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Challenging Battery Investment Myths

April 15, 2019

By Paul Homewood

 

Timera Energy have an interesting post up on battery storage:

 

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Battery storage flexibility is a key building block of a decarbonised power sector.’

This statement is not a myth.  In fact it is almost a truism.

Intermittent renewables will dominate electricity supply in a decarbonised world. Wind and solar output require a low carbon source of flexible backup.  Rapidly declining battery costs will facilitate broad deployment. Sound familiar?

While there is a broad consensus around the vision for batteries, the practical details of the business model and investment case for individual battery projects is less clear.  In today’s article we challenge three ‘myths’ currently circulating in relation to battery investment.

 

‘Myth’ 1: Batteries shift load to smooth renewable output

While in theory batteries can be paired with renewables to smooth intermittent output, this does not represent a viable business model to support battery investment. There are three main reasons for this:

  • Duration: Investment is currently focused on 0.5-2.0 hour lithium-ion batteries, which are seeing the steepest & fastest cell cost declines. The short duration of these batteries significantly limits the volumes of energy that can be moved between time periods.
  • Degradation: A focus on shifting load requires deep cycling. This shortens the life of lithium-ion batteries and accelerates the costs of cell replacement, undermining project economics.
  • Returns: Cycling batteries to shift load is not commercially optimal. The returns from load shifting (e.g. full cycle to capture cheapest offpeak hour vs highest price peak hour) are well below those required to support investment.

Maximising battery returns involves the complex optimisation of battery optionality against multiple markets including wholesale (e.g. day-ahead and within-day prices), balancing markets and network services.

The logic above does not preclude successful co-location of batteries with solar or wind projects.  But the benefits of doing this are focused on cost reductions (e.g. shared infrastructure & connection) and portfolio risk diversification, not on load shifting.

Battery flexibility will also play a key role in dampening price fluctuations which are driven by intermittent renewable output.  But with shorter duration batteries this is via multiple shallow cycles to respond to short term price volatility rather than deep cycling in order to shift load.

A viable investment case for longer duration, deeper cycling storage solutions (e.g. flow batteries) looks to be at least five years away.

 

Full post is here.

 

The rest of the analysis concerns itself with potential financial returns, which may occur in certain niche situations.

But it is Myth 1 which really sums up why, given current technology, we cannot rely on battery storage to solve the problem of intermittent renewable energy.

18 Comments
  1. Stonyground permalink
    April 15, 2019 8:20 pm

    I find it interesting that the climate alarmists are only interested in “solutions” that can never work. If CO2 emissions really are a problem then we have nuclear power, proven technology that can provide power on demand and at a fraction of the cost.

  2. Coeur de Lion permalink
    April 15, 2019 8:22 pm

    Off thread but we have a prime time BBC Documentary on Thursday entitled Climate Change the Facts with all the usual scare stories. It will be awful. How are we to counter it?

  3. April 15, 2019 8:52 pm

    The next greatest battery and super capacitor technology is always “just around the corner” or “proven” (but with a slight problem that can’t be overcome) and introduction is “just a couple of years away”. They need to keep the hype going because without storage wind and solar power will never meet grid standards on their own. If we would have been invested all the money wasted so far on building out wind and solar we might have had a solution by now.

  4. April 15, 2019 9:33 pm

    We counter the scare stories with the facts as portrayed by our host on this site. Of course most people do not read these websites and so they may be unduly influenced by the programme, but many will not see it, and a growing number are becoming sceptical. Even Attenborough’s magic can become tarnished by exaggerating and falsifying the truth.

  5. April 15, 2019 10:12 pm

    Keep shovelling ever more money into impractical power supply options. What could possibly go wrong?

  6. John F. Hultquist permalink
    April 16, 2019 2:51 am

    Some years ago ( around 2010) I investigated several storage ideas, such as massive spinning wheels, and new battery ideas. Some concepts are interesting. I suggest folks do a little search and reading.
    I bought a few hundred dollars of A123 Systems. The company was getting US$249 million grant from the U.S. Department of Energy.

