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DOE Invests Half a Billion to De-risk Cheaper Energy Storage

May 18, 2022

(From Utility Dive)

Dive Brief:

  • To help commercialize emerging energy storage that can power the grid for at least 10 hours, the Department of Energy has launched a $505 million four-year initiative. It aims to lower barriers to grid energy storage, and support small-scale, behind-the-meter pilots as well as large utility-scale demonstrations.
  • DOE’s initiative, announced May 12, will tap into the know-how of its agency and research laboratories, and industry to make “solar power available when the sun isn’t shining and keeping wind energy on tap when there’s no breeze” at an affordable cost, it stated.
  • For long-duration energy storage to become prime time, not only must the cost of emerging technologies fall drastically, like they have for solar and wind, but many more renewables must be added to the U.S. grid, according to an energy storage analyst. In addition, the market must provide adequate compensation regardless of how often the storage supplies the grid.

Dive Insight:

DOE’s new Long Duration Energy Storage for Everyone, Everywhere initiative aims to increase local control, “build resilience for communities, minimize power grid disruptions, and help reach President Biden’s goal of 100% clean electricity by 2035,” Secretary of Energy Jennifer Granholm said when the initiative was announced at the end of last week.

Today, lithium-ion batteries dominate the energy storage front but their duration to date has been limited to two- to four hours. To keep energy flowing across the grids in the U.S., especially during extreme weather, storage with much longer duration is needed, analysts and grid operators say.

And the emerging long-lasting storage is inextricably linked to solar and wind resources.

Today, however, renewables across the U.S., including hydropower, make up only about 20% of average supplies and much more is needed, said Dan Shreve, Wood Mackenzie’s Global Head of Energy Storage. Thus, the timing of DOE’s new initiative is good as it allows young startups to “get their technology out in the field and demonstrate its capability to ensure that there is technology readiness when it is required,” Shreve said.

Long-duration storage has the unique opportunity of “balancing higher levels of renewable penetration without having to overbuild on the generation side,” and perhaps also alleviating some “extraordinarily problematic additional transmission buildout,” according to Shreve.

There are several emerging technologies that are expected to be able to provide long-duration storage but commercialization depends on affordability.

“The challenge of 10 hours or more of storage all comes down to the cost of that many MWhs,” said MIT Department of Mechanical Engineering Professor Yang Shao-Horn. “Lithium-ion is so hard to beat in the market because it can be manufactured fast and at scale.”

She also said there is a huge storage potential from the expected continued surge in the lithium-ion batteries in electric vehicles, the growth of which is ten times that of grid storage. “What we will have in EVs can be comparable or can be a substantial fraction of the grid need.”

DOE is striving to drive down the costs of multi-hour storage to $0.05/kWh by 2030 with its half billion dollars announced last week and its “Long Duration Storage Shot” announced last July.

It is too early to tell if its goal of a 90% cost drop is realistic but the big fall in wind and solar prices are a reason for optimism, according to Shreve.

“There are numerous precedents showing technological advances can move quite rapidly on total deployed costs,” said Shreve. “If you asked industry pundits 10-15 years ago the price point on wind and solar, I think folks would be hard pressed to think we have come this far.”

In addition to EVs with bidirectional capability, other long-duration candidates include sodium-ion batteries, Shao Horn said. They can be swapped into lithium-ion production, and sodium is widely available unlike lithium, the price of which has soared sevenfold since the war in Ukraine began, she said. Sodium batteries currently lack the energy density of lithium but prototypes are helping it catch up.

Other candidates include vanadium flow batteries and fuel cells powered by renewable gas and green hydrogen.

Successful commercialization also requires that the various storage technologies that come online are able to make a profit.

Shreve stressed funding should not just support technology field testing but also allow developers to better understand the critical commercial side, “helping formulate the market mechanisms that are going to enable long-duration storage to survive and prosper on the grid.”

DOE requested input on optimal implementation of its program and the eligibility requirements for electrochemical, mechanical, thermal or a combination of storage technologies by June 16.

– Elizabeth McCarthy

Source: Utility Dive

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