FERC Issues Statement on Electric Storage Technologies

The commissioner of the Federal Energy Regulatory Commision (FERC), John R. Norris, recently issued a statement (called a Notice of Inquiry) focused on energy storage. Here's what he had to say: “I want to thank the team for their hard work tackling the difficult issues addressed in today’s Notice of Inquiry (NOI). While the NOI is not focused exclusively on storage technologies, issues unique to storage devices are a major part of it. As the questions we pose in this NOI demonstrate, new storage technologies present some interesting challenges for current Commission policies and practices, and I appreciate our staff’s efforts in helping us sort them out.

I am extremely interested in storage technologies and the benefits they could bring to our electricity system. I speak often about the numerous challenges we see facing the electricity grid. The increased penetration of renewable resources on the grid, the need to update our aging infrastructure to accommodate new demands, and the pressure that environmental regulations will put on existing generation assets – these drivers are bringing significant change in the electricity sector. With that change will come associated costs to consumers, and for that reason, we should be looking at any and all potential solutions to help us manage this change in an efficient and sustainable way.

Storage technologies, if more fully developed and utilized, hold great promise to help us efficiently address these challenges and hold down costs to consumers. As the Electric Power Research Institute (EPRI) noted in a white paper on storage technologies issued last year, energy storage systems have a key feature that transmission and distribution systems do not – they “can move energy through time, providing it when and where it is needed.” This feature, as EPRI points out, can help balance variable renewable resources, increase reliability, and improve the utilization of existing assets.

Given the significant potential benefits of storage technologies, the Commission should strive to ensure that our regulatory policies foster, rather than inhibit, their growth. Today’s NOI touches on a variety of key issues that we need to address to be sure our regulatory policies and practices do not stand in the way of storage technology development.

One issue that is important to me is that we recognize that storage technologies may provide multiple services, and thus multiple benefits, to the electricity grid and wholesale electricity markets. The Commission’s policies should be geared toward fairly compensating these technologies for the full range of benefits they will provide when deployed. Achieving this outcome will help ensure that the rates that customers pay for these benefits remain just and reasonable.

By analogy, I use the example of paying for the costs of a new stadium in a city. That stadium provides a venue for multiple events, from basketball games to rock concerts, providing multiple services to users and adding to the overall value and benefit to the community. This value would be lost if the stadium only charged for admission to basketball games; the ticket price for basketball games would necessarily be too high, and other events would not take place in the stadium without compensation – all to the community’s detriment. Instead, the stadium should seek to charge a fair price for each event (i.e., service) it offers. We need to think about storage in the same manner.

One service that new storage technologies could provide is frequency regulation. In February of this year, we issued a Notice of Proposed Rulemaking on Frequency Regulation Compensation, where we proposed to require RTO/ISOs to adopt new mechanisms to compensate resources for frequency regulation in a way that rewards them for quickly and accurately responding to the needs of the system. As I noted at the time, this pay-for-performance mechanism could result in the need to procure less regulation capacity and in improved utilization of existing supply resources, efficiencies that will benefit the grid and consumers over the long-term. While I supported this initial focus on the RTO/ISO markets, I noted that we should also look at how frequency response resources are procured and compensated in non-RTO/ISO regions. I am pleased that today’s NOI seeks comment on these issues. I hope that the comments we receive will shed light on efforts that we can undertake in those areas to create similar efficiencies and benefits for the grid and consumers.

I am interested in learning more about all aspects of electric storage technologies, and what the Commission can do to support – and avoid hindering – their development. Good, robust comments on this NOI will help us learn more. To the extent industry and the public have information they would like to share with me and my staff, please do not hesitate to contact us.”

Fight Brewing Over Off-Grid Energy Storage, Says Lux

Battery, flywheel, ultracapacitor and fuel cell developers need to act now if they wish to tap the $4B market for off-grid applications, says Lux Research. Struggling to get their feet in the door of transportation and grid-tied markets, emerging electrical storage developers have begun eying off-grid opportunities as a way to attain scale and lower costs. But the off-grid market represents a rapidly closing window of opportunity for emerging storage – only developers who take immediate and intelligent action will capture a meaningful share of the market, according to a new report by Lux Research.

