The energy sector might change for good. Will stakeholders be ready for the wave?
By: Stephane Bilodeau
Tags: Energy, Power, Transitions, Data Analytics, Smart

Various Power Technologies pushing the wave

Improvement in energy storage system costs, service life, durability, and power density are accelerating and made possible by innovative materials and technologies. This enables new battery chemistries, new types of energy storage and component technologies, such as low-cost membranes for flow batteries, sodium-based batteries, synthetic phase change materials, high voltage capacitors, wide band-gap materials, and smart devices for power electronics.

Storage systems can be designed with a broad portfolio of technologies, each with its own performance characteristics that make it optimally suitable for certain grid services. Established large-scale technologies, such as pumped hydro and compressed air energy storage, are capable of long discharge times and high capacity. In contrast, various electrochemical batteries, thermal energy storage and flywheels are positioned around lower power but more acute applications or those suitable for shorter discharge times (a few seconds to several hours).

Recently, power electronics as greatly improved, in areas such as switches, inverters, and controllers, allow electric power to be precisely and rapidly controlled. Energy storage and power electronics improve power supply reliability and responsiveness.

Grid Analytics and Policy.

On top of these technological improvements, data science, analytical and multi-physics models have seen new deployments that allow to better understand the risk and safety of complex systems, optimization, and efficient utilization of energy storage systems in the field. Advanced simulation and modelling and real-world demonstration projects increase the understanding of safety and reliability of energy storage systems.

Source: C. Ji et al, IEEE Power and Energy Society Power; Large Scale Data Analytics for the resilience of Power Grid and Grid Failure during Hurricane Sandy in NY

Many big changes are coming

Many analyses already show there are many ways utilities and more globally the energy sector can benefit from energy storage. Validated data sets already support the development of codes and standards to optimize the use of storage resources across electricity infrastructures in many countries. Amongst these changes, we can notably see:

• Intelligent energy storage and frequency regulation

When integrated with the Internet of Things (IoT), energy storage technology can communicate energy usage data at the grid’s edge back to utilities. They can then use this information as part of their strategic planning through forecasting and load balancing. The data generated by IoT-enabled energy storage can even help utilities reduce the need to build peaker plants and substations by helping them streamline energy generation activities through frequency regulation.

• Enhanced efficiency of renewables

Energy storage technology can increase the usefulness of intermittent renewable energy sources such as wind and solar power. That’s because it enables the power they generate to be stored and used later when the wind isn’t blowing or the sun isn’t shining. This way, utilities can save money and reduce their carbon footprint by relying more heavily on renewable energy sources.

In the USA, the electric power grid is integrated coast to coast by modern devices connected to an aging infrastructure. Without Energy Storage and proper Reall time analytics, an accident or attack on one component could create cascading problems for huge segments of the grid.

• Increased grid resilience

Energy storage can provide a backup power system in the event of outages and other unforeseeable downtimes on the grid. It can also quickly communicate outages to utilities when integrated with IoT technology so they can quickly be repaired. As a result, an outage could occur and be repaired without any disruption to power flow and customers wouldn’t know anything happened.

Lifting Barriers

On the other hand, there are also many barriers to Energy Storage and DER deployment. They can be aggregated in 3 subsets.

Barrier one: Costs

High costs are the primary obstacle to widespread energy storage adoption. Although many storage technologies have low operating costs, upfront investment costs for most are often prohibitively high compared to other available options. Economies of scale have not yet been fully achieved for many energy storage technologies because of limited deployment.

“Soft costs” are another barrier to accelerated clean DER deployment at scale. These costs reflect the fraction of a final product sale that is neither equipment, installation, nor profit. While this big bucket encompasses other barriers, soft costs are usually dominated by red tape and customer acquisition costs.

Taking rooftop PV as an example again, former Sungevity CEO Andrew Birch laid out a damning explanation of how soft costs contributed to the expense of distributed solar systems installations in the U.S., where systems cost almost three times as much as those in Australia — almost $10,000 more for a typical five-kilowatt system. A study from Lawrence Berkeley National Lab comparing soft costs for residential solar in the U.S. and Germany estimated that customer acquisition cost differences were around $3,000, or nearly a third of the U.S.-Australia difference. These cost differences could just be due to the more fragmented U.S. market and lack of public education, but red tape also has a clear effect on customer acquisition costs.

The residential solar market’s well-documented challenges are echoed in the experiences of most clean DERs. EV chargers face complicated siting and permitting rules, as well as widely varying electricity rate pricing structures. Energy storage faces different rules and rates for interconnecting batteries while meeting fire codes. Electrified appliances face siloed incentives that promote replacing older gas furnaces with newer more efficient gas units without considering alternatives like heat pumps; energy-efficiency codes and programs might not recognize the benefits of new electric loads replacing dirty fuels.

These challenges all fall on the soft-cost spectrum, and while progress has been made in reducing them, much room remains for progress through standardization and streamlining of permits and requirements in an environment with clear policy targets for installations.

Barrier two: Markets and financing as well as hostile incumbents

The market presents a range of obstacles. For example, storage solutions compete with other flexible energy provision technologies, as well as smart grids, and many alternatives currently have much lower costs. Financing is needed in many quarters, but financing approaches themselves are often barriers to energy storage research and adoption, with a lack of sufficient project financing for demonstration projects and deployment. Perhaps the biggest challenge is the market’s lack of experience and confidence in energy storage performance and technical capacity at large scales. Market environments also have outdated compensation structures based on traditional power system technologies, which may not be relevant to storage solutions.