HOW much power does a tweetstorm involving two tech tycoons, the prime minister of Australia and 8.5m Twitter followers generate? Enough, at least, to supercharge a debate about the future role of batteries in the world’s energy mix.

Elon Musk, a Silicon Valley entrepreneur (pictured), may be best known for his gravity-defying ambition, but his core product is the battery: whether for his Tesla cars, for the home or for grid-scale electricity storage. He gave the last of these an unexpected jolt of publicity on March 10th, by responding to a blackout-inspired challenge on Twitter from an Australian software billionaire, Mike Cannon-Brookes. Mr Musk said he could install 100 megawatt hours (MWh) of battery storage in the state of South Australia in 100 days to help solve an energy crisis it faces, or it would be free of charge. “That serious enough for you?” he asked.

In response, Malcolm Turnbull, the prime minister, communicated with Mr Musk and appeared to turn from pro-coal sceptic into battery believer. On March 14th Jay Weatherill, the premier of South Australia, went further. Declaring that the national electricity market was “broken”, he said the state would launch its own A$550m ($415m) plan to build a 100MW battery system, as well as a gas-fired power station, with public funds. Mr Musk may have got what he wanted. He is “good at bringing nerdy subjects to a broad audience”, says Julia Attwood of Bloomberg New Energy Finance.

Are batteries now cheap enough to be a cost-effective way of solving energy crises like that in southern Australia, brought on since July by storms, heatwaves, the intermittency of solar and wind power and the closure of coal- and gas-fired power stations? The answer, says Michael Ottaviano of Carnegie Clean Energy, which is hoping to sell its own grid-scale battery systems to the state, is “no”—especially under current market structures.

True, battery prices have plummeted and Mr Musk’s price, of about $250 per kilowatt hour (kWh), is relatively cheap. But the total cost (including building the plant, for example) would be about $500 per kWh to hook the batteries up to the grid. A 100MWh facility would cost $50m. Only when power prices reach stratospheric levels would that investment make sense for a utility. That’s why the government of South Australia is having to stump up instead. Eventually, practitioners hope that changes to the power market will make battery storage viable without public funding. “This is a short-term Band-Aid until the regulatory process catches up,” Mr Ottaviano says.

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The Prosper-Haniel hard coal mine in North-Rhine Westaphalia is a show piece of the right way forward. It is a hard coal mine that dates back to 1863, and thankfully in 2018 it will never produce coal again.

Instead of just being shuttered, it is being converted into a 200 megawatt pumped-storage hydroelectric reservoir. This means that it will be used to store excess energy from green sources like solar and wind.

Projects like this are a necessary part of a green grid, and show how innovative thinking can repurpose some of the most horrendous forms power generation into valuable infrastructure. Instead of helping to create toxic pollution, this coal mine will be creating badly needed power storage.

Solar and wind power are now economic alternatives to power sources like coal, and in some cases they are actually much cheaper. The drawback they have is their inability to produce what is called “base load”. This refers to power that can be created at any time, to meet fluctuation in electricity demand.

Next generation battery technology will ultimately play a big role in green power storage, but for now projects like this offer a bridge to the future. It is also extremely satisfying to see a coal mine being flooded to make a green grid work.

North-Rhine Westaphalia has committed to have 30% of its power created by renewable sources by 2025, and this project is a big part of that effort. This facility creates enough electricity to power 400,000 German homes, and it will also create jobs for the local community.

It is wonderful to see strong action being taken to move our race towards a future that is safe and sustainable. The government of North-Rhine Westaphalia deserves to be recognized for innovative thinking, and taking action.

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According to market research firm IHS, the energy storage market is set to “explode” to an annual installation size of 6 GW in 2017, exceeding 40 GW by 2022. Such forecasts reveal a huge jump from an initial base of only 0.34 GW installed in 2012 and 2013. Here is a list of seven energy storage disruptors that are innovating and changing the industry as we know it:

ViZn Energy. Founded in 2009, this firm is using an emerging technology called a zinc-iron flow battery. That battery runs on a safe chemistry that is non-toxic, non-flammable, and non-explosive. In addition, flow battery systems do not require cooling systems. The company just announced a large-scale storage microgrid project that will be built in Nicaragua at Rancho Santana Resort (Fig. 1). There, the ViZn (four-hour) flow batteries will be combined with an 800-kW-peak solar photovoltaic (PV) system. It will be interesting to observe whether this technology will significantly attract more investments and carry more projects.

