In September 2016, several wind farms in South Australia blacked out owing to a fault in the transmission system, resulting in a continent-wide power crisis. While critics got a reason to question the increasing dependence (or overdependence) on wind power and its sustainability, wind power enthusiasts realised that even the large-scale execution of wind power in isolation cannot guarantee grid protection. The solution came in the form of Tesla’s 100 MW battery bank. While the battery system is much smaller in size than South Australia’s 3,000 MW of peak hour demand, this storage solution injects power instantaneously into the grid, thereby balancing it in case of any exigencies.
This has become a case study for the global power industry, setting the ground for energy storage as a means of load-balancing, or frequency-controlled ancillary services (FCAS) with renewable energy technologies, which further reduce the need for coal- or gas-based modes of power generation. This was subsequently proven when, in December, a coal-based power generator was shut down unexpectedly, shaving 689 MW of supply to the grid. The battery bank immediately responded and injected the requisite power, thereby saving the grid from another massive blackout.
Most wind farms in operation do not offer FCAS and depend on conventional energy-based generators for balancing services, making the case for the adoption of energy storage technologies. While Tesla’s solution is based on the lithium-ion (Li-ion) technology, there are various other energy storage technologies available as well.
Technology overview
Besides pumped hydro, there are several battery-based technologies currently prevalent in the storage space. Chief among these are solid-state batteries, flow batteries and flywheels.
Solid-state batteries use electrochemical cells that convert the stored chemical energy into electrical energy. The most common type of solid-state battery storage technology is the Li-ion battery, deployed for applications ranging from a few kWh in residential solar systems to providing ancillary services to the grid (as has been done by Tesla in South Australia). Electrochemical capacitor (EC) batteries, on the other hand, physically store energy and have a very low response time with a nearly unlimited charge-discharge cycle. Considering that these have a relatively longer life cycle, EC batteries are typically suited for large-scale grid integration applications.
Nickel-cadmium (Ni-Cd) batteries can be found in some of the earlier storage systems. A notable example of these is the Golden Valley Electric Association battery where a 27 MW system was installed in 2003. The Ni-Cd technology is also used for stabilising wind power generation systems. A 3 MW Ni-Cd system was commissioned at the Island of Bonaire in 2010, as part of a project aimed at powering the island completely through sustainable resources. The sodium-sulphur (NaS) battery has also found application in energy storage technologies. It has a 90 per cent round trip efficiency, which has made it a preferred choice of energy operators in Japan, where it has been demonstrated at over 190 sites. The largest NaS installation is a 34 MW, 245 MWh unit used for wind power stabilisation in Northern Japan.
Flow batteries are rechargeable energy storage systems that can be instantaneously recharged by replacing the electrolyte liquid, while simultaneously recovering the spent material for re-energisation. These include Redox flow batteries, iron-chromium, vanadium redox (VRB), and zinc-bromine batteries.
Flywheel battery systems use kinetic energy stored in a rotating mass, which is discharged by drawing down the kinetic energy using the same motor generator. Low speed flywheels use steel as the core rotating material with a speed of 10,000 rotations per minute (rpm). More advanced flywheels have achieved, high speed (about 100,000 rpm), high efficiency and low losses by using fibre glass resins or polymer materials with high tensile strength, and rotations in vacuum-like conditions to create minimum aerodynamic drag. It uses air or magnetic suppression technology to derive a high rotational speed. These have extremely fast ramp and response rates, and can go from full discharge to full charge in a few seconds. These advantages make the flywheel technology preferable for energy service applications, power backup, fast area regulation and frequency response.
Capital cost trends
According to the India Energy Storage Alliance, the cost of energy storage technologies has rapidly reduced over the past 10 years. Especially notable is the trajectory taken by the Li-ion battery technology that has fallen from over $1,000 per kWh in 2008 to $300-$400 per kWh in 2018. The cost of other technologies has also followed similar trends, however, less pronounced. The cost of VRB batteries fell from $1,000 per kWh in 2008 to about $850 per kWh in 2013, and then rather drastically to about $500 per kWh in 2018. Meanwhile, the cost of sodium-nickel-chloride batteries and sodium-ion batteries reduced from $1,000 per kWh and $900 per kWh in 2013 respectively to $700 per kWh and $600 per kWh in 2018. Lead-acid and NaS batteries have seen a plateaued growth over the years, with NaS falling from about $700 per kWh to only $600 per kWh in the past 10 years, whereas lead-acid has remained more or less constant at about $200 per kWh.
Lead-acid batteries not only have the lowest cost among all technologies but also a rather poor life cycle. Technological advancements have helped reduce the cost of Li-ion batteries while increasing their life cycle, thereby boosting their adoption across the world for energy storage. Flow batteries have high cost and moderate life cycles, making them less popular for large-scale applications.
Cost benefit and challenges
The role of energy storage goes beyond the typical grid integration support for variable renewable energy. It also functions as a revenue generator and helps reduce electricity expenses. According to media reports, the Hornsdale Power Reserve in South Australia where Tesla’s battery bank is located has generated about $1.4 million since its inception. This has been possible by using a simple business model of buying and storing power when prices are low and selling it during peak load hours when the prices are high. Such best practices need to be emulated across the world to encourage the deployment of large-scale energy storage solutions by clearly outlining the incentives available to operators and providers.
There are, however, certain challenges that continue to plague the energy storage market, restricting its growth in the short term. Lack of awareness about the technologies and their collective benefits has hurt the market the most. While the capital cost for installing a grid-scale energy storage solution is on the higher side, especially for price-sensitive countries, examples exist where significant revenues can be generated by deploying smart business techniques.
It is also expected that the technology costs will continue their descent as the scale of deployment and demand increases. Financial incentives in the form of low-interest, high-tenure loans can help create a robust grid infrastructure that can accommodate high variable renewable energy injection.
Conclusion
Considering the growing need for the technology and its increasing acceptance, the global energy storage market is expected to grow considerably over the next five to seven years. Fuelled further by decreasing costs, efficient technologies such as flywheel are likely to become increasingly popular. However, in the near future, Li-ion batteries are expected to dominate the market, while flow batteries may find a bigger market in the US and the Asia-Pacific region.
The next few years will also witness the growth of energy service companies, wherein the storage-as-a-service business model will find greater acceptance, especially with the advent of electric vehicles and the growing need for storage for charging infrastructure. Many countries lack a favourable policy and regulatory environment, which may impede the growth of the market. Given the ambitious renewable energy targets pledged by countries and the associated variability, energy storage systems are increasingly becoming a necessity for better grid integration and supply of improved quality of power.
By Ashay Abbhi
