Market Review Of Energy Storage Systems

What is an Energy Storage System ?

An energy storage device is generally an energy-technical device that allows the following three processes: Charge, Storage and Discharge.

This article focuses on systems that use electricity in the charging process, store it in various forms and give electric power back to the grid or the user. Yet there is more than one possible configuration of absorbing energy and energy outflow.

Energy Storage Systems (ESS) will be classified by the form of energy they are using in the storage process. There are five major types:

• Electrical
• Electrochemical
• Thermal
• Mechanical
• Chemical

Each group has a specific balance of different technologies in it and some technologies like LAES have one predominant type and use additional advantages of other technology to improve their efficiency.

Each technology has sub-categories, often with different components, yet the schemata should give a good overview of existing technologies:

• SMES: Superconducting magnetic energy storage
• LAES: Liquid air energy storage
• CAES: Compressed air energy storage

Technical Readiness Level (TRL)

The Technology Readiness Level (TRL) is a scale for evaluating the state of development of new technologies on the basis of a systematic analysis. On a scale from 1 to 9, it indicates how far developed technology is.

Why is the importance of ESS growing?

Climate change has become one of the major topics in our society especially since the 2°C goal was adopted during the Paris climate conference in December 2015. To obtain this goal CO2-emissions drop significantly and new ways of consuming and production are required.

To tackle this issue the energy production has to reduce its share of fossil fuels and depend more on renewable energies, despite growing demand in emerging countries.

The ESS work as enablers for this transition in the energy market. They ensure that supply and demand can be balanced. Furthermore, they reduce the dependence on fossil fuel imports and the pollution emitted by coal and gas plants.

Sources and Information

The energy storage market is evolving at a very fast rate and using older sources always begs the question of their relevance in the current stage of development of energy storage technologies, especially when they are referring to even older sources.

Consequently, this article cites recent studies or academic papers published in the last 5 years to guaranty suitability to give an informative overview of existing energy storage systems. The objective is to explain the working principle of each technology and mention the key figures of possible configurations achievable with today's technology level:

Supercapacitors

Working Principle

Electrochemical capacitors (ECs), also referred to as “supercapacitors” or “electric double-layer capacitors”, are composed of two electrodes soaked in a liquid electrolyte and separated by a membrane through which ions can flow from one electrode to the other.

During the loading process, a thin layer of negative ions (cations) forms on the positively polarized electrode and simultaneously a layer of positive ions (anions) on the negative one. The electrodes are porous and highly influence the characteristics of the capacitor.*

SMES

Working Principle

Technical Data Application areas Superconducting Magnetic Energy Storage Systems (SMES) consists of a superconducting coil, a power conditioning system and a cryogenic system to cool the coil down below a critical temperature. In this state the material obtains the property to conduct electric current without resistance and energy can be stored nearly without losses.*

Lead Acid Battery

Working Principle

Lead Acid is the oldest and most widely deployed rechargeable battery type. Lead (Pb) is used because of its properties as a good conductor. The two electrodes are plunged into an electrolyte composed of dilute sulfuric acid (SO4) which participates in the loading and discharging reactions.*

Li-Ion Battery

Working Principle

Lithium-ion (Li-ion) batteries are based on the same energy storage principle as lead-acid batteries: electrochemical charge/discharge reactions. There is an exchange of lithium ions (Li+) between the anode and the cathode, which are made from lithium intercalation compounds.*

NaS Battery

Working Principle

As with lead-acid and lithium-ion batteries, the sodium sulphur (NaS) battery has two electrodes and an electrolyte. Nevertheless, the specificity of NaS batteries is that the electrodes are made of molten sulfur and molten sodium, and they are separated by a solid ceramic electrolyte, sodium beat aluminum. To keep the electrodes in a molten state, the system needs to be maintained at high temperatures (above 300°C).*

Flow Battery

Working Principle

Flow batteries are rechargeable batteries that use two liquid electrolytes as energy carriers, separated by an ion-permeable membrane. Several combinations of electrolytes are possible; the most mature ones are with vanadium or zinc-bromine.*

Sensible Heat

Working Principle

To use sensible heat the temperature of the storage medium is increased or decreased, and the amount of stored energy is proportional to the heat difference between the temperature inside the system and ambient temperature. Therefore, heat and cold can be stored.*

Latent Heat

Working Principle

Latent Heat Thermal Energy Storage (LHTES) systems use phase change materials (PCMs) to store large amounts of heat at a nearly constant temperature. Often the transition between solid and liquid state is exploited, in which the solidification releases energy (exothermic) and the solidification absorbs energy from the surroundings (endothermic).*