Nissan and Eaton. These companies provide a sustainable energy storage solution for homeowners known as the Nissan XStorage unit (Fig. 2). These units provide a second life for Nissan’s electric vehicle (EV) batteries. The XStorage units can draw energy from the sun or from the grid (a smartphone app will allow consumers to manually switch between energy sources).

The units come with solar panel inverters that are already integrated for use with renewable energy sources, such as existing solar panels. They are available in different sizes: 4.2 kWh (second life batteries), 6 kWh (new or used batteries), and 9.6 kWh (new batteries). This should be a good option for homeowners who are allowed and able to sell energy back to the grid. They also could be use as energy back-up in case of a blackout. Time will tell if reusing batteries for stationary energy storage applications is profitable and if this sustainable solution will eliminate the need of battery recycling.

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Tesla’s (NASDAQ:TSLA) ability to raise capital should mitigate fears over solvency. The $350 million equity and $850 million in convertible notes offers improved operating leverage with minimal dilution of approximately 4.6 million shares or 3% dilution. Not too bad considering expectations of generating futures revenues of over $12 billion in EVs.

In the big picture, let’s focus on how Tesla is positioned to leverage the additional capital and build the infrastructure to effectively compete in the EV, energy storage, solar and in particular, what IP can be gained from competencies in self-driving vehicles. Tesla’s position in energy storage is a differentiator in EVs where it commands the lead in battery efficiency and vehicle range. Tesla can gain a cost advantage by continuing to drive lower battery cost per kWh.

Tesla Vision can generate substantial value because of the competencies extended through image and sensor processing that are also a catalyst for AI. Tesla Vision is leveraging testing and data compiled from its relationship with Mobileye (NYSE:MBLY), recently announced target of acquisition by Intel (NASDAQ:INTC) for $15 billion. Image and data processing of numerous data points from RADAR, LIDAR, and cameras are complex requiring graphic floating-point intensive operations and neural network architecture. The capabilities gained through autonomous driving offer substantial competitive advantages that create additional value for Tesla.

Energy Storage and EV Performance

Tesla has improved its EV positioning as the leader in the EV market by extending the EV range battery efficiency can be measured by energy density or kW per kilogram of battery weight power duration. In practicable measures the vehicle range relative battery kWh size is a relevant measure. However, vehicle size and weight will have an impact on the range metric. To compensate for vehicle weight a measure of distance and weight may offer a more impartial performance metric. The following chart shows the battery kWh size relative to vehicle ton-miles similar to comparing freight costs.

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Many consider the sun the energy source of the future. But one challenge is that it is difficult to store solar energy and deliver the energy ‘on demand’.

A research team from Chalmers University of Technology in Gothenburg, Sweden, has shown that it is possible to convert the solar energy directly into energy stored in the bonds of a chemical fluid — a so-called molecular solar thermal system. The liquid chemical makes it possible to store and transport the stored solar energy and release it on demand, with full recovery of the storage medium. The process is based on the organic compound norbornadiene that upon exposure to light converts into quadricyclane.

‘The technique means that that we can store the solar energy in chemical bonds and release the energy as heat whenever we need it.’ says Professor Kasper Moth-Poulsen, who is leading the research team. ‘Combining the chemical energy storage with water heating solar panels enables a conversion of more than 80 percent of the incoming sunlight.’

The research project was initiated at Chalmers more than six years ago and the research team contributed in 2013 to a first conceptual demonstration. At the time, the solar energy conversion efficiency was 0.01 percent and the expensive element ruthenium played a major role in the compound. Now, four years later, the system stores 1.1 percent of the incoming sunlight as latent chemical energy — an improvement of a factor of 100. Also, ruthenium has been replaced by much cheaper carbon-based elements.

‘We saw an opportunity to develop molecules that make the process much more efficient,’ says Moth-Poulsen. ‘At the same time, we are demonstrating a robust system that can sustain more than 140 energy storage and release cycles with negligible degradation.’

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Energy storage lies at the heart of grid digitisation and is part of a larger trend of technologies that is disrupting South Australia’s network for the better, according to Terry Teoh, General Manager of Engineering at ZEN Energy.

Ahead of his presentation on monetising storage at the grid edge in Adelaide’s CBD at the Australian Energy Storage Conference, June 14 – 15 2017 at the new International Convention Centre Sydney, Mr Teoh said battery storage currently has strong market potential in South Australia and the National Electricity Market (NEM).

“Energy storage and the ability to perform peer transactions lie at the heart of grid digitisation and will drive the democratisation of energy, just as we are seeing the democratisation of services, media and R&D,” Mr Teoh says.