    How did that work out?
    On October 16, 2012, A123 filed for bankruptcy protection . . .

    That and a couple of other lessons, and I no longer buy individual stocks. I now let pros decide if a concept will “support investment.”

  7. tom0mason permalink
    April 16, 2019 5:52 am

    Well, what so wrong with ‘clean’ battery power.
    Please don’t look at all the pollution, life-shortening, and dangers that all the miners and processors of lithium have to put up with. Or the fact that lithium production (found in arid areas) use substantial amounts of water.
    See http://www.lithiummine.com/lithium-mining-and-environmental-impact for more subtle whitewashing of the problem .

    And you wouldn’t wish to look at the way most cobalt is obtained.

    So how much of these precious minerals are recycled from old batteries — very little, and then they have to be subsidized to make it worth doing! 😦

    So in a few years time added to the piles of non-recyclable items such as old solar cells and wind turbine blades, are piles of dangerous old lithium batteries. While the countryside gets converted to industrialize electricity production with evermore wind farms and vast acreages of solar panels.
    Welcome to the world of dumb Green ideas. 👿

  8. dennisambler permalink
    April 16, 2019 8:23 am

    “a decarbonised world”

    A strange concept…

    • tomo permalink
      April 16, 2019 9:46 am

      dennisambler

      …. that is predicated by a very narrow series of seguing definitions of what “carbon” is and how it works….

  9. Mike Higton permalink
    April 16, 2019 9:48 am

    On the battery theme, it’s been reported that Panasonic and Tesla are holding back from investment in further battery manufacturing capacity because of the uncertain outlook for electric car sales…..

  10. Harry Passfield permalink
    April 16, 2019 10:28 am

    When it comes to de-carbonising, yesterday, WATO had an interview with a woman from the XR group causing chaos in London. The interviewer asked her, if there was a magic machine on which she could just push a button and all the problems from ‘carbon’ could be eliminated, and we could continue living our modern life-style, would she press the button and would she be happy with the result.
    ‘No’, said the protester, what we want to do is change society and bring down capitalism.
    End of interview.

  11. April 16, 2019 12:42 pm

    Reblogged this on ajmarciniak.

  12. Joe Public permalink
    April 16, 2019 8:17 pm

    Potentially, the prime use of batteries in markets with a high % of intermittents is for grid stabilisation, not storage.

    They’re ‘sold’ to the public as storage being beneficial, & that’s what the public understands.

    To acknowledge they’re for grid stabilisation is an admission intermittents need it!

    The Tesla / Hornsdale ‘Big South Australian Battery’ is a prime example.

    SA’s already-flaky grid simply can’t cope with its large % of intermittents

    https://greycellsenergy.com/examples/the-tesla-big-battery-south-australia/

    https://electrek.co/2019/02/18/tesla-big-battery-pay-for-itself/

  13. April 18, 2019 11:48 am

    Reading all these articles here and in other places which use the ‘decarbonise’ meme and ‘carbon neutral’ etc annoys the sh*t out of me. It aint carbon, THATS A SOLID, its CO2, THATS A GAS! \rant

  14. Gamecock permalink
    April 19, 2019 1:00 am

    Wind and solar are intermittent. Storage will fix that.

    Uhh . . . no, that’s ridiculous.

    ANY DISCUSSION OF BATTERIES/STORAGE shows that the Greenies control the agenda, that intermittency can be fixed. Which is PREPOSTEROUS!

    Imagine how much storage you’d need for a 7 day outage of weather dependent generation. How would you charge it? What if you had an 8 day outage? Or a 2-month outage? Half of the UK would die.

    Wind/solar are inadequate for primary electricity generation because they are intermittent. PERIOD.

  15. Lin permalink
    April 19, 2019 11:37 pm

    Don’t use lithium batteries. This problem of low-life lithium batteries has been solved. And a real- world solution has been developed, all it needs is scale:

    https://redflow.com/

    As it stands now, it is perfect for off-grid applications and back-up power solutions. Can be utilised by homeowners up to commercial operations.

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