Battery Storage –
A Technology whose time has come?
There have been a lot of discussions in academic journals (Nykamp et al., 2014) (Kim et al., 2015) as well as more mainstream media (Shankleman, 2016) (Evans-Pritchard, 2016) as to how battery technologies might impact on electrical energy consumption in UK. It almost became a cool topic of general conversation when Elon Musk announced to the world that Tesla were going to become a major force in residential battery storage (Tesla, 2015). Having a ‘gigafactory’ and the fastest electric car in the world behind your marketing strategy is always going to attract attention.
Just how seriously should we be taking these claims and how close are we to battery storage becoming an integral part of the energy landscape ?
What is driving this interest ?
There are two distinct areas of potential impact, namely stabilisation of the grid and small scale domestic storage.
With the level of distributed energy being fed into the grid continuing to increase – 25% in 2015 (Clark, 2016) and rising – grid stabilisation is becoming a real challenge. This is reflected in limitations being placed on new medium and large scale installations of renewable energy installations in the South West England (Western Power, 2015).
Small scale domestic storage has become a hot topic, certainly since that Tesla announcement about entering into the domestic market place with their Powerwall range (Tovey, 2016). The appeal is a mix of cost savings through optimising PV performance, linked to a desire to protect one’s home from inevitable increases in electricity price rises, possibly along with the warm glow associated with helping the environment.
Where might battery storage help ?
The greater the installed wind and PV energy supplies, the greater the potential fluctuations as the wind suddenly drops and cloud cover increases or vice versa. In the UK the legal requirement is to keep the voltage delivered to homes and businesses between 253 and 216 V and the frequency at 50 +/- 0.5 Hz (DTI, 2005). The battery type selected needs to be capable of delivering high power with sub second performance (National Grid, 2016). The more rapid the response the more stable the grid.
On the other hand, domestic storage is more focused on maximising the use of energy either from PV panels or from the use of off-peak electricity. So the energy requirements are far lower and the charge / discharge times can be slower (REA, 2016). One factor that will become increasingly significant will be the ubiquitous presence of smart meters, predicted to be completed by 2020 (Ofgem, 2011). These will allow time-of-use tariffs to be introduced, which should have the effect of reducing the peak levels of consumption seen between 4.00 and 8.00pm, see Fig 1 (Gavin, 2014). This can only happen with some form of battery storage.
Fig 1 (Gavin, 2014)
Where are we now ?
Earlier this year National Grid confirmed that 201MW of sub-second frequency response contracts in order to stabilise the Grid, had been awarded (National Grid, 2016). All eight contracts awarded were for battery storage and are due for installation over the next two years. A further 1.4 GW of capacity has been pre-accredited, indicating more battery storage is to come.
When one looks at the UK domestic scene, there is a lot of talk, but far less action. There has been a steady increase in battery providers into the UK domestic and small commercial market – 43 and counting (Sahan, 2015). However there is little evidence that there is any significant penetration of this market. North Star Solar’s innovative PV / Battery storage scheme was launched this year, but whilst this scheme, with a 23 year term, has been offered to over 50,000 homes, none appear to have taken up the offer at the time of writing (North Star Solar, 2016). It is worth noting that Germany saw 14% of domestic PV installations include battery storage in 2014, this increased to an impressive 41% in 2015, due in no small part to the 25% capital grant, but significant nonetheless (energypost, 2016)
What is happening to the cost / kWh ?
The rate of change in installed and lifetime cost of battery storage is, as one might expect, the key driver. We are seeing a 13 – 15% annual decrease in battery cost for Lithium Ion (Li Ion) the lead battery technology (D’Aprile, et al., 2016). Current cost is around $400/kWh, predicted to fall to $200/kWh by 2019 and $100/kWh by 2023 (Nykvist, Nilsson, 2015).
There has also been a significant increase in research in battery storage technology (Eurobat, 2013) which is leading to a significant increase in different types of battery storage technologies (MIT, 2016). In part this is due to the different demands from battery users regarding discharge times, depth of discharge, life time and density compared to the investment, maintenance and running costs, see Fig 2 (IEC, 2011). And in part it is simply a function of the good old economies of scale.
Fig 2 (IEC, 2011)
So, has the time come to invest ?
For grid scale infrastructure, based on the recent awards by National Grid, certainly for sub-second voltage stabilisation, battery technology is already established. Reduction in battery costs can only accelerate this trend.
As can be seen in Germany, significant uptake of domestic energy storage will depend on domestic energy pricing compared to the installed and life time battery costs. In the UK energy storage is seen as a logical extension of the use of PV panels, in that the householder can use, and store, electricity that would normally be exported. Under the terms of the Feed in Tariff (FIT) there is a presumed export of 50% of any electricity generated by the PV panels, if the householder can store any of this, that electricity is effectively ‘free’.
The net costs will obviously be affected by any government grants available; Germany’s 25% grant has clearly had a big impact. The National Grid would certainly be happy that more renewable electricity is retained within the house rather than exported into a stressed grid.
On balance, the UK does not seem quite ready for large scale deployment of battery storage, but, as battery costs decrease and as electricity prices move up, it does appear to be only a matter of time.
Knowledge Transfer Manager
Faculty of Science and Engineering
University of Wolverhampton
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