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The Growth Of Battery Storage

The recent announcement that the world’s largest lithium-ion battery will be installed in South Australia by the end of 2017 is lending rare optimism to proponents of utility scale battery storage around the world.

This feat is expected to transform and fast track reliable renewable energy not only in Australia, but also around the world where this form of energy, while highly desired, remains short of guaranteeing dispatchable electric supply whenever needed.

Under an agreement with the South Australian Government, billionaire entrepreneur Elon Musk’s Tesla, and the French renewable energy group Neoen, the battery, three times more powerful than any other system in the world, will be designed to provide power to the grid at times of generation shortfall, as well as providing stability to the network, day and night.

“The coupling of renewable energy with large scale battery storage is a fundamental requirement for an affordable, reliable and sustainable energy future for Australia,” says Dr Alex Wonhas, managing director, Energy, Resources & Manufacturing of global engineering and infrastructure advisory company Aurecon.

“South Australia is now set to lead the charge in battery storage that will, in turn, revolutionise the way in which renewable energy is integrated into electricity networks.”

Aurecon is the Specialist and Technical Engineering Advisor to the Government of South Australia for the implementation of its Energy Plan. The company is providing advice across the entire programme, including the 100 MW battery, emergency gas generator and power supply contracts.

The last July announcement of the world’s largest lithium ion grid connected battery system at 100 MW/129 MWh is the culmination of three months of intensive work by Aurecon.

This included evaluation and shortlisting of expression of interest submissions, development of the technical and functional requirements of the system and invitation to supply documents, evaluation of respondent proposals and negotiations to enable the final contract to be signed.

Aurecon also supported the Government to engage with various stakeholders, including the Australian Energy Market Operator (AEMO) and South Australian transmission and distribution network service providers, in order to identify and advise on grid connection and registration matters.

“As engineers design for the future, technology and innovative solutions like this will be imperative to meeting tomorrow’s challenges,” says Dr Wonhas, who was previously Executive Director for CSIRO’s environment, energy and resources sector.

He goes on to say that in future, the role of the engineer will be to interrogate impossible challenges, including that of energy supply; and to answer “I think we can!” when others have said it’s impossible.

Batteries capable of storing power at utility scale are expected to be as widespread in 12 years as rooftop solar panels are now, revolutionizing the way consumers use energy. Batteries capable of storing power at utility scale are expected to be as widespread in 12 years as rooftop solar panels are now, revolutionizing the way consumers use energy.

That is the conclusion of Bloomberg New Energy Finance, which forecasts the battery market may be valued at $250bn or more by 2040. It expects 25 gigawatts (GW) of the devices to be deployed by 2028, about the size of the small-scale photovoltaic industry now.

The findings in the researcher’s New Energy Outlook indicate a further challenge to the traditional utility business model, where power generation and distribution are monopolised in a single company. Energy storage devices can be used to smooth out variable power flows from wind and solar plants, reducing the need for large, centralised generation plants fired by fossil fuels.

When the Abu Dhabi Water and Electricity Authority (ADWEA) successfully deployed a Battery Energy Storage System (BESS) in 2014 and connected it to its grid, the move opened the entire GCC region to the possibility of utility scale energy storage.

While the Middle East and North Africa region stirs up its energy mix with a wave of new investments in renewable energy to a tune of $8.7bn especially in solar and wind, concerns remain about their limitation in providing baseload power, and this is triggering interest in energy storage.

Global energy storage players such as AEG, AES, Delta, Eaton and SIEL are banking on this business prospect and now setting up operations and also creating business partnerships in the region, with demand for their solutions expected to surge.

Last year, power management company Eaton and The AES Corporation, through its subsidiary, AES Energy Storage, signed an alliance agreement under which Eaton will offer AES’ Advancion energy storage platform as the core of its grid-scale, integrated energy storage systems to help manage grid stability and peak demand infrastructure.

From a technological perspective, battery storage is mature and there are hundreds of suppliers providing reliable systems globally.

“Batteries will get a boost as costs drop and developers see the chance for lucrative new revenue streams,” says Julia Attwood, storage analyst at Bloomberg New Energy Finance. “Batteries could offer a whole range of services to the grid — they have the flexibility that will allow renewables a larger stake in energy generation.”“Batteries will get a boost as costs drop and developers see the chance for lucrative new revenue streams,” says Julia Attwood, storage analyst at Bloomberg New Energy Finance. “Batteries could offer a whole range of services to the grid — they have the flexibility that will allow renewables a larger stake in energy generation.”

Currently, less than 1 gigawatt of batteries are operating on the grid around the world. By 2040, the industry will mushroom, storing and discharging 759 gigawatt-hours.

The spread of electric cars is driving up demand for lithium-ion batteries, the main technology for storage devices that are attached to utility grids and rooftop solar units. That’s allowing manufactures to scale up production and slash costs. BNEF expects the technology to cost $120 a kilowatt-hour by 2030 compared with more than $300 now and $1,000 in 2010.

That would help grid managers solve the intermittency problem that comes with renewables — wind and solar plants don’t work in calm weather or at night, creating a need for baseload supplies to fill the gaps. Today, that’s done by natural gas and coal plants, but the role could eventually be passed to power-storage units.

The researcher estimates 35% of all light vehicles sold will be electric in 2040, equivalent to 41 million cars. That’s about 90 times the figure in 2015. Investment in renewables is expected to rise to $7.8 trillion by then, compared with $2.1 trillion going into fossil-fuel generation.

“The battery industry today is driven by consumer products like computers and mobile phones,” says Claire Curry, an analyst at Bloomberg New Energy Finance in New York. “Electric vehicles will be the driver of battery technology change, and that will drive down costs significantly.”

Global installed energy storage capacity for grid and ancillary services is forecast to grow from an annual market of 1.1GW in 2016 to 21.6GW in 2025, according to Navigant’s Energy Storage for the Grid & Ancillary Services report.

About 65% of the new energy storage capacity, or 52.3 GW, will be deployed in East Asia and the Pacific. South Asia will account for 13%, or 10.4 GW, the Middle East and North Africa (MENA) region will install 5.6 GW, and Latin America and the Caribbean will deploy 5.4 GW in 2016-2025. Eastern Europe and Central Asia will add 4 GW, while Sub-Saharan Africa installs 3.3GW.

Across all regions covered by the study, utility-scale energy storage is seen to be by far the largest market segment with a 66% share, followed by the commercial and industrial (23%), the residential (6%) and the remote power systems (5%) segments.

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