The report, titled “Off-grid: A Modest Meal for Starving Storage Developers,” forecasts opportunities for emerging battery, flywheel, ultracapacitor, and fuel cell technologies in off-grid markets, such as telecommunication networks, datacenters, and mobile and semi-permanent military bases. The off-grid storage market will grow from $9.9 billion in 2011 to $13.5 billion in 2016, a 6% compound annual growth rate. Emerging technologies will be the fastest growing segment of the market, growing from $1.5 billion in 2011 in 2011 to about $4 billion in 2016, a 22% CAGR.

“Considering the current financial and regulatory state of grid-connected storage, the off-grid market presents a relatively bright opportunity for emerging storage technologies,” said the report’s lead author, Steve Minnihan. “But given the sheer number of developers competing for a share of the market, decisive action is needed to succeed.”

The report bases its analysis on a lifetime cost calculation for each technology, market, and application it covers. Among its key conclusions:

• Li-ion sees small, steady growth in diversified markets. Li-ion batteries will grow from $795 million in revenue in 2011 to $2.2 billion in 2016, a 23% compound annual growth rate (CAGR). Thanks to its improved cycle life and energy density over lead-acid batteries, lithium-ion will see narrow penetration into the high-end datacenter market, netting 6.8% of unlimited power supply (UPS) capacity and 5.8% of telecom backup capacity in 2016. If Li-ion developers can trim costs 33% to $400/kWh and demonstrate improved lifetimes, then the technology could usurp further market share in the telecom backup market in the latter half of the decade.
  
  
• Flywheels and ultracapacitors will supplement, not lead, the UPS market. Together, flywheels and ultracapacitors will capture 10% of the datacenter UPS market by 2016. Flywheels will grow from $49 million in 2011 to $104 million in 2016 (a 16% CAGR), while ultracapacitors will expand from a base of $88 million to $248 million in 2016 (a 23% CAGR). High reliability, superior cycle life, unsurpassed power density, and minimal maintenance costs all help make these technologies strong candidates, but their limited energy capacity raises barriers against broad adoption.
  
  
• Fuel cell potential is strong, with room for growth beyond 2016. Fuel cells will grow from $536 million in 2011 to $1.3 billion in 2016, a 22% CAGR, through adoption in the off-grid telecom power and datacenter market. This expansion won’t be enough, however, to support the expansive list of fuel cell developers, leading to fierce competition and consolidation.
  

“Off-grid: A Modest Meal for Starving Storage Developers,” is part of the Lux Smart Grid and Grid Storage Intelligence service. Clients subscribing to this service receive ongoing research on market and technology trends, continuous technology scouting reports and proprietary data points in the weekly Lux Research Smart Grid Journal, and on-demand inquiry with Lux Research analysts.

Patent Analysis Highlights Big Changes in Last Five Years

A report covering the analysis of over 40,000 patents granted in the last five years in the field of energy storage technologies for electric vehicles shows that two Japanese players - Panasonic and Toyota - now dominate the scene closely followed by two Korean firms, Samsung SDI and LG Chemical.

PatAnalyse a Cambridge, UK based IP analysis company looked at patents covering lithium batteries, supercapacitors, and battery management systems. The report "Advanced Energy Storage Technologies: Patent Trends and Company Positioning" was co-authored by IDTechEx, a global analysis and market intelligence company.

Lithium-ion battery technologies are starting to replace the older and lower energy density Lead Acid and Nickel Metal Hydride (NiMH) batteries in electric vehicles. The high energy Lithium-ion cells, however, are more vulnerable to abuse and need more support from electronic battery management systems to provide protection and ensure long life. The battery and on-board battery management system have become an important product differentiators just like the internal combustion engine in contemporary cars.

