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Energy Storage: Where Next?

Issue 4 | March 2018


From the Editor

Dear reader,

The energy industry is undergoing tremendous change. This edition of the Energy Journal explores the single most important transformation in energy: the shift towards solar energy and towards battery storage. The articles explore technological, financial and political affairs that are disrupting energy.

The revolution towards low-carbon and renewable sources of energy is tearing down the incumbent fossil fuel monopolies. Energy is being electrified as demand for electricity, notably from electric vehicles, rises. Technological advances, changing consumer preferences, and new policies are pushing de-centralisation of power away from top-down, one-way centralised grids. They are being replaced by decentralised and dispersed grids that offer more control for customers to generate and store their own energy. This future energy system is being powered by solar power and made possible by battery storage.

Both have witnessed huge falls in prices as well as technological breakthroughs. Both are becoming economically feasible as well as cost competitive with fossil fuels. Whereas solar energy generates long-term financial benefits, battery storage offers energy independence and reliability. When combined, smart solar-plus-storage leverage the digital transformation to provide clean, lean and green electricity. The ability for households, businesses and communities to generate and store their own electricity is re-defining energy. Decentralised solar-plus-storage is compatible with social equality, pluralism and liberty.

Energy constitutes 10% of global GDP. The transition towards the future is a unique opportunity for you to discover, understand and seize.

It is my pleasure to present you with the fourth issue of the Energy Journal. I would like to personally thank all the writers for the time they’ve dedicated. Their enthusiasm to write for you meant that not all articles were selected, although the effort invested did not go unnoticed. I would also like to thank my team. We worked tirelessly to deliver to you this overhauled edition.

In its second year, the Energy Journal has been rebranded and redesigned. We’ve also welcomed the Imperial College London Energy Society. Merging the two pre-eminent universities’ different backgrounds offers complementary and interdisciplinary diversity to our publication. We have introduced several additions to encourage you to learn more about the opportunities in energy.

Last but not least, I want to thank you – the reader – on behalf of the entire team for your interest in the Energy Journal.

Your chief editor,

Egor Nevsky


Past Six Months

Politics

The UK’s Eggborough coal power station is to close this autumn, leaving just eight coal-burning generators in the country. 130 jobs may be lost. The Yorkshire plant usually supplies 2 gigawatts of electricity but failed to secure contracts for next winter. It began operation in 1967.

The United States through its International Trade Commission has implemented a 30% tariff on all foreign imports of solar cells and modules. The decision results in a 10 cents/W increase in the price of solar modules and could lead to a 11% curtailment of US solar installations by 2022.

The United States has passed a carbon capture tax credit (called “45Q”) that would fund $50 per ton of CO2 that is buried into the ground. The credit is expected to support development and implementation of Carbon Capture and Sequestration technology.

What’s the news in Britain? A report commissioned by the All-Party Parliamentary Group on Energy Storage found that 12GW of energy storage could be installed in the UK by 2021 (REA, 2017). Among the options is London startup ArenkoGroup, which in February announced a partnership with GE to supply a subsidy-free 41MW energy storage facility near the Midlands in 2018 (Arenko, 2018).

Scientists at the US Department of Energy have found an efficient way to turn waste carbon dioxide captured from CCS processes into syngas – a mixture of carbon monoxide and hydrogen that can be used as fuel, though conventional carbon storage is still needed in combating global warming.

The Abu Dhabi National Oil Company plans to expand its carbon capture programme six-fold to cope with the increase in the use of CO2 in maturing oilfields. CO2 has been extensively used to boost oil recovery rates, the process of which is known as Enhanced Oil Recovery (EOR).

UK investments in wind, solar and other renewable sources dropped by 56% to $10.3bn (£7.5bn) in 2017. This was the steepest decline of any country, far outstripping the decrease of 26% for Europe as a whole. Keegan Kruger, wind analyst for BNEF, said to The Guardian in January 2018 that investors and developers need more transparency from the government.

Donald Trump has controversially suggested funding to the Office of Energy Efficiency and Renewable Energy, will be cut by 72%. Stated in the President’s draft budget for the 2019 fiscal year, the proposed changes will reduce the budget from $2.04bn to just $575.5m; however, this will have to pass congress.

