Energy storage technologies
The rapidly changing field of energy storage covers a wide range of technologies, each with specific technical characteristics. While Solar Server covered energy storage technologies extensively in our July 2010 report, and will only supply an overview of new developments here, it is important to note some of the technical details.
First, different energy storage technologies cannot be treated as commodities, since the technical features of energy storage systems determine the functions that they can supply on the grid. Ultracapacitors and flywheels offer very rapid power transfer, which can smooth out power fluctuations which last less than one second. For longer-term storage on the order of minutes, hours or days, a variety of battery types can be used. Finally, compressed air, pumped hydro, and methane and hydrogen systems are useful for long-term storage.
One of the key advantages of lithium-ion technology are higher cycle lives. Solarpraxis AG estimates that lithium ion batteries can reach a lifespan of 20 years or 7,000 charge cycles if charged and discharged daily, much more than the 2,000 maximum cycles available with lead-acid gel batteries. The two can also be combined, and Fraunhofer ISE (Freiburg, Germany) reports that a hybrid approach of using a larger lead-acid battery with a smaller lithium-ion battery subsystem can create a battery system with a longer lifespan.
Fraunhofer ISE also finds that while lithium-ion batteries are more expensive initially, that over their lifetimes they are nearly as cheap as lead-acid batteries at smaller scales.
Exponential market growth
When we talk about deployment of energy storage, we are talking about multiple different markets at different scales. At the residential and commercial behind-the meter scale, PV systems with energy storage system represent a very small portion of overall PV system sales.
However, this market is growing rapidly, in large part due to German subsidies. At the beginning of September 2013, IHS reported that 1,000 German PV system owners had qualified for subsidies to support 30 MW of storage, with another 4,800 applications being considered. IHS states that the subsidy is causing the PV energy storage market to boom in the same way that feed-in tariffs caused the PV market to boom in previous years.
At the larger scale it is difficult to put a number on the size of the current market, as deployment is uneven from year to year. However, with the large number of projects that have been announced, it is clear that this market is also growing.
IHS and other market analysts have made predictions about the future size of the global energy storage market, with IHS anticipating particularly sharp growth among energy storage systems to accompany PV systems for businesses. And while all predict exponential growth, the size of the market anticipated in any given year varies widely.
Like the PV industry, greater market adoption of energy storage will depend upon a number of factors, including regulatory support and subsidies, with prices falling as economies of scale are built and the industry matures.
It should be noted that the recent regulations in California allow energy storage at multiple scales, including behind-the-meter systems, to meet the 1.325 GW target. The main limitation is that pumped hydro systems larger than 50 MW do not apply. As such, while this will be a massive boost to the market, it is currently unclear what impacts this will have on various segments of the storage market.
This is not only true of California. We simply do not know what the future global energy storage market will look like, including what technologies will dominate. But what we do know is that as more and more renewable energy is added to the grid globally, energy storage will inevitably be a major component of our energy systems. The future is here.