(The author is a Reuters market analyst. The views expressed
are his own.)
By Gerard Wynn
LONDON, April 4 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
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
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
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
($1 = 0.7497 euros)
(Reporting by Gerard Wynn; Editing by Alison Birrane)