In 2018, Iceland looks set to expend more energy mining virtual currencies than powering its homes. The process involves enormous amounts of energy to power the computers involved in the mining process, and due to Iceland’s bounty of renewable energy sources, the country has boomed as an international cryptocurrency hub.

The UK’s power consumption fell by about 2% in 2017. It became the only country to see a fall in the EU, who saw an overall rise by 0.7%. The decline is one the largest in several years and could be attributed to a decrease in industrial activity and users choosing more energysaving appliances.

Polar bears are losing weight in the Arctic. Scientists conducted a study on 9 female white giants over 10 days in April and found that 5 of them lost weight, with one of them losing 51 pounds in 9 days. Climate change is a cause as the reduced ice cover makes it harder for them to hunt for seals.

As of December 2017, the £16bn International Thermonuclear Experimental Reactor (ITER) being built in France is now 50% complete. The scientists are on course to begin generating plasma in the machine’s core in December 2025. If this nuclear fusion technology is proven, it could generate clean energy in just over 20 years.

Markets

EDF is planning to accelerate renewable energy deployment having witnessed its UK nuclear revenues collapse in 2017. EDF’s wind and solar generation capacity now stands at 8.8 GW across the group. The company in 2017 installed an additional 1.8 GW of this type of generating capacity, representing a 23% increase in its overall wind and solar capacity.

Dyson has announced its intention to enter the electric vehicle market. The company is investing £2 billion, half of which is earmarked for battery research. It intends to start selling the first of three models in 2021. Dyson specialises in appliance manufacture; this is its first automotive venture.

Blockchain technology will soon be implemented in Germany in a “first of its kind” pilot project to provide decentralized solutions to bottleneck problems in the power grid. Storage systems will be used for “re-dispatching” excess of energy. IBM blockchain platform will be used to record the transactions automatically and in a secure way.

BP has declared it is looking to acquire more green energy firms, as the British oil giant pledged to set carbon targets for its operations. BP recently bought a $200m stake in Europe’s biggest solar developer, returning to solar power six years after it quit the sector.

A 15-hour flight between LA and Melbourne on 29th January 2018 was the first flight powered by biofuels. Mustard seeds were used as part of a blended fuel on the Qantas flight, and this helped reduced carbon emissions by 7% as compared to the usual flight.


Energy Storage

The Key to Unlocking the Full Power of Renewables

A clichéd criticism of low-cost renewable energy such as wind and solar goes something like this: “What will we do when the sun doesn’t shine, and the wind doesn’t blow?” In response, many energy enthusiasts argue that large-scale energy storage is necessary to transition the world to a low-emission (and low-cost) energy system. The benefits of such technology may be more widespread than they first seem.

Solar power has a problem both when the sun doesn’t shine - and when it does. Take a look at a country like Germany, which can supply half of its domestic demand during a sunny day in the summer (Fraunhofer, 2018). When solar panels were first installed at scale in Germany during the end of the 2000s, solar power enjoyed the benefit of supplying electricity when demand was highest and at its most expensive.

The electricity price is set by the marginal generator. The plant is considered ‘marginal’ because it the most expensive generator operating on the network. The merit order effect (Figure 1) describes how generators can be ranked by their capacity and cost. For a given electricity demand, the most expensive generator sets the price to meet its costs. The rest of the plants on the system are paid the same price and receive a margin of profit. For solar, the fuel cost is zero. As sufficient solar power comes on-line (or demand is reduced), the marginal plant shuts down and the next most expensive plant running lowers the price.

As German solar energy reached higher levels of market penetration, an interesting effect occurred: electricity became less valuable (Hirth, 2015). From 2006-2013, as solar market share increased to 5%, its market value fell by 35% due to excess supply and lower market prices during the mid-day hours. However, as soon as the sun sets, the electricity price snaps back, sometimes over the long-run average. The same trend, with a more modest effect, can be seen with wind generators. Renewables are cannibalizing their own market!

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Figure 1: The Merit Order Effect

Electricity is valuable when it is scarce. It is even more valuable when it can be supplied under unexpected circumstances. The UK National Grid employs a set of ancillary services in order to prevent emergencies in the electricity system. Frequency Response helps maintain the frequency, or ‘clock’, of the UK grid at 50 Hertz (plus or minus 1%). Reserve Services ensure that energy is balanced between supply and demand points. Demand Response allows the National Grid to drop off loads that stress its wires. Typically, these lucrative services are met with low capital-cost, high operational-cost machines such as ‘peaking’ oil or gas generators, which operate when national electric power demand is at its highest. However, an old technology strengthened by the new electric vehicle revolution is changing the paradigm.

