RELYING ON THE ECOSYSTEM
Taamara de Silva analyses the factors impacting the energy storage sector
The claim that clean and renewable energy sources are required to create a sustainable society cannot be disputed. What’s more, it is helping displace the current dependence on more problematic sources of power such as oil, natural gas and uranium.
However, the challenge with renewable power sources is that they don’t produce energy when it’s most needed – especially during periods of peak energy demand.
For example, the creation of energy from such sources depends on external conditions such as wind energy being harnessed in windy conditions and solar energy creation being dependent on sunlight. The increase in severe weather events across the world, from hurricanes and floods to wildfires, has caused power grid interruptions and a growing demand for resilience.
As a result, long-term and affordable storage becomes the missing link to a stable power supply, and holds tremendous potential where conventional power sources dominate the energy space at this time.
The energy storage sector has continued to evolve, adapt and innovate, in response to changing energy requirements and advances in technology. The 2015 UN Climate Change Conference in Paris set the framework for a rapid global shift to a sustainable energy system to avoid the risk of catastrophic climate change.
Meanwhile, the ability to store energy is slowly but surely impacting our energy systems – i.e. from disrupting the motor industry to transforming the manner in which we produce and store electricity. It is primarily composed of three principal markets – viz. electronic device batteries, mobility applications such as vehicle batteries and stationary storage deployments.
Electronic devices such as laptops, mobile phones and drones serve as the most mature markets for energy storage with minimal growth opportunities for battery manufacturers.
As for mobility applications, they include both battery electric vehicles (BEVs) and fuel cell electric vehicles (FCEVs), and are supported by vehicle emissions regulations. Car manufacturers are aggressively expanding their BEV offerings to capture a greater share of this growing market.
And finally, stationary storage deployments are also increasing globally to support growing renewable deployments, meet grid storage mandates and tap into new revenue streams through application stacking. However, it can still be challenging to profit in this market due to uncertainties in regulation and regional differences.
Since being invented by Italian physicist Alessandro Volta in 1800, the battery has come a long way. Lithiumion batteries were initially developed in the 1970s and commercialised by Sony in 1991 to power its handheld video recorders.
These days, they can be found in virtually all electronic items from iPhones to the International Space Station (ISS).
The Tesla Roadster was unveiled in 2008, setting Tesla apart as the first motor company to commercialise a battery powered electric vehicle. Until then, automakers had tinkered with hybrid models but never explored electric cars fully given the high cost of producing battery storage.
In this case, the battery serves as the key differentiator between electric vehicles as a car’s range is determined by the amount of stored energy and it also impacts the length of time needed for charging.
The installed capacity of energy storage is continuing to increase at an exponential rate in the global context. Global capacity doubled between 2017 and 2018 to eight gigawatt hours (GWh), according to the International Energy Agency (IEA).
Pumped hydro storage continues to comprise the bulk of energy storage capacity, accounting for more than 95 percent of global storage capacity while electrochemical storage (batteries) follows with the most potential.
On a global scale however, world energy balances have increased by more than 50 percent with hydro and wind taking the lead in the renewable energy sector. This is measured by a tonne of oil equivalent (toe), which is defined as the amount of energy released by burning one tonne of crude oil or approximately 11.6 megawatt hours (MWh).
In contrast, the largest lithium ion battery installation is located in South Australia and powered by Tesla. It has 100 megawatt capacity, which the company says enables it to power 30,000 homes when dispatching at peak output.
While the exact type of battery or most feasible form of energy storage that will win remains unknown, what’s certain is that energy storage will play an even larger role in powering our lives going forward. The colossal investments that have been directed towards battery manufacturing and steady advances in energy storage technology have set in motion a seismic shift in how we organise energy systems.
However, to harness the massive economic opportunity, planners, policy makers and regulators, as well as investors, must take an ecosystem approach to develop these markets.