THE STATUS OF STORING ENERGY

Energy Storage on the Grid; Long Duration Energy Storage Systems: Compressed Air, Pumped Hydro, NAS Batteries, Flow Batteries, and Lithium Ion Batteries for Utility-Scale Storage
David Link and Clint Wheelock, 3Q 2010 (Pike Research)

"The stationary energy storage sector will play a large role in the electricity grid of the future. Demand is being driven by…the proliferation of variable sources of renewable energy, principally wind and solar…[T]he electric grid faces variability issues that it was not designed to handle…Other key drivers of the need for energy storage on the grid (ESG) technologies include the onset of the smart grid and a shift to plug-in hybrid and electric vehicles…Pike Research estimates 2010 worldwide ESG market revenue at approximately $1 billion…

"The principal technologies in the ESG category are pumped hydro, compressed CAES, and NAS batteries, as well as zinc bromine (ZnBr) and vanadium redox flow batteries (VRBs). Lithium-ion (Li-ion) batteries are poised to be the leading technology…[I]n order for Li-ion to gain share in the ESG category…it will need to deliver lower-cost energy…"

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"Prior to 2010, ESG did not receive much support…[T]he tide turned in 2010 with the ARRA. The DOE granted $185 million for Energy Storage Demonstration projects that will attempt to validate a range of technologies, applications, and deployment structures…[and] $435 million for Smart Grid Regional Demonstrations, $118 million (if not all) of which will utilize energy storage…In the transportation sector, the U.S. DOE issued grants [to be matched by the private sector] totaling $2.4 billion focused on advanced transportation technologies…There are a number of incentives in place at the state level…The Storage Technology of Renewable and Green Energy Act [is a game-changer]… Forward-looking utilities]…are working with key industry players…"

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"ESG Technologies must overcome key barriers to adoption…[They] lack history with regulators and the utility community… [They must show value] across the entire utility value chain of generation, transmission, and distribution…perform multiple applications…[and develop] a cost recovery system…It is easier for utilities to make investments in natural gas spinning reserves to address grid instability…[T]he major barriers to adoption appear to be weakening…

"Pike Research forecasts the total ESG market will grow from over $1.5 billion in 2010 to approximately $35 billion in 10 years…The upside story in the market pertains to lithium-ion…Signs of energy storage market adoption are beginning to emerge on a worldwide basis, led by developments in the United States…followed by Asia Pacific and Western Europe…While little is known about storage plans in China and India, these large developing regions should have long-term upside opportunity…There are also pockets of activity in the Middle East and South America."