Why The Hot Money Is Chasing Energy Storage

by Giles Parkinson

Originally published on RenewEconomy

What do Bill Gates and Warren Buffett have in common? Apart from being very, very rich, it is a growing interest in battery storage and other “smart” technologies that will redefine the way our electricity grid operates – hopefully to the benefit of the consumer.

Gates has built up a collection of energy storage investments – including Aquion Energy, Ambri, and LightSail – and Buffett is a major investor in Chinese electric car and battery developer BYD, soon to unveil a home battery storage solution in Australia.

Last week, Gates and well-known cleantech investor Vinod Khosla last week bought into Varentec, a US company that is developing “smart” technology that will link storage devices and renewables, and lead to what Khosla describes as “cost-effective, intelligent, decentralized power grid solutions.”

Energy storage, as described by investment bank Citi in its new Energy Darwinism report, is likely to be the next solar boom. Citi says the main driver of this investment will not be just to make renewables cost competitive, because they already are in many markets – but for the need to balance supply and demand.

This, in turn, will make solar and other renewables even more attractive. It may even mean the end to the domination of centralised utilities, as storage will allow the industry to split into centralised backup (based around the old rate-of-return regulated utilities model) and much smaller “localised” utilities that harness distributed generation such as solar and storage.

This could be deployed even on a “multi street” basis, Citi says. (Yes, Grant King, the Sydney suburbs of Pymble and Gordon could go off-grid – see our interview with the Origin CEO here). In Germany, some small towns are doing just that, and Citi notes that KfW, the German development bank that kicked off the solar boom 10 years ago, has now begun an energy storage subsidy program.

This presents yet another challenge for generators, which are being displaced by the huge impact of solar generation in markets such as Germany, and in Australia too.

“If, as we expect, storage is the next solar boom and becomes broadly adopted in markets such as Germany, the electricity load curves could once again change dramatically causing more uncertainty for utilities and more disruption to fuel markets,” Citi notes.

This could be good news and bad news for generators and network operators. The first graph (figure 26) shows what is happening to baseload generation on sunny days in Germany with lots of solar. Similar impacts are being felt in Australia and the US. Baseload generation is squeezed out, but flexible gas generation finds a role.

With storage, this evens the output of solar. That’s bad news for flexible gas, because it is no longer needed as much, and while the overall level of baseload is reduced, at least it is fairly consistent.

“So, solar initially steals peak demand from gas, then at higher penetration rates it steals from baseload (nuclear and coal) requiring more gas capacity for flexibility, but then with storage, it benefits baseload at the expense of gas,” Citi writes.

“Who would want to be a utility, with this much uncertainty?”

Citi says that while energy storage is in its infancy, and subsidies will be needed for solutions that right now are still expensive and largely uneconomic, increasing amounts of capital are being deployed in the industry.

“Much of the historic investment in battery storage technology has been in the automotive sector given the development of electric vehicles. However, increasing efforts are being made elsewhere, most notably for the purposes of either small-scale residential storage (via the integration of Li-ion batteries into the inverters which convert solar electricity from DC to AC), or at a grid level.

It is important to note that while the holy grail for the automotive industry has been maximising energy storage capacity while reducing weight (electric vehicle batteries are enormously heavy, and thereby affect range, performance etc), at a residential or grid level, size and weight is far less of an issue.

The industry is still at that exciting (and uncertain) stage where there are many different competing technologies, and it is not yet clear which will emerge as winner(s).

At a grid level investments are being made into compressed air storage, sodium sulphur batteries, lead acid batteries, flow batteries, Li-ion batteries, and flywheels to name a few. These are all discussed in more detail in the report highlighted below.

So while storage is still very much a nascent industry, we should remind ourselves that this was the case with solar in Germany only 5-6 years ago. The increasing levels of investment and the emergence of subsidy schemes which drive volumes could lead to similarly dramatic reductions in cost as those seen in solar, which would then drive the virtuous circle of improving economics and volume adoption.” — Citi

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This article, Why The Hot Money Is Chasing Energy Storage, is syndicated from Clean Technica and is posted here with permission.

About the Author

Giles Parkinson is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia’s energy grid with great interest.

