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U.S. Government To Create A Big Energy Storage Market

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Solar Panels

Solar electricity will likely make up just 0.4 percent of the total power supply in 2014.

As the renewable electricity generation and electric cars is rising there is also a growing interest in energy storage technology. On Thursday the U.S. Department of Energy released a report on this emerging technology that points out big problems and potential panacea for encouraging energy storage technology development and installation. Lowering the price of energy storage systems and ensuring they are safe to use are among the big obstacles.

The report is directed at energy storage for the electric grid, which is gradually undergoing major and long-term changes as large amount of solar and wind energy is flowing into it. A grid operates well when it maintains a balance of supply and demand, something that cannot be achieved when wind and solar power generation can differ quite a bit at various times of the day and also from day to day. Using storage will empower utilities to bank renewable energy and discharge it at a steady pace into the grid.

Solar and wind power continues to be a small fraction of the country’s electricity mix, which won’t cause problems for the gird now. According to the U.S. Energy Information Administration solar electricity generated by power companies will likely make up just 0.4% of the total power supply in 2014 where as wind power is set to take up over 4% next year. A growing number of homes and businesses also are installing solar panels on their rooftops, and those energy storage systems also transfer electricity that is not used onsite to the grid.

However utilities, grid operators and policy makers need to decipher how to make sure the grid will operate just fine as wind and solar power generation increases. This attempt will cost billions of dollars and last over decades because the emergence of renewable energy and the ability of homes and businesses to generate electricity on their own.

The United States has about 24.6 gigawatts of energy storage capacity, or 2.3% of the country’s total electricity generation capacity. But 95% of that is pumped hydro, which discharges water up to a reservoir when electricity demand and cost is low and transports water through hydro-power equipment to generate power when demand increases. Pumped hydro is an old technology that is limited in where it can be built. Energy storage technology companies are exploring different methods to bank electricity, from batteries to the use of gravel and gravity.

Four major challenges identified by the energy department for creating a market for energy storage:

Lowering the price of energy storage: Currently energy storage technologies are far more expensive for mass deployment. Advanced battery systems are said to cost over $1000 per kilowatt-hour. According to the Electric Research Power Institute, which serves the utility industry, believes the energy storage market will grow tremendously once the price falls below $500 per kilowatt hour. The energy department’s report has set an aim of reaching $250 per kilowatt hour in 2018 and under $150 per kilowatt hour by around 2023.

Regulating safety and performance standards: Since the energy storage market is an emerging technology, there is not enough field data to present how well different types of batteries and other storage technologies can perform over time, may be, 10 to 20 years, consequently making it difficult for investors to calculate returns and decide if they want to finance energy storage projects. The storage equipment safety is also a concern, especially when it’s installed near or at where people live and work.

Benefiting energy storage owners: Storage makes it feasible to regulate the rate and amount of electricity released into the grid. That ability should permit storage plant owners to make profit in more ways than just supporting utilities manage renewable energy. There are many types of services that natural gas power plant owners currently offer, such as sending bursts of power into the grid, that help to balance supply and demand. Energy storage system developers want regulations that make those profit making opportunities made available to them as well.

Making storage a part of grid planning: Utilities and grid operators need software and processes in place to determine where and how much energy storage is required and create short- and long-term plans accordingly.

To rise above these challenges, the report advises funding different types of research and development projects for energy storage technologies and the technologies for analyzing their performance and execution and also for trying all those technologies in the field. Plans are also initiated for laying technical and safety standards and for the public and private sectors to work together.

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