Energy Storage on the Smart Grid: 99.45% Cheap and 0.55% Cool 51 comments
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Infocast’s Storage Week was all I had hoped it would be, and more. While I thoroughly enjoyed serving on three discussion panels and was warmly received by roughly 250 attendee...[T]he most important value for me came from the opportunity to hear four days of high-level presentations by industry executives, national thought leaders and policymakers who repeatedly stressed that:
- From a utility perspective grid-based energy storage is the functional equivalent of an instantly dispatchable generating asset;
- The combination of wind assets with cost effective load-shifting storage can improve internal rates of return by 50% or more;
- The combination of solar assets with cost effective load-shifting storage can improve internal rates of return by 50% or more;
- When it comes to grid-connected energy storage, cost, reliability, maintenance and cycle life will be the primary decision drivers.
Consensus was that an optimal smart grid configuration will need storage capacity equal to at least 5% of peak system load and areas that rely heavily on intermittent renewables like wind and solar will need a higher capacity to maximize the value of those assets.
In the example of California, the required annual storage build was estimated at 500 MW per year for the next 10 years. Of this total, 50 MW would need to be fast storage in the form of flywheels and Li-ion batteries and the 450 MW balance would be 4 to 6 hour storage in the form of pumped hydro, compressed air, flow batteries and advanced lead acid batteries.
The following table assumes that fast storage for frequency regulation will have an average discharge duration of 15 minutes and load shifting storage will have an average discharge duration of five hours. It shows how the aggregate annual storage build for both California and the U.S. as a whole will break down in terms of both MW of dispatchable power and MWh of stored energy.
| State of California | MW | Percent | MWh | Percent |
| Annual Fast Storage Build | 50 | 10.00% | 12.5 | 0.55% |
| Annual Load Shifting Build | 450 | 90.00% | 2,250 | 99.45% |
| Nationwide (8x California) | ||||
| Annual Fast Storage Build | 400 | 10% | 100 | 0.55% |
| Annual Load Shifting Build | 3,600 | 90% | 18,000 | 99.45% |
Using a quick and dirty pricing metric of $1 million per MW for fast storage devices including flywheels and Li-ion batteries the annual revenue potential of $400 million is impressive. Using an equally quick and dirty pricing metric of $500,000 per MWh for load shifting storage, the annual revenue potential of $9 billion is mind-boggling.
In the fast storage space, the leading contenders are Maxwell Technologies (MXWL), a leading manufacturer of supercapacitors; Active Power (ACPW), which builds low-speed flywheel systems for industrial power conditioning and UPS applications; Beacon Power (BCON), which builds high-speed flywheel systems for utility frequency regulation and recently snagged a DOE loan commitment for a 20 MW fast storage demonstration project; Altair Nanotechnologies (ALTI), which has built and deployed 2 MW of fast storage that is currently being tested by a major utility; and A123 Systems, which has also built and deployed several MW of fast storage for utility customers in the U.S. and overseas.
In the load shifting space, the leading contenders are Dresser Rand (DRC) which builds above ground compressed air systems, ZBB Energy (ZBB), which builds zinc-bromine flow batteries; lead-acid battery manufacturers like Enersys (ENS), Exide (XIDE) and C&D Technologies (CHP); and innovators like Axion Power (AXPW.OB) which is in the early stages of demonstrating the capabilities of its lead-carbon storage technologies.
The broader market has not yet come to grips with the realities that:
- The combination of wind and storage yields better returns than wind as a stand-alone;
- The combination of solar and storage yields better returns than solar as a stand-alone; and
- While the fast storage developers have been grabbing all the headlines because of the push to develop PHEVs and EVs, the manufacturers of cost effective load shifting systems will lay claim to well over 90% of the anticipated revenue.