As a rule it takes at least five years from invention to the first product on the market, so to highlight `hidden' R&D efforts which have not yet materialised as new products, the study focussed on patents with a priority date from 2005.

While Japanese and Korean multinationals dominate the patent landscape, second tier players are more international with Japanese companies like Sony, Hitachi, Denso, Nissan, Mitsubishi, Toshiba, and Honda joined by Ford, General Motors, Robert Bosch and, not surprisingly, by the Chinese BYD.

US activity seems dominated by government sponsored research which is reflected in the strong position of US government labs and universities

Looking at trends in patenting over the last five years it is evident that much of the growth comes from European and US players waking up to the challenge.


Caption: Trend in patenting advanced energy storage over the most recent years for which statistically meaningful data are available. Source: Source PatAnalyse/IDTechEx report "Advanced Energy Storage Technologies: Patent Trends and Company Positioning"

Korean companies are substantially outnumbered by US firms when all small players are taken into account. A more sophisticated analysis of the trends shows that Korean firms are reducing their relative contribution to energy storage patenting while Europe and China have been substantially increasing their contributions.

Looking specifically at lithium traction battery development, while Toyota is a bold new entrant to this area, Panasonic has been steadily active for some time. Recently LG Chemical has been patenting less and this seems to reflect a reduced R&D spend for the development of the new generation of lithium traction batteries. It could be that LG Chemical is shifting its financial resources from R&D to manufacturing which should pay off in a short term but could be quite a risky strategy in the long term.



Caption: Toyota lithium-ion traction battery patent filings by year. Source PatAnalyse/IDTechEx report "Advanced Energy Storage Technologies: Patent Trends and Company Positioning"

A comparison of Toyota's and Panasonic's lithium traction battery patents shows that while Toyota is backing the use of electrode nanotechnology for reducing the charging time and improving lifetime, Panasonic is focusing more on separator technology and cathode chemistry.

Companies big and small are already reaping the benefit of this novel kind of business intelligence. Local technology strategy company, Technologia, was one of the first customers. Mick McLean, Managing Director explained: "Patent landscaping is a tool increasingly used by big corporations to inform product development and technology strategies. By analysing the vast amount of data in databases of patents, multinationals can gain significant competitive advantages. But most current methods are skill and labour intensive and costs exclude the small players."

BASF to Enter Lithium-ion Electrolyte Business

BASF announced that it is entering the business of electrolytes for lithium-ion batteries (LIB) and is forming a global electrolytes team in its Intermediates division for this purpose. By adding electrolytes to its existing portfolio for the LIB industry, BASF is able to offer another key component for the battery technology.


Electrolytes are complex formulations that are essential for the transport of electronic charge inside batteries. High-quality electrolytes are prerequisites for improving the battery performance.

BASF is already developing specific formulations for high-quality electrolytes based on organic carbonates for customers in the battery and automotive industries. The first products will be commercially available by the end of this year.
Dr. Andreas Kreimeyer, Member of the Board of Executive Directors and Research Executive Director of BASF . said: “In the electrolytes business we intend to become a system supplier that is capable of offering tailor-made solutions to our customers.”

Photo caption: The heart of the BASF Group is BASF SE headquartered in Ludwigshafen, Germany. With its over 160 chemical production plants, several hundred laboratories, technical centers, workshops and offices, it is the largest integrated industrial complex in Europe (according to BASF).

Portable Fuel Cell Unit Shipments to Top 7 Million Annually by 2017

Fuel cells are gaining momentum as a source of clean and reliable power for a host of portable device applications including electronics, battery chargers, remote monitoring, and military applications. In recent years, fuel cell manufacturers and electronics companies and distributors have sought to demonstrate their respective technologies across these new applications in preparation for large-scale commercialization. While key challenges still remain for the industry, most notably issues related to cost and technology standards, a new report from Pike Research forecasts that the current period of product development will lead to commercialization for portable fuel cells at an increasingly larger scale, beginning in the 2015 timeframe. The cleantech market intelligence firm forecasts that, by 2017, annual unit shipments for portable fuel cells will reach 7 million per year.


