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Countries must overcome multiple challenges to install more
energy storage if they want to reach net-zero, a report found.
The newly-formed Long Duration Energy Storage (LDES) Council
presented the report in a webinar 13
December.
Speaking on a panel during the webinar, Rembrandt Niessen, chief
operating officer at long-duration CO2 battery provider Energy
Dome, told participants: "We see the large utilities [with wind and
solar] coming to us wanting to know more about the technology,
wanting to know more about the value proposition."
While consumers pay for renewable energy through bills, the
carbon emissions prevented by energy storage are not tracked and
priced. "Integrated utilities with future transmission bottlenecks
benefit from LDES but face uncertainty on monetization," found the
report.
Globally, renewable power usually relies on natural gas-fired
power as a backstop, but gas-fired power will need to be replaced
with energy storage to allow the electricity sector to eliminate
fossil fuel-related emissions per Paris Agreement targets. "To
avoid catastrophic climate change, we need to rapidly build a
net-zero power sector predominantly powered by renewable energy,"
it said.
LDES could store 10% of all power generation, make up 60% of all
new flexibility capacity, and eliminate around 10% to 15% of
today's power sector CO2 emissions.
When renewable penetration reaches 50% over the next 15 to 20
years, and then later reaches 60-70%, more energy storage will be
needed. The duration of LDES could average 50 to 130 hours by 2040,
compared with two to four hours currently.
By 2040, global LDES capacity will need to have scaled up to 400
times the present-day levels to 1.5-2.5 TW (85-140 TWh), the report
found.
Growth in the energy storage sector has accelerated this year.
IHS Markit analysts project that energy storage capacity grew at twice the rate of the prior
year (to 10 GW) in 2021, and expect China will account for 44%
of annual installations by 2030.
Renewable energy targets
Not only utilities, but also the EU and countries in Europe plan
to use renewable power to reach net-zero targets.
To meet these targets, states and utilities must act
"imminently" to meet an expected $1.3 trillion to $3 trillion-worth
of demand for LDES globally before 2040, according to the report.
However, this is much smaller than the amount invested regularly in
transmission and distribution networks.
Most LDES will be used for shifting loads in large energy
systems, but it could also be used, for example, for firming
corporate power purchase agreements (PPAs) and for companies
disconnected from grids, for which it would offer a lower cost
solution than gas turbines.
Regulators will also need longer-duration storage to run public
services during climate-change-linked disasters, Alexander
Schönfeldt, CEO at council member company and flow battery supplier
Enerox/CellCube, said during the webinar.
Technology in early stage of development
LDES is defined as any technology that can cheaply store energy
for multiple hours, days, or weeks, but at present typically is
available for eight or more hours. The most widespread LDES
technology is Pumped Storage Hydropower (PSH), a form of mechanical
storage that accounts for 95% of global energy storage
capacity.
Mature LDES technologies exist, but they have issues:
lithium-ion (Li-ion) batteries would be uncompetitive to operate
over a long duration, hydrogen faces cost barriers, and PSH is
dependent on natural geography.
The report homed in on the opportunities offered by LDES
technologies still at an early stage of development, like
electrochemical flow batteries, liquid air energy storage (LAES),
and compressed air energy storage (CAES), as well as underground
PSH that isn't geographically dependent.
Standing in the way of LDES' development and use are barriers in
the form of a lack of policy and a weak business case, the
panelists said. "There's … a huge need for new technologies that
can actually meet these requirements for not only technical
feasibility, but also commercial viability," said Alan
Greenshields, EMEA director at US-based battery company ESS.
Lack of viable contracts
Speakers on the panel blamed a failure to advance on LDES
projects on an absence of models for storage contracts, confusion
around what battery services should cost, as well as the lack of a
common language around storage services. "There are only three
things that matter: costs, costs, and costs, and so for these
systems to actually be commercially viable as well as technically
viable, you have to have a new technological approach to get to
cost points which can compete with natural gas," Greenshields
said.
LDES is only viable today in community microgrids that are
separate from urban grids, for example, in developing countries,
said Greenshields.
Microgrids are also used by industrial users. "There is
significant potential for industrial customers, in particular
off-grid mines or other facilities that rely on expensive diesel
generators for primary power," said McKinsey & Company
consultant Yves Gulda, adding there was potential to use
green-hydrogen-powered generation as LDES in the steel sector.
But finding users to pay for storage's operating costs in urban
markets is a challenge. This is because electricity is highly
commoditized and cheap, while pollution by grid operators and grid
users is not adequately priced, he said.
"In the services we're used to, you basically crank up a gas
turbine to provide as much energy as the grid needs to serve the
corresponding under-liability service to the user. At the moment
[this] appears to cost nothing. There's a big issue to bridge the
gap between the political goal and the realities of how grids work,
where you have to ask people now to pay for things they've never
paid for in the past, but if you don't pay for them, the only way
to do it is to carry on burning fossil fuels," added
Greenshields.
The LDES Council's report said that to make the LDES assets
economically viable, owners would rely on policy mechanisms such as
a carbon price, the carbon price would need to rise over time,
subsidies or otherwise must reduce the capital cost, and
certificates of origin for electricity must help to ensure LDES is
used.
Not only utilities, but oil majors with renewable assets are
backing these policies. The launch of the LDES Council at the
start of last month's COP26 climate summit included paying
members BP and Breakthrough Energy Ventures, which is Bill Gates'
venture capital fund. Its lobby effort is backed by EASE, an energy
storage industry association the EU created in 2011 to represent
the emerging sector.
The LDES Council is also aiming to collaborate with bodies like
the International Energy Agency and European networks association
ENTSO-E/G.
Posted 16 December 2021 by Cristina Brooks, Senior Journalist, Climate and Sustainability