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Climate goals to drive long duration energy storage ambitions

15 November 2021 Keiron Greenhalgh

As much as 2.5 TW of long duration energy storage may need to be deployed by 2040 if the world is to meet its Paris Agreement commitments, a group of companies predicted as diplomats met in Glasgow to codify mechanisms for achieving the landmark climate pact's goals.

Long term energy storage, typically described as lasting eight to 10 hours or more, is expected to support the growing shift towards electrification—offering a smoothing out of the ebbs and flows of intermittent generation, resources when demand spikes, and a conduit for the myriad of hydrogen plans unveiled in recent months, even by the world's largest oil companies.

Such a buildout won't come cheap, said the companies, who are all members of the Long Duration Energy Storage (LDES) Council. Some 2.5 TW of capacity would cost as much as $3 trillion in capital expenditure, they said.

Launched in Glasgow 4 November, the LDES Council is on "a mission to replace the use of fossil fuels in meeting energy imbalances with zero-carbon alternatives." The trade group is set to lobby governments and grid operators on the requirements for accelerating the LDES sector. It will unveil more details on 23 November with the launch of a study, it said.

Building 2.5 TW of LDES capacity would see dispatchable renewable energy help eliminate the 1.5-2.3 gigatons of CO2 produced annually from fossil fuels to meet grid energy imbalances, equivalent to 10-15% of the global power sector's emissions, the LDES Council said.

The LDES Council has 24 founder members, including Alfa Laval, BP, Form Energy, Highview Power, and Siemens Energy.

A broad church

Another of the founding members, UK-based fuel cell and electrochemical technology company Ceres Power ramped up its operations in the sector on 11 November, the penultimate day of COP26, signing a development deal with LDES specialist RFC Power.

RFC is developing a flow battery, a hybrid between a fuel cell and a battery that "decouples power from energy." RFC's battery has a patented hydrogen manganese chemistry offering "low cost, high round-trip efficiency and an extremely long cycle-life," said Ceres Power, which has an option to acquire RFC.

Until now, Ceres Power's focus has been chemical LDES, but its fellow founding members of the council include players in the mechanical LDES realm that includes the original storage technology (pumped storage) as well as electrochemical options such as flow, metal-air, or hybrid batteries.

These companies join a growing suite of startups targeting the market for medium-duration energy storage and LDES using technologies not based on conventional lithium-ion batteries.

While few of these technologies have been deployed at scale, companies are raising money to develop large-scale demonstration projects or, in some cases, to enter the market and compete head-to-head with lithium-ion, said IHS Markit Director Sam Huntington.

Lithium-ion, the dominant battery energy storage technology, is energy dense, has high charge/discharge rates, very good efficiency, and is already cost effective at durations of two to six hours. In addition, lithium-ion technology is getting cheaper, said Huntington, propelled by massive growth in manufacturing capacity to meet electric vehicle demand.

While lithium-ion battery costs are expected to continue their decline long term, costs are unlikely to fall enough to ever make lithium-ion broadly cost-effective at durations beyond 10 hours, Huntington said.

In addition to the cost hurdle, there is the question of value. In today's power markets there is little to no signal for longer energy storage durations—capacity markets only require four hours of storage, and most of the arbitrage value in energy markets can be captured with 2-4 hours of storage, he added.

An alternative path to commercialization is to demonstrate the value of LDES in resource planning models. Indeed, California's long-term planning process led to a procurement order for 1 GW of eight-hour energy storage this year.

California's largest current battery storage facility is Vistra Energy's 300-MW Moss Landing facility. Moss Landing is on track to become the world's largest battery storage facility at 400 MW, but three-quarters of that capacity is currently offline following a fire in September. A spokeswoman for Vistra Energy had no update when it might be back online.

Chinese to lead global growth

The US is currently the largest market for energy storage, but IHS Markit forecasts indicate China will supplant it at the top of the global rankings.

