Updated: Oct 8, 2022
Back in 2012, we were discussing with partners until late at night about the potential barriers for more renewable energy adoption and how we thought we can work on it. It was already clear at that time, that energy storage was going to play a major role, and we got hooked. Therefore, to understand why is so important, we need to talk briefly about renewable energy and how a typical electric grid works.
We understand, as Renewable Energy, any form of energy (most commonly adopted as electric energy) that does not depend on a finite fuel resource, like the fossil ones (diesel, gasoline, gas, coal, etc). Renewable is not the same as Sustainable, because sustainable it is also a form of energy that does not generate any impact in the world and its population. Two of the most adopted, used, and accessible forms of sustainable renewable energy are Solar and Wind Energy. Solar energy can come in different ways and technologies, the most common (and cheaper actually) is the one that uses photovoltaic panels to transform the irradiance (energy from the sun) into electric energy (also known as “Solar PV”). In the other hand, the energy in the wind can be transformed into electric energy by using wind turbines, those tall and beautiful three blades machines that we see in advertisements and movies. So, these two available resources, wind and solar, are transformed into electric energy by suitable equipment.
Then, in the other side, we have all the energy consumptions, like our houses, the industrial facilities, the public and street lighting, the electric vehicles (EV) and electric transportation, absolutely everything that consumes electric energy. Of course, in the middle there are long, complex, and sophisticated energy transportation and distribution systems, that interconnect energy producers with energy consumers. This massive interconnection system is the famous “grid”. The consumptions we just described, are normally not happening all at the same time, but spread along the 24 hours of a day (and mostly at night when we turn on the lights, the TV, the laptop, the electric oven, etc). This “curve” of consumptions (that generally looks like two peaks one close to noon and one at night, with a valley in between) must be covered by different energy producers minute to minute. Normally, every country has its own means to organize this interaction, and commands different generators to start or shutdown (delivering electric energy or not) in order to “follow” the curve of consumptions. If we have too much energy, or not enough, the grid protects itself by “cutting off” parts of the consumptions or generators, as an intent to stabilize the grid and avoid a blackout (blackout is when all the grid shutdowns, and restart it could take days or even weeks, so we better avoid it).
Some of you will recognize these “grid protections shutdowns” we are describing. You should remember some hot summers of your childhood, when the electric consumption was too high and some neighborhoods were out of power in order to prevent a complete blackout, and on top of the sweltering heat, when the power came back usually generated a voltage spike that burned out the appliances.
From the generators side, now that we know the effect of carbon emissions to the atmosphere and the danger of Climate Change, a growing number of people are beginning to agree that having mostly sustainable and renewable energy, such as wind and solar power, is a key solution to help revert the effects of the Climate Change. These two forms of sustainable and renewable energy have certain characteristics that made them difficult to handle from the grid standpoint. First, these energy sources are available only when we have the resource (wind or sun) and not necessarily when we need them (like at 9 PM to see your favorite Netflix series). Second, the way they produce electric energy is not as smooth as we could desire, and this generates some level of instability in the grid.
Just to paint the full picture, we have these two intrinsic characteristics (intermittency and variability) but we also have other issues to solve, such as the massive amount of minerals required to produce the wind turbines or solar panels, the logistics constraints, the energy transport bandwidth and distances between potential power generation and consumption areas. All these topics, in different ways, are limiting the adoption and installation of more renewable energy. Back in 2021 the International Energy Agency (IEA) released a paramount report called “Net Zero by 2050, a Roadmap for the Global Energy Sector” that by the way we strongly recommend you take a look. In the report, IEA addressed that one of the pillars for the decarbonization will be the massive adoption of renewable energy, from the average 29% of share in 2020, up to 88% by 2050. This means, a massive, big, and global add of new renewable energy during the next 30 years. This target will not be possible if we don’t find different ways to compensate the intermittency and variability of the wind and solar energy. And just there, is on that critical point where Energy Storage can play a decisive role.
Storage of electric energy is not new, there are energy storage facilities all around the world. The issue is the number and size of them, that are simply not enough. With more and more intermittent and variable wind and solar electric energy coming to the grid every year, and according IEA this participation will be huge, we will need many distributed and smart energy storage solutions, to guarantee the grid stability and energy quality we all need. The electric energy then, can be stored by different means, could be electrochemical like lithium-ion batteries (very similar than the ones of your cellphone or laptop) or super-capacitors, or flying wheels (imaging a big spinning top) or mechanically (compressing or liquefying air into a cavern or reservoir, and then expanding that air through a turbine, these last two are called CAES and LAES respectively). Even Hydrogen could be a way to store renewable energy, producing green hydrogen from renewable energy and then using it for different purposes. So, in general, all these technologies can store electric energy when it is in excess or available and deliver it to the grid when it is required. Energy storage acts basically as a buffer, a cushion between generation and consumption, solving the availability and variability issues.
So where is the catch? Why are we not seeing more energy storage projects appearing like mushrooms? Well, somebody must be willing to invest on all that fancy equipment, build the energy storage facility, and operate it during some period of time (normally 20 years or more). In some countries, or even USA states, you can do what is called “arbitrage”, which means that you can use your energy storage facility to buy cheap renewable electric energy when available in excess and sell it to the grid (at night for example) at a higher price and then, preferably make some profit. But arbitrage is not possible anywhere, and some countries are still heavily regulated where this kind of business is not even feasible. Other option could be that electric energy regulators ask the renewable energy generators to use these solutions in order to improve the grid stability, as a way to facilitate more renewable energy adoption, or maybe put the responsibility on the transmission companies and distribute the cost of such energy storage solution abroad all the consumers. It is not clear yet, who should do this, so there are different schemes and regulatory frameworks under test.
Last, the cherry of the cake. Remember the peaks of the electric energy consumption curve I mentioned? Well, to cover those peaks there are distributed along the grid some high efficiency gas turbines that quickly start when needed and deliver electric energy for few hours just to cover those high electric energy consumption demands. So now you have a very simplified overview of the complexities we face, with electric energy consumption and consumer behaviors changing all the time moving to more electric energy dependency, the difficulty to match those energy consumptions with generation every second, the intermittency and variability of wind and solar PV power, the possibility to have distributed gas turbines burning hydrogen soon, and yes, energy storage has the power to glue all together. Nice right?