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13/07/2016

Hybrid Storage Technologies Can Lead to a New Electricity System Balance

Startup companies are developing a lot of new technology that can be used to balance the energy grid. In “Commercial Use of Battery Storage” the impact of reaching a high penetration of renewable energy generation on the energy storage market was discussed. That discussion showed that the current business model of energy supply could be a lot less profitable in the coming years. This change is already showing in the behavior of utilities: they collaborate more with startups to get an early seat at the table of promising, potentially lucrative innovation that helps to deal with a market in transition. In this article two companies with high innovation potential are discussed.

Technological innovation is one of the drivers for changing business models. The market is asking for a way to be more efficient with produced energy both in distribution and consumption. Numerous solutions are being developed for storage of energy as electricity and as heat. Hybrid or combinations of solutions are gaining ground fast.   

Within the system operator market, shown in figure 1 under the transmission and distribution headers,  there are ongoing initiatives to implement new solutions. One of the current steps is testing battery storage units as a means to maintain frequency and voltage control, power quality and provide capacity grid support (i.a. Primary Control Reserve). These functions are becoming increasingly important to stabilize our energy system for periods of a few seconds up to about 30 minutes.

Figure 1: Battery storage applications in the electricity value chain

 

Current energy storage solutions are mostly geared towards storage of electricity in Lithium Ion batteries.  This type of technology is very good at reacting quickly to system changes, which is great for system operators in the short term. However, the main disadvantage is it’s suitability up to a maximum of 2 hours of operation for large installations due to low economies of scale. Below we talk about two Dutch companies  with technology capable to take over energy supply after lithium ion takes care of the initial quick response, a so called hybrid storage solution. This would create a new market for battery storage in the production part of the value chain (figure 1).

Storage of electricity in batteries: Elestor

This producer of battery systems is combining several new techniques to build the best Hydrogen-Bromium battery that is currently available. The main focus of its battery system is on minimizing the cost per stored kWh. This results in a levelized cost of storage (LCOS) of 0.05 Euro per kWh. That is up to 50% cheaper than Tesla’s (Lithium ion) powerwall and cheaper than baseload coal and gas.

Elestor’s batteries are different from the batteries in a phone or laptop, having a water based solution inside, rather than graphite plates. The long lifetime of 10.000+ cycles, high efficiency of 80% for a complete charge discharge cycle and low material and production cost make it a viable storage option for medium to long term charge and discharge times (greater than 2 hours).

The technology could be used as a hybrid solution with Lithium ion to be able to quickly respond to demand, while switching to the cheaper storage solution Elestor provides when the initial seconds or minutes of electricity change are controlled. Renewable energy storage at a more significant scale (peak shaving) is also more economical with Elestor’s lower cost storage solution giving a storage system a wider range of application.

Storage of electricity in heat: Ecovat

Ecovat does not store electricity, but it stores heat in water in different temperature layers. Layering heat in the water optimizes the energy it contains.  An Ecovat system can take up a surplus of electricity from the grid, convert it to heat and store it underground in a big, well insulated barrel. The water in the barrel serves as an energy buffer, leveling out the energy that is needed on the grid.

Heat exchangers may need some startup time before they are effective. A hybrid solution of an Ecovat barrel with batteries can again prove to be a complete solution for grid stabilization and longer term energy and heat supply.

Ecovat’s autonomous energy management software takes care of extracting the right kind of heat, for the right purpose at the right time. Heat and cold can be used to aid heating or cooling of houses or industrial processes. With the addition of a heat engine it is possible to generate electricity from stored heat as well. This barrel can be used in a neighborhood as a community energy storage point.

 

Figure 2: Ecovat heat storage barrel (Ecovat, 2016)

 

Elestor and Ecovat are examples of frontrunners in a transforming market. These innovators can eventually create a more versatile and cheaper energy storage solution than currently available. There is significant growth in renewable energy generation capacity in the next 15 years, but also more and more innovation to retain a balanced energy system. At Sia Partners we believe there is not one perfect technology solution to accomplish this. Often only a tailor made combination of technologies, like hybrid storage, could bring the right solution to deal with changing circumstances.

Key to finding this combination is to spend enough time identifying system and organizational needs to prepare yourself for a next round of innovation. New technology can stay within the problem boundaries you set, or even expand them to generate new business. Thinking about these actions early sets you up for continuous business model optimization, the most important requirement for future success. 

 

Copyright © 2016 Sia Partners . Any use of this material without specific permission of Sia Partners is strictly prohibited

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