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Energy storage represents what could be considered one of the fastest areas of growth associated with the smart grid between now and 2020. Currently, there is a large market for electrical storage in uninterruptible power supply (UPS) for critical infrastructure, but the coming years will see a significant increase in the need for storage solutions to support the evolving intelligent grid, both to improve power quality and to allow integration of high levels of intermittent generating sources, such as wind and solar energy.

There are many materials and integrated storage solution opportunities for chemical storage batteries and supercapacitors for grid storage. In the short term, the initial increase in demand for storage will be met with current deep- cycle lead acid batteries, sodium sulfur (NaS) batteries, lithium-ion batteries, and sodium nickel chloride solutions.

Lead acid is the technology with an established manufacturing base that can expand to meet demand in the near term, and NaS has been commercialized in Japan, but the lack of multiple manufacturers will retard growth of NaS in the near term. Lithium-ion capacity exists, but many of the standalone companies are in poor financial condition, and module prices are the highest of any available technology. And though sodium nickel chloride just entered the market this year, significant volumes will be available in 2013.

Further out in time, advanced lead carbon, ultrabatteries, high-temperature batteries (NaS and NaNiCl) and flow batteries will begin to be the dominant growth sectors in large-scale storage applications, with supercapacitors gaining significant market share in grid-quality applications. However, liquid metal batteries and sodium ion/water electrolyte batteries may start to gain market share by 2020.

The evolving grid and the role of energy storage

The importance of the electrical grid is difficult to overstate. Inexpensive, reliable electricity is a key metric of all advanced societies. The amount of overall energy consumption in the form of electricity has increased from 10% in 1940 to over 40% today, and it is projected to be the fastest-growing energy source for the foreseeable future.

There are several factors driving the need to upgrade the electrical grid infrastructure. For electrical generators, there is an increasingly large incentive to find ways to more efficiently use the generating resources that are already in place, both for better use of capital and to avoid regulatory impediments to increasing generating capacity. Also, because there is currently little storage on the grid, there must be enough capacity to meet maximum demand, which results in an overall usage of generating capacity of only about 60%.

While it has been one of the least-talked-about parts of the evolving smart grid, electrical storage is now recognized as a crucial piece of the smart grid puzzle, and it has been recently included as part of the national grid evolution going forward.

The major driver for large-scale grid storage is the planned addition of significant amounts of intermittent generating sources, such as wind and solar energy, to the grid. (The increase in renewable energy sources to the grid is being driven by mandates in over 30 states that require that between 8% and 40% of electrical generating capacity come from renewable sources by 2030.)

As the penetration of renewables rises above approximately 20% on regional grids, grid storage becomes necessary in order to stabilize the grid in the face of large swings in generation input from intermittent wind and solar assets. Thus, in the near term, wholesale grid storage will be used for grid stabilization of renewables. The relief of transmission line congestion from wind and solar farms will be another near-term use. Further out in time, as prices for grid storage continue to drop, large-scale peak shifting becomes viable.

Large-scale energy storage is not a new concept. Pumped hydro electrical storage was first used in Europe in the late 1800s, and peaked in the U.S. at nearly 3% of total capacity in the mid-1990s. However, environmental concerns eliminated any further growth of pumped hydro in the U.S., and such facilities are limited to certain geographic regions.

Another energy storage technology that is also limited to certain geographic regions is compressed air energy storage (CAES). While it is competitive where the geographic features allow it, it is generally limited to use in salt domes, abandoned mines and the like, and is not a general storage solution for all regions.

Other forms of storage, such as flywheels and superconducting magnets, have also been tried, but because of cost and system complexity issues, these technologies will not likely be considered for large-scale applications. Therefore, NanoMarkets’ research indicates that these chemical storage in batteries and short-term storage in supercapacitors have the highest potential for growth within the next eight years.

Current energy storage options

Lead acid: Currently, the most pervasive use of large-scale chemical energy storage is for power quality in the form of uninterruptible power supplies. UPS is used to protect expensive electrical assets, such as computer data centers, hospital operating suites and dialysis units, and critical infrastructure, and represents an $8 billion-a-year market.

Such systems do not require high energy content, as most power outages are less than a minute in length. Lead acid batteries are the mainstay of this industry, but it is an application where supercapacitors and integrated supercapacitor/battery backup systems may make significant inroads, because they have significantly quicker response times than batteries alone.

Lead carbon and ultrabatteries:
Lead carbon and ultrabatteries represent the first major improvements over lead acid batteries in over 50 years. In the case of the ultrabattery, a supercapacitor electrode material (activated carbon) is added to the negative electrode. In the lead carbon battery, lead is removed entirely at the negative electrode in favor of one of several nano-engineered carbon electrode materials. In each case, the carbon at the negative electrode eliminates the sulfation mechanism at the negative electrode and improves the lifetime of the batteries 10 times compared to lead acid at what will be a similar cost to lead acid when in volume production.

