The battery decade: How energy storage could revolutionize industries in the next 10 years

The next step: utility-scale storage

The biggest potential market for energy storage is not individual consumers, however, but massive utility companies.

Renewables like wind and solar are providing more and more power for the grid. But until effective energy storage is developed these intermittent sources will continue to rely on fossil fuels.

Put simply, the way the electric grid typically operates at present is that power used is generated just moments before. There’s not a lot of inventory, so supply and demand must be in balance at all times.

But as battery prices fall, more and more utility companies are integrating lithium-ion batteries into their systems. At the moment, they’re primarily used to replace what’s known as peaker plants — plants typically powered by natural gas that are only used at times of peak demand. They’re also beginning to replace diesel generators in places that have continuous power requirements, such as hospitals.

Government incentives and falling solar and wind costs are also accelerating the viability of energy storage.

NextEra Energy is among the country’s largest renewable energy providers, which includes energy storage offerings. In a recent note to clients Credit Suisse called it one of their top investment ideas, based on NextEra’s “heavy exposure to the fast-growing renewables industry” and “world-leading large-scale renewable development business.” Other names offering energy storage include Pennsylvania-based EnerSys, as well as Pinnacle West Capital Corporation, which in February announced plans to add 850 megawatts of battery storage in Arizona over the next 5 years.

Currently, the largest lithium ion battery installation is located in South Australia and powered by Tesla. It has 100 megawatt capacity, which, according to the site, allows it to power 30,000 homes when dispatching at peak output. In November France-based Neoen, which operates the site, announced a 50% expansion, which will raise capacity to 150MW.

Renewable energy equipment makers and operators, as well as chemical and materials companies could also benefit if storage makes wind and solar power more feasible. Osborne noted that new software will be required to help utility companies understand power needs as renewables and electric vehicles draw from the grid.

The next decade

Costs that remain high are among the reasons preventing a surge in lithium-ion battery grid integration. Another factor is that this specific type of battery may not necessarily prove to be the best suited to storing energy for longer periods of time. They’ve also been known to catch fire, and there are issues with some of the required components like cobalt, almost half of which comes from Congo. Recycling and the environmental impact of metals extraction are other issues to watch.

Billions of dollars are being spent to find alternatives. Solid-state batteries — which use sodium, for example, instead of liquid electrolytes — is one possible option, as are flow batteries, which use tanks of electrolytes to store energy. But neither of these are viable options just yet.

While the exact type of battery that will win out is unknown, what’s certain is that batteries will play an even larger role in powering our lives going forward.

“Massive investments in battery manufacturing and steady advances in technology have set in motion a seismic shift in how we will power our lives and organize energy systems as early as 2030,” researchers from Rocky Mountain Institute wrote in Breakthrough Batteries: Powering the Era of Clean Electrification.

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