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New Compressed Air Storage Deals Fatal Blow To Zombie Lies About Wind And Solar

by Tina Casey – Special to JBS News

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Isothermal CAES courtesy of SustainX.

We don’t expect the wind and solar naysayers to give up any time soon, but new utility-scale energy storage solutions are beginning to come on line, and they will put to rest this whole notion that intermittent energy sources (namely, wind and solar) can’t provide a significant proportion of reliable power to the national grid.

The latest development comes from a company called SustainX, Inc. The technology is called an isothermal compressed air energy storage system, and since we’ve been following its progress for the past several years we’re happy to tell you that SustainX has completed construction of its first utility scale system. It was hooked up to the grid earlier this month and it’s now in the process of revving up to speed.

An Isothermal Compressed Air Energy Storage System

We first took note of SustainX back in 2009, when it spun out of Dartmouth College. The goal was to store four megawatt-hours worth of energy in transportable 40-foot long containers, while achieving a 70% reduction in the amount of energy needed for conventional compressed air energy storage (CAES) systems.

Last year, the company took a big leap forward by entering a technology licensing agreement with the University of Minnesota.

Isothermal refers to storage of compressed air at a constant temperature, which is a key element in the improved energy efficiency of the system.

The new SustainX CAES system is located in New Hampshire, at the SustainX headquarters. As SustainX describes it, the new system represents a next-generation improvement over earlier CAES systems dating back to the 1970′s which typically are located underground and run on fossil fuel.

The SustainX system was designed to run on grid-supplied electricity, so depending on the local grid mix it can potentially run exclusively on emission free sources including wind and solar. That also means that it is not dependent on caves or other geological quirks for site selection.

Some patented, cutting edge tweaks by SustainX make all the difference, but other than that, the entire system consists of practically nothing but steel, water, and air. Here’s how it works:

A mechanical drivetrain utilizes an electric machine and a crankshaft…This efficient mechanical link powers a two-stage, mixed-phase (water-in-air) heat-transfer process within pneumatic cylinders. During piston strokes, water is sprayed into the air-filled chamber of each cylinder, allowing heat to be transferred from water to air during expansion or from air to water during compression. The same ICAES power unit provides both isothermal compression and expansion, eliminating the cost of separate compressor and expander subsystems.

We Built This CAES!

If the new facility proves successful we taxpayers can all do a group hug because SustainX received a $5.4 million award from the Department of Energy to help accelerate the project, as part of the Obama Administration’s Smart Grid initiatives.

The project, which also includes private sector investors, appears to be on track. Completion of the test phase  is due by the end of this year and a final technology report is due in 2015.

CAES and other new storage technologies fit into the Smart Grid concept partly by eliminating the need to construct new peaking plants. Peaking plants, which typically run on natural gas, are designed to come on line quickly to address demand spikes, but most of the time they sit idle, which means that they are a very expensive way to provide for variations in local energy consumption to say nothing of their dependence on fossil fuel sources.

In terms of the levelized cost of energy (LCOE, not to be confused with EROI), a mechanically simple system like the SustainX solution has some clear advantages over building new peaking plants, including the potential for far lower operating, maintenance and repair costs in addition to lower fuel costs.

In the past, CAES systems were primarily sited to take advantage of caves and other geological quirks, so the Smart Grid goal of developing more geographically flexible, above ground systems is also critical if CAES is to play a major role in the national grid.

The Future Of CAES

Coincidentally, just last month CleanTechnica covered a new report by the consulting firm Navigant, which predicted a burst of growth in the CAES market as new technologies climb out of the R&D stage including scalable, modular systems.

In that regard, we’re following a company called LightSail, which has developed an energy efficient, mist-cooled system that enables above-ground storage. Last we heard, LightSail had secured $5.5 million in private funding for its CAES project from A-list investors including Bill Gates and PayPal co-founder Peter Thiel.

The underground storage approach is also still worthy of development in certain regions, as evidenced by Pacific Northwest National Laboratory, which has been researching the potential for storing compressed air in porous rocks in the Northwest.

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This article, New Compressed Air Storage Deals Fatal Blow To Zombie Lies About Wind And Solar, is syndicated from Clean Technica and is posted here with permission.

About the Author

Tina Casey Tina Casey specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. You can also follow her on Twitter @TinaMCasey and Google+.