The world of energy storage: Rebooting the normal

 Energy storage as a technology has evolved significantly over the last one decade. The technology, which up until a few years ago was dominated primarily by pumped storage, has seen entrants of many more competent technologies in the value chain. In terms of cumulative installed capacity, the world crossed 10.9GW of installed capacity by the end of 2019. China, Korea, Germany and USA remain the leaders in the race. In Korea, the main demand is seen coming from Commercial and Industrial segment behind-the-meter (BTM) markets, while in China the main demand enabler is grid-scale storage for RE integration and optimization. Japan, presently the global market leader in BTM sales sees continuous growth in the market (policy rewards the export of self-produced power to the grid), whereas in the US which has set short-term grid-scale targets of more than 20GW has witnessed growth in connection to achieving the same. California has been a pioneer in the game (> 10,000 BTM installations-citing grid resilience and wildfires). Europe has also shown promising growth with strong long-term support and defining storage as entity separate from generation.

Growth projection 

ES technologies 

The energy storage space predominantly has been dominated by pumped storage with the largest installation (operational) sized at 3GW in Virginia, US. There are other technologies, too, that have gained ground. One such is the flywheel project in the State of Oxfordshire in the UK, constructed in 2006, supplying 400MW of power from two flywheels. The other is the biggest compressed air project by Bethel Energy Centre of rated capacity of 317 MW in Texas, US. Other technologies like thermal storage has also seen significant installations with the largest installation at Solana solar generation plant of 280 MW capacity in Arizona, US built in 2013. Besides these technologies which are quite mature in the energy storage domain when we talk about electro-chemical energy storage technologies, we have witnessed significant growth in the last decade.
The graph below shows the top ten projects utilizing electro-chemical modes of energy storage technology across the world, with the largest of such projects being in Australia, the Hornsdale Power Reserve Project of 100 MW capacity for 1.28 hrs. The same is now also approved for expansion. Along with these there have been some bigger projects which have been announced, one such is from Dalian, China, which will be the largest vanadium flow battery in the world with a 200MW/800MWh capacity. It is being developed by Rongke Power Co. Ltd. and UniEnergy Technologies (UET). If the regulatory bodies give permission in 2020, Strata Solar will build a 100MW/400MWh energy storage station in Oxnard, California. The project is expected to start in December and will be connected to the largest system of lithium-ion batteries in the world.
Pacific Gas and Electric has secured permission from local regulator for construction of the largest battery system in the world. Its capacity will reach 567.5MW/2270MWh. The system will include four separate projects. The first one will be built by Vistra Energy at the existing power station and have the capacity of 300MW/1200MWh. The other project built by Tesla and operated by PG&E will provide 182.5MW/730MWh from the local substation. All projects are expected to be commissioned by the end of 2020. They will replace three peak gas-powered stations.

RE plus storage 

One of the major areas that has witnessed significant growth is the integration of storage along with renewables across the grid. RE with storage makes a very strong proposition as storage helps in making renewables much more reliable and helps to propel further growth of renewables in the global energy grid. With the increasing penetration of renewables, the world will also require a buffer to take care of the dynamics which renewables bring to the grid and thus energy storage becomes even more important. The same is seen as much beneficial too, as with renewables the overall cost of storage at project level is further reduced due to pooling of resources like substation, grid infrastructure, inverters, etc.
Looking into some of the largest projects of storage coupled with renewables, the same is quite well distributed across the globe (as can be seen in the world map).
The growth of integration of storage with renewables, especially solar will be a journey that will traverse faster than we can even imagine. To give an example, around one third of solar projects planned in the U.S. are coupled with storage, that itself is quite noteworthy. By the end of 2019, there were more than 367GW of solar plants in the U.S. Interconnection queues, of which 102GW (around 28 percent) are hybrids, most typically pairing photovoltaics with battery storage, and about 5 percent of the 225GW of wind projects in interconnection queues include storage (11GW).
Along with this, EDF Renewables is planning to build a 200MW solar plant with a 180 MW/720 MWh battery for Nevada utility. Many such announcements and commitments have been made over the last year. In fact, beating through the pandemic, U.S. set record installations in battery storage in the first half of 2020. What has been noteworthy here is the decreasing PPA costs for U.S. solar with storage projects, even with increasing percentage of penetration the cost has been seeing a downward trend with 15 percent drop just in between 2018 and 2019 signed PPA prices. To give an example, A four-hour battery that is sized at roughly 25 percent of the PV capacity adds about $4/MWh to the overall PPA price. But as the battery capacity increases to 50 percent and 75 percent of the PV capacity, the levelized storage adder increases linearly to ~$10/MWh and ~$15/MWh, respectively.

Battery storage for EVs 

Talking of energy storage, especially batteries, we need to talk of the main enabler which has made batteries, specially Li-ion so competitive with respect to its other competitors in market. More than 50 percent of the present demand of Li-ion comes from its need in EVs. Let us, therefore, focus a little on what has been its impact on the global automotive sector. Today, there are more than 7 million passenger EVs on road worldwide (i.e. around 3 percent of total vehicles globally), with around 2.1 million of them added in 2019. The share of commercial EVs in this is slowly increasing with many e-commerce players shifting to EVs for deliveries, across the globe. The percentage of electric buses in the same is also showing much promise (> 500,000 today). China has been the undisputed leader in the EV frame, from manufacturing to sales. China is followed by Europe and South Korea, with U.S. being a close fourth. Due to greater adoption and supportive government policies in the forms of incentives, subsidies and phasing out Internal Combustion Engine vehicles (13 countries and many municipalities have already announced), we see price parity coming faster in Europe, U.S., and China. Europe's CO2 regulations and China's EV Credit System makes both the countries together make up for more than 50 percent of the EV market.

Growth of EVs