Over the past decade, prices for solar panels and wind farms have reached all time lows, leading to hundreds of gigawatts worth of new renewable energy generation. As the saying goes though, the wind isn’t always blowing and the sun isn’t always shining.If, for example, it’s a beautiful sunny day and we’ve got a super abundance of electricity,we can’t use it. The question of how to firm renewable, that is, ensuring there’s always energy on demand no matter the time of day or weather, is one of the biggest challenges in the industry. We need a good way to store energy for later. And the main option right now is lithium ion batteries
. You see them in products like Tesla’s home battery, the Power wall and utility-scale system, the Power pack. But though lithium ion is dropping in price, experts say it will remain too expensive for most grid-scale applications. To get to battery for the electrical grid,we need to look at a further cost reduction of 10 to 20x. Right now, lithium ion batteries just can’t store more than four hours worth of energy at a price point that would make sense. Plus, they pose a fire risk and their ability to hold a charge fades over time. To address this, there’s a cadre of entrepreneurs experimenting with a variety of different solutions.
Now we’re seeing flow batteries, which are liquid batteries, and we’re seeing other forms of storage that are not chemical or battery-based storage.And each has serious potential. We looked at materials on the periodic table that were actually going to be cost competitive from day one. Purims Power’s flow battery’s a workhorse. Thermal energy storage has a pretty unique opportunity to be extremely low cost.Our solution will last 30 plus years without any degradation in that performance.Which technologies prevail remainsto be seen. But one thing is clear. For renewable to truly compete with fossil fuels, we need to figure out a better way to store energy. From 2000 to 2018, installed wind power grew from 17,000 megawatts to over 563,000 megawatts.
And solar power grew from a mere 1,250 megawatts to 485,000 megawatts. And it’s not stopping there. Renewable are expected to grow an additional 50 percent over the next five years.We know today that solar P.V. and wind are the least expensive way to generate electricity. In particular, the price of solar photo voltaic has plummeted far faster than all forecasts predicted, after China flooded the market with cheap panels in the late 2000s. All the Wall Street analysts did not believe that solar was going to ever stand on its own without subsidies. Well, a few years later, even the most conservative analysts started realizing that actually solar was going to become economic in most parts of the world pretty quickly. And as solar has gotten cheaper, so too have lithium ion batteries, the technology that powers electric vehicles,our cell phones and laptops.
And thanks to improved manufacturing techniques and economies of scale, costs have fallen 85 percent since 2010. Now, wind or solar plus battery storage is oftentimes more economical than peaker plants, that is, power plants that only fire when demand is high. Tesla, for example, built the world’s largest lithium ion battery in Australia, pairing it with a wind farm to deliver electricity during peak hours. But this doesn’t mean lithium-ion is necessarily economical for other grid applications. We don’t really see the cost structure coming down to the point where it can serve those tens to hundreds of hours applications. Basically, the market is ripe for competition. There are dozens of chemistry being looked at today.
There are hundreds of companies working on scaling up and manufacturing new battery technology. Lithium ion has done remarkable things for technology, but let’s go to something far better. One of the main alternatives being explored is a flow battery. Unlike lithium ion, flow batteries store liquid electrolyte in external tanks, meaning the energy from the electrolyte and the actual source of power generation are decoupled. With lithium ion tech, the electrolytes stored within the battery itself. Electrolyte chemistry vary, but across the board, these aqueous systems don’t pose a fire risk and most don’t face the same issues with capacity fade. Once they scale up their manufacturing, these companies say they’ll be price competitive with lithium ion.
Hayward, California-based Primus Power has been working in this space since 2009, and uses a zinc bromide chemistry. So far it’s raised over $100 million dollars in funding, including a number of government grants from agencies like the Department of Energy and the California Energy Commission. Primus’s modular Energy Pod provides 25 kilowatts of power, enough to power five to seven homes for five hours during times of peak energy demand and for 12 to 15 hours during off-peak hours. Most systems use multiple Energy Pods though,to further boost capacity. The company says what sets it apart is its simplified system.
So instead of two tanks, which every other flow battery has, Primus only has one. And we are able to separate the electro chemical species by taking advantage of the density differences between the zinc bromine and the bromine itself, and the more aqueous portion of that electrolyte. To date, Primus has shipped 25 of its battery systems to customers across the U.S. and Asia, including a San Diego military base, Microsoft and a Chinese wind turbine manufacturer. It expects to ship an additional 500 systems over the next two years. Future customers are either independent power producers that are doing solar plus storage at utility-scale or larger commercial enterprises. Also operating in this space is ESS Inc, an Oregon-based manufacturer of iron flow batteries, founded in 2011.
Its systems are larger than Primus Power’s. They’re basically batteries in a shipping container and they can provide anywhere from 100 kilowatts of power for four hours to 33 kilowatts for 12 hours, using an electrolyte made entirely of iron, salt and water. When we came into this market, we wanted to come into it with a technology that was going to be very environmentally friendly. It was going to be very low cost. It didn’t require a lot of volume on the production line to drive down costs. ESS is backed by some major players like Soft Bank Energy, the Bill Gates-led investor fund, Breakthrough Energy Ventures, and insurance company Munich Re. Having an insurance policy is a big deal, since it will make risk-averse utility companies much more likely to partner with it. So far, ESS has six of its systems, called Energy Warehouses, operating in the field and plans to install 20 more this year. It’s also in the process of developing its Energy Center, which is aimed at utility-scale applications in the 100 megawatt plus range.