As investors in the $100+ billion wind and solar sectors come to understand the critical need for storage to maximize the economics of those intermittent renewables, interest in the $2 billion storage sector will surge. As storage sector investors come to understand the critical need for cost-effective load shifting storage, interest in established manufacturers of less glamorous technologies will also surge. It all goes back to my fundamental premise that for the next decade, cheap will beat cool.
I'm in transit from California to Europe and won't have access to electronic copies of the Storage Week presentation materials for a few days. So I apologize for the dearth of links to source materials. When those materials become available, I'll follow up with a more detailed series of articles that get into the grittier questions of which companies are best positioned to capitalize on explosive growth in both fast and load-shifting grid based energy storage.
For the first time in my career, I find myself on the leading edge of a trend that will be larger than most investors can begin to imagine. It's going to be a fun decade for investors who position their portfolios early because events like Storage Week and the anticipated IPO from A123 Systems are rapidly sending a clear signal to the broader market.
DISCLOSURE: Author is a former director and executive officer of Axion Power International (AXPW.OB) and holds a large long position in its stock. He also holds a small long position in Exide (XIDE), Active Power, Enersys and ZBB.
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This article has 51 comments:
Past is the past though. Very informative article. Batteries just don't have the same sexy street appeal as solar panels and wind farms. Might be slow to catch on with the herd.
But I noticed that, though you mention ENS in the article, you did not disclose your position in the company as you usually do. Was that an oversight?
An IPO of that magnitude would be a sea change event. It would also generate a lot of sector interest among the bottom fishers who will start searching for other stocks in the same sector that might be undervalued. In other words, the IPO market is ultra-trendy and there is never just one. They come in series and each new offering builds on the excitement of the last one. So I think of A123 as being the equivalent of the first major solar or wind IPO - the beginning of a monster wave that's going to rock the entire marina.
D.McHattie, thanks for a great catch! I filed this article from the road and altenergystocks.com inserted the disclosure paragraph for me. I do in fact have a small position in Enersys (ENS) and also have small positions in Active Power (ACPW) and ZBB Energy (ZBB). I've sent a note to Seeking Alpha asking them to update the disclosure paragraph.
I know from Ireland's perspective we plan to reach 40% wind by 2020 with no new storage. We plan to use wind in combination with fast response Open Cycle Gas Turbines (OCGTs) and interconnection to the UK.
I look forward to the details on the economics.
I'm supposed to be getting electronic copies of the Storage Week presentations within a few days and will try to make selected material available to readers if I can get the presenter's permissions.
Most of the discussion to date in your articles comment sections has been about PHEV, L-ion (neither of which peak my interest,though I'm invested) and major national grid applications (also invested in). The link is driving me crazy. Being a rural Texan (with all the stubborn, obnoxious independance that entails), I, my neighbors, and investing friends want to live off-the-grid as soon as possible. We still want the Grid as our UPS system, but ....
For major Utility installations the conversion of low voltage storage systems into the "smart" grid transmission seems to be covered by all the usual player suchas Eaton(ETN), International Business Machines(IBM), Emerson Electric(EMR), Siemens AG(SI), Johnson Controls(JCI), Honeywell(HON), and the like. All good companies and I would not hesitate to reccomend any of them, but they are too diversified and solutions too costly to have upside specific to this investing thesis. Most of the world doesn't have a mature or even an existing electrical grid. Our thesis is that the real upside to renewable energy is in these undeveloped places and the return of rural life that our kids and grandchildren will experience. I'm a believer that this urban sprall that is the USA will start to fade in the next fifty years and am looking out that far for investing beyond my lifetime. I know it's too soon to know but the local energy source is a today problem for us. That is why the link between our renewable sources and the house is a problem. Hell, our little co-op even tried to get A123 to install a household test at our expense just because their system uses Energy Conversion Devices(ENER) laminate, one my favorite companies, and we would be able to see what I don't fully understand in action. They thought us crazy and inefficiencies of cost were nutty even to me.
My question to you and this site would be: What might be an investable company that can invert low voltage storage into household existing energy?