Flow batteries: Whether vanadium- or bromine-based, flow batteries store energy through the reaction of two liquid electrolytes that are maintained in separate containers and allowed to react in a membrane redox cell. The advantage of the flow battery is that the storage capacity is only limited by the size of the storage containers. The disadvantage is the current high cost of the electrolyte. As electrolyte costs come down over time, flow batteries will be an ideal solution for large-scale peak-shifting applications.

Sodium sulfur batteries: NaS-based systems are also in production, with over 300 MW of total capacity in the field, and they are extensively used in Japan. However, in July 2011, a fire in a 1 MWh module caused production to cease until October 2012, during which time new safety precautions were being put in place. While the technology is sound, the production stoppage may allow others to gain market share.

Sodium nickel chloride batteries:
Sodium nickel chloride batteries are similar to NaS, as they are a high-temperature battery (~300°C) with attractive performance and costs for grid storage applications. General Electric and Fiamm Sonik have each come online in 2012 with approximately 100 MWh of capacity/year.

Lithium-ion batteries:
While lithium-ion batteries traditionally have been considered cost-prohibitive for grid storage, development support mainly from the American Recovery and Reinvestment Act of 2009 has resulted in significant capacity. However, the vast majority of standalone companies have either folded or are in financial trouble, because the module cost of lithium-ion systems is too high compared to other technologies.

Even so, some of the large companies offering integrated solutions, such as Johnson Controls and SAFT, will continue to use lithium ion because their solutions for smart buildings and the like are highly integrated solutions where the higher module cost will not make the entire system unprofitable.

Supercapacitors will see significant growth in two major applications. The first is frequency regulation, where their fast discharge of power can maintain voltage and frequency quality during voltage sags or when the frequency of base load generating resources is unstable. The long lifetime and near-zero maintenance of supercapacitors are additional features that make them attractive for such applications.
A second area of growth for supercapacitors in grid applications is in regenerative braking for light rail systems. A supercapacitor-based regenerative braking system has been demonstrated to reduce electrical usage by 30%.

Eight-year forecasts for grid storage

NanoMarkets expects the overall market for chemical batteries and supercapacitors for grid storage to be around $11.2 billion a year by 2020, with $9.5 billion coming from chemical batteries and $1.7 billion coming from supercapacitors.

The large-scale grid storage market is in its infancy, and, therefore, there is little precedent for predictions of its growth. That being said, NanoMarkets believes that the mass adoption of grid storage will come in three waves.

The first wave will be grid storage for remote applications, island grids and microgrids. These applications are now economically viable. The best example is remote cellphone towers. Remote grid storage cuts the estimated energy costs for such remote towers by half versus traditional diesel power. The addition of chemical battery grid storage shows similar savings for island grids. Along with microgrids in developing regions, remote grid storage and island grids represent the first wave of significant demand for stationary grid storage.

The second wave of grid storage adoption will be in retail applications (on the customer side of the meter) for power quality and peak shaving. This second wave will have significant overlap with the first wave, and early adopters are already beginning to use the technology. Pharmaceutical, semiconductor and chemical manufacturers are leading the adoption of grid storage for improved power quality today and expanding its use to peak-shaving applications as prices drop. Another second-wave application in the wholesale area is the addition of grid storage to achieve grid stability for wind and solar farms.

The final wave of grid storage will be dominated by both wholesale and retail peak shifting applications. Peak shifting is the most cost-sensitive grid storage application, because the storage solution has to provide large amounts of electricity at a cheaper price than it can be bought from the grid.

Finally, NanoMarkets expects supercapacitors to become an integral part of grid storage, particularly later in the reporting period, as their costs continue to go down and storage capacities continue to increase. In the smart grid area, their growth will be dominated for the next five years by regenerative braking systems on grid-attached light rail systems. Supercapacitors will then expand aggressively into the frequency regulation arena, first for microgrids, and later on for large established grids.

Jeff DeBord is an associate analyst at research firm NanoMarkets, and author of 25 papers in peer-reviewed journals in the areas of organometallic synthesis, organically templated transition metal phosphates and organically templated metal oxides with novel magnetic properties. DeBord’s educational background includes a Ph.D. in inorganic chemistry from the University of Nebraska-Lincoln and postdoctoral work at the NEC Research Institute in Princeton, N.J. He holds three U.S. patents.

This article was adapted from a report titled “Batteries and Supercapacitors for the Smart Grid - 2013.” For more information about the report, click here.

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