Balancing supply and demand is vital to counteract renewables’ variability. So, assuming carbon capture and storage (CCS) doesn’t emerge as a white knight, a lot more renewable energy is needed.
Time-shifting supply and demand so that they better match – not just minute by minute, as today, but also season by season from tomorrow on. Energy storage has been widely heralded as the solution here, but market barriers are still slowing down quick progress.
Apart from emission reductions, the EU also aims for at least a 32% share for renewable energy, and 32.5% improvement in energy efficiency.
Pledge to phase-out combustion engines
A raft of countries has pledged to phase out the internal combustion engine in favour of electric vehicles (EVs). Companies such as Tesla and Moixa are bringing batteries into our homes; and solar panels continue to get cheaper, and wind turbines taller and more efficient.
“Before long, we could even see solar panels printed like newspaper and incorporated into all sorts of fabrics and building materials. One sees windows that convert the invisible parts of the light spectrum into power even as they remain transparent to the human eye,” said Patrick Clerens, Secretary General at the European Association for Storage of Energy (EASE). These solutions, in his view, will work together to ensure that we have abundant electricity in the future. “Yet none will solve the variability issue,” he cautioned.
Setting the right incentives to shift demand
Large scale, decentralised and intelligent energy storage can realistically incentivise energy users to shift the pattern of their demand. For example, people can be incentivised to set washing machines to run overnight when demand is lower – if the price is right.
Electric vehicles will provide a giant network of flexible battery storage when left on charge. Batteries, however, begin to degrade after enough charge cycles and use in this manner will accelerate that, he said, warning that some batteries could lose 20% within a few years time. “It all comes down to money and incentives,"he said, "but so long as we remain relatively wealthy in Europe and electricity remains relatively cheap, those incentives would have to be significant.”
Decentralized, behind-the-meter electricity and heat storage have an important role to play in decoupling behaviour from grid needs, as do batteries which degrade more slowly through cycling.
The option of large-scale, front of meter energy storage is also an area of innovation, notably lithium-ion batteries. Elon Musk’s grand plans for Tesla include a ‘Gigafactory’ which will be the largest building on Earth by footprint, and the company has already supplied grid-scale batteries to Australia. Closer to home, Mitsubishi and Eneco are developing EnspireME – a 48 MW lithium-Ion system with a capacity of over 50 MWh, which corresponds to the average daily energy consumption of over 5,300 German households.
“But lithium-ion isn’t the whole story. In labs around the world, innovators work on better and complementary batteries such as solid state and flow designs. At the same time, we have supercapacitors, designed to hold less charge but discharge it far more quickly for fast frequency response and other applications, possibly also increasing the cycles and therefore the life span of lithium-ion,” Clerens forecast.
“Nor is it just about batteries,” he said pointing at pumped hydro storage as a long-established technology, pumping water uphill when power is cheap and abundant and letting it flow back through generation turbines when its needed. Now a Scottish start-up is taking the same gravity-inspired concept and applying it to abandoned coal-mines.
“Compressed air is also an option, hydrogen another,” he continued. Liquified Air Energy Storage (LAES) is emerging as a high-tech contender too. Each technology has its own profile, strengths and weaknesses and an intelligent combination could go a long way to solving intermittency second-by-second, hour-by-hour and even season-by-season.
Subsidies vs. free market
Investment in renewable generation technology needs to be matched by investment in varied cutting-edge forms of energy storage. For starters, policy makers need to decide whether to incentivise deployment by market design or subsidy regimes. Europe largely opted for the latter for renewables but as the market matured, these have been rolled back.
There is little political will for a fresh wave of subsidies for storage, hence a carefully crafted market design is needed to incentivises flexibility and storage. At the European level, clear policy frameworks for EU Member States need to give a strong signal to investors and innovators. Member States need to decide on taxation and the costs at transmission and distribution network level.
The private sector can then step forward and start to put propositions in place. But this doesn’t just mean the storage manufacturers and operators themselves, it means a host of supporting services too. Investment banks need to create structured products to both help spread risk and attract different types of investor, with insurers stepping into the breech.
“This is easier said than done for a new sector, especially if we don’t go the subsidy route, offering investors guaranteed 20 year returns as we have for renewables,” Clemens cautioned. There’s a lot on the to-do list, but unlocking energy storage in Europe is non-negotiable if we are to meet our 2030 climate targets.