Chinese & Indian companies can do this now, but I don't understand either countries bookkeeping/finacial structure well enough. The major industrials are too costly and nonspecific. I'm just driving myself nuts with the large number of smaller companies that are mostly private. Thought??????
What do you know about NAATBatt? This emerging Kentucky-based alliance (National Alliance for Advanced Transportation Batteries) are aggressively postioning themselves for an inside track on getting some of Obama-bucks.
Seems there are quite a few companies around here in Philly that are competeing in this challenge to raise some government money: FYI-->> International Battery, Inc., C&D Technologies, Enersys, East Penn Manufacturing Co, Inc., and Lithium Technology. Also some biggies like FMC and Airgas.
Good article, again. It's fun to read about the future of the Grid.
But I think I need "patience" pills.
The link to the Edgar website with all their recent reports is
www.sec.gov/cgi-bin/br...
The company's website is
www.zbbenergy.com/
To catch you up on a piece of news that seems to have escaped mainstream reporting is that beginning August 2nd, the Chinese citizens will no longer have to go through the Central Bank to make foriegn investments. This could be huge support for the dollar--something the Chinese so desperately need.
Considering China's zeal for rare metals, I'm thinking your pal Jack Lifton might be a little bifurcated about this news, as he might be a little happier when he reads or learns of this--for his Avalon shares-but he might also be concerned for the USA in that some private Chinese citizens might follow their government's lead and be after those mining companies that produce the rare metals, as well as American gold miners.
I have no idea how this will affect the battery biz for us shareholders, but if they throw a billion or two into battery stocks (along with the DOE monies), I'll take it.
On Jul 19 06:18 PM flywheel niche wrote:
> BCON flywheels are the most niche and have the most upside.
Market cap : 1.9 billion Euros (about 2.65 billion USD). It is listed in the German market. Ticker: Yahoo: S92.F, Bloomberg: S92 GY. I think the ADR trades on the pink sheets as SMTGF.PK
On Jul 19 02:58 PM DRich wrote:
> My question to you and this site would be: What might be an investable
> company that can invert low voltage storage into household existing
> energy?
>
storage tech. Thanks for covering the storage sector in general.
On Jul 19 11:30 PM John Petersen wrote:
> There are a lot of companies out there gunning for the fast response
> frequency regulation niche including Beacon, Active Power, Altair,
> A123 and others so while I like Beacon's high speed flywheel solution
> and enjoyed meeting Mr. Capp at Storage Week, it would be dangerous
> to assume that any company will be the only competitor in a particular
> niche.
I'lll watch ZBB, BCON -- but I agree -- none of these unprofitable co's have a lock. They ride and fall on risk appetite... much better to use some TA when trading those. XIDE is just a core holding until 2010
BCON bounced off the 200 day MA, but is trapped by the 50 day MA. If the IPO does spark interest again in these names, BCON might run to 1.10 where it failed before.
XIDE for example, runs into its 200 day MA at 4.29 and will probably fail as it's a bit extended.
But all Technical Analysis is 1-part observation, 1-part voodoo horseshit -- so I like to mix it with research, or rather scour the 'nets for thoughtful commentary. For some reason, people who trade the charts tend to dismiss FA and value investors scoff at the chartists... seems to be no one I've seen that integrates the two.
In general, the markets are very extended here - and since all markets tend to be 100% correlated these days... I'm expecting a 5% pullback and I can rebuy XIDE, for example, at 3.80.
Wall Street loves a good story though. When 'batteries' makes the front page of the WSJ or ABC report -- all these names go up 10% together, regardless of value.
But I could be wrong... it appears there is very little that can push the markets down these days.
Congratulations again of providing your groupies with a whole year (plus) of great articles!
Hi John, Good article though some technical info is needed.
I don't think lithium, lead is going to be good here as life isn't that long needing to be replaced too often, every 5-7 yrs or so.
Sodium batteries will be the likely winner as they last decades and made of inexpensive materials And flywheels are reliable, inexpensive.
