Governors' Wind Energy Coalition

Rapid innovation and deployment of advanced batteries and other technologies that store wind, solar and other forms of distributed energy are expected to drive a 33-fold increase in the energy storage market over the next 10 years. It will expand from roughly $452 million last year to more than $16.5 billion in 2024, according to new findings from Navigant Research.

The findings, published in a new research report and discussed on a Navigant-sponsored webinar yesterday, suggest that firms pursuing energy storage technologies — whether in the form of advanced batteries, compressed air energy storage or other applications — should see sustained high demand for their products by utilities, grid managers and others over the coming years.

“The development of advanced battery chemistries, including lithium ion (Li-ion), flow batteries, advanced lead-acid, and other next-generation chemistries, has enabled rapid advancement in the distributed storage market,” Anissa Dehamna, a senior research analyst with Navigant Research and lead author of the study, said in a statement. “These advances are helping to meet demand for distributed and flexible resources created by the spread of solar PV, electric vehicles, electric vehicle charging, and home energy networks.”

Dehamna, along with Parag Soni, an associate director at Navigant, and Peter Nortman, chief operating officer with Coda Energy, stressed that the world’s major economies are poised for “unprecedented growth” in energy storage technologies.

This will happen as utility business models and government energy policies shift from highly centralized power delivery systems to distributed systems where generation assets are located much closer to consumers and electrons can ebb and flow with available resources and customer demand.

To date, according to Navigant, there is roughly 171.9 megawatts of installed distributed energy storage system (DESS) capacity worldwide. But that number is expected to swell to more than 12,100 MW by 2024, especially as new, high-capacity storage projects come online to support the integration of utility-scale solar and wind power, according to experts.

Compressed air version of Hoover Dam

Shifts in scale also bring about shifts in technology. For example, the current leading storage technology across all sectors is the lithium-ion battery. But challenges around the cost and scalability of batteries have led to the emergence of alternatives, such as compressed air energy storage (CAES), that can be used to store hundreds of megawatt-hours of energy over much longer time periods.

Soni, an expert in such systems, said that to date CAES has been limited to only a few commercial sites, including an energy plant in south Alabama. But it is expected to be deployed at a much larger scale as part of a massive integrated energy, storage and transmission project being built by the Pathfinder Wind Energy Group and its partners.

The $8 billion Pathfinder project involves producing more than 2,000 MW of wind energy in Wyoming, transmitting and storing the turbines’ output as compressed air in salt caverns in Utah, then transmitting the power to Southern California for consumption by Los Angeles-area ratepayers.

Backers of the project have called it “a Hoover Dam-scale solution” to meeting California’s renewable energy goals, which are among the most ambitious in the world, according to Soni.

Moreover, Soni said, a large renewable energy plant with storage capabilities such as Pathfinder “can mimic a baseload combined cycle plant” both in terms of generation and in its ability to meet complex grid conditions such as those in Southern California. And when built at scale, CAES can be cheaper over the long run than rival storage technologies such as batteries.

Antidotes to pricey power

But batteries are not cooling off in the red-hot energy storage sector.

Nortman at Coda Energy, a Monrovia, Calif.-based developer of li-ion batteries for the transportation, industrial and commercial sectors since 2001, said that for a growing number of businesses, behind-the-meter energy storage is becoming a viable alternative to transmission and distribution line upgrades.

He said Coda has placed its emphasis on li-ion batteries because they can provide large amounts of power quickly, can aid in the ramping up and down of renewable generation, and offer critical peak load shaving ability.

“They have low inertia and can respond on the time scales that industrial and commercial businesses run on,” he said. The systems are also relatively compact and can be located on-site, often in a corner or closet of the facility where it is deployed.

Last month, Coda announced the completion of the largest behind-the-meter li-ion energy storage system in the Los Angeles basin, a 510 kilowatt (1,054 kilowatt-hour) unit designed to aid in energy demand management at its Monrovia manufacturing facility. Coda has an additional 1 MW of battery storage capacity that is ready to be connected and a 120 kW array that is being prepared for customer delivery early this year.

While growth in distributed energy storage technologies is projected to be strong going forward, Navigant’s researchers noted the sector continues to face challenges. “Advances still need to be made in cost reductions, software and controls, and integration expertise across nearly every storage technology,” the firm said.

Navigant also said that market conditions will vary depending on the end-user of such systems. While the main driver of energy storage investment for commercial and industrial customers is high energy costs and price volatility, the primary drivers in the residential sector are electricity reliability and energy cost management.