To facilitate grid stabilisation and promote the uptake of electric vehicles (EVs), energy storage is key. In the renewable energy sector, storage addresses the intermittency issue associated with solar and wind power, and ensures a smooth power generation output, thereby facilitating grid integration. It has a range of other applications across generation, transmission and distribution. As the importance of energy storage is being recognised, increasing emphasis is being laid on advancements in cell technology. Storage systems vary in terms of driving technologies, form and size, based on their method of storing energy. Battery chemistries have been evolving, and different types of energy storage solutions are being considered for the applications they are best suited for. New technologies are constantly being developed to make energy storage cheaper and more efficient.
Baker McKenzie recently released a report titled “Battery Storage – A Global Enabler of the Energy Transition”, which covers in detail different energy storage technologies currently in use, alternative technologies being developed and technologies that the sector can expect to see going forward. REGlobal provides a brief extract from the report…
Current status of storage technologies
Stationary energy storage technologies such as pumped hydro storage (PHS) have been in use since the early 1900s. Through the years, the uptake of other storage technologies has also increased with the growing use of portable consumer electronics and electrification of the transport sector. The potential of PHS technology is limited due to several constraints including availability of sites and political issues.
Currently, new energy storage projects use battery storage. The market for battery storage has evolved due to rapidly changing battery technologies and a steady fall in battery and renewable energy costs. The battery storage market was dominated by lithium-ion battery technology, as of 2021. The technology comprised over 90 per cent of stationary battery capacity, according to REN21’s Renewables 2021 Global Status Report. The remaining market was dominated by sodium-sulfur (NaS) and lead-acid battery technologies. NaS technology is typically considered inferior to lithium-ion technology and poses safety concerns. The lead-acid technology is still in use in data centres and the transport sector, but is facing stiff competition from lithium-ion technology, which is cheaper and has a longer life cycle.
Lithium-ion uptake is also driven by intense research and development (R&D) in EVs. Due to R&D, the technology has become easier and quicker to deploy. The technology also benefits from an established supply chain, dominated by Asia, particularly China. Despite the advantages of lithium-ion technologies, different storage technologies are emerging due to the varied priorities of energy storage applications.
As the ideal battery technology for EVs sees increasing use in automotive battery supply chains, technology that is less suitable for EVs may be deployed in storage at a reduced cost. For instance, the divergence to lithium-ion technologies can be seen in the growing use of lithium-iron phosphate (LFP) chemistry for grid-scale storage, particularly in China, as compared to nickel-manganese-cobalt (NMC) chemistries predominantly used in EV supply chains. LFP chemistries gained prominence in 2021 in grid-scale stationary applications. This technology offers several advantages for stationary storage such as higher durability, thereby reducing maintenance costs and several safety concerns. Meanwhile, LFP chemistries have lower energy density than NMC, which is a disadvantage for EVs. Going forward, LFP deployment in storage is expected to increase over the next decade given its increasing use by storage developers in China and expected reduction in costs.
Another key consideration for lithium-ion batteries is that their performance is better for short-term storage, that is, less than eight hours before discharge. This does not present substantial issues for most storage projects in the short or medium term as the average grid-scale storage project currently aims for around four-hour storage. However, in the long term, particularly after 2030, the rising penetration of renewable energy will require not just increasing amounts of energy storage but long-duration storage (eight hours or more). Given this scenario, cost-competitive long-duration storage technologies are now being developed to replace lithium-ion batteries across the world.
Alternative storage technologies
Lithium-ion batteries in their various chemistries are expected to dominate the storage market till 2030, according to BloombergNEF. Nevertheless, R&D is being carried out on alternative lithium-ion chemistries such as silicon-based anodes, and lithium-metal anode all solid-state batteries. These alternatives are, however, considered commercially unviable at present and suitable manufacturing capacity has not been added. Another alternative is flow-batteries, also known as redox flow batteries (RFBs), which are aqueous batteries that use tanks of liquid electrolyte. The electrolyte is run through electrodes to charge and then run in reverse to discharge. Large flow-battery storage projects are currently in operation or under construction in China and Japan, and in the pipeline in other locations across the world. This technology is easily scalable and has a long life cycle and effectively unlimited capacity. However, lower energy density as compared to lithium-ion batteries and lack of cost competitiveness are the key challenges for RFBs.
The emergence of iron-based chemistries to solve some of the cost issues of RFBs is expected to improve their commercial feasibility, allowing them to compete with lithium-ion for around half of the stationary storage market by 2030, according to the US Department of Energy’s Energy Storage Grand Challenge Market Report 2020. Currently, the preferred electrolyte for flow- batteries is vanadium due to its stability. However, the metal faces supply issues, thereby posing a risk of cost escalation. Several countries have announced recent investments in vanadium production in order to facilitate RFB projects, including Australia and the US. Vanadium flow-batteries are also being trialled in South Korea and Australia to support EV charging systems.
Apart from batteries, there are many other potential energy storage technologies such as PHS, compressed-air energy storage (CAES), hydrogen, flywheel and thermal energy storage. These technologies are being improved, and have their own advantages and disadvantages. CAES stores energy as compressed air and is generally deployed in large underground caverns. The technology is slowly becoming cost competitive and projects using this technology are in operation in the US and China. These projects provide peaking and energy shifting applications.
Hydrogen technology has high potential with flexibility of use in both the energy storage and transportation sectors, and much lower dependence on critical metals as its key advantages. A key factor for the success of this technology is that several countries plan to exploit it to meet their carbon reduction goals. While the production of green hydrogen (through electrolysis with renewable energy) is gaining traction globally, it still represents a small fraction of total global hydrogen production, which is primarily produced from fossil fuels. Green hydrogen is not yet cost competitive vis-à-vis hydrogen produced from fossil fuels but is expected to catch up, with larger electrolyser capacities and the falling cost of renewables. R&D in hydrogen storage is at relatively early stages. Gaseous hydrogen storage is achievable with current technology, but is dependent on locating appropriate sites, such as large salt caverns or depleted gas fields. While large-scale hydrogen storage projects exist across the world, further capacity is being planned as well. A key concern with this technology remains the limited potential for commercial deployment.
Storage technologies for the future
A key issue is the suitability of the various technologies for long-duration storage (more than eight hours), which national grids will require in the coming years. As the share of renewables in the energy mix increases, the duration of storage needed to provide reliability also increases. For more than 80 per cent renewable energy penetration, storage for durations as long as over 120 hours (seasonal storage) will be needed, according to the US Department of Energy’s Energy Storage Grand Challenge Market Report 2020.
Currently, while lithium-ion batteries are generally the most commercially viable solution for short-duration storage, the technology is not optimised for life cycle or durability. Furthermore, lithium-ion systems do not scale as effectively for long-duration storage. Longer or more frequent dispatch of lithium-ion battery systems accelerates degradation, eventually requiring replacement or upgrade of the battery components, and tends to shorten maintenance cycles for shared components such as inverters.
Several technologies are currently available or in the development stage to address the need for long-duration storage. These include PHS, flow-batteries, hydrogen and thermal storage, gravity-based and electrochemical technologies. Flow-batteries can provide long-duration storage but have cost issues, particularly due to the high and volatile cost of vanadium. Other chemistries using earth-abundant materials are expected to become more cost competitive. For example, iron-based flow-batteries have been tested at small scale and are now being scaled up. At present, hydrogen for energy storage typically requires appropriate cavern storage that is economical, and limited to a few locations. Hydrogen systems with the right site conditions are expected to provide seasonal storage and projects with geological storage and natural gas (combined with carbon capture and storage) are viewed as a key technology for the future.
