Energy storage is a critical technology for a low carbon economy,
reflecting the need to substitute use of electricity in transport and heat, and
the less flexible nature of low carbon power generation. A recent Oxford Energy seminar brought this together in a way that emphasised the profound importance
of all three main pillars of energy and climate policy – innovation, markets
and regulation. The discussions also brought out the fundamental importance of
context in determining the choice and application of storage technologies. Key
issues will be managing the future of the heat sector, resolving the problems
of longer term or inter- seasonal storage, and using regulation and markets to
incentivise the solutions we need.
Energy storage is a critical
technology for a low carbon economy largely because most of the alternative
options we have for low carbon energy rely on electricity as the main vector to
carry the energy output from its source (primary energy) to the point of use. It is also widely assumed that fossil fuels
can be displaced from the very large heat and transport sectors by low carbon
electricity. Electricity itself is an
instantaneous non storable commodity, so without some form of storage we cannot
easily match production with the times we actually want to use our energy for
heat, light or power. This is especially so for less flexible low carbon
resources such as wind and nuclear, and a zero carbon commitment will further
limit the use of what is traditionally the easiest source of flexibility,
fossil fuel generation.
Innovation and context.
The pace of recent advances in
battery technology has been staggering, and this advance currently looks set to
continue with research and development continuing to drive big improvements
both in technical performance and in production costs that parallel the
advances made in photovoltaics over recent decades. But the complexities of
power systems and the energy sector make it very clear that different solutions
are required for different problems.
There is no “one size fits
all” for battery technology. The key
parameters for performance may include capital and energy costs, mobility,
speed of response and battery life (in years or cycles). The importance of each
depends on the application – weight and volume for transport applications,
scale and capital cost for large scale systems, and so on. Li-ion battery costs are falling at
a rate that could very soon have a transformative effect of electricity
markets, according to one of Europe’s leading battery experts, but they function
best when delivering all of their stored energy over a few hours. Redox flow batteries have cycle
lives and storage capacities that could be much greater than Li-ion cells, and
are one of the few battery candidates for longer-term storage at a utility
scale.
For
power systems, storage options are increasingly useful both at grid and system
levels, but also in relieving thermal and voltage constraints in much more
local distribution networks. They will become increasingly important in the context
of future electrical loads. For transport this includes coping with unforeseen
peaks that reflect personal transport habits (a later comment on Norwegian
experience will expand on this). For heat
the scale and seasonal character of heat loads (in temperate climates) poses
particular problems and choices.
But this choice extends beyond
simply making choices between different types of electric battery. Batteries
are in competition with other forms of storage, including heat storage,
“gravitational storage” in large hydropower dams, compressed air (for some
purposes) and so on. In the key area of seasonal storage, batteries seem unlikely to provide useful solutions, with
conversion to storeable energy vectors such as hydrogen a more practical
answer.
Nor can storage questions be
separated from their geographical context, with very different answers for hot
or tropical climates with high solar potential and cooling load. And they
cannot be separated from technology choices in energy use. One speaker
emphasised the potential use of “cold” as opposed to “heat” storage, an
exciting but neglected possibility, given the increasing proportion of energy
use devoted to air conditioning and food storage. Similar options can be
discussed in relation to storage of heat, and the provision of cheap battery
back-up within individual consumer premises.
Behind this discussion lies
the growing realisation that the four options to balance supply and demand in
an electricity system can be considered at all levels of scale, from an
individual household with solar and batteries, and its own load, up to national
or larger systems. The options are more flexible generation or management of consumption,
storage, and reliance on external interconnection with an outside source. Flexible
generation is becoming much more problematic in a low carbon context, but the
future choices that need to be made will involve competing claims from means to
store and balance energy at highly decentralised or much more aggregated levels;
at its extreme this choice is between smaller scale household heat or battery
stores and large scale hydro or other methods.
Markets and Regulation
It is sometimes assumed that
markets can or should be the sole determinant of what technologies succeed or
fail. But reliance solely on markets is a questionable strategy in determining
approaches to storage, for three main reasons:
·
first there is currently no adequate approach
to putting a price on the key element of cost, that of the environmental and
climate damage imposed by CO2 emissions. Unless these costs are internalised, markets are unlikely to find optimal or even acceptable solutions
·
second, many storage and energy system
solutions have the character of infrastructure investment – investment that is
long life, has no alternative uses, and is not mobile. Infrastructure investors will not put up the very large sums required for these without secure long term contracts or other guarantees
·
third, conventional electricity markets were
designed to suit the technical and economic characteristics of fossil fuel
based power generation. It was observed that any value that storage options can
earn by arbitraging electricity markets is likely to be a fraction of their
real economic value to the energy system.
Markets do not develop in a
vacuum. They are established within an institutional and regulatory framework.
One lesson from the discussion was that this framework now needs to address some fundamental questions around
energy storage and other features of a low carbon economy. Storage, the
associated choices, and the implications for regulation and markets, sit at the
centre of the low carbon energy revolution.
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