EES International - Last year was a very important year for energy storage, and we saw huge strides made in the technology, utilisation, public acknowledgement, and investment sector. The question is: how will 2016 build on the successes of 2015?
Last year we saw electrical energy storage take its biggest step towards becoming a credible and commercially viable energy alternative rather than the fanciful concept it previously has been. For example, the U.S. storage market grew from $135 million in 2014 to $381 million in 2015 – an increase of 185%; it is also estimated that, by 2020, energy storage will be a $2 billion market. Globally, the energy storage pipeline increased by 45% in the fourth quarter of 2015, with a pipeline of planned projects totalling 1.6GW. The increase in planned and newly-operating large-scale projects has been accompanied by a growing public familiarity with both grid-level and domestic energy storage. Making energy storage a household topic is in no small part thanks to Tesla, with the announcement of the Powerwall system, which is sold out until mid-2016 due to enormous interest, and its place of manufacture, the Gigafactory, being built in collaboration with Panasonic.Estimations for the capacity of energy storage in 2020 is anyone’s guess, with estimates ranging from between 7 and 12GW.
The lowering of cost
At the heart of this acceleration in energy storage deployment is lithium-ion technology, which is the current technology of choice with huge amounts of investment and research driving down cost whilst improving energy density, in part due to the growing market for electric cars. At its levelised cost, lithium-ion technology is often the favoured option for numerous utilisations. Deutsche Bank cite Tesla’s Gigafactory as a significant force in driving down the cost of lithium-ion batteries everywhere. However, there is evidence that the price drop actually being experienced is much greater than industry analysis had predicted. This drop has suddenly thrust large-scale battery storage projects into being commercially-viable opportunities, and has seen a large interest from the private sector. It is not just Tesla and Panasonic that are investing heavily in the development of energy storage; other big tech players are also trying to commit to the market. For example, Toshiba are focussing their R&D investments on energy storage in the coming year, Mitsubishi are now one half of a joint venture with Lithium Energy Japan, Samsung SDI has decided to invest $600 million into its new lithium-ion plant in China between now and 2020, and LG Chem continues to manufacture batteries on a huge scale.
Although lithium-ion currently occupies the spotlight, there are other technologies, even within lithium-ion technology, that are making a push toward commercial viability. For every developing technology, they each offer their own niche in the energy storage market, whether that be for rapid frequency response, long-term discharge times for sustained output, peak-shaving or integration with renewable energy. The use of a certain technology is often determined by its discharge time, power ratings, and rated energy capacity. The reason lithium-ion has proved so successful is due to its ability to span so many areas of use. Flow batteries are gaining interest as a useful technology that is much larger and less efficient than lithium ion, but have long lifetimes and can be utilised effectively in many settings, though mainly at industrial-scales. Other alternatives such as liquid air, sodium and zinc batteries, superconductor, and supercapacitor technology are starting to show their potential as they begin developing toward commercial viability for both in-front-of-the-meter and behind-the-meter use.