Expanding innovation, shrinking cost in energy storage
Jul 14, 2022

Expanding innovation, shrinking cost in energy storage

Many countries are using batteries to store energy from renewable sources. In the U.S., more than 90% of this capacity relies on lithium-ion batteries. But that could be changing.

Finland installed the world’s first functional sand battery this month. It heats up the sand, which can retain that heat for months at a time, according to the developers. This stored heat is energy that can be tapped later.

All over the world, electric grid operators are looking to store more renewable energy from wind and solar and turning to big batteries, sometimes acres of them. Here in the U.S., more than 90% of this storage relies on lithium-ion batteries, according to the government, thanks to their efficiency and relatively low cost.

Marketplace’s Kimberly Adams spoke with Jason Burwen, vice president of energy storage for the American Clean Power Association, an industry group. She asked what other kinds of battery innovations are getting him excited. The following is an edited transcript of their conversation:

Jason Burwen: What’s exciting is that there are so many new grid energy storage technologies in development. And each has their own clever way of opening new opportunities while unlocking the economics of longer durations. I’m excited about battery developers who are using Earth-abundant materials, like iron and zinc and sodium, that could expand the accessibility of global supply chains for energy storage. I’m excited by folks who are looking to repurpose old fracking wells or salt domes for underground pumped hydro storage or compressed air storage. And that could create new jobs in brownfield redevelopment. And there are even really exciting things happening in turning clean power into hydrogen or ammonia as energy storage, which can also be doubled as a product for things like clean fertilizer.

Kimberly Adams: How green or climate-friendly is all this technology?

Burwen: The exciting thing about energy storage is that it is a critical resource for unlocking much higher shares of wind and solar power, really any zero-carbon energy source that is going to be variable in its supply. When we look to how we are going to decarbonize the power system, there is a pathway that the National Renewable Energy Laboratory has looked at, in its storage futures study, that determines that with several hundred gigawatts of energy storage, we can decarbonize the power system with wind and solar and storage for most of the power needs of the day.

Adams: And so how close are we to that?

Burwen: Well, today, we have just over 7 gigawatts of battery energy storage on the power system. That’s equivalent to powering over 4 million homes through the hours of peak demands on the electric system. That joins 23 gigawatts of pumped hydropower. And depending on who you talk to, we might need maybe 100 gigawatts of new energy storage by 2030 to meet the pace of clean energy deployment to decarbonize the power system by 2035 or 2040. So we’ve got a ways to go. But the good news here is that we’re adding now multiple gigawatts of battery energy storage to the power system each year.

Adams: And what’s supporting these additions? Are these government initiatives? Is it the private sector? Where’s the money coming from?

Burwen: It’s a combination. There are a number of states that have set energy storage deployment targets. Folks have been able to pair energy storage with, for example, solar projects to take advantage of federal tax credits. But also, and I think this is an important part of the story, a lot of energy storage being deployed today is being deployed without these kinds of tax credits or other supportive policies. You have a very large number of batteries being added to interconnection queues in regional electricity markets across the U.S. Texas alone, I think, has added 2 gigawatts of batteries in just the past year or two. And utilities are going out and procuring battery energy storage in places as diverse as Idaho and Arkansas and Indiana because they are determining that it is cost-effective when they do long-term resource planning.

Adams: So what’s the size of this market for battery storage for the grid?

Burwen: We expect that by the end of the decade, this is really an $8 to $10 billion market annually. Of course, a little bit of that depends on what will happen with congressional legislation. One of the considerations before Congress right now is whether to award tax credit to energy storage technologies directly. If that does occur, then that market size could grow significantly over the coming years.

Adams: What are some of the barriers to some of these technologies that you’ve highlighted actually being deployed at scale across the country?

Burwen: Certainly, the challenges in global supply chains and logistics that have occurred over the last couple of years have made this a little bit more challenging for companies who are oftentimes contracting projects several years in advance for development. But really, the thing that I think is on the minds of most companies building and operating grid energy storage facilities is their ability to get permitted, get interconnected to the power system. Those processes are taking longer and longer for a variety of reasons. You have to get in line to connect to the power grid, and that line is getting longer everywhere in the United States right now.

The National Renewable Energy Laboratory, a Department of Energy project, put out a series of reports looking at the future of battery storage in the U.S. The lab also has a video talking about when, where and how batteries could fit into our future electric grid.

Burwen also explained why lithium-ion batteries have become a dominant energy storage method. A lot of that has to do with money, of course. With the rapid growth of the electric vehicle market, more battery production is coming online, driving down cost. And the companies making batteries for the grid are benefiting from that as well.

An Energy & Environmental Science study found that the price of lithium-ion cells has declined by about 97% since they were introduced to the market in 1991.

Here are a few other examples of thermal battery tech developments. Thermal batteries involve storing heat and deploying that energy later, like the sand battery in Finland or the “molten salt” battery being developed in Malta. Engineers here in the U.S. are even working on a “reversible rust” battery that could store energy for days.

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