The Battery Boom is Here

December 22, 2021

Wall Street Journal:

Companies are poised to install record amounts of batteries on America’s electric grid this year, as government mandates and a steep decline in costs fuel rapid growth in power storage.

The U.S., which had less than a gigawatt of large battery installations in 2020—roughly enough to power 350,000 homes for a handful of hours—is on pace to add six gigawatts this year and another nine gigawatts in 2022, according to S&P Global Market Intelligence.

Demand for utility-scale storage is expected to keep rising world-wide for the next several years, driven by rapid growth in the U.S. and China, as new storage technologies and pressure to add renewable energy sources to stem carbon emissions reshape the electricity industry.

Giant batteries, often paired with solar farms, can charge when sunshine is plentiful, then send electricity to the grid later when the sun goes down or demand otherwise spikes and power is more valuable. The installations, most of which currently use lithium-ion batteries like the ones found in electric vehicles and laptops, resemble rows of boxy shipping containers, and usually provide up to four hours of backup power.

The surge in battery development has the potential to substantially change the power generation sector. Electricity discharged from batteries is increasingly replacing electricity generated by gas-fired power plants in certain parts of the country, especially those that only fire up during periods of peak demand. Already, utilities, power generators and investors are rethinking the need for conventional power plants, as batteries become cheaper and more viable.

Plummeting costs for lithium-ion batteries, which have become ubiquitous in smartphones and laptops and are increasingly in high demand for electric vehicles, have made utility-sized battery projects more economical. Lithium-ion battery packs, which cost more than $1,200 per kilowatt-hour in 2010, have fallen to around $132 this year, according to data from BloombergNEF.

California is driving much of the U.S. battery market’s expansion. It is racing to secure power to make up for the impending closure of several gas-fired power plants as well as a nuclear facility that provides nearly 10% of the electricity generated in the state. A California law passed in 2018 requires the state to decarbonize its power grid by 2045.

At least eight other states so far have storage mandates or targets, including New York, Virginia and Nevada, according to the U.S. Energy Storage Association. Goldman Sachs expects the U.S. market for stationary batteries to grow from about $1 billion in 2020 to $13 billion to $14 billion by 2030.

Storage developer Key Capture Energy now has 370 megawatts of battery projects in operation or under construction, up from 54 megawatts this time last year. The company is working on projects in New York, New England, Texas and elsewhere, including a 20-megawatt installation on the site of a Maryland coal plant that is set to retire in the coming years.

Jeff Bishop, Key Capture’s co-founder and chief executive, said declining costs have enabled the company to expand to Oklahoma, Michigan and other states where it has historically been economically challenging to build batteries.

“Five years ago, most energy storage developers were small shops like us that had a couple of people and PowerPoints and dreams,” Mr. Bishop said. “Now, it’s companies with real money behind them and billions of dollars for growth.”

Some states that lack storage mandates have had a boom in battery installations anyway, including Arizona and Texas, where batteries are being built alongside large renewable energy projects, but also as stand-alone projects that aim to take advantage of fluctuations in power prices.

The major Texas grid operator had 225 megawatts of utility scale battery storage operating at the end of 2020. Now one company, a subsidiary of Italy’s Enel ENEL 2.74% SpA, has 551 megawatts under construction in Texas. This month, it connected a 55 megawatt site to the grid southeast of Dallas.

But don’t imagine for a minute that Lithium-ion is the only game in town.

Inside Climate News:

Hydrostor, a Canadian company, has filed applications in the last week with California regulators to build two plants to meet some of that need using “compressed air energy storage.” The plants would pump compressed air into underground caverns and later release the air to turn a turbine and produce electricity.

The stored energy would be able to generate hundreds of megawatts of electric power for up to eight hours at a time, with no fossil fuels and no greenhouse gas emissions. Long-duration storage includes systems that can discharge electricity for eight hours or more, as opposed to lithium-ion battery storage, which typically runs for up to four hours.

This project and technology have potentially huge implications for the push to develop long-duration energy storage. But the key word is “potentially,” because there are many companies and technologies vying for a foothold in this rapidly growing part of the energy economy, and the results so far have been little more than research findings and hype.

“Their technology is not overly complicated,” said Mike Gravely, a manager of energy systems research for the California Energy Commission, speaking in general about CAES. “Compressed air is a very simple concept.”

The main challenge, as with so many clean energy technologies, is to get the costs low enough to justify building many of the plants.

Hydrostor, founded in 2010 and based in Toronto, has completed two small plants in the Toronto area, including a 1.75-megawatt storage plant that can run for about six hours at a time.

The company’s system begins with an industrial scale air compressor that runs on electricity and sucks in air from the environment. The compression of air produces heat, which the system removes and stores in a thermal storage vessel.

Meanwhile, the compressed air flows through a pipe into a cavern more than 1,000 feet below the surface. The cavern would be excavated for the project, as opposed to natural caves providing the storage.

To discharge the energy, the system releases water into the cavern, which forces the air to the surface, where it mixes with the heat that had been stored. The heated air then flows through turbines to produce electricity.

Hydrostor filed an application last week for a plant, called Pecho Energy Storage Center, that would be located in San Luis Obispo County and cost $800 million. It would have a generating capacity of 400 megawatts, with a duration of up to eight hours.

The company then filed an application on Wednesday for the second plant, called Gem Energy Storage Center, that would be located just east of the Pecho plant in Kern County and cost $975 million. It would have a generating capacity of 500 megawatts, with a duration of up to eight hours.


8 Responses to “The Battery Boom is Here”

  1. rhymeswithgoalie Says:

    My standard rant:

    Save the Li+ for vehicles and e-toys and use cheap heavy battery tech on the ground.

