a long way down. BNEF foresees that the surge in energy storage installations will be fueled by a 50% drop in the cost per kilowatt-hour of Li-ion batteries by 2030, partly due to the advent of low cost lithium.

Who’s Gonna Pay For All This Energy Storage?
There being no such thing as a free lunch, BNEF notes that it will cost many benjamins for the Li-ion energy storage market to reach its 122-fold potential by 2040.

BNEF puts the figure at a US$622 billion investment over the next 20 years. That’s chump change! Just look at the US Congressional Budget Office estimate for national defense in the fiscal year 2020. It is looking at a total of US$727,569 million for just one year if you throw in the Energy Department’s nuclear programs and the Maritime Administration.

The falling price of renewable energy has been dominating the headlines, but more dramatic change is happening behind the scenes, where battery storage is disrupting the way utilities provide power.

The change is driven not just by cheap renewables and cheap batteries, but by the electronics that link them together, said Mark Ahlstrom, the president of the non-profit Energy Systems Integration Group.

“Unlike all the old spinning generators that were electromechanically coupled to the grid, these are using power electronics, computers, state-of-the-art technologies that scale really well, as we’ve seen with other industries,” said Ahlstrom, who also serves as vice president for renewable energy policy at NextEra Energy. “And it really is the digital revolution finally hitting the power industry.

“We saw it coming a little bit with wind and solar and what we’re really doing with storage is going to push it over the edge in a big way.”

In the past, utilities had to “take what they could get” from slow, inflexible fossil-fuel plants, Ahlstrom said. Their primary concern was having enough energy to meet peak demand.

Now, utilities will have abundant cheap power from renewables. Paired with batteries, that power can be deployed by computer in microseconds to ensure reliability or fulfill other ancillary services.

“What really surprised me—this is all I work on now—is hybrid projects,” Ahlstrom said at a workshop hosted by the National Academies of Sciences, Engineering and Medicine. “What happens when you tightly couple storage with solar PV, what you end up with of course is a solid-state computer-controlled power plant. When you really step back and think about this means, we’re really talking about virtual power plants becoming real. It’s very dramatic.”

The rise of electromobility and demand for stationary storage will drive lithium-ion battery costs down by a further 50% by 2040, according to Bloomberg New Energy Finance’s latest Energy Storage Outlook report.

With costs for the technology having already tumbled 85% from 2010 to 2018, the business intelligence firm predicts 1,095 GW/2,850 GWh of energy storage will be installed in 21 years’ time, up from 9 GW/17 GWh last year.

By that point, China and the U.S. will dominate, according to the Energy Storage Outlook 2019 study, with significant markets in India and Germany and only slightly lower volumes in Latin America, Southeast Asia and France.

Australia, the U.K. and Japan will also have significant markets, as will current world leader for energy storage South Korea.

The role played by solar in the energy storage revolution was highlighted by BloombergNEF’s head of energy storage Logan Goldie-Scot in a press release issued by the firm to promote the report, published yesterday.

Solar-plus-storage

“In the near term, renewables-plus-storage – especially solar-plus-storage – has become a major driver for battery build,” said Goldie-Scot. By 2040, however, BloombergNEF predicts energy storage will have become a practical alternative to newly built generation assets of any kind.

In a significant indicator of the rapid rate at which stationary storage is altering the energy market, the 2019 report now predicts utility scale batteries will make up the majority of storage deployment by 2040. Until now the analysts have expected behind-the-meter batteries – whether in homes or businesses – to take the lead.

BloombergNEF also revised up the amount of investment energy storage will attract over the next 21 years, adding $40 billion for a predicted $662 billion.

The analyst has predicted solar and wind energy will supply almost 40% of the world’s energy by 2040, up from 7% today and driving demand for the energy shifting/peaking services available to grid operators through battery storage. The study also predicts electric vehicles will make up a third of the global passenger transport fleet in 21 years’ time, up from less than half a percent today.

Noting the explosion in demand for energy storage will be good news for lithium, cobalt and nickel miners, the release issued to promote the annual report made no mention of attempts to develop battery chemistries with less ecologically damaging materials.

Siemens Gamesa Renewable Energy (SGRE), known for its wind turbines used in both large onshore and offshore projects, in June began operation of an electric thermal energy storage (ETES) system in Germany (Figure 1). The technology is designed to store large quantities of energy, using volcanic rock as the storage medium.

“The technology employs an electric heater to charge the storage and a conventional heat recovery steam cycle to discharge the storage,” Veronica Diaz Lopez, who handles external communications for Siemens Gamesa, told POWER. “For charging, electricity is converted into hot air and blown through the storage, which is filled with volcanic rocks.”

The project includes about 1,000 metric tons of volcanic rock. The electrical energy is converted into hot air by means of a resistance heater and a blower that heats the rock to 750C/1,382F (Figure 2). “In the storage the heat is transferred from the air to the rocks and stored,” said Lopez. “During discharging, the flow direction through the storage is reversed and cold air enters the storage from the opposite end. In the storage, the air is heated up by the rocks and leaves the storage as hot air. The hot air is guided through a boiler where the energy is used to produce steam. The steam runs a steam turbine, which in combination with an electric generator, produces electricity.”

The system is installed at the Trimet SE aluminum smelter site in Hamburg-Altenwerder. The ETES pilot plant can store up to 130 MWh of thermal energy for a week, and its storage capacity remains constant throughout the charging cycles, according to SGRE. The company said the plant has a generator rated at 1.4 MW that produces energy for up to 24 hours. SGRE wants to use the storage technology in commercial projects, with plans to increase the storage capacity and power output as the technology is developed. SGRE said its goal is to store energy in the range of several GWh in the future. “Currently we are planning to do the commercial rollout in the mid 2020s,” said Lopez.