IHS Markit says the energy storage industry will experience rapid growth in 2021, with installations topping 12 GW by the end of the year, an increase of over 7 GW compared with 2020. Annual global installations are set to exceed 20 GW in 2024 and 30 GW by 2030.

The increasingly optimistic outlook is underpinned by a growing number of ambitious national energy storage targets linked to strengthened decarbonization commitments from around the globe, IHS Markit Senior Analyst, Clean Energy Technology George Hilton said. A total of 87 GW of national energy storage targets for the coming years had been announced in 2021 by early October.

China's recently announced 30-GW energy storage target by 2025 is the biggest factor. Hilton told Net-Zero Business Daily he expects continuous, sustained annual capacity growth in the region of 25% to 50% through 2030. In contrast, the US won't see sustained growth because the incentive provided by tax credits is set to expire.

Supply chain fears are a "relatively transient problem" because the increase in battery production is "so huge," Hilton said.

Previously, stationary storage has struggled with bankability and financing, in addition to lithium-ion battery safety worries, said Hilton, but the scaling up of production will see a greater bankability and increased diversity among battery cell manufacturing backing.

Currently, frequency regulation remains the most common use for batteries, but other uses, such as ramping, arbitrage, and load following, are becoming more common as more batteries are added to the electric grid, according to the US Energy Information Administration (EIA).

In 2020, EIA data showed 885 MW of US battery storage capacity (59% of total utility-scale battery capacity) cited frequency response as a use case; some 583 MW of capacity cited ramping or spinning reserve as a use case; 586 MW of capacity was used for arbitrage; and nearly 400 MW of capacity was used for load following.

Biden administration goals

Batteries are a "linchpin technology for the current US administration's GHG 2030 and clean generation 2035 targets, said US Deputy Secretary of Energy David Turk. Demand is set to grow five to 10 times in that period, Turk told attendees of a COP26 US Pavilion event on better batteries 10 November, noting "we're going to need a lot of batteries."

The US wants to ramp up domestic production of batteries, while making them cheaper and more efficient, including through the Department of Energy's Li-Bridge public-private alliance, he said.

In addition, a bipartisan infrastructure bill that President Joe Biden will sign on 15 November offers $320 billion in tax credits for stationary and transportation batteries, $7 billion in supply chain support, and $7.5 billion in electric vehicle charging buildout backing, Turk noted.

Building better batteries is key, said Freyr Battery CEO Tom Einar Jensen told the COP26 event, as there are currently 15 steps to manufacturing. Freyr is building semi-solid lithium-ion batteries using renewable power in Norway and Jensen says the company's production process eliminates 10 of the steps its rivals must plow through, he said.

The moderator of the US Pavilion event was Principal Deputy Assistant Secretary for the Office of Energy Efficiency and Renewable Energy Kelly Speakes-Backman, the former head of the US Energy Storage Association, which will assimilate into the American Clean Power Association on 1 January.

During an event hosted by Speakes-Backman's former employer on energy storage's role in improving grid resilience, Jonathon Monken of consultant Convergent Strategies said storage has four possible paths to aiding the reliability of the grid:

  • Grid-scale storage at the critical transmission intersections of the bulk electricity system, what he termed the "nodes" model;
  • Supporting the existing fall-back system of the bulk electricity system as a black-start option;
  • Offering many, small distributed energy resource storage assets together in conjunction as a large capacity resource, and;
  • Performing as enhanced demand response, whereby large or critical consumers exit the grid to take the pressure off the bulk system.

It's not just in the US where this is at the forefront of the minds of diplomats and industry players though, especially as domestic industries look to withstand the onslaught of competition from Asian battery giants such as China's CATL and South Korea's SK Innovation and LG Energy Solution.

On 7 October, Swedish battery manufacturer Northvolt said it planned to create a "fully-integrated ecosystem" for catalyzing technological advances in the emerging European battery industry with a $750 million investment.

