One of the barriers to the large-scale expansion of renewables is its “intermittency.” Quite simply, the sun only shines so often, and wind is not always constant. While this is not a problem most of the time, the occasional high demand for energy forces utilities to build peaker power plants just to meet that demand. Those plants almost invariably use fossil fuels, and their existence has been a limiting factor in many utilities’ willingness to adopt renewables on a larger scale.
While the so-called baseload arguments put forth by special interests to promote fossil fuels are mostly fear tactics, peak power and renewable intermittency is a real issue. We can’t go back to the days of rolling blackouts and jeopardize hospitals, telecommunications networks or other essential infrastructure. The obvious solution – giant batteries to store this energy when we need it – was, until recently, far too expensive. What we need is affordable, large-scale systems that can store renewable energy and distribute it when there is higher demand.
Guess what? These system are nearing reality. Earlier this year, in a move that could be a sign of things to come, one of the nation’s largest investor-owned utilities, Southern California Edison, decided to forgo a plan to build natural gas peaker plants in favor of investing in energy storage. And they aren’t the only ones. Other utilities are looking to make similar moves.
“The big three electric utilities in California are working together to bring battery storage into the state’s energy mix,” said Robert Magyar, Managing Director of Navitus Strategies, a professional services provider in the area of renewable energy revenue, to Planet Experts. “SoCal Edison has been the most progressive in moving forward.”
The Biggest Obstacle Is Cost
Energy storage is more than batteries, and takes many forms. There’s the traditional systems, such as dams and smart, distributed grids that can shift power from where it’s being generated to where it’s needed. But it is batteries that are the most promising and fastest growing technology.
The key driver here is cost. Like any decision made by a big for-profit utility, SoCal Edison chose energy storage not just because it was environmentally friendly, but because its costs have fallen so much, and so quickly, that it made financial sense. In fact, according to GreenTechMedia (GTM) in a report released earlier this year, energy storage costs are expected to fall 41 percent in the next five years, due to improvements in technology systems and savings from production volume increases. As costs go down, growth should begin to take off.
“[Our] studies show that the estimated global opportunity for energy storage over the next 10 to 20 years is valued between $200 and $600 billion,” said Zolaikha Strong, director of sustainable energy for the Copper Development Association, who represent a key component of many energy storage systems. “We’re already seeing tremendous growth in usage due to increasing affordability and accessibility.”
Other analysts agree. GTM’s report found that 112 megawatts of energy storage was deployed in the last quarter of 2015. This alone was more than the total combined capacity added in 2013 and 2014. But what’s coming is even greater. Total energy storage is projected to surpass 1 GW in 2019, and hit 1.7 GW the following year – with the caveat that the market has so far outstripped their most optimistic estimates and could very well do so again.
That is why IHS, a global research firm, believes 2016 will be the year of energy storage.
“Continued battery cost reduction, government funding programs and utility tenders have helped spark a notable acceleration in the global energy storage market,” said IHS Technology Analyst Marianne Boust in a press statement. “Suppliers and developers around the world are preparing for a record year in 2016.”
What’s driving this? Simply, innovation. We know about the Tesla Powerwall, but they are just one of dozens of companies in this field developing, testing and producing better, cheap batteries, creating what will, with time, become a massive market. Some are big names like General Electric, but others are unknown, like Calmac, Greencharge Networks, and AES.
Energy Storage Is More Than Just Batteries
Energy storage is more than just batteries. It takes many forms, from dams, distributed grids, to systems that cool water when energy is plentiful and use that water to cool rooms over time.
The other factor is renewables. Energy storage makes them not only more reliable but also a lot more financially viable.
“A driver for [energy] storage is the growing realization that it makes solar and wind more valuable,” said Magyar. “It, in essence, stabilizes electricity production for when you need it.” This can make renewable energy capture more efficient and provide even more incentives for investors to put solar panels on roofs and wind turbines on farms.
Fossil fuels had the advantage of combustion on-demand, for use whenever we needed it. Renewables do not work the same due to their reliance on intermittent natural systems, like the Earth’s rotation. But technology is finally evening the gap, and many expect that energy storage and renewables could soon achieve cost parity with coal power.
Energy storage is the ying to renewables’ yang, working in harmony to provide energy when it’s dark, or light when the wind doesn’t blow. The energy revolution we’ve seen over the past five years could be chump change compared to what’s coming.