Can we now say that electricity storage has “broken through”?


The question of whether electricity storage technology can overcome the problems of expense, efficiency and scalability and finally “breakthrough” is one that’s been asked again and again and again. In April last year though, this pattern was disrupted when a 44-year-old business magnate, engineer and inventor didn’t ask a question. Instead he stood up and told the world that he had the answer.

Unveiling his new electric battery – which has both home and utility scale versions – Telsa Motors boss Elon Musk said the technology represented “a fundamental transformation about how the world works”, adding that it was nothing short of a “solution” to the problem of climate change.

In terms of the overall potential of storage to tackle global warming, he undoubtedly has a point. Effective electricity storage solves the intermittency problem of wind, solar and tidal energy allowing power to be supplied at times of demand rather than only when the wind blows, sun shines or sea rises and falls. This, in theory, means renewables can be scaled up to meet all power demand, obviating the need for fossil fuel power and even other kinds of low-carbon energy like nuclear.

But if electricity storage does indeed represent an important part of the solution, has Musk, as he claims, delivered it? Or looking beyond Tesla to electricity storage in general, has it improved to a point where we’re seeing an exponential growth in take-up?

In one simple sense Musk’s own products, the Powerwall and the Powerpack, don’t represent a significant step-change because they use a technology that has been around since the 1970s: the lithium-ion battery. If a breakthrough has occurred it is one achieved through increments rather than leaps and one that is economic rather than technological.

As Forbes has pointed out, the Powerwall battery intended for home use still delivers electricity at too high a cost (30 cents per KWh) to be attractive beyond a few markets where electricity is very expensive. The Powerpack, on the other hand, is a different story. Here the costs of stored electricity are $250/kWh, a price well below the point at which they become a cheaper way to meet peak demand than building new power plants – a point one study put at $350/kWh.

As might be expected, it’s not just Tesla who are cracking the economics of electric batteries. A study published last year found that the cost of electric vehicle batteries have dropped faster than anyone projected and are now below most forecasts for the year 2020. Likewise a report in January on utility-scale storage predicts costs will decline 41% over the next five years.

But affordability on paper is one thing, real evidence of a breakthrough rests in what is happening with installed capacity. Yes Tesla has received 100,000 reservations (worth $1bn) for its batteries but these are non-binding and the firm’s Gigafactory which will make them is yet to go into production. If you look at what’s on the ground now, you find the vast majority of electricity storage – a whopping 96% globally – is pumped hydro. There’s definitely no breakthrough here as it’s an old technology inherently limited by a need for both water and a steep incline. At the other end of the scale are technologies which are genuinely breaking-ground, but barely out of the lab (supercapacitors) or limited to a small number of projects (compressed air, flywheels, flow batteries).

Elsewhere though, the word breakthrough may not be so misplaced. Thermal storage occupies second place in terms of amount installed capacity and has increased from 0.1GW in 2005 to 1.7GW in 2015 – a rise of 1700%. Forecasters expect this to double again by 2020.

There is good news too for Musk’s friend the electric battery. Its global capacity has trebled since 2010, but it is the growth in installations rather than the growth in wattage which points to its future potential. There are already more battery storage projects than storage projects for any other technology. This is due in part to battery tech’s high energy to weight ratio which means it can be used at a variety of scales. It is also very adaptable as it can be allied with a host of generation technologies. More than anything else, it’s this versatility – coupled with economic viability – which now makes electric batteries such a thrilling and open-ended prospect.

Musk was no doubt mindful of this when, in his presentation last year, he envisaged a world in which the energy needs of the entire planet – electricity, heating and transport – were met with a combination of his batteries and renewable generation. Are we there yet? Of course not. Has electricity storage broken through? Maybe (just maybe) it has.

Global energy storage projects over time (does not include pumped hydro storage). Source: (click for higher resolution).


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