- Ottawa, Ontario
As anyone who follows forecasts for electricity system development can attest, future opportunities for energy storage technologies appear to be exciting and abundant. According to Navigant Research, the global market for energy storage (ES) is expected to increase from $1.3B in 2016 to $16.5B in 2024Footnote 1. What is not widely agreed upon is which technologies will be in a position to seize the lion’s share of those opportunities, what it will take to bring those technologies to the point where they can demonstrate the optimal cost, performance, and safety attributes when the market comes calling, and how future projections for these attributes can be objectively compared.
Take Power-to-Gas (P2G) as an example. P2G is unique in that excess renewable electricity is used to produce hydrogen gas (H2) via water electrolysis, which can then be stored, transported and utilized through various pathways. In the 2016 winter edition of Energy Storage News, we discussed some of the circumstances under which P2G might be a viable ES technology to consider. Some benefits of this storage method include long duration (seasonal storage), existing infrastructure (blending into existing pipelines), large capacity (terra watts of available space) and potential other end-use markets (vehicles, industrial processes).
Regulatory support for some of these pathways already exists in Low Carbon Fuel Standards (LCFSs) at both provincial and federal levels. LCFS regulations will provide incentives for the use of a broad range of lower carbon fuels and alternative energy sources and technologies such as demand management for renewable electricity, renewable natural gas, hydrogen, and renewable fuels. P2G touches on all of these markets.
However, it can be challenging to assess and compare P2G to other ES solution stacks that also meet these market requirements because each solution has its own system, cost, performance and safety risks and attributes. Many are based on new technologies, where limited operating data is available to validate vendor or developer claims and projections. Harmonized codes, standards and regulations have not caught up with the demand for these technologies and do not yet provide a reference framework for selecting between competing technologies.
As water electrolysis technologies mature and manufacturing of electrolysis plants and equipment realize economies of experience and scale, capital and operating costs will decline – but how far? A consistent and robust methodology must be applied to forecast future improvements from the current State-of-the-Art (SOTA), and to establish limiting bounds that could be approached.
As illustrated by the P2G example, projections for declining capital costs, widespread renewable energy adoption, and grid transformation (retirement of aging infrastructure) coupled with a need for coherent cost, performance, safety and lifetime data, not to mention codes and standards, expose the need for decision-making tools that allow industry stakeholders to assess and compare the various ES technologies (at certain stages in the development life-cycle) for the myriad of services they will be asked to perform.
Technology assessment requirements
Currently, there exist many tools for assessing technical and economic values of the various storage technologies; however, these assessment tools are highly reliant on input data for cost and performance. Such data come from a variety of sources, ranging from primary data gathering through vendor surveys, application of parametric estimating techniques, through to experience-based assumptions. For emerging storage technologies without commercialization or demonstration cases, little validation data is available. Fundamentally, the majority of existing ES analysis and valuation tools suffer from a lack of up-to-date data on technological advancements, evolving market information and limited access to consistent datasets across technologies.
As a result, estimates and performance projections may vary substantially, even for the same technology group. For example, the quoted cost of lithium-ion batteries (LIB) for MW grid T&D support application in some ES assessment tools ranges from $1800 to $4100/KW. Cost benchmarking and related value analysis from the tools are essential for comparative business case studies, but can at best be used to provide a “directional” understanding of a system’s costs and capability as a high level guideline for stakeholders.
Also, there is a lack of harmonization of cost and technical performance data. Data gaps exist between different elements of the supply chain, from technology vendors, integrators, project developers, and end users and it is often left to decision-makers to fill in those gaps.
These problems create considerable confusion and disagreement around costs and performance of each technology. This makes evaluation tools difficult to use with any level of confidence by managers and technologists for strategic decision making or product development purposes.
There is a clear need for a comprehensive framework where a comparison can be done with not only the SOTA data but also the future projections on both performance and costs for various ES technologies, which can provide stakeholders deeper insights for strategic decision-making.
Several international organizations have led the way in the field of forecasting cost trends; however, these trends do not always recognize that further and continuous improvements to emerging technologies will occur in response to meeting performance targets for specified grid services. The interaction between cost and technical developments must also be taken into account.
The technology development matrix
NRC is currently looking for partners and supporters for the development of a Technology Development Matrix (TDM) as a tool to meet these needs.
This tool consists of a centralized database which gathers together meaningful and continuously updated data on technical attributes and cost parameters for each ES technology of interest. This data will include parameters for the current SOTA and projections for future technical attributes, performance and costs as technology, manufacturing processes and markets mature. These data will be presented and compared to transparently show how far each technology is along its development path, and what is required to reach maturity. With this tool, decision makers will have a better understanding of what the various technologies offer and have the means for objective comparisons: energy storage technology deployment will accelerate as risks and uncertainties are quantified and removed.
Any successful deployment of ES should not only rely on the technology’s performance and costs parameters, but also other factors such as safety, compliance with codes and standards, technology readiness, market readiness, manufacturability, market sizing, supply chain and so on. The TDM will include data on these factors.
NRC’s TDM approach will link market needs to technology attributes and to key technical parameters in a consistent, comparable way. This approach can allow both a system level comparison across the full breadth of ES technologies and a depth of comparisons within one type of ES technology having different sub-components.
The TDM assessment framework will be driven by the parameters for Application Requirements for ES Use Cases, compared against performance parameters (Technology Characteristics) and Costs (integrated from sub-system or even component level).
Cost projections will be done in two ways: firstly, from a top-down analysis starting with an assessment of Technology, Market and Manufacturing Readiness Levels (TRL, MRL) for the SOTA, which is then combined with typical (but consistent) experience curves for the type of technology represented to generate projected data. In addition, a bottom-up cost estimate is compared as a lower boundary. These projections can then guide long-term technology decisions.
Development of the TDM approach and its implementing across a variety of emerging energy storage technologies is just one of the many activities that NRC is currently working on with stakeholders to ensure that all of the right information is available to support strategic decision-making.
Please contact us for more information on how these projects and other initiatives related to the TDM approach can benefit your organization.
Rob James, Director, Business Development