Ultra-caps are a scam as they cost 100x's Lithium or other batteries. They just can't hold much cap/$
Electronic, inverters can't be separate issues as they make it work. The good thing is they are reasonably priced and getting cheaper. One could use large, eff electric motor/generators instead at high power levels. Many companies use them with/without a flywheel disc already for surges, PFC.
The basic premise though is rather off as only solar/wind farms are markets in RE because most future RE will be on homes, small businesses where their economic case is strongest and they average out as they are spread over a larger area. Thus handled just like variable loading all grids deal with every day.
Solar happens in most place just when peak power is needed so not likely a storage penalty with it as it matches loads very well. Only wind is variable. Tides, river power is very predictable or steady. Hydro is controllable so about the best.
Now add the V2G from EV's which will come online in about 10 yrs in large enough quantity will cut the need for stand alone peak power as each with it's 50-200kw inverters will easily handle peak loads, recharged at night.
A better market might be home storage, buying cheap power at night for those who don't have good RE sites or ones RE equipment and selling it back in the day at much higher prices.
Bromide is very, very dangerous so should not be where people are if it was to leak.
On Jul 20 01:20 PM jerrydd wrote:
"Hi John, Good article though some technical info is needed.
I don't think lithium, lead is going to be good here as life isn't
that long needing to be replaced too often, every 5-7 yrs or so.
Sodium batteries will be the likely winner as they last decades and
made of inexpensive materials And flywheels are reliable, inexpensive."
Jerry, I take issue with your putting lithium & lead together citing a 5-7 year life cycle. True perhaps for lead - but lithium in a storage application can last 15-20 years before needing replaced.
Sodium batteries also have similar life cycle times as lithium and they are less expensive (so we are told) but these batteries operate at internal temperatures exceeding 700 degrees F however, bringing problems of thermal management and safety, and placing more stringent requirements on the rest of the battery components.
Just wanted to put your statements into some perspective here.
P.S. Good article John!
Mayascribe, my younger brother will be tickled because he's apparently been following you for quite a while on Motley Fool. This last year has been so much fun for me I feel like I ought to be paying for the privilege. Readers like you make it all worthwhile.
jerrydd, actually the slippage on both wind and solar is far more dramatic than most realize. One speaker at Storage Week talked about a presentation where an expert on wind energy held up a transparency of a daily utility demand curve and said "this is demand." He then turned the transparency upside down and said "this is typical output from wind." According to the California Energy Storage Alliance, the combination of wind and storage increases the IRR of the entire system by roughly 50%. The same is true of solar which reaches an output peak at noon as compared to a utility demand peak of about 4 p.m.
Sodium batteries are great in utility scale applications, but their high operating temperatures (400 to 700 F) can be very problematic in distributed systems. Flywheels are great for fast response, but their discharge duration is typically measured in seconds or minutes, which is great for frequency response but useless for load shifting. Ultimately the big dollars are going to go into CAES where possible, and flow-batteries and lead acid where CAES is impractical.
I'll have a new article up in a day or two that explains why I don't believe V2G will ever happen. It's just my opinion, but I think you'll agree the underlying rationale is sound. In any event, it will make for some interesting comment.
nasdaq is up 9 days in a row. It doesn't take much brainwork to realize 9 day runs are very rare and usually result in obscene short term profits and irrational exuberance among daytraders leading to a sudden plunge as the euphoria evaporates as soon as the first profit-taking session kicks in. I sold about 15% of my XIDE holdings over 4. That's all I'm willing to give up to gamble on a rebuy at lower prices.
9 day runs are truly rare -- though. Should be a pullback and it is very healthy and necessary to have a pullback or we will all be worse off. See housing bubble as evidence of what happens when markets go too far in one direction too fast.