The Asian competition and the cost of competing in the battery market was too hot for one European player though. London-based chemicals and autocatalysts group Johnson Mathey said 11 November it was exiting the battery materials business. After failing to find a partner with pockets as deep its own if not deeper, Johnson Mathey said it was stepping away from battery materials. The company will remain active in another energy transition arena, the hydrogen sector, where it said it is "making good progress."

Deep pockets

Deep pockets are important in the fast-growing storage sector. AES and Siemens-backed Fluence Energy raised almost $1 billion as COP26 got underway through a 2 November initial public offering. Even with the backing of the two established power industry players, Fluence delved into the capital markets to take advantage of the appetite for green investments and build its war chest and momentum.

Start-up disruptors can also raise funding through the special purpose acquisition company (SPAC) route. Louisville, Colorado-based solid-state battery manufacturer Solid Power is in the process of merging with Decarbonization Plus Acquisition Corporation III.

Solid Power replaces the flammable liquid electrolyte in a conventional lithium-ion battery with a proprietary sulfide-based solid electrolyte. But it is also teaming up with industry giant SK Innovation.

Meantime, ESS, a US manufacturer of iron-flow long-duration batteries and a member of the LDES Council, raised more than $300 million after merging with a SPAC: ACON S2 Acquisition Corporation. Also, on 30 September, ESS gained the backing of Japanese conglomerate SoftBank Group, inking an agreement with a subsidiary to deploy 2 GWh of ESS batteries through 2026.

An earlier supporter of ESS was Bill Gates' Breakthrough Energy Ventures (BEV) investment group. "Long-duration energy storage is a critical innovation needed to support the world's transition to clean, renewable energy," said Carmichael Roberts, BEV investment committee business lead.

Alternatives

Going forward though, anyone looking into alternatives to lithium-ion batteries must question whether that option costs less, whether it has a sufficient lifetime, if the energy density and power density are good enough, and can it operate safely, Columbia Electrochemical Energy Center Co-Director Dan Steingart told attendees of the Columbia Energy Tech Revolution Forum 10 November.

Large-scale storage needs to have the right cost-level, a long enough lifespan to support economic deployment, and to be environmentally sound, added Brookhaven National Laboratory Chief Scientist Esther Takeuchi.

Batteries are an "enabling technology," said Takeuchi, and a successful battery meets its application needs better than anything else on the market. However, there is unlikely to be just one type of battery going forward, said Takeuchi, which isn't a bad thing, because there is such a broad umbrella of requirements.

The rate of change required in the battery industry to meet the call from stationary storage is unprecedented, said Takeuchi, but she added that she is optimistic it was possible. The renowned chemical engineer said one of the biggest advances of late is that it is much easier to test and monitor new electrochemical battery technology while up and running.

This is important because car batteries are 10,000 times bigger than cell phone batteries and the batteries required for grid storage are another 1,000 times bigger still, added Joint Center for Energy Storage Research (JCESR) Director George Crabtree.

The key to long duration storage is understanding batteries at a chemical level, said Crabtree, adding that it was the introduction of nickel and manganese into batteries that drove the increase in the energy density of existing batteries.

Governments should be looking for a gradual slope of improvement through "relentless engineering," rather than disruption with their investments, said Steingart, adding that what was required were "micro disruptions."

It is possible there will be a return to lithium-metal anode technology in the coming five years, said Crabtree, which will then require another five years to refine. Other battery technologies that may come to the fore include lithium-oxygen and lithium-sulfur, he said. Steingart suggested other routes could include sodium-ion, iron, zinc-bromine, or reversible aluminum, although he said the latter option is a "stretch goal" due to current CO2 emissions-heavy manufacturing processes for the metal. Crabtree said iron-oxygen options would democratize battery production, and "nothing could be easier from a supply chain perspective."

Posted 15 November 2021 by Keiron Greenhalgh, Senior Editor

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