The case for stationary energy storage

Flow batteries have been around for decades now but initially there was not a lot of interest for stationary energy storage. As the energy density of flow batteries is quite low compared to conventional batteries like lithium-ion, typical applications such as consumer electronics and later electric vehicles were ruled out.

The growth of intermittent renewable energy production changed all this. As more and more wind and solar farms were built and connected to the grid, it became difficult in many places to match the offer and demand of electricity. Solutions like interconnection of grids, additional peak production capacity or conventional energy storage such as pumped hydro were first considered, but it quickly became clear that other options like electrochemical energy storage could help. This is because the conventional solutions often have limitations. For instance, the process of building new lines or power plants is long and expensive and once completed, the result can be inadequate because in the meantime new capacities in renewable energy production can be in place in ways that have not been anticipated. Pumped hydro, as another example, cannot be built at will because it requires sites where a large volume of water can be stored at two different altitudes.

A revolution in the making?

What was once a riddle for engineers in grid management then turned into a headache for a whole class of decision makers because of a new trend in renewable energy.

In the early years of the 21st century, wind and solar energy were considered expensive technologies, developed and brought to market with subsidies that only advanced economies could afford, for political reasons linked to climate change, for instance. Capacities were small, prices way higher than conventional energy such as fossil fuels or nuclear, and traditional grid models were not really challenged.

Over the years however, prices went down relentlessly, to a point that in an increasing number of areas, renewables are now competing with conventional sources. This leads to ever larger investments in renewable energy production and significant or even dominant shares in the energy mix. A scissor effect is therefore possible: if clean energy becomes cheaper than traditional options, why would people pay more to burn fossil fuels or keep nuclear reactors?

The stakes are therefore huge. It is not about one or two percent more of clean energy a year. Ultimately, the outcome can be the disappearance of the conventional power plants that we have always seen around. This seems impossible to many of us, but these industrial monuments could go the same way as cathodic TV screens did a few years ago. The 5 % in the energy mix could become the new 95 %.

However for this to happen, renewable energy must not just be cheaper. It also has to become manageable. People use energy at various times in the day, not necessarily when the wind blows or the sun shines. If inexpensive and reliable energy storage solutions are made available, they can do much more than just help renewables. They could be the cornerstone of a revolution in the world energy market.

A revolution with many outcomes

The consequences of such a revolution go way beyond cleaner air or a redistribution of industrial assets. Of course, if clean energy becomes the norm, the impact on global warming or public health could be dramatic. But public policies are often based on more short-term considerations such as energy security: clean energy is local, not sourced abroad. This could bring stability to the world more quickly than international military operations where fossils or nuclear fuels are located.

Other models can be disrupted. In advanced economies, the debate focuses on grid management. The situation is different in emerging economies where the grid only provides for some areas, usually cities. There people can start wondering whether they need large infrastructures at all. If local sources of clean energy can be managed with energy storage systems of similar size, maybe large, long-term investments can be avoided. Microgrids could develop before central institutions are ready to set up large grids.

In many ways, this is comparable to the changes in telecommunications at the end of the 20th century. In places where landlines were already in place, mobile phone systems were painstakingly added and work in parallel. Where network did not exist, though, mobile phones just filled the area and landlines were never built.

Time scales

Does this mean that the world of energy is going to change overnight? It is unlikely for many reasons. Power plants and lines, for instance, are in place and will only be dismantled if operational expenditures are too high. New systems, even if they are cheaper, will take time to be authorized, funded and built. This process will be faster in some areas than others. One has to distinguish between thermodynamics, which define the final outcome, and kinetics, that tell us how fast the transition will take place. From a thermodynamic standpoint, for instance, the disruption is unmistakable and could spell the end of an era in energy production. However, kinetics could be slower than most people think and many options could co-exist for a long time.

The evolution should typically be faster in emerging economies, where needs are immediate and wild growth makes it difficult to organize traditional, big picture grid management. Microgrids, for instance, should drive growth in energy storage there. Conversely, advanced economies should be dominated by creative destruction, and the emergence of a new model in energy generation and use will be done at the expense of existing and deeply conservative systems and practices.

In both cases, first movers will gain a competitive advantage because of the complexity of this market. Those who understand what is going on and can anticipate trends are more likely to choose the right options (thermodynamics) and taking steps at the right time (kinetics).