Researchers Eric Hittinger and Eric Williams of the University of Rochester in the United States pointed out in the survey report that low-cost battery applications will change the way the electric power industry and the automotive industry operate, as well as the way homes, businesses, and utility companies produce and use electricity. More importantly, their research shows that energy storage technology is "future-proof" and it can work properly regardless of how the power supply system evolves. Due to falling prices and government policy support, the grid energy storage market is growing rapidly.
Based on research by technicians on grid operations and costs, new energy storage technologies can change the way American homes, businesses, and utility companies produce and use electricity.
Lithium-ion battery energy storage facility in the United States
The storage deployment in this case simply means saving electricity for later use. This is like a large number of rechargeable batteries that are much larger than the battery capacity of mobile phones and may be connected to the power grid.
According to a survey conducted by the research institute GTM, the average annual growth rate in the next five years will be around 50%. The U.S. power industry installed a total of 1 Gigabit storage capacity between 2013 and 2017, which is enough to supply 16 million laptops with several hours of power.
Although this energy storage capacity is less than 0.2% of the average US electricity consumption, analysts predict that from 2017 to 2018, the energy storage capacity will double, and will maintain rapid growth in the United States and globally.
If people want to understand why this trend is a big problem, first consider how electricity works. The power supply for homes and workplaces needs a hidden complex world and a series of delicate balancing act to promote, because the grid's energy storage capacity is usually very small. After power plants generate electricity, electricity is usually transmitted along the power transmission line at the speed of light, and most of the electricity is consumed immediately.
Without a means to store electricity, utility companies must produce enough electricity to meet demand, including peak hours.
This is where the power industry differs from most industries. Imagine what would happen if the automaker had to do this. When people bought a car, they had to leave it out of the factory gate. The production assembly line may continue to accelerate or slow down depending on consumer preferences. This sounds maddening and ridiculous, right? But grid operators need to balance power supply and demand every few seconds by opening and closing power plants.
This is why the energy storage deployment boom will bring about tremendous changes. If necessary, the storage device is equivalent to a warehouse that can store large amounts of power when other times are sufficient.
Energy storage technology expansion
Energy storage can provide electrical energy in a variety of ways, basically equivalent to a multi-functional Swiss army knife of the power grid. It can help balance short-term power fluctuations, manage peak power demand or act as a backup power source to prevent blackouts or restore power. With utilities, businesses, and consumers providing more renewable energy online, without additional storage capacity, the grid may be difficult to balance.
It can be deployed in any size grid, as well as at any point on the grid, from small home energy storage systems to pumped storage power stations that are adequate to power small cities. Although the energy storage device actually consumes some electrical energy and does not generate any electrical energy, it makes the power business more cost-effective. With the increase of energy storage capacity, people expect the grid to become more stable and flexible.
Energy storage systems may also be very different from electricity generated by solar energy or wind energy. For example, solar energy can produce electricity only when there is sufficient sunlight, and wind power can generate electricity only when the wind power is sufficient.
But generally speaking, this is not necessary at present. Although these renewable energy industries are rapidly developing and growing, wind power generation accounts for only about 6% of U.S. electricity, and solar electricity generation is less than 2%. But currently, the grid can use almost all of this electricity.
Grid operators are accustomed to managing variable power supply and demand and can manage their additional unpredictable wind and solar power, but as utilities, businesses and consumers bring more renewable online Energy, the grid may become more difficult to balance without additional energy storage.
To be sure, hydro operators have long been storing electricity. The United States has 22 GW of pumped storage capacity, accounting for about 2% of the United States' electricity production. However, relying on large reservoirs that are difficult to build near the electricity market has limited the growth potential of this energy option.
Competing with natural gas power generation
Once the scale of energy storage is expanded, utilities will be able to more easily meet peak demand for electricity, reduce total capacity, and reduce power plants. If they can rely on energy storage to provide electricity during peak hours instead of building new power plants, they can save even more.
However, energy storage is not the industry's only technology, and other technologies provide similar advantages. Utilities companies can install new transmission lines or rely on flexible natural gas power plants, which are essentially the biggest competitors for energy storage systems.
Natural gas power generation now produces about one-third of the electricity in the United States and offers many of the same benefits as energy storage systems because these power plants can be easily turned on and off. The price of natural gas is relatively low, which is due to the widespread application of hydraulic fracturing technology and cutting its mining costs by half, which may delay the growth of the United States' energy storage capacity.
If the price of the energy storage system is sufficiently low, it may threaten the economic efficiency of natural gas power generation.
Natural gas power generation has become more popular since 2000, replacing the need for coal power generation. However, if the cost of energy storage becomes sufficiently low, this situation may be reversed and the energy storage system may threaten the economics of natural gas power generation.
Government help and better battery performance
One reason why the energy storage industry is growing is that it has been promoted by all levels of government in the United States. California, Maryland, New Jersey, and Nevada provide subsidies or mandatory adoption for energy storage deployments, or both. The Hawaiian legislature is taking similar steps.
Despite the efforts of the Trump administration to maximize the exploitation of fossil fuels, some local governments are laying the regulatory basis for the energy storage industry to compete for the first time directly in the open wholesale energy market.
Advances in battery technology have also had an impact. Battery technology dominated by lithium ion design is making great progress and the cost has become lower.
Lithium-ion batteries are a major component of this new grid-connected power generation system and are a key component of the rapidly growing American electric vehicle. For example, the lithium ion battery used in the domestic battery system Tesla Powerwall is the same as the lithium ion battery used in its electric vehicle.
Grid-scale lithium batteries are usually different from batteries in cars, but use the same technology. The price of utility-scale lithium-ion battery systems will drop from approximately US$2,100 per kilowatt-hour in 2010 to approximately US$1,200 in 2015, and is expected to continue to decline, with a drop of 40%.
Energy Storage Technology and Future Development of Power Grid
At present, the relatively small amount of energy storage capacity of the power grid is due to the fact that of the 17.2 million vehicles purchased in the United States in 2017, only 200,000 are electric vehicles. Because the current price of the battery is still very expensive.
For most U.S. drivers, the use of electric cars does not save money. However, market experts predict that the cost of ownership of electric vehicles will be lower than gasoline-powered cars in a decade and will continue to lower prices.
Similarly, for the grid, if the energy storage price is sufficiently low, its potential market may expand from 1 gigawatt-hour to tens or even hundreds of thousands of megawatt hours.
If this happens, wind power and solar energy will become more competitive and increasingly replace the current coal power and natural gas power plants in the United States.
This low-cost energy storage system will also lower the price of electric vehicles and reduce the amount of gasoline and diesel used by Americans. The way the power and automotive industries operate today is almost the same as 50 years ago, but the lower-cost battery world will change them in an exciting and unprecedented way.
No matter what happens, people believe that the development of energy storage technology is "future-oriented" because it works well on the current grid and various power generation technologies. If the wind and solar energy industry maintains the current momentum, energy storage will become more valuable.
But if the development of the power grid goes in another direction, such as relying on large and expensive power plants, energy storage will more easily manage peak power demand without remaining capacity. Even if it is not clear what the future grid will look like, people believe that they can maintain the operation and development of the grid in new ways.