Not Your Father’s Battery

Energy Storage is not a new technology. North Wales proposed the UK’s first pumped hydroelectric storage facility at Ffestiniog in 1953 (Roseveare, 1964) . After charging its reservoir with low-cost electricity at night, Ffestiniog can throttle to 360MW of power in 5 minutes. Its capabilities were useful in the pre-Netflix era, as it was touted for its support during ‘television load’ which could see grid demand spike by 1000MW in 10 minutes after a popular programme as toilets were flushed and kettles switched on synchronously.

Could we buffer the entire UK grid with hydroelectric storage? In his book, ‘Sustainable Energy - Without The Hot Air’, David McKay estimated that the complete exploitation of highland territory in Scotland and Wales would provide only a third of the energy necessary to buffer a renewables-led electricity grid (MacKay, 2008). Other technologies will need to fill in the gap.

One candidate for the next generation of energy storage is advanced low-cost lithium-ion batteries. A case-study in the powers of scale in manufacturing, batteries for energy storage have become a convenient by-product of the electric vehicle industry. Tesla recently made headlines by commissioning the world’s largest lithium-ion battery in South Australia. The 100MW facility was notoriously offered by Elon Musk in a bet after the local grid faced stability issues after a storm caused a blackout in the state in 2016(Morton, 2017). It was switched on in December 2017. After a large 560MW coal plant unexpectedly tripped offline later in the month, the battery was able to respond in less than a second to support the grid (Parkinson, 2017).

Virtual Power Plants and Beyond

Building off the success of the 100MW battery in South Australia, state Premier Jay Weatherill has announced further plans with Tesla to provide 250MW of distributed solar and storage capacity in a trial of a “Virtual Power Plant” (Bloomberg, 2018). The scheme would offer 5kW solar panels and 13.5kWh Tesla Powerwall 2s to consumers at no fee. As the solar panels charge the batteries in the Powerwall during the day, the grid operator would be able to coordinate the storage resources to provide as much power as a single coal or gas power station. The system savings from the project could be passed onto consumers in the form of a 30% rate cut(Harmsen, 2018).

Can energy storage solve the problem of renewables’ selfcannibalization? While no technology can change when the sun shines or when the wind blows, batteries can help shift when renewable energy is sold. Other regions with high solar generation such as California, are starting to witness the effect of excess renewable generation during the day in what is referred to as the ‘duck-curve’ (Jones-Albertus, 2017). The immediate challenge faced by system operators is to flatten the curve in order to provide electric system stability (Figure 2).

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Figure 2: The ‘duck-curve’ Source: ISO New England

A study conducted by the Massachusetts Institute of Technology recently concluded that, at the right price, energy storage can profitably arbitrage electricity markets (Braff, Mueller & Trancik, 2016). The ‘duck curve’ will flatten as energy shifts to periods of high demand. Energy storage may be just the key to help renewables make a greater impact in the energy transition.


Wind Power

Where Next for Wind?

Wind power is nothing new. For hundreds of years humanity has harnessed its power to transform the Earth, travel to faraway lands and to drive huge machines (DK Books, 2009). Now in the 21st century, it is a multi-billion-pound market which is being used to generate more of our electricity. Wind, therefore, is essential in the shift towards using cleaner, more renewable energy sources.

Wind turbines were first used to generate electricity at the end of the 19th century. The first was built in 1887 by Professor James Blyth from Anderson’s College, Glasgow, Scotland, to power his home in Marykirk (Nixon, 2008). This was pioneering at the time, and although the technology has advanced a long way since then, the basic concept still remains the same. The typical three-bladed wind turbine design we see today has been utilised since the 1930s, mostly on account of its optimised build cost - output efficiency ratio. In essence, wind turbines covert the wind’s kinetic energy into electricity. The blades of a wind turbine spin, causing a connected shaft to spin, this in turn spins a generator and thus electricity is produced.

