Are EVs holding back stationary energy storage systems?

The stationary battery sector is in flux, leaving many to wonder where to put their time and resources. Andrew Tunnicliffe looks at the criticism that electric vehicles are getting too much of the attention, hindering stationary battery development.

For the stationary battery sector, the next two decades are going to be seismic. According to BloombergNEF’s Energy Storage Outlook 2019 report, capacity will grow from 9GW in 2018 to a staggering 1,100GW by 2040, a 122-fold increase. However, if the sector is to rise to the challenges it needs significant investment, to the tune of $662bn according to the research provider.

The report highlighted a number of significant changes that are, or will, shape the market in the coming decades: from the continuing fall in raw material costs to growing utilisation of stationary storage on an industry scale. Report co-author Yayoi Sekine said analysts now think, “the majority of new capacity will be utility-scale, rather than behind-the-meter at homes and businesses.”

It’s a significant shift from what has previously been seen, but one that will shape the market as it moves towards a critical and increasingly advanced stage. However, many have warned that, despite its growing importance, the electric vehicle (EV) portion – and to a lesser extent mobile devices – are dominating the narrative and potentially holding back development, something that needs to be addressed.

/ Four hours is the current maximum for storage that can be built economically. /

Stationary batteries set for a boom? 

Branding it the second wave, some industry players, however, believe the stationary power market is set to explode with the right investment and nurturing. US-based analyst with the Institute for Energy Economics and Financial Analysis, Dennis Wamsted, says he finds it hard to fathom the argument that EVs are having a detrimental impact on stationary storage.

“I do not believe the EV market is ‘holding back’ the development,” he says. “In their latest quarterly report, the Energy Storage Association and Wood Mackenzie estimated that installations in the power sector battery storage market would grow to more than 7GW annually by 2025, creating a market worth more than $7bn. That does not seem like a market being held back by anything.”

/ Four hours is the current maximum for storage that can be built economically. /

That is, however, not to say the market doesn’t have its challenges. Whilst the popularity of renewables has been increasing unabated, with new wind and solar farms coming on stream at a record-setting pace, the biggest challenge remains stationary energy storage systems (ESS) batteries. Renewables are now a vital part of many countries’ energy mix, providing significant amounts of power. But capturing unused power when these elements aren’t available continues to be the challenge.

Wamsted says that currently, the key stumbling block in the lithium-ion battery market is duration. “Four hours is the current maximum for storage that can be built economically,” he says. “Longer duration storage is needed to facilitate the transition away from fossil fuels; and there are other battery options, particularly flow batteries, that may be able to do just that.”

/ Ultimately, many of today’s new entrants and investors will be disappointed. /

Making the right choice

It’s a fair point, but one that many battery manufacturers are investing heavily in to get a handle on. The World Bank has also announced funding initiatives – perhaps as much as $5bn – to support low to middle income countries in their quest to utilise all renewable power generated. The challenge governments, institutes, companies and the entire supply chain has been grappling with has been where to focus their resources and finances.

In a 2018 study, Arthur D Little attempted to address some of those questions. ‘Future of batteries: Winner takes all?’ asked which technology would dominate the battery space in the future, and what the potential scenarios for future growth were. The answer, however, is not a simple one, and risks are high, the report warned. One of the biggest unknowns is the unknown: what’s right for one will likely not be right for another; what are the specific unmet needs and how can they be addressed; and what are the potential risks and advantages of investment?

/ Ultimately, many of today’s new entrants and investors will be disappointed. /

Sadly many of those questions remained unanswered. However, there is one known – the market is only going to become more competitive, innovative and, above all, important. The report said: “Despite uncertainty, demand for battery storage will continue to grow across a wide variety of markets and applications.” However, it warned that while a vast number of next-generation technologies are in development, with large potential markets, it is “easy to bet on the wrong horse”.

“Ultimately, many of today’s new entrants and investors will be disappointed,” it continued.

/ The most interesting long-term area to watch is the development of green hydrogen, which can be thought of as a storage device. /

New technologies and materials could unlock new capacity

Whilst advances in lithium-ion batteries, now more than 40 years old, are helping address some of the issues – such as silica anodes, advanced cathodes and solid-state electrolytes – other technologies and advances in materials may be set to open the door to even greater capacity.

