Current trends and future bets

What role will offshore pumped hydro play in the future of energy storage? Photo credit: Green Power Island

We review energy storage trends in 2013 and look at the future of energy storage. Could 2014 be the year of offshore pumped hydro storage? Photo credit: Green Power Island

Energy storage has come a long way in the last 12 months. While the pace of change will undoubtedly not have been quick enough for many in the industry, the fact remains that interest in and awareness of energy storage as a critical component of future power generation strategies has increased significantly.

And within this general uptick in importance, a number of notable trends are starting to emerge. Some of them, such as the pressures on battery price and performance, have been around for a while and will continue to be highly relevant in 2014.

Ignoring such perennial issues, though, here are three points that we think were particularly significant in shaping the industry in the last year.

1. National markets (and support mechanisms) began to emerge

Clean-tech sectors usually require some form of stimulus in order to become established, and energy storage is no different. So it is highly significant that in recent months the Californian and German administrations have taken their first steps towards supporting energy storage.

As two of the geographies with arguably the most ambitious energy transition programmes in the world, the value of what happens to storage in Germany and California cannot be overstated.

2. The fundamentals of energy storage came under scrutiny

Starting with a report last year by Charles Barnhart and Sally Benson of Stanford University, observers and academics have started to question some of the fundamentals of energy storage, such as its energetic and material demands.

This could be troubling for some sectors of the industry (the Stanford report, for example, casts doubt on the value of battery storage as it stands), but is a necessary step. Without a clear grasp of the fundamentals it is difficult to establish and compare the true value of different storage technologies.

In power generation technologies, for example, the levelised cost of energy offers a straightforward yardstick for comparison. Energy storage, which currently covers a wide range of technologies, needs to be similarly easy to grasp at a glance. The fact that meaningful comparisons are now being made is important, and more work in this direction is needed.

3. Energy storage is heading out to sea

It might seem like a trifling matter that a number of recent energy storage proposals involve coastal and underwater concepts, from man-made islands to seabed pumped hydro. And indeed, these projects are currently insignificant compared to, say, pumped hydro’s dominance of the energy storage market, or the strides taking place in the battery sector.

Nevertheless, these sea-based ideas are noteworthy for two reasons. The first is because of the increasing weight of marine renewables generally around the world. With countries such as Japan embarking on ambitious offshore wind programmes, for example, the potential for co-located energy storage might end up being immense.

The second reason is that most of the ideas to date are essentially variants of pumped hydro, which is not only by far the market leading energy storage technology but also, according to Stanford, the most efficient. Furthermore, pumped hydro does not require technological breakthroughs to achieve high efficiency.

Thus the main challenges for marine energy storage are engineering ones. Sea-based storage is generally still very much at the drawing-board stage, with just a few concepts coming close to commercialisation.

How they will measure up to traditional modes of energy storage remains to be seen, but given their potential location, efficiency and technological simplicity, they deserve attention. But the very fact they are out there is a boon to the marine renewable energy industry, in continuing to focus attention on the potential of power from the sea.

The future

And now the predictions. Without sticking our necks out too far, it seems the current level of innovation taking place in energy storage will rapidly help to cut the cost and improve the efficiency of a wide range of technologies. Picking winners and losers will remain problematic, however, because of vagaries of the market.

In some respects, the energy storage market now resembles the solar power market five, six or seven years ago. Back then, the solar industry was teeming with photovoltaic (PV) and solar thermal variants, all vying for market dominance. Subsequently, flat-plate crystalline silicon PV has become virtually the only game in town.

But that has had nothing to do with technological superiority. Instead, market forces (and specifically oversupply from Chinese manufacturers) have taken crystalline silicon to the top even though it was possibly viewed as the technology with least potential a few years ago.

So at this point all that can be said with certainty is that energy storage will continue to grow in importance going forward. Systems will get better and cheaper. Applications will become more diverse. Deployments will multiply. And huge market shifts cannot be ruled out. We will return to this topic soon, but for now let’s just say 2014 promises to be an exciting year.

Written by Jason Deign

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