“Fuel cell technologies have strong potential advantages over conventional solutions such as batteries, diesel generators, and solar-powered systems,” says research analyst Euan Sadden. “Power generation from fuel cells is quiet, can provide extended runtime, produces fewer emissions than conventional fossil fuels, and can operate independent of weather conditions.”

However, despite these advantages, says Sadden, large barriers remain with respect to the capacity of the fuel cell supply chain and associated manufacturing costs. Adopting universal industry standards for components and systems will help reduce these costs in the coming years, but a significant amount of work remains for that goal to be realized. Additionally, Sadden says that another critical factor will be the increased focus among Japanese and Korean electronics companies in boosting manufacturing capacity and integrating fuel cell technologies into their products.

Pike Research’s analysis indicates that external battery chargers are a key area of market opportunity for portable fuel cells, and the firm anticipates that this category will lead in terms of unit shipments over the next several years. In addition, new niche markets such as environmental remote monitoring have also been recognized as promising areas for fuel cells, which can offer substantial benefits compared to generators and battery banks. Military man-portable applications such as remote monitoring/sensing and mobile soldier power remain a strong area of focus for fuel cell developers, as well, and are expected to be the largest revenue category for portable fuel cells given the high average cost per unit. The consumer electronics market, though it has enormous long-term potential, is not expected to be a significant percentage of total portable fuel cell shipments between now and 2017.

PSERC awarded $5.5 million to Study Energy System Grid

The Power Systems Energy Research Center (PSERC) has been awarded a $5.5 million grant from the Department of Energy to investigate requirements for a systematic transformation of today’s electric grid. The future grid needs to support high penetrations of highly variable distributed energy resources mixed with large central generation sources, energy storage and responsive users equipped with embedded intelligence and automation. These sustainable energy systems require more than improvements to the existing system; they require transformative changes in planning and operating electric power systems.

Vijay Vittal, director of PSERC and Ira A. Fulton Chair in Electrical Engineering at Arizona State University, is leading a multidisciplinary, multi-university team to investigate these challenges and to seek solutions to achieve the needed transformation.

“The effective transformation of the grid will require identification and solution of major operating, planning, workforce and economic challenges,” says Vittal. “Changes are already occurring to enable sustainable systems, particularly with the growing introduction of smart grid technologies. Research is still needed to make it possible to achieve much higher penetrations of wind, solar and other distributed generation resources economically, efficiently and reliably.”

To date, the energy system architecture has been a hierarchically-connected network with tightly synchronized energy resources. The envisioned system is going to be very different. It will be more complex, heterogeneous and dynamic. The operating environment will be more uncertain due in part to the variability of renewable energy production, to diverse and distributed operating objectives and to greater reliance on customer responsiveness to maintain power system reliability.

PSERC will be investigating innovations in network architectures; planning approaches; operation, control and protection paradigms; computational and analysis challenges; carbon policy implications; customer response programs; and resilient cyber-physical systems. For example, tight synchronicity and balancing constraints may be relaxed through an architecture based on autonomous local energy clusters and microgrids that localize the quality standards. The future grid will also rely on an IT infrastructure with underlying communications networks that will enable the physical network to closely interact and support the performance objectives of sustainable energy systems. Regional differences in energy resources and the legacy electric power grid will affect requirements for the future grid.

“We are leveraging existing digital technologies that can enable effective end-to-end adaptation of renewable resources into the electric grid system,” says Vittal. “PSERC researchers will use their knowledge of today’s operating and planning paradigms for electric power grids, as well as their knowledge of the technologies, and market systems, as the starting point for introducing new paradigms and transition strategies from today’s systems.”

PSERC will also develop educational resources to ensure that the existing and future power and energy engineering workforce can enable a high penetration of sustainable energy systems by envisioning the requirements of the future energy system; and designing, planning, manufacturing, building and operating the diverse energy systems.

