In October 2015, the Aliso Canyon gas fields in Southern California sprang a leak that took the state’s largest gas-storage system out of service. The leak raised red flags for California’s energy planners, who worried that there would not be enough gas to fuel peakers—generating plants that kick in when summer heat causes electricity demand to soar. In response, the California Public Utilities Commission issued a solicitation for energy storage projects that could help ensure the state would have enough power.
As a result, companies such as AES Energy Storage, Greensmith Energy and Tesla stepped up and within eight months—a fraction of the time it would take to build a gas plant—the state had 70 MW of storage online. “Aliso Canyon was a significant sea change” for the power industry, says Daniel Finn-Foley, senior analyst for energy storage at GTM Research. It showed energy storage could be effective in filling the role traditionally played by gas-fired peakers.
After decades of being just out of reach, a steep decline in the cost of lithium-ion batteries is making energy storage a viable solution for a variety of energy industry applications.
Between 1991 and 2005, the cost of lithium-ion batteries dropped from about $200 per watt-hour to about $0.40 per Wh. The batteries have become ubiquitous in laptops, cell phones and in the rapidly growing market for electric vehicles—pushing up demand and triggering economies of scale. In a recent study, investment bank Lazard says it expects the cost of lithium-ion batteries to plummet by about 50% over the next five years.
Energy storage is still only a very small piece of the power marketplace, but it is growing quickly. There were 234 MWh of energy storage installations in the first quarter of 2017, a 944% increase compared with first-quarter 2016, according to a GTM Research report done with the Energy Storage Association.
Market shift
The falling prices that have led to the growth of energy storage is part of a wider shift underway in the power sector. The industry is moving away from the central-station model that has prevailed for a century to a model where electricity flows two ways, where customers can also be generators. In many states, customers with rooftop solar panels can sell excess electricity back to their utility.
New York is one state trying to come to grips with how technologies like energy storage are becoming market disruptors. The state’s Reforming the Energy Vision (REV) initiative is funding pilot projects and seeking to rewrite the rules for the industry.
In New York City, utility Consolidated Edison’s participation in REV has allowed it to use a combination of energy efficiency, demand management and energy storage to defer a $1-billion investment to upgrade a substation.
ConEd also is looking at energy storage as one alternative to make up for the potential loss of the Indian Point nuclear plant just north of the city, which supplies about 20% of the city’s baseload power. The plant is set to close by 2021.
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Scientists have designed a new type of cathode that could make the mass production of sodium batteries more feasible. Batteries based on plentiful and low-cost sodium are of great interest to both scientists and industry as they could facilitate a more cost-efficient production process for grid-scale energy storage systems, consumer electronics and electric vehicles. The discovery was a collaborative effort between researchers at the Institute of Chemistry (IOC) of Chinese Academy of Sciences (CAS) and the U.S. Department of Energy’s (DOE) Brookhaven National Laboratory.
Minnesota’s largest retail electric cooperative is in negotiation with vendors to build the largest storage energy project in the state alongside three solar installations.
The House passed a government spending bill on Thursday that would provide a small funding boost for energy storage research as part of the appropriations for energy and water development programs in fiscal 2018.
There is increasing high-level interest in the potential for energy storage in the Middle East, with grid-connected systems forecast to reach 1.8GW in the region by 2025, according to I.H.S.
A cutting-edge new cargo ship from the company Eco Marine Power could be the first out of the box to integrate a rigid sail system with solar power and energy storage. Going by the concept design, the renewable energy hardware seems to be taking up some valuable deck space, but this first vessel will be a floating R&D platform intended to arrive at the optimal balance between renewables and cargo for various ship models.
Only a handful of states – California, Oregon and Massachusetts – have energy storage procurement targets. California and Oregon were the first to enact mandates for energy storage. They were followed by Massachusetts, which
Business minister Greg Clark, announced yesterday, that the first phase of the Government’s £246million investment into battery technology and energy storage in the UK had begun.