Thank you for highlighting the massive need for storage if alternative energy is to ever be a significant player. I have a couple real concerns, and wonder if you heard anything this week that could address them:
1. The current real cost of wind and solar (land, equipment, maintenance) are nowhere near competitive with nuclear, coal, or natural gas. I've seen projections that get solar down to $.05/kwh, not sure how that compares to wind, but the current feed-in tarrifs don't look sustainable to me as more people start to realize that government tax and subsidization creates boom/bust cycles (at least that's what I've been told Freddie and Fannie did). Today's boom company can turn into tomorrow's wasted hulk of facilities and talent if not sustainable- true?
2. The disconnects between supply and demand for wind are huge, solar not as much but still considerable. Can micro-storage (batteries, flywheels, supercapacitors) actually provide enough storage to allow solar/wind to make a serious dent- or are macro-storage technologies (more pump-charge reservoirs, Riverbank technology, large scale hydrogen plants) required?
This is an area with lots of technology and excitement, but at the end of the day all the talk of government contracts and grants driving revenue and stock prices is kinda troublesome. At least some of the companies you list have viable businesses that can be counted on to keep a stock from zeroing out...
If your bro is interested, here are my lastest buy and hold (that is if the #@%! doesn't hit the fan again) positions I've been picking up.
You know my favorite, and although Jaguar Mining has had a nice run during the past two weeks, Jaguar (JAG), over the last two quarters, has increased production by over 50%. Jaguar Mining expects, by 2014, to further increase production by another whopping 600%! I honestly don't understand why this fast growing miner isn't getting more press. I study gold miners a lot, and I know of no company increasing production faster than this one. I'd toe dip it now, but buy hard when it gets down to $7.50. Trading now at $8.49. If gold just maintains it's value, and energy costs don't spike up, then we're talking at least a $35.00 stock by 2014. The cool part is that if energy prices do spike up, then likely the dollar will fade, and henceforth the price of gold bullion will rise accordingly. Either way, Jaguar is a winner. If, perhaps, out there a couple of years inflation does come, look out.
Sequenom (SQNM)- A little risky play, because their shareholders are pissed about a couple of employees screwing up a late stage three non-invasive pregnancy test for Downe Syndrom. The stock plummeted from $29.00 down to the low $3's. You know I made a rather large play at this stock a couple days before it shot up 68% in one day, then sold off half, and have started picking up more shares recently. If this company passes the FDA test later this year, we're talking about an extra 2 billion to the bottom line. One valuation I read said the stock would then be be valued at $42.00, as most women over 35 who become pregnant will opt have the non-invasive test rather than a foot long needle entering their body. The corporate website will explain what other treatments they have in the works that alone make this stock worth more than it's trading for right now ($4.36).
China Unicom (CHU)- The second largest cell phone company in China. With 3G wireless coming in there huge, and the government throwing billions toward wireless buildout, this stock could just be the best of any Chinese stocks that us Americans can buy. Current price around $14.00. If I made a list of stocks that I think will double by this time next year, China Unicom would be topping that list.
Arena Phamacueticals-(ARNA) Another bit of a risk, but by late summer from all I've read, they should gain approval of their fat pill. Given how fat America is, and how obesity is one of the biggest reasons for heart failure and expensive joint surgery, I'm betting they gain this approval, and the stock should double or even triple up in one day, fall back some, and then take off further.
AgFeed Industries (FEED)- As fast as China's middle class is growing, and their growing appetite for meat, especially pork, to invest in this grain company is a no-brainer.
I'll let you handle the battery stocks!
Thanks, again.
The current religious fervor against carbon in all its forms is, in my view, counterproductive. I'm willing to accept the idea that coal is unacceptably dirty and that imported oil is too expensive, but when it comes to natural gas I'm firmly in the pro-development camp. We have lots of it at home and a wonderful national distribution system is already in place, so I think we're foolish to let an aversion put us in a position where we may have citizens freezing in the dark. Mercifully, I'm hearing a lot of pro-nuclear sounds coming from the DOE so maybe - just maybe - we'll both live long enough to see nuclear technology get back on track.