“Decoupling generation and consumption of fluctuating renewable energy via storage is an essential contribution to implementing the energy system transformation,” said Andreas Feicht, state secretary at Germany’s Federal Ministry of Economics and Energy, which funded the project known as Future Energy Solutions (FES). “We therefore need cost-effective, efficient, and scalable energy storage systems.”

A new report released July 31 details continued growth in global energy storage, driven by lower costs for lithium-ion batteries.

Research company BloombergNEF (BNEF) in its latest forecast published Wednesday said energy storage installations worldwide will grow across the next two decades, from the 9 GW/17 GWh of capacity deployed as of last year, to 1,095 GW/2,850 GWh by 2040, as battery costs fall by half by 2030 compared to today’s levels. It said two markets—stationary storage and electric vehicles—will drive demand for batteries.

BNEF said most of the new energy storage capacity for the power market is likely to be grid-scale.

Yayoi Sekine, a co-author of the report, in a news release said the latest research has “two big changes,” noting that “this year … we have raised our estimate of the investment that will go into energy storage by 2040 by more than $40 billion,” with BNEF forecasting $662 billion will be invested in storage over the next 20 years. Sekine, an energy storage analyst for BNEF, said, “We now think the majority of new capacity will be utility-scale, rather than behind-the-meter at homes and businesses.”

‘Energy Shifting’
BNEF’s analysis points to how less-costly batteries can be used in more applications, including “energy shifting,” or moving in time the dispatch of electricity to the grid, often during periods of excess solar and wind generation; peaking in the bulk power system, or using storage to deal with spikes in demand; and programs enabling customers to pay less for their electricity, by enabling the purchase of power at times when it’s cheaper, and storing it for later use.

Several speakers at Storage Week Plus, a July 23-25 energy storage conference in San Francisco, California, attended by POWER, noted how growth in storage likely is dependent on a continuing decline in battery cost, advancements in battery technology, and more applications for storage. Legal and regulatory mandates for storage also will play a role.

Thom Byrne, CEO of the clean energy investment group CleanCapital, told POWER his company is investing in “new markets and new renewable energy asset classes, with a specific focus on distributed solar and energy storage.” Byrne’s group earlier this month announced its largest acquisition to date with the purchase of Olympic, a 75.2-MW solar portfolio comprising 15 operating solar projects in New Jersey, from KDC Solar, a private, non-utility-affiliated owner and operator of large-scale commercial and industrial solar power generation.

CleanCapital’s investments are part of the growth forecast by BNEF. CleanCapital recently closed on a $300 million debt warehouse facility with Credit Suisse, leveraging funds managed by CarVal Investors, a global alternative investment fund manager.

Brandeis University is launching a new energy storage project that is projected to save the campus upwards of $50,000 annually in electricity costs.

The Massachusetts university is partnering with AMS and FirstLight Power to install and operate a 780-kWh battery-based energy storage system that will connect with the school’s electrical power system. According to Brandeis, large enterprises like college campuses typically pay variable rates for electricity that are set in part by supply and demand – the more demand for electricity, the more the utility charges. By charging overnight when the price of electricity is at its lowest, the battery will be able to send electricity into Brandeis’ system during the day when prices peak – enabling the university to buy less electricity at the most expensive times.

Increasing Use of Energy Storage
Energy storage installations around the world will multiply exponentially, from a modest 9GW/17GWh deployed as of 2018 to 1,095GW/2,850GWh by 2040, according to the latest forecast from BloombergNEF (BNEF).

This 122-fold boom of stationary energy storage over the next two decades will require $662 billion of investment, according to BNEF estimates. It will be made possible by further sharp declines in the cost of lithium-ion batteries, on top of an 85% reduction in the 2010-18 period.

And in national news, energy storage deployments in the United States during the first quarter of 2019 were up 232% year-over-year, Wood Mackenzie Power & Renewable’s latest US Energy Storage Monitor shows. The market saw 148.8 MW deployed in Q1 of this year.

Each quarter, Wood Mackenzie Power & Renewables and the Energy Storage Association (ESA) gather data on US energy storage deployments, prices, policies, regulations, and business models. This information goes into the report.

On August 6, the California Contractors State License Board (CSLB) will hold a vote which could have serious consequences for the largest residential energy storage market in the nation. In specific, CSLB is considering restricting the ability of solar installers who hold a C-46 solar installation license, but not a C-10 electrical license, to install batteries.

California Solar and Storage Association (CALSSA) issued an action alert yesterday afternoon, calling on its members to come to Sacramento and fight the proposal to restrict battery installations. “We need you and your colleagues to attend this hearing to voice opposition to this decision and to protect the solar and storage market going forward,” reads the alert.

In an interview with pv magazine, CALSSA Executive Director Bernadette Del Chiaro was explicit about the danger that this represents:

Safety issues?

As everyone who reads the news or has boarded a flight knows, lithium-ion batteries can enter a dangerous state where the heat buildup gets out of control. And while improper installation can cause problems, research by pv magazine suggests that most instances of thermal runaway are the result of poorly designed software with inadequate safety controls.

CALSSA argues that two and a half years of public hearings and reports have not turned up evidence of a safety risk to justify the proposed changes. Instead, it alleges that CSLB is considering this change due to pressure from the International Brotherhood of Electrical Workers (IBEW), with support from the state’s investor-owned utilities.

Whether or not these specific accusations are accurate, utilities across the nation have consistently worked to kill rooftop solar markets. In California, the shift to mandatory time-of-use rates under Net Metering 2.0 created an incentive to pair solar with storage. And if utilities can restrict how many workers can install these systems, this will inevitably have effects not only on the behind-the-meter battery storage market, but also the rooftop solar market in the state.