    • J4Zonian Says:

      Welcome to the Neolithic
      But since lithium can be used on the grid, why not use it there? Especially since at the moment there’s nothing available on a large scale that comes remotely close to being as good. Developing lithium batteries will bring their price down faster and accelerate experimentation. (Cheaper, cobalt-free chemistries like LiFePo are better in the grid than in vehicles, eg, because though they’re not as energy dense as the best cobalt-containing ones, so are heavier per KW, that doesn’t matter on the grid. They’re also already being used some in lower-end EVs, by BYD et al. and are improving like all the rest of this. Using lithium in the grid will get us to the magic $100/KWh* faster, where comparable EVs are as cheap as ICEVs. And then it will keep the price moving down, making it cheaper, faster and politically easier to not only to renewablize the grid (and primary energy) it will convince more incorrigible on-the fencers and ideological idiots that we can renewablize.

      Putting lithium batteries on the grid creates an incentive for our single-minded psychopathic economic system to find, mine and process it, creating a supply chain and strategic reserve that’s also useful now. As cheaper, even more benign but much heavier battery chemistries like iron-air can take lithium’s place in the grid, the gridlith can be repurposed or recycled into vehicles (unless we also have better stuff there by then) with little energy or money cost compared to mining new lithium and virtually no ecological cost.

      * Don’t jump on me; of course it’s not magic. Or immediate. Personally, I think we passed the point of price parity a while ago, since almost all EVs are better than almost all ICEVs in every meaningful way already. But I keep reading that $C/KWh = the magical muffin point and after that everyone will want one. I have no evidence to the contrary except my utter certainty that it’s ridiculous, but apparently no one in the business cares about what I think. So I’ll go with C/K and hope it’s right while I join them all in creating this strategic castle in the air.

      Again, don’t jump on me.

      • rhymeswithgoalie Says:

        In my infinite mercy and tolerance, I will allow lithium batteries on slabs if it doesn’t compete at all with the supply of lithium for vehicles! There are alternatives for grid storage, but not for BEVs.

        • J4Zonian Says:

          I appreciate your magnanimousosity. Since it takes a few years to plan and build pumped storage and a few months to plan and build battery storage, what I hope will happen as an alternative to lithium grid batteries for storage is other kinds of storage as storage—pumped hydro (which is about 95% of grid storage in the world now (led by China of course), maybe compressed air, weights and cranes, etc—and batteries used for what they do best—instant response to prevent blackouts and very short term storage while the backup storage ramps up, ancillary services… And better interconnections to distribute generation widely enough so thee need for storage is delayed.

          Besides the obvious reasons people and corporations stifle clean safe renewable energy, the lack of it allows its opponents (who also control media) to blame it for failures of fossil and fissile fuels, and forces its proponents to fight over scraps. Clean safe renewable sources could be providing all of our energy now if we had started seriously when it became obvious we needed to, joining China and Germany in driving the price down while the technology advanced. Instead, neither old nor new energy system can meet the demands being placed on them by ever more indulgences for the neglectful and abusive rich in a world of ever less predictable weather. The collapse of the old is beginning to stifle its maintenance while the power of its owners continues to stunt the new, so we’re stalemated as the collapse spreads to the rest of the world.

          Ultimately, the problem is the oligarchy’s refusal to build clean safe renewable energy infrastructure at anything like the speed and scale needed. That will have to be solved for us to get anywhere. And as you all know there’s only one way to do that.

          • rhymeswithgoalie Says:

            I think the “rust battery” people would have all sorts of utilities and investors throwing money at them. Longer-scale batteries I’d expect to become more valuable (i.e., investable/buyable) as the dynamics of shorter-term batteries shakes out and understanding of the needs of the grid develops.

            Season-scale batteries would probably be government-developed, like those “strategic” fossil fuel reserves some governments have now (or maybe as the back end of established grid storage providers).

  2. rhymeswithgoalie Says:

    “Their technology is not overly complicated,” said Mike Gravely, a manager of energy systems research for the California Energy Commission, speaking in general about CAES. “Compressed air is a very simple concept.”

    Pressurizing and de-pressurizing cycles effects on natural rock are not a very simple concept. Rock is not often uniform in composition and strength, and injecting gases in the ground is used as a mean to fracture (albeit generally weaker) rock.

    (OK, it was the engineer in me objecting to “simple concept”, a phrase originally used on several of the projects I was put on. I probably learned too much exception detail in the several geology classes I’ve taken, too.)

  3. J4Zonian Says:

    A case study
    California needs more wind power, especially offshore, some of it floating, to complement its growing (?—see below) solar. It could also use pumped hydro storage which is longer-term holding and discharge than lithium or compressed air, and maybe some iron-air batteries, which will be cheaper and even more benign than lithium. California and Nevada also need the one bill that didn’t pass among the many at the end of Jerry Brown’s term as gov.—to connect CAISO (Cal. grid) better to points east. But what it needs most right now is a political firestorm to stop the corrupt Cal. Air Resources Board ruling coming up, that will make adding more rooftop solar so much harder it threatens to stop its development.

    Distributed, aka rooftop, solar increases the amount of utility solar that can be integrated and makes the whole system cheaper*. That combination will boost the amount of wind power that can be added; the wind will complement the solar over the course of both a day and a year, helping to cover the daily duck curve and winter low sun. A few hours battery storage can level the remaining duck curve, and some pumped hydro storage and geothermal can do the rest in winter. (A lot of Cal. is a Mediterranean climate; virtually all the rain falls between October 15 and May 15; however, it’s becoming less reliable because of climate changes.)


  4. Abel Adamski Says:

    BYD has already achieved price parity with ICEV withe their Blade LiFePo batteries and are now selling NEV variants of their ICE vehicles at the same or lower price

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