PSERC expertise incorporates three major research stems critical to planning the transformation of the grid system: power systems; electricity markets; and transmission and distribution technologies. PSERC university partners have a long-standing history in power system research and education. They are located around the country: Arizona State, Carnegie Mellon, Colorado School of Mines, Cornell, Georgia Institute of Technology, Howard, University of California at Berkeley, University of Illinois at Urbana-Champaign, Iowa State, Texas A&M, Washington State, Wichita State, and University of Wisconsin-Madison. PSERC was founded in 1996 and is currently supported by 36 industry and government partners.

Small Batteries Power Biggest Growth in the EV Market Says Lux

The overall market for energy storage technologies that power electric vehicles is set to grow from $13 billion in 2011 to $30 billion in 2016, a compound annual growth rate (CAGR) of 18%. But, while prominent plug-in passenger cars like the Chevy Volt and Nissan Leaf grab most of the headlines, the bulk of future growth will be driven by more humble vehicles, such as e-bikes and micro-hybrids, according to a new report from Lux Research.

Titled “Small Batteries, Big Sales: The Unlikely Winners in the Electric Vehicle Market,” the report offers a reality check on the hype surrounding batteries for electric passenger cars by looking at the overall market for electric vehicles. Specifically, it provides both a bottom-up analysis of the potential for storage technologies, including batteries, supercapacitors, and fuel cells, as well as a top-down analysis of the demand generated for these technologies by different vehicle types, including e-bikes, passenger vehicles, buses and trains.



“Although battery prices for all-electric and hybrid passenger cars are dropping, they’re not dropping far enough or quickly enough to fuel the sort of broad adoption that advocates expect,” said Kevin See, a Lux Analyst and the report’s lead author. “Instead, the substantial growth we see for vehicle-related storage technologies will be powered mostly by e-bikes – which are shifting from lead acid to Li-ion battery technology – and microhybrids, which offer a more incremental, low-risk way for automakers to improve fuel efficiencies.”

Among the report’s key findings:

• Micro-hybrids offer auto OEMs the shortest road to improved fuel efficiency. Micro-hybrids, which apply energy storage only toward start-stop and/or regenerative braking applications, require neither the drastic redesigns nor the more expensive battery costs that all-electric or hybrid electric vehicles do. Thus, they are set to surpass these other passenger vehicle types in terms of both total storage and dollars in 2016, growing from 5.1 GWh and $495 million, to 41 GWh and $3.1 billion – CAGRs of 52% and 44%, respectively.
  
  
• E-bikes pack minimal storage but compensate with sheer volume. Although their 0.4 kWh to 1.0 kWh of storage is a far cry from the Nissan Leaf’s 24-kWh battery pack, e-bikes will continue to dominate the overall market in terms of dollars and MWh. Replacement batteries for the currently deployed base – largely in China – plus strong growth in new sales will drive growth from 84.2 GWh and $12.0 billion in 2011, to 156.6 GWh and $24.3 billion in 2016, a CAGR of 13% in kWh and 15%in dollars.
  
  
• Advanced lead-acid batteries dominate the current and future storage market. While Li-ion technology will eat into lead-acid sales for e-bikes, and supercapacitors will steal share in micro-hybrids, lead-acid will maintain a comfortable lead in both of these high-volume and growing markets. Overall, the market for lead-acid batteries will grow from 83 GWh and $9.4 billion in 2011, to 165GWh and $16.1 billion in 2016, CAGRs of 15% and 12%, respectively.
  

“Small Batteries, Big Sales: The Unlikely Winners in the Electric Vehicle Market,” is part of the Lux Electric Vehicles Intelligence service. Clients subscribing to this service receive ongoing research on market and technology trends, continuous technology scouting reports and proprietary data points in the weekly Lux Research Electric Vehicles Journal, and on-demand inquiry with Lux Research analysts.