Supercapacitors and flywheels are not large-scale energy storage solutions. They are power oriented frequency demand solutions that can only be used to smooth second to second spikes. When you start talking about storing energy to run a home, factory or city for hours, the grunt work will fall to pumped solutions, thermal solutions and batteries.
Storage is an ultra-broad field and the simple fact is that there won't be a single dominant technology. It's hard to find suitable locations for pumped hydro and CAES, so while they're great their future is limited by topography and geology. Above ground CAES is great where feasible, but the industry really seems to be heading toward a distributed system where generation and storage will be located closer to the end user in order to increase security, reliability and performance.
When all the shouting and hand-waving is done, the utilities are going to take the most cost-effective route to their goals. It's the ultimate cheap beats cool application. I really do believe that we need every storage technology we can get our hands on. The real key is to avoid the irrational beliefs that (1) a single technology will dominate or (2) cost per kWh out the factory door is not the only metric that matters.
I'll have a follow up article in a day or two that adds some more color. Stay tuned.
On the H2 scene, interest in fuel cells seems to be waning rapidly because the catalysts are so expensive. Nevertheless, there are some really smart people working in the sector and I'd never say never.
Can you rank your holdings in terms of risk/reward. I am particularly interested in you thoughts on EXIDE relative to you other investments. Thanks for your inciteful posts. I have and am still learning a lot from you on how to be positioned for the Energy revolution. - AOS
What would Hank Hill trade in his clunker for?
blogs.edmunds.com/gree...
The propane HEV uses lithium, but don't tell anyone.
On Jul 20 03:58 PM John Petersen wrote:
> Dirk, the costs of wind and solar keep falling and those that work
> in the generation field expect further economies, but solar is still
> more expensive than wind. While the feed-in tariffs can be problematic,
> the incorporation of storage into renewable power facilities does
> a lot of good for the fundamental economics. I think the big takeaway
> is that electricity is going to cost more tomorrow than it does today.
> One of the nice things about wind and solar is that once the systems
> are in, they work for a long time with minimal maintenance. So even
> if the economics don't pan out the way the initial investors planned,
> the generating capacity will still be there.
>
> The current religious fervor against carbon in all its forms is,
> in my view, counterproductive. I'm willing to accept the idea that
> coal is unacceptably dirty and that imported oil is too expensive,
> but when it comes to natural gas I'm firmly in the pro-development
> camp. We have lots of it at home and a wonderful national distribution
> system is already in place, so I think we're foolish to let an aversion
> put us in a position where we may have citizens freezing in the dark.
> Mercifully, I'm hearing a lot of pro-nuclear sounds coming from the
> DOE so maybe - just maybe - we'll both live long enough to see nuclear
> technology get back on track.
>
> Supercapacitors and flywheels are not large-scale energy storage
> solutions. They are power oriented frequency demand solutions that
> can only be used to smooth second to second spikes. When you start
> talking about storing energy to run a home, factory or city for hours,
> the grunt work will fall to pumped solutions, thermal solutions and
> batteries.
>
> Storage is an ultra-broad field and the simple fact is that there
> won't be a single dominant technology. It's hard to find suitable
> locations for pumped hydro and CAES, so while they're great their
> future is limited by topography and geology. Above ground CAES is
> great where feasible, but the industry really seems to be heading
> toward a distributed system where generation and storage will be
> located closer to the end user in order to increase security, reliability
> and performance.
>
> When all the shouting and hand-waving is done, the utilities are
> going to take the most cost-effective route to their goals. It's
> the ultimate cheap beats cool application. I really do believe that
> we need every storage technology we can get our hands on. The real
> key is to avoid the irrational beliefs that (1) a single technology
> will dominate or (2) cost per kWh out the factory door is not the
> only metric that matters.
>
> I'll have a follow up article in a day or two that adds some more
> color. Stay tuned.
economictimes.indiatim...
