If you are looking for the best sales stunts man in energy storage then it would be hard to beat Wang Chaunfu.
In 2009 the founder, chairman and chief executive of BYD stunned Warren Buffett’s then second-in-command, David Sokol, by swigging a glass of battery electrolyte and offering some to the American investor. Sokol declined.
But by then he had already swallowed Chaunfu’s pitch about creating 100% recyclable batteries.
A 10% stake in BYD from Buffett’s Berkshire Hathaway investment firm in 2008 had helped Chuanfu become the richest man in China by the time he starting toasting with battery fluid.
And, while clearly not for the faint-hearted, such headline-grabbing antics may not be a bad idea for other execs wanting to attract attention to energy storage. Because right now the industry is doing a pretty poor job of selling itself.
Technical or engineering backgrounds
Energy storage continues to be dominated by start-ups whose people predominantly have technical or engineering backgrounds.
This means that while they may be able to make perfectly good products, they frequently lack the marketing skills to communicate the benefits of their product to the market.
The lack of marketing sophistication was underscored by a small experiment conducted by Energy Storage Report at a trade show last year.
Out of a dozen companies selected at random, less than a third felt comfortable about advertising in trade media, even if they could get the ad space free of charge.
This timidity contrasts sharply not just with the much bolder attitude of manufacturers and developers elsewhere in renewable energy, but also with the magnitude of the claims being made by observers about the industry.
Potentially huge market
“The market for energy storage is global, growing fast and potentially huge,” says Philip Alexander Hiersemenzel of Younicos. “The McKinsey Global Institute lists it as one of 12 disruptive technologies.”
One of the problems for would-be energy storage promoters appears to be knowing just what they should sell. The desirability of energy storage varies greatly according to how it is used.
For grid-connected projects, says Hiersemenzel: “In our experience, primary frequency regulation is the most promising business case in Europe at this point. It’s the only thing that pays so far. Everything else is highly subsidised and/or in trial phase.
“We think the point is that the system needs this sort of stability first, and there’s much more to be done here. Revenues here heavily depend on the regulatory framework, but the overall economic impact of storage is already positive.”
In time, Hiersemenzel adds: “Other applications will follow as the share of renewables increases. Displacing expensive diesel and other imported fuels on islands will become a straightforward business case as soon as the first big projects are in place.”
On-grid and off-grid situations
Beyond Europe, energy storage can claim to offer a range of potential advantages in both on-grid and off-grid situations.
Conor Trujillo, a system design engineer at Urban Green Energy (UGE) of New York, USA, says: “Off-grid storage can be a more cost effective and reliable option than a grid-tied system in many cases.
“In areas where outages are frequent, the grid is intermittent or the location is very remote, storage typically is the best option.
“Storage can also regulate brownouts or irregular frequency, or cut down on costs associated with demand charges, where the grid charges more during certain times of the day or year.”
Even in areas that have a stable grid, Trujillo continues, off-grid storage provides added reliability and energy security, and often is as affordable as connecting to the grid. A great example is with outdoor lighting.
Lights powered by solar, wind and battery storage
“Traditional street lights require trenching and laying conduit to connect to the grid, while lights powered by solar, wind and battery storage are half as expensive and 80% more reliable,” Trujillo points out.
Despite these no-brainer applications, however, the industry still needs to educate customers and investors on the benefits of energy storage, and overcome some long-held prejudices.
For example, says Trujillo: “The technology is expensive but the costs are coming down rapidly and new innovations are happening every day. Historically, battery banks have been oversized for renewable energy systems, which leads to higher costs.
“But UGE has developed new tools that allow us to optimise the system and ensure it is specifically designed for the needs of a particular site. This keeps costs low without sacrificing any of the reliability or efficiency of the system.”
Similarly, says Hiersemenzel: “Many agree that we need fast storage now, but few want to be the first. Another big problem is that many potential users/customers underestimate the need for intelligent storage, and the complexity involved.
“They often simply look for a technology/cell supplier and think that they can connect a unit to the grid and run it themselves. After all, don’t they have competent engineers too? Well, of course they do, but, alas, they do not have the experience.”
Despite this, Hiersemenzel is upbeat about the prospects for energy storage. “Following years of relative timidity, global storage markets, both on- and off-grid, are set to explode,” he believes.
Younicos, with its on-message ‘Let the fossils rest in peace’ motto, seems to have enough marketing nous to take advantage of such an uptick.
Less savvy companies might want to start cultivating a taste for battery fluid or similar trade show shock tactics, though. If you remember Betamax versus VHS, it wasn’t technological superiority that won the battle, but cost.
And for costs to come down you need people to sit up and take notice, whatever it takes.
- Energy Storage Report will be launching a free ESR Marketing Club for energy storage marketing and new business professionals later this year. Get in touch if you want to be a part of it.