One of solar power’s biggest enemies is—not surprisingly—when the sun’s not shining. Not just at night, but also on cloudy days. The variability of the power source, time and again, is one of the reasons utilities have fought the addition of more solar power to their networks, particularly distributed solar generation. But energy storage technologies batteries, thermal storage—even more exotic energy storage technologies like flywheels and compressed air are starting to gain traction and analysts are increasingly seeing it as a potentially large future market.
This week at least two companies, GTM Research and Navigant Research released reports related to solar energy storage, with Navigant anticipating energy storage will generate $4 billion in revenue annually by 2024. Meanwhile GTM Research projects that energy storage for commercial energy in the U.S. could increase from a little over 100 megawatt hours in 2014 to more than 700 megawatt hours by 2020. And efforts to explore more ways to store solar energy are already underway. Also this week, Sumitomo Corp. announced that it deployed a new energy storage system using used EV batteries to provide large-scale energy storage in Japan.
Why is energy storage becoming such a big deal? “Because electricity supply must match demand on a second-by-second basis, ensuring that demand is met requires costly planning and investments from grid operators throughout the energy supply chain, as well as critical ancillary services which ensure the stability of the electrical grid,” GTM Research said in a brief on its new report, Distributed Energy Storage 2014: Applications and Opportunities for Commercial Energy. It added, “The proliferation of intermittent, renewable generating sources (such as solar PV) over the last several years has presented utilities, grid operators, and project developers with a new set of challenges and opportunities—many of which can be addressed through the deployment of distributed energy storage.”
A key area of energy storage won’t just be large-scale deployments adjacent to giant PV or wind farms but at distributed locations including micro grids—the focus of Navigant’s new report: Energy Storage for Microgrids. Navigant anticipates that the worldwide capacity of microgrid energy storage systems will grow from 817 megawatt-hours 2014 to 15,182 MWhs by 2024. As such it will grow from an industry with $662 million in revenue this year to one with a revenue of $6 billion over the next decade.
“The primary value proposition of energy storage in a microgrid is in improving the payback period of the system, either by enabling an increase in the penetration of renewable energy sources, allowing participation in deregulated ancillary service markets, or reducing diesel fuel consumption,” said Anissa Dehamna, senior research analyst with Navigant Research. “High prices for diesel fuel, a stronger push for the utilization of renewable resources in microgrids, and ancillary service market reforms will all underscore the business case for energy storage for microgrids.”
Still, the technologies are being evaluated. The new, used battery storage system in Japan is near the Hikari-no-mori solar power project on Yume-shima Island, Osaka. It consists of 16 used EV batteries and has a capacity of 600 kilowatts and 400kW hours. To develop the project Sumitomo partnered with Nissan to create the company 4R Energy to address the secondary use of electric vehicle lithium-ion batteries. The system will be evaluated over the next three years.