Storage: The Energy Transition’s Flexible Friend

on April 29, 2019

Is storage the Holy Grail of the energy transition? Maybe. Certainly, a critical missing link in the quest for decarbonization. If intermittent solar and wind generation can be complemented by competitively priced storage, the power sector can rid itself of its dependency on fossil fuels. Investors, among them utilities, oil majors and private equity, have started to place bets on storage technology playing a big part in future energy markets.

How realistic is that vision? Our Global Energy Storage team – Ravi Manghani, (Director, Americas), Rory McCarthy (Senior Analyst, Europe) and Le Xu (Senior Analyst, Asia Pacific) – has just released its Global Energy Storage Outlook. I went to the team for the answer.

What’s the technology?

Batteries, where the technology is evolving rapidly. Storage for power predominantly uses NMC (nickel, manganese and cobalt) batteries, the same chemistry as in most electric vehicles. The attraction is their efficiency – the ability to release power quickly – and falling costs. The big difference between the two is that EVs need lightweight batteries, and NMCs’ high-energy density fits the bill. Weight isn’t an issue for power storage.

How does storage fit into the power system?

The biggest segment is front-of-the-meter (55% of energy storage). Utilities or private investors build storage for frequency response to help short-term system balancing (second-by-second response), to provide energy capacity availability (up to four hours) and to deal with intermittency as more renewables come onto the grid. Residential (23%) has been mainly state-subsidized solar-plus-storage packages. Falling costs should help continue to drive growth as subsidies are phased out. For non-residential (22%), businesses install storage systems to reduce their reliance on high retail prices at peak times and improve power resilience.

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Fractal Energy Storage ConsultantsStorage: The Energy Transition’s Flexible Friend