Compressed Air Energy Storage

Working Principle

A compressed air energy storage (CAES) power plant is a storage system that uses a cavity (generally an existing cavern) filled with compressed air as an energy storage. During the charging process, electrical energy is used to operate a compressor, which pumps air from the atmosphere into the storage. During discharge, this compressed air is used to generate electrical energy again with a turbine and a generator driven by it.*

Liquid air energy storage

Working Principle

The Liquid Air Energy Storage (LAES) system consists of three main parts: The charging section, the storage section, and the discharge section. The charging section is in operation when electricity is to be stored. The electricity is used to compress air, then cool it to -190 °C and liquefy it by expansion. The liquid air is then stored near ambient pressure in an insulated tank with a density greater than 700 times that of ambient air. When electricity is needed again, the liquid air is pressurized by a pump, heated and vaporized, and finally expanded in the discharge section in one or more turbines. System efficiency can be increased by storing and reusing air cooling and compression heat; external heat and fuel can also be injected to increase efficiency and output power.*

Flywheels

Working Principle

Flywheels (Flywheel Energy Storage System) store electrical energy as rotational energy (kinetic energy). For this purpose, the flywheel is accelerated by an electrically driven motor and its speed is increased, whereby energy is stored. During the discharge, a generator converts it again into electrical energy. The stored rotational energy is proportional to the mass moment of inertia and to the square of the angular velocity. This means that the amount of energy that can be stored can be boosted by increasing the speed of the flywheel than by increasing the mass of the flywheel.*

Pumped Hydro Storage

Working Principle

A pumped storage power plant is a hydropower plant consisting of two water basins at different heights. Energy is stored as potential energy in the upper basin, which can be recovered by releasing the water into the lower basin. During the charging phase, water is pumped into the upper basin using electrical energy. When the energy is needed the water is released into the lower basin via turbines. With this outflow, the water drives the turbines, which produce electrical energy again.*

Power-to-Gas

Working Principle

Power-to-Gas (PtG or P2G) is an energy storage concept which transforms electric power into energy of chemical bonds. The two most common applications are Power-to-hydrogen and Power-to-methane. Hydrogen is produced by water electrolysis and afterwards the hydrogen can be used for the methanation process. During every step of this concept electric energy is necessary.*

*For more information you can  download the full report 

Supercapacitors and SMES are only used for very short cycles and high power output, and other technologies like Power-to-gas have only pilot facilities, and therefore have not been considered in this discussion.

Costs and system definition

To estimate the costs of energy storage technologies, various factors have to be taken into account. One big challenge is to determine the system's boundaries so that information from different sources can be compared. For the capital expenditure (CAPEX), the graph shows a possible segmentation of elements influencing the costs for a battery system but it is extendable to other technologies as well. The costs for operations and maintenance are difficult to compute. They have a fixed and a variable part and depend significantly on the type of project.

Conventional Batteries – Lead Acid

The market for lead-acid batteries is valued at €49,5 billion in 2017 and €53,7 billion in 2018. Due to the large panel of applications for this type of batteries, the market doesn’t only depend on large scale energy storage, but also on other domains like the automotive or construction sector. It is expected that the market will grow to €82,6 billion by 2026.

Conventional Batteries – Li ion

The market for lithium-ion batteries is largely driven by the growing number of electric vehicles (EV). Due to regulatory constraints, the automotive sector is launching a panoply of new EVs which all have increasing range and larger batteries. As a result, demand is increasing at a very fast rate. In addition, new projects have shown that lithium-ion batteries are a mature technology even for large scale energy storage systems and are able to compete with legacy solutions in certain sectors. In 2018 the market was valued at €31,5 billion and is forecasted to reach €95,6 billion by 2026.

Project - Hornsdale, Australia

The largest lithium battery in the world was officially connected to the grid in South Australia in December 2017. The system, supplied by Tesla, is the heart of the Hornsdale Power Reserve and consists of hundreds of PowerPack 2 batteries, which together can store up to 129 MWh and deliver up to 100 MW. Samsung 21700-size cells are used in this project. Tesla gives a 15-year warranty on the batteries. The lithium-ion battery is powered by wind turbines from Hornsdale Wind Farm. The French operator Neoen can store part of the irregularly generated wind power. Yet the objective of this project is not only to facilitate the integration of renewable energies sources but also to stabilize the electricity grid by acting as a fast response unit in case of a change in frequency.