That would be 1,000 times more power than a single Energy Warehouse. We’re planning to be at 250 megawatt hours of production capacity by the end of this year, which is probably a little over 10 times the capacity we had last year. And then eventually getting to a gigawatt hour of production capacity in the next couple of years. So far, key customers include Pacto GD,a private Brazilian energy supplier, and UC San Diego. But for all their potential, flow battery companies like Primus and ESS Inc still aren’t really designed to store energy for days or weeks on end. Many of those flow battery technologies still suffer from the same fundamental materials cost challenges that make them incapable of getting to tens or hundreds of hours of energy storage capacity. Other non-lithium ion endeavors,such as the M.I.T spin off Ambri, face the same problem with longer-duration storage.
Form energy, a battery company with an undisclosed chemistry, is targeting the weeks or months-long storage market, but commercialization remains far off. So other companies are taking different approaches entirely. Currently, about 96 percent of the world’s energy storage comes from one technology: pumped hydro. This system is pretty straightforward. When there’s excess energy on the grid,it’s used to pump water uphill to a high-elevation reservoir. Then when there’s energy demand, the water is released, driving a turbine as it flows into a reservoir below. But this requires a lot of land,disrupts the environment and can only function in very specific geographies.
Energy Vault, a gravity-based storage company founded in 2017, was inspired by the concept but thinks it can offer more. And so we wanted to look at solving the storage problem with something much more environmental, much more low cost,much more scalable, and something that could be brought to market very quickly. Instead of moving water, Energy Vault uses cranes and wires to move 35 ton bricks up and down, depending one nergy needs, in a process that’s automated with machine vision software. We have a system tower crane that’s utilizing excess solar or wind to drive motors and generators that lift and stack the bricks in a very specific sequence. Then when the power is needed from the grid, that same system will lower the brick sand discharge the electricity. This system is sized for utility-scale operation.
The company says a standard installation could include 20 towers, providing a total of 350 megawatt hours of storage capacity, enough to power around 40,000 homes for 24 hours. Some of our customers are looking at very large deployments of multiple systems so that they’ll have that power on demand for weeks and months and whenever it’s gonna be required. The company recently received 110 million dollars in funding from Soft Bank Vision Fund, and it’s building out a test facility in Italy as well as a plant for India’s Tata Power Company. But some say the sheer size of the operation means it just can’t be a replacement for chemical batteries. Sounds very simple. However, the energy density in those systems are very low. And so that’s where we believe chemical-based storage still has an advantage in terms of a footprint.
You can’t install a gravity-based system in the city, but you’d have to install it outside in the remote areas. Then there’s thermal storage. It’s still an emerging technology in this space, but it has the potential to store energy for longer than flow batteries with a smaller footprint than gravity-based systems. Berkeley, California-based Antora Energy, founded in 2017,is taking on this challenge. Basically, when there’s excess electricity on the grid, that’s used to heat up Antora’s cheap carbon blocks, which are insulated inside a container. When needed, that heat is then converted back into electricity using a heat engine. Typically, this would be a steam or gas turbine. But Briggs says this tech is just too expensive and has prevented thermal storage solutions from working out in the past. So Antora has developed a novel type of heat engine called a thermo photovoltaic heat engine, or TPV for short, which is basically just a solar cell, but instead of capturing sunlight and converting that to electricity, this solar cell captures light-radiated from the hot storage medium and converts that to electricity.
So it’s electricity in, electricity out,and it’s stored in ultra-cheap raw materials as heat in the meantime. Recently, Antora received funding from a joint venture between the Department of Energy and Shell, who are excited by the company’s potential to provide days or weeks-long storage. We think that that solves a need that is currently and will continue to be unmet by lithium ion batteries and that will sort of enable the next wave of integration of renewables on the grid. It’s still early days for Antora and Energy Vault though, and there’s definitely other creative solutions in the mix. For example, Toronto-based Hydrostor is converting surplus electricity into compressed air.
And U.K. and U.S.-based High view Power is pursuing cryogenic storage. That is, using excess energy to cool down air to the point where it liquefies. These ideas may seem far out,but investment is pouring in and projects are being piloted around the world. While these companies are all vying to be the cheapest, safest and longest lasting, many also recognize that this is a market with many niches, and therefore the potential for multiple winners. In the residential and commercial areas,you’re gonna have a certain type of technology.
A lot of it will probably be battery-based. I think as you get to utility-scale-and grid-scale, you’re going to see some batteries, you’re going to see other types of compressed air and liquid air solutions, and then you’re going to see some of the gravity solutions that could be scaled. Overall, the energy storage market is predicted to attract$620 million dollars in investments by 2040. But as always, it’s going to be tough to get even the most promising ideas to market.No matter if the raw materials were dirt cheap, the initial cost of a first system is essentially astronomical. Of course, government policies and incentives could play a major role as well.There is a production tax credit on wind. There’s an investment tax credit on solar.
We in the battery community would like to see an ITC for batteries in the same way that it is in existence for solar. Implementing a storage mandate, as California has done, is another policy that many are advocating. When we get to roughly 20 percent of our peak demand available in storage, we will be able to run renewable-only system, because the mix of solar and wind, geothermal, biomass all backed up with storage will be enough to carry us through even some of these potentially long lulls. With the right mix of incentives and ingenuity, we’re hopefully headed towards a future with a plethora of storage technologies. The future is not going to be a mirror of the past. We’ve got to do some thing that’s radically different from everything that’s been done up until now. I’m really excited about that.