“Global experience shows that commercial behind the meter storage is challenging. Yet the market potential in South Australia, and more broadly in the NEM states, is significant.”

Mr Teoh and Zen Energy are undertaking a groundbreaking project demonstrating real-time optimisation and monetisation of battery storage in the NEM by connecting four high-profile Adelaide CBD buildings to 513kWh of behind the meter storage.

The four sites – the Art Gallery, State Library, Adelaide High School and the Adelaide City Council works depot in Thebarton – were chosen for their contrasting load and occupancy patterns, and their potential to apply battery storage in conjunction with solar and demand response.

In his interview for the Australian Energy Storage Conference, Mr Teoh said the $1 million project will play a defining role in opening up the commercial storage market, starting in South Australia.

“It will provide real implementation experience and benefit quantification of batteries located in commercial sites, monetising multiple value streams,” he says.

“It will turn a theoretical concept into a commercially executable reality for commercial and industrial customers looking for a lifeline to alleviate their energy price distress in South Australia.”

Zen has also been working on other battery storage projects including the ‘Big Battery Project’ which proposes installing a battery in Port Augusta capable of storing between 50-150MWh of energy. This is one of the projects aiming to address South Australia’s grid instability and the need for a backup if power is lost.

The South Australian Government has also recently released a $550 million comprehensive energy plan for the state that includes the construction of Australia’s largest battery.

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The City of Summerside has partnered with international tech giant Samsung to test a massive solar energy battery.

The pilot programs’ proponents are touting it as a first in Canada.

Samsung Renewable Energy Inc. and city made the announcement Thursday. The project will coincide with a solar energy project the city had previously announced for Credit Union Place (CUP) in an effort to shrink the facility’s massive electrical bill. The city pays more than $380,000 annually to power the facility and the battery and solar panels are expected to save the CUP a little more than $100,000 annually.

Thursday’s announcement was the culmination of a lot of hard work by a string of people from P.E.I. to Korea, where Samsung is based, said Summerside Mayor Bill Martin.

“This was a year in the making … our agreement for this project is 510 pages long, for Phase I. So it took a lot of work, a lot of back and forth. So I would say (I’m) a combination of extremely excited, proud and relieved,” said Martin.

Martin also said that this is phase one in what could be a three-part project with Samsung. It all depends on how this initial pilot project goes, but the two parties have signed a memorandum of understanding regarding all three phases.

Phase one involves constructing a shipping container-sized battery and integrating it into CUP’s electric system. The battery will be fed power from 1,300 solar panels the city plans to build on a portion of the facility’s current parking lot. The battery will store excess energy and pump it into the building during peak use hours.

To accommodate the build, one of the outdoor beach volleyball courts will be moved. The city does not expect to lose any parking spaces as a result of the solar panels.

Phase 2, if it happens, will include the construction of a new solar/wind farm. This phase would bump the percentage of electricity the city gets from renewable sources from 46 per cent to 70 per cent.

Phase three would include investment in more electric pilot projects, such as infrastructure for electric vehicles and a smart grid system.

Martin said he expects Phase 1 to be completed sometime this fall.

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Lithium-ion batteries are best positioned to meet the demand for energy storage over the next five to 10 years, but in the long run, other battery storage technologies will be needed for long-term energy storage and larger- scale applications.

That’s the word from Lux Research, which recently outlined up-and-coming battery storage technologies in a teleconference.

Right now, the need for storage is prompted by the growing use of renewable energy on the grid, said Chris Robinson, an analyst for Lux.

The amount of wind and solar on the grid has doubled, he said. Half the electricity added last year was wind or solar, driven largely by cost reductions. “Even just in the last 15 years, we have seen a big drop in the cost of solar modules. We don’t expect this trend to change,” he said.

However, the large amount of renewable energy being added to the grid is causing grid instability, Robinson said. With solar, there’s instability in the morning when there’s often too much solar coming online. And in the evening, the grid becomes unstable when the amount of solar decreases.

“Energy storage can play an important role,” he said.

The use of Lithium-ion batteries is growing quickly because prices have dropped due to increased economies of scale and larger production capacities. But Lithium-ion batteries can’t solve all problems, and are often not appropriate for large-scale and long-duration applications, he said.

For example, a large solar project in China capable of powering 2,000 homes would need massive-scale storage, in the gigawatt-hour range, a task not suitable for Lithium-ion batteries, Robinson said.

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SDG&E is unveiling a new vanadium redox flow battery storage pilot project in coordination with Sumitomo Electric, which stemmed from a partnership between Japan’s New Energy and Industrial Development Organization and the California Governor’s Office of Business and Economic Development.

