Last year was a big year for battery storage and 2016 promises to be even bigger. Energy storage is an integral part of strategic efforts to reduce
costs and cut carbon emissions. They also improve the security and resiliency of power supplies. Better energy storage is crucial to the growth of the low carbon economy both in terms of renewables. Renewables are the future of energy but storage is key if we are to efficiently address the problems of intermittency. To harness the power of the sun which only shines during the day and the wind which blows hardest at night, we need to see advances in energy storage.
Batteries can be used during periods of high demand however prohibitive costs are a barrier to energy storage. If batteries they are to be a key part of a viable low carbon energy solution the price will need to be significantly reduced. In 2014 Jay Apt, executive director of the Carnegie Mellon Electricity Industry
Center, told the New York Times that prices would have to fall by 90 percent, from $300 to $500 per kilowatt-hour of capacity down to $30 to $50 for battery storage to be profitable.
We are well on the road to finding technological solutions to the impediments associated with energy storage particularly as they relate to cost. The most commonly used batteries are the stationary lithium-ion (Li-ion) battery systems and their price points have fallen dramatically in the last decade. As reported by ZME Science, Snowmass, CO-based
RMI estimates that costs have fallen by 70 percent in the last eight years (from $1,000
per kilowatt-hour (kWh) in 2007 to $300/kWh today.
Navigant Research said that in the last year and a half
stationary Li-ion batteries has declined anywhere from 40-60 percent and they are expected to fall another 60 percent in the next few years. This would bring the price down to $120/kWh
According to a GreenTechMedia analysis forecast the cost of energy storage hardware is expected to fall by drop 41 percent by 2020. The current average is around $670 a kilowatt and it is expected to drop down to $400 a kilowatt by the end of this decade.
As the year was drawing to a close GTM Research’s Ravi Manghani said that “2015 is turning out to
be a breakout year for the U.S. energy storage market,” with triple the
deployments seen in 2014. In 2015 utilities, commercial and industrial businesses,
schools, hospitals and offices began incorporating
energy storage in unprecedented numbers. Tesla’s release of the much publicized Powerwall last year consolidated the public’s interest in the prospects of affordable energy storage.
There are some interesting models being employed to promote the growth of stored power. In 2015 California utility, San Diego Gas and
Electric announced its Bring Your Own Battery model which may result in a pilot project in 2016.
The primary reason behind this growth is the declining price points of batteries.The declining costs of stationary battery storage prompted a surge in installed US battery capacity in 2015. Battery storage surged 600 percent in the second quarter of 2015 alone.
The declining costs of battery storage is good for renewables. According to market research firm IHS grid-connected PV energy storage paired with energy storage will reach 775MW of global installations during 2015.
“Newer technologies are just getting traction and finding their sweet spot. Some will leap forward we’ll see the most dramatic decreases in cost as they gain economies of scale,” said Trojan Battery senior sales director Dean Middleton.
We need to institute energy market reforms will also need to see
legislative changes and more investment in battery technologies to
realize the dream of efficient storage.
The combination of demand and the declining costs of batteries have made energy storage a megatrend.