One such prospect is vanadium redox flow batteries (VRFBs). A growing number of experts are raising the prospect of VRFBs being at least part of the solution. Writing in Energy Post in 2019, Dr James Conca said these offerings were “fully containerised, non-flammable, compact, reusable over semi-infinite cycles,” and “discharge 100% of the stored energy and do not degrade for more than 20 years”.

Wamsted believes there might be another way of sustaining power supply, even when the elements are against you – during the night, winter months with fewer hours of sun, or summer when winds tend to be lighter and less frequent.

/ The most interesting long-term area to watch is the development of green hydrogen, which can be thought of as a storage device. /

He said: “I think the most interesting long-term area to watch is the development of green hydrogen, which can be thought of as a storage device. Hydrogen today is generated with fossil fuels, but there is the potential to use electricity generated from renewable energy to produce hydrogen via electrolysis.”

This involves using an electrolyser to split water into its constituent parts, oxygen and hydrogen. Once this is done, Wamsted says, the hydrogen can be stored for use when needed, even seasonally. “Using the US as an example, you could use wind power during the spring when generation is at its peak and electricity demand tends to be lower to create hydrogen for use during the peak summer demand months.”

/ The global electricity system is transitioning and storage will be a key component of that transition. /

Meeting the challenge

For now though, ESS batteries will continue to be the primary focus. “The global electricity system is transitioning and storage will be a key component of that transition,” Wamsted says. State and federal requirements are helping drive change too. For example, an Arizona Public Service programme launched last year requires developers to deliver a set amount of solar power in the evening, in essence requiring the use of storage. “I believe these kinds of linked contracts will be increasingly common in the years ahead.”

One other area of great interest is EV battery reuse. These batteries have a life expectancy of around a decade. That’s not to say they are unusable, rather that they are not suitable for an EV application; having them remanufactured to be incorporated into storage systems is a possibility. “This is indeed quite possible and a promising potential,” says Wamsted.

/ The global electricity system is transitioning and storage will be a key component of that transition. /

EV batteries are generally slated for replacement when they still have 70-80% capacity remaining, making them usable for stationary storage according to Wamsted. “One such project was recently announced involving the re-use of Renault EV batteries. A company in Belgium, Umicore, is going to use batteries recycled from Renault’s Kangoo to supply frequency response services to the grid.”

It’s clear many questions remain about the best, most suitable technologies for ESS applications. It’s as evident that some will back the wrong one. The market is moving fast and, today, there remains a myriad of endpoints. It’s clear, however, that significant investment is needed and support from other industries and government will have to be forthcoming. Nevertheless, Wamsted believes development is coming either way: “What we are talking about is simply a matter of timing.”

Playing catch-up in the US

“In Europe, offshore wind has been there for a number of years, but I think in the United States we're a little bit behind that,” said Karustis.

Should it be successful, Halo’s approach could lead to a surge in US onshore wind, which has historically lagged behind other regions in terms of wind installation and production. Since 2016, according to the International Energy Agency, the US has installed just 22.6GW of new onshore wind capacity, compared to 30.7GW in the EU, and 50.3GW in China, struggles that Karustis hopes to address.

Last December, the Chinese Government approved a number of new offshore wind projects, totalling 13GW of production and costing around $13.3bn, as the country continues to invest in utility-scale power. Karustis hopes projects like Halo’s distributed turbine can contribute to a more balanced wind sector in the US, with both large- and small-scale operations expanding renewable power.

“The large-scale wind turbines wouldn't be phased out, it's kind of an ‘all of the above’ thing,” he said. “The large wind farms play a very important role for us in reducing the carbon footprint globally, and hopefully the micro wind market is going to augment that by producing energy where energy is being used. It's a good two-pronged approach.”

This two-pronged approach also includes other renewable power sources, including solar and utility-scale wind; Halo is not trying to replace all clean energy with its turbines, but offer another option for people eager to engage in renewable power, who may have been historically sidelined due to the high costs of building utility-scale facilities or the unsuitable geographical characteristics of the places they live.

“When you look at that market we're very excited because just as megawatt-scale wind is a large market, I think distributed wind can be as big of a market or bigger over time,” said Karustis.

“When you have incentives and improvements in the technology, the costs go down, so you can be more competitive and compete, and that's certainly the case with megawatt-scale wind,” he continued. “Just 15/20 years ago, it wasn't competitive with natural gas [and] coal, but it is now. So those government policies have helped and they've driven the technology improvements, so it's all bundled together.”