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Figure 1: Blyth’s 1887 turbine (left) compared to a modern-day Siemens SWT- 6.0-154 (right). With a rotor diameter of 154 metres, the Siemens turbine is around 50 times bigger than Blyth’s. (Siemens, 2015; Wikipedia).

So why wind power? Wind turbines are more efficient than most of their counterparts; with current technology, photovoltaic cells (solar panels) have a maximum efficiency of around 20%, whereas a wind farm can peak at 50% efficiency. This makes them just as efficient as greenhouse gas-emitting coal-fired and gas-powered stations (NSW Governement - Environment, Climate Change & Water, 2010). Hydroelectric power has a peak efficiency of 90%, however, for countries such as the UK, limitations in geography mean they aren’t always cost-effective (EDF Energy, 2018). Furthermore, they can cause adverse damage to eco-systems.

What’s the catch? Clearly, if there is no wind, then wind turbines won’t spin and electricity will not be generated. This ‘on-off’ nature has led to scepticism about the value of wind turbines, often claiming they aren’t worth their production costs. To overcome electricity production fluctuations, a large number of wind turbines in the UK are in offshore wind farms; almost half of the wind power generated in the UK comes from offshore wind farms (World Energy Council, 2016), such as the London Array, Greater Gabbard and Dudgeon. Wind speeds offshore are generally higher than those onshore, and the wind is more consistent (Anderson, 2013), so we should expect the cost efficiency to be higher. However, the costs involved with building offshore wind farms are considerably higher, leading to the cost of their energy being around 2.6 times more expensive than their onshore counterparts (Institute for Energy Research, n.d.). The three aforementioned wind farms had production costs of £1.8bn (London Array Ltd), £1.5bn (SSE) and £1.25bn (Statoil, 2017) respectively; this is mostly down to problems of constructing in dangerous seas.

Although wind power has a long history, is it important to the current energy landscape? Simply put, very. In Europe alone, 2016 saw 300TWh generated from wind power, providing over 10% of the energy demand in the EU. Furthermore, wind power has the second-largest power generation capacity in Europe. This is largely due to increases in funding for wind farms, with the EU investing €27.5bn in 2016, 5% more than the previous year (Wind Europe, 2017), so clearly the value of the market is escalating.

Wind power is hugely important in Europe. During 2015, Spain produced almost 20% of its total energy from wind power (REE, 2016) and 2016 saw Denmark generate 61.6% of its electricity from renewable sources, of which nearly 72% was produced by wind power (ENERGINET, 2017). Furthermore, with China planning to invest an enormous $360bn in renewables by 2020 (Jiang & Jonathan, 2017), it is hardly surprising that they have the highest wind power capacity of any country in the world. From the statistics, it is clear that the influence of wind power is large.

And for the future? One analysis suggests that the global wind capacity will more than definitely double, potentially trebling or even quadrupling between the years 2015 and 2030. A safe estimate of the 2030 capacity would be 977GW, however this could certainly be in the 2TW range (World Energy Council, 2016). This is to be expected when you consider the sheer size of the Chinese investment in clean energy, further bolstered by a clean energy revolution in India and funding in the EU set to continue increasing.

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Figure 2: Evolution of the global wind power capacity (Global World Energy Council, 2017).

However, we all know government funding for renewable energy in the UK has taken a big hit over the last two years. Investment in wind and solar has fallen 56% over a single year; this is as a result of the governments’ ban on onshore wind subsidies and cuts to solar power. This is the second year in a row that investment has declined on this scale in the UK (Merrick, 2018). With Brexit set to reduce international investment in British industry, it is perfectly reasonable to question whether the UK will continue to be a global player in this industry. For example, the uncertainty around Brexit has already caused a slump in manufacturing investment (Monaghan, 2017), which will have direct ramifications on building sources of renewable energy. Furthermore, by leaving the European Union, the government is likely to have ‘more freedom’ for phasing out renewable energy support schemes (Norton Rose Fulbright, 2016). Perhaps all we can do is hope this decline isn’t set to continue, and the impending effects of Brexit are minimised. Over the pond, the Trump administration look set to cut funding for the Energy Efficiency and Renewable Energy office ‘by nearly three-quarters’ (Shugerman, 2018), so the situation in the States is perhaps even worse.