During the four-year demonstration project, SDG&E will be researching if flow battery technology can economically enhance the delivery of reliable energy to customers, integrate growing amounts of renewable energy and increase the flexibility in the way the company manages the power grid.

“SDG&E is continuously at the forefront of delivering clean energy solutions and championing innovative technologies to assess the long-term benefits for our customers,” said Caroline Winn, SDG&E’s chief operating officer. “This pilot will advance our understanding of how this flow battery technology can help us increase the reliable delivery of clean energy to our customers and align with state and local carbon emission reduction goals.”

The vanadium redox flow battery storage facility will provide 2 MW of energy, enough to power the energy equivalent of about 1,000 homes for up to four hours. Like other battery storage systems, the battery will act like a sponge to soak up renewable energy harnessed from the sun and release it when resources are in high demand.

Flow battery systems have an expected life-span of more than 20 years, and could have less degradation over time from repeated charging cycles than other technologies. SDG&E will be testing voltage frequency, power outage support and shifting energy demand.

“We are delighted to see our first flow battery system operating in the U.S. through the multiple-use operation of the battery system in SDG&E’s distribution network, we would like to prove its economic value and potential use on the electric grids,” said Junji Itoh, managing director of Sumitomo Electric.

“California continues to lead the nation when it comes to growing the economy and decreasing emissions,” said Sid Voorakkara, Deputy Director for External Affairs at the Governor’s Office of Business and Economic Development. “GO-Biz is proud to partner with NEDO to bring this demonstration project to life and increase opportunities for economic growth powered by renewable energy.”

SDG&E has been a leader in bringing energy storage options into the region with the recent unveiling of the world’s largest lithium ion battery storage facility in Escondido and a smaller facility in El Cajon. To date, SDG&E has about 100 MW of energy storage projects completed or contracted.

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Earlier this year we saw Maryland’s legislature stand for solar and other renewables with the override of Governor Hogan’s veto of the Clean Energy Jobs bill. This allowed for an increase in the state’s renewable portfolio standard to 25%.

Maryland has long been a national leader in renewable energy, but could the state become the next frontier in energy storage? In the current legislation session, Maryland’s House and Senate are now looking to encourage the adoption of energy storage technologies, which will be key to the future growth of renewable resources. There are three promising bills under consideration which seek to better understand and grow the market for this emerging technology.

The Bills

Of the three bills currently on the table, two of the bills seek to incentivize storage while the third hopes to better understand the technologies implementation and the best way to facilitate its growth.

1. HB1395 – Solar Energy Grant Program

HB1395 seeks to incentivize residential owners to purchase storage technology by allowing the Solar Energy Grant Program to award grants to certain energy storage equipment, effective as of October 1, 2017. The bill does the following:

• Defines storage technologies to include electrochemical forms of storage alongside compressed air, pumped hydropower, hydrogen storage, thermal energy storage, flywheel, a super conducting magnet, capacitor, or superconducting magnet.
• Sets a capacity standard for eligible technologies at a minimum of 5 kWh, with an applicable solar photovoltaic property defined at a capacity of 20kW or less.
• Establishes that the grant amount eligible to energy storage equipment will be the lesser of $3,000 or 30% of the total installed cost of the energy storage equipment.

2. HB0490/SB0758 – Income Tax Credit – Energy Storage Systems

Joint House and Senate bills HB0490 and SB0758, if approved, would allow for a credit against the State income tax for certain costs of energy storage systems on both residential and commercial properties; commercial properties is not defined. The credit would apply to systems installed between January 1, 2017 and December 31, 2021, coinciding with the ramp down of the federal Solar investment tax credit. The credits, as proposed, are as follows:

• For commercial properties, the credit would be the lesser of $150,000 or 30% of the installed system cost for commercial properties.
• For residential properties, the credit would be the lesser of $5,000 or 30% of the total installed cost of the energy storage system for residential systems.

3. HB0773/SB0715 – Clean Energy – Energy Storage Technology Study

Unlike the previously mentioned bills, which will jumpstart the market with incentives, joint bills HB0773 and SB0715 will require the Maryland Clean Energy Center to conduct a study on energy storage. The purpose of the study would be to understand what would be the most effective regulatory reforms and market incentives to increase the use of energy storage devices in Maryland in a way that is fair to all stakeholders, including the State government, electric companies, environmental organizations, providers of energy storage devices, developers, and other interested parties. The final findings of this report would be due on December 1, 2018 with an interim report due on December 1, 2017. Some of the key components of the study include:

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