Energy Storage: Poised for Growth

    May 7, 2015 4:54 PM by Russell Ray, Chief Editor, Power Engineering

    Storing electricity on a large scale has long been pursued by electric utilities in hopes of using the power to cover periods of peak demand. The ability to store large amounts of power would help power producers fill the production gaps created by growing amounts of intermittent generation such as solar and wind power.

    Until recently, efforts to develop cost-effective, grid-scale storage solutions have yielded limited progress. But new mandates and breakthroughs have accelerated demand for a technology some say will become cost competitive with natural gas.

    According to Navigant Research, energy storage could grow to become a $21.5 billion market by 2024.

    The research firm projects that worldwide revenue from energy storage technologies could grow from $605.8 million in 2015 to $21.5 billion in 2024. In the U.S., about 220 MW of storage will be deployed this year, more than three times the capacity installed in 2014.

    The market for large scale energy storage technologies received a big boost in October 2013, when California adopted the nation’s first energy storage mandate. The measure requires the state’s investor-owned electric utilities to buy 1,325 MW of energy storage capacity by the end of 2020.

    A year later, Southern California Edison (SCE) announced plans to procure 260 MW of energy storage to offset a loss of capacity created by the closure of a nuclear plant and other facilities slated for retirement. SCE also unveiled plans to build one of the largest battery storage systems in the world. The $53 million project will use lithium ion batteries to store excess wind power. Nearly 11,000 battery modules will be housed in a 6,300 square-foot facility near California’s Tehachapi Mountains, where 4.5 GW of wind capacity is under construction and expected to be online by the end of 2016.

    Just this month, Tesla, an electric car company known for its lithium ion batteries, announced plans to enter the market for utility-scale grid storage.

    In addition, four companies, including Duke Energy, are building a 1,200 MW underground energy storage facility in Utah that uses compressed air. The $1.5 billion project is the largest of its kind, featuring four vertical caverns, each capable of storing 41 million cubic feet of high-pressure compressed air. The project is part of a larger initiative that includes the construction of a $4 billion, 2,100-MW wind farm and a $2.6 billion, 525-mile high-voltage transmission line. The project has been described as “The 21st century’s Hoover Dam.”

    During the first half of 2014, the amount of wind and solar capacity added in the U.S. more than doubled versus the first half of 2013. The U.S. added 2,478 MW of residential, commercial and utility-scale solar capacity during the first six months of 2014 while wind power accounted for 675 MW of new generation capacity. In California, state law requires power providers to generate 33 percent of their power from renewable resources by 2020.

    Utilities and grid managers are struggling to maintain a balanced load amid the growing amount of intermittent generation. A capable system for storing large amounts of power could bring more balance to supply and demand, making the grid more resilient and efficient.

    Worldwide, the demand for large-scale energy storage solutions, particularly lithium ion batteries, is significant.

    Other states may follow California’s lead and adopt similar requirements. Texas and New York are aggressively pursuing several initiatives to promote the development and commercial application of grid-scale energy storage.

    Home to more than 10,000 MW of wind power capacity, Texas has become a major testing ground for storage technology. Duke Energy built a large lead acid battery storage facility near a wind farm in west Texas. Dresser-Rand plans to build a 317-MW storage facility for compressed air in east Texas. In New York, state officials announced a $23 million public-private investment to build a battery storage test and commercialization center in partnership with NY-BEST.

    The growing market for energy storage systems and advancements in energy storage technology will be thoroughly discussed at POWER-GEN International 2015, Dec. 8-10, in Las Vegas, Nevada. For more information, visit www.power-gen.com

    If you have a question or a comment, contact me at russellr@pennwell.com. Follow me on Twitter @RussellRay1. 

Russell Ray

The Power Points blog, written by Russell Ray, Editor-in-Chief of Power Engineering, covers all forms of power generation, including coal, gas, nuclear and renewable. It examines a wide range of issues and advancements in pricing, policy and technology. You can follow Russell on Twitter @RussellRay1.

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