Conventional Batteries – NaS

The technology used in sodium Sulphur batteries was developed by Ford in the 1960s and later on sold to NGK, a Japanese company, who commercialized the concept. NGK Insulators is nowadays the only commercial manufacturer of NaS-Batteries with experience of more than 15 years with commercial products. The technology is being first introduced in Japan, so it is hardly surprising that the market is larger there. In fact, nearly half of all projects were carried out on Japanese soil. Nevertheless, recent progress in modularity makes this technology appealing for large scale energy storage projects and accordingly big facilities, such as in Italy or Abu Dhabi, are being built.

Project – Buzen, Japan

The largest NaS battery in the world was officially connected to the grid in Japan in March 2016. It is a pilot project to compensate for fluctuations in the electricity grid due to, in particular, a growing share of solar power in the energy mix. The aim of this facility is to demonstrate its advantages to other large scale energy storage systems such as pumped hydro.

Flow Battery – VFB

Flow batteries, especially ones using Vanadium, are making their first appearance on the commercial market. There have been a multitude of pilot projects in different countries but the announcement of the construction of a 200MW/800MWh facility in China based on this technology was a major boost for this industry and key players of the energy storage dominate this system.

Sensible Heat

The market for thermal energy storage is highly segmented in different applications. The technology is used to heat or cool down the building, store process heat in industrial facilities and store energy to been later on injected in the power grid. In such cases, sensible heat is the most common method for storage. The systems to store energy in the form of heat are already highly commercialized.

Project - Solana Generating Station

This concentrating solar power (CSP) power plant uses parabolic trough technology and a thermal energy storage system with a storage capacity of six hours. This will enable Solana to produce and supply electricity even with cloudy skies and after sunset. In contrast to the projects presented before, this one includes the production of electricity, so that the costs of storage are difficult to determine.

Flywheel

Flywheels have different use cases in the industrial sector to store energy for a short duration with high power output. Nowadays they are also used as a backup in case of power fails, for example in data centers. Furthermore, projects have been developed to ensure frequency control in New York and Pennsylvania. The U.S. is one of the major players in the flywheel market. In the graph opposite, the evolution of the U.S. market is shown and the share of the different applications is addressed.

Pumped hydro

Pumped Hydro Storage (PHS) has proved itself to be the most prevalent and mature energy storage technology, with 161 GW of installed capacity worldwide by the end of 2017. Open-loop PHS represents the major share of this capacity with more than 95%. Yet closed-loop PHS is becoming more and more appealing and it is estimated that the market for this type of system will reach €10,4 billion by 2024.

Current State of the Market

Pumped hydro storage is by a large margin the technology with the most installed power capacity (in GW) and most installed energy storage capacity. In the thermal storage sector, the molten salt technology dominates with 75% of its installed power nearly always linked to CSP-Plant.

Key drivers of future evolution

The energy storage market will grow substantively in the next decade due to 3 major factors:

• Lower costs: For nearly every technology (except pumped hydro) this will help make investment more attractive.
• Higher demand: Directly linked to the rising share of renewable energies in the power grid.
• Sector coupling between energy markets: Power-to-X solution will become an important way to balance the grid and store energy. In addition, EVs will hugely impact by increasing the grid solicitation, but could also pave the way for smart grid solutions.

The market for energy storage systems will grow significantly in the near future. Bloomberg New Energy Finance estimates that in 2040 there will be a total of 942 GW of installed power and 2,857 GWh of installed capacity in energy storage solutions, excluding pumped hydro storage. This is particularly impressive considering that today the power and the capacity are of all the existing systems are only a few GW, respectively GWh without PHS. To achieve this massive expansion, investments of €540 billion are needed.

A challenging market with great opportunities

There is a large misconception that energy storage only means batteries, because of the increasing profile of the lithium-ion battery. In fact, the largest energy storage technology nowadays is pumped hydro storage. Nevertheless, lithium-ion technology is interesting for its flexibility and energy density: it can be used for mobile and stationary applications and could benefit from economies of scale and synergies in R&D. All in all, a multitude of technologies are already on the market, with projects all over the world. Not all have the same level of maturity (some have completely commercialized solutions, others are working with pilot facilities) nor the same advantages and disadvantages. It is important to emphasize the fact that there is no one-size-fits-all solution. The range of use cases is broad from fast-response power storage, over daily peak-shaving, to seasonal storage and in each case, the optimal technology needs to be determined according to the constraints.

To ensure the growth of the energy storage market, more transparency is needed. On the one hand, the lawmakers have to clarify the rules and policies for ESS and their integration into the power grid, and on the other consumers should have access to more information to facilitate investment. The value of energy storage has to be underlined and rewarded accordingly.