However, it’s not all doom and gloom. With regards to future wind turbine design, the future looks promising. One company in Spain, Vortex Bladeless, has designed revolutionary, ‘bladeless’ wind turbines. These contraptions have no moving parts; subsequently, this makes them ‘noiseless’ and more ‘respectful of nature’. The technology works because the wind causes tall, carbon fibre pillars to oscillate in the wind; this mechanical energy is then converted into electricity. One idea is that these pillars will be built on top of houses to power them. Vortex Bladeless state the manufacturing and operating costs will be reduced by 50% (Vortex Bladeless, 2015). The reduced production costs mean the relative cost of energy produced by them is reduced, a major problem with current wind turbines.

Meanwhile, here in the UK, KPS are using kites to generate electricity. This neat way of producing electricity is achieved by flying two kites, both connected to a generator, and continually unreeling them and reeling them in. Each kite is connected by a cable to a generator such that when they are unreeled, the cable is ‘spooled out rapidly’, consequently generating electricity (KPS). When each kite is reeled in, they are manipulated to consume a minimal amount of energy, therefore, over one cycle there is a net energy gain. Furthermore, to keep the energy supply constant, the two kites are run at a half-cycle phase, i.e. when one is generating, the other is being reeled in. KPS claim that one of these devices could power 380 homes per year (KPS). Reflecting on this factor, for locations such as Wales or Scotland where villages and towns are more sparsely distributed, this technology could be a game-changer.

Perhaps one issue with the preceding concepts is that they require space at ground level to operate. However, researchers at the Massachusetts Institute of Technology (MIT) may have found a solution through their spin-off company Altaeros Energies (Harris, 2017). Their design uses an aerial platform called an ‘aerostat’ to host a wind turbine at an elevation of 600m. It is claimed that at this height, the turbine will generate ‘over twice the energy output of similarly rated wind turbines’; this makes sense because wind speeds at higher altitude are both higher and more consistent (Altaeros). Makani are using a similar concept with their ‘energy kite’; again, this uses an airborne device to generate electricity which is transported back to earth through a long cable. Rated at 600kW (Makani, 2017), this is, however, lower than conventional wind turbines which generate power on a MW scale. Nonetheless, with continued research and development, it is highly possible future wind kites will be on par with current wind turbines. For large cities such as London and New York, using cables to connect these devices may not be feasible or safe; furthermore, their elevation could interfere with a cities’ airspace. However, when you take into consideration their portability and speed of assembly, they may have uses when immediate power is needed in a natural disaster, or when powering remote communities.

Wind power really has the potential to change the energy production landscape, even if its future, and the future of all renewables in the UK and USA is unclear. Innovations in technology and continued global financial support mean that wind power, in conjunction with the other renewables will one day dominate, and overthrow the current main sources of energy.

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Figure 3: An Altaeros Aerostat (Matheson, 2014).


Hydrogen

The prospects of hydrogen as an energy medium

Hydrogen could be incredibly important to our energy system in the future. Why is it so promising? Burning hydrogen releases zero air pollution, so it has fewer health impacts than conventional fuels. There is no noise, no risk of carbon monoxide poisoning, and no direct climate impact (Lucia, 2014).

While hydrogen can be burned, fuel cells are a better option. Like electric cars, these are a 19th century invention that have seen a burst of research in the past few decades. A group of technologies that use hydrogen fuel cells as a medium – for instance, central heating and cars - are just reaching the public. They take in a fuel, like combustion engines, but use electrochemistry to produce heat and electricity. The only waste product is pure water.

Fuel cells are incredibly efficient, turning up to 95% of the fuel energy into electricity and heating (ene.field, 2018). They can be built at almost any scale imaginable, from portable cells to systems for whole city districts, but most research efforts are for car-sized or domestic boiler-sized systems (Lucia, 2014). In a CHP arrangement, one hydrogen fuel cell unit can provide electricity, heating and cooling. Fuel cells are one of the best future tools for distributed energy, in which people and communities generate their electricity locally.

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Figure 1: Energy efficiency of CHP compared to conventional power generation ( P3P Partners, 2018).

CHP stands for ‘combined heat and power’. A CHP unit is an electrical generator that also makes hot water or steam. This is much more efficient than generating the same amount of heat and electricity in separate processes. CHP units are often used as power sources for large businesses and institutions, including ICL’s South Kensington campus (Czyzewski, 2016). Micro-CHP units for single homes also exist.