(The author is a Reuters market analyst. The views expressed are his own.)
By Gerard Wynn
LONDON, April 4 (Reuters) - Neglected power storage technologies have a big role in a future low-carbon grid if policymakers can find a way to reward nuanced benefits, including avoiding price spikes and reducing the need for backup power.
The essence of storage is simple: to transfer power supply to peak from off-peak demand. Or, in the case of renewables, from days when it's sunny or windy to those when it isn't.
Energy storage has the potential to cut required generating capacity by helping meet peaks in demand, yet it is only at the cusp of government thinking.
That is slowly changing as the intractability of energy supply choices becomes clear, whether on grounds of safety (nuclear), expense (carbon capture and storage) or carbon emissions (fossil fuels).
Energy support has traditionally rewarded generation technologies such as low-carbon renewable and nuclear power.
Energy storage involves rather more nuanced benefits including avoided spikes in power prices and efficiency gains from avoided construction of standby power plants. Perhaps for that reason it has so far fallen below a public policy radar.
The vast majority of electricity storage presently is through pumped hydropower, essentially pumping a lake uphill, and releasing sluice gates at moments of peak demand.
That's a solution limited by topography and water resources; the trouble with wider applications is the novelty or expense of technologies including battery power, compressed or chilled air, and electrolysis (using electricity to split water into hydrogen and oxygen).
Another problem is policy support, presently firmly rooted in helping energy generation technologies including wind and solar power reach maturity.
Energy storage has had to compete for one-off energy technology grants: in the wake of Germany's decision to pull back from nuclear power, the Berlin government announced a 3.5 billion euro ($4.67 billion) energy research programme from 2011-2014.
Some 200 million euros were set aside for storage research.
Britain has left the door ajar for longer-term support, under plans to reform the electricity market, embracing what it calls a "capacity mechanism" where companies would bid to provide a certain amount of power generation capacity in a given year in the future.
Some of that capacity would inevitably be idle, to assure a reserve margin; policy drivers for the reforms are the forthcoming closure of about a fifth of the country's ageing power plants, plus rising dependence on intermittent wind power.
The idea is for the country to be able to cope, for example, with a surge in power demand on a windless day.
A "technical update" published last December foresaw a potential role for storage.
But the 56-page document went no further. For example, it didn't suggest how energy storage might bid against cheaper gas-fired power plants, even though they may provide a more efficient use of assets in six or seven years' time, the full lead time to build a gas plant.
Start-up companies are working on energy storage but need the assurance of a future market role to develop.
An example of an electrolysis approach is Germany's start-up Enertrag AG, with partners Vattenfall, Total and Deutsche Bahn. It is operating one of the first plants to generate wind power and convert it into hydrogen.
Hydrogen can be stored, and later burned to generate power, heat or fuel cars, or blended in natural gas pipelines.
The trouble is it costs two to four times the amount Germany pays for imported gas.
Another novel approach is cooling air to liquid form, as developed by UK-based Highview Power Storage, allowing the liquid passively to expand and drive a turbine and generate power, as required.
Another approach is battery power for grid storage.
A decentralised, household-level battery storage could be aggregated, in theory, by a central energy supplier, drawing on the batteries as needed using emerging smart grid technologies.
Lithium ion battery storage is likely to get a fillip from large and growing autos market interest in electric vehicles.
While such technologies are still in the development phase, they need a route to market, which a UK-style capacity mechanism offers a glimmer of.
The challenge will be to value the benefits, and recognise these in a technology commercialisation programme which builds maturity in the same way as so successfully achieved for renewable power. ($1 = 0.7497 euros) (Reporting by Gerard Wynn; Editing by Alison Birrane)