The Hyundai hybrid you provided a link for is also quite cool since it combines CNG with what appears to be mild hybrid technology. I reach the mild hybrid conclusion because 20 horsepower is too small for a full hybrid and too large for a simple stop-start system. Now if someone would just do the same thing with diesel . . .
why don't you ever mention AMSC why discussing the grid ?
gudovac1941.blogspot.c...
CEO makes lots of promises... book value is $5/share. Obviously someone agrees -- as 24% of AMSC float is shorted -- but the markets have never seemed to care too much.
My only advice is do some extra rigorous research with AMSC. I have no position.
seattletimes.nwsource....
On Jul 19 09:59 AM John Petersen wrote:
> ari5000, I'd normally agree that it may take a while for the market
> to tune in but I see the upcoming A123 IPO as a watershed event.
> I think they're likely to get a big ATVM loan and a big ARRA battery
> grant. If that's the case, they'll need to raise something on the
> order of $600 million to pay their cost shares and provide working
> capital. Their last round of private financing was priced in the
> $9 range and they've got 70 million common equivalent shares outstanding.
> When I put it all through the sausage grinder, I see a post-money
> IPO valuation approaching $2 or perhaps $2.5 billion.
>
> An IPO of that magnitude would be a sea change event. It would also
> generate a lot of sector interest among the bottom fishers who will
> start searching for other stocks in the same sector that might be
> undervalued. In other words, the IPO market is ultra-trendy and there
> is never just one. They come in series and each new offering builds
> on the excitement of the last one. So I think of A123 as being the
> equivalent of the first major solar or wind IPO - the beginning of
> a monster wave that's going to rock the entire marina.
>
> D.McHattie, thanks for a great catch! I filed this article from the
> road and altenergystocks.com inserted the disclosure paragraph for
> me. I do in fact have a small position in Enersys (seekingalpha.com/symbo...)
> and also have small positions in Active Power (seekingalpha.com/symbo...)
> and ZBB Energy (seekingalpha.com/symbo...). I've sent a
> note to Seeking Alpha asking them to update the disclosure paragraph.
The most promising application area for a battery like ZBBs seems to be storing underused generation capacity from wind during the nighttime hours and delivering it back to the grid during peak load periods; or storing underused generation capacity from solar during the morning hours and delivering it in the afternoon. In both cases, you're basically shifting the power delivery time by 4 to 12 hours so that the owner of the generating assets gets the best possible price for his power. Another big potential is off-grid or end-of-grid areas that want, for example, to run on solar or wind, but deliver reliable power 24/7 without having to resort to diesel generators.
In grid-based energy storage, there will always be sexy applications that grab an inordinate share of headlines and more mundane applications that grab the lion's share of the revenue. While we all like to think of ourselves as extraordinary in one respect or another, the reality is that most of our needs and wants are pretty average, no matter how good we may be in our personal sphere of excellence.
When it comes to building a sustainable business, there is a much bigger future in catering to the mundane needs of the masses than there is in catering to the extraordinary needs of the few.
On Jul 27 11:00 AM John Petersen wrote:
> User 419580, the gigawatt magnitude power swings described in the
> article you linked are difficult for any utility system or battery
> technology to deal with because they're so massive and require assets
> to be taken off line quickly and then brought back on with comparable
> speed. It's also not profitable to invest in a system that is only
> used occasionally. It's far better to have a system that is used
> at predictable times on a daily basis, and results in consistent
> recurring revenue for the owner.
>
> The most promising application area for a battery like ZBBs seems
> to be storing underused generation capacity from wind during the
> nighttime hours and delivering it back to the grid during peak load
> periods; or storing underused generation capacity from solar during
> the morning hours and delivering it in the afternoon. In both cases,
> you're basically shifting the power delivery time by 4 to 12 hours
> so that the owner of the generating assets gets the best possible
> price for his power. Another big potential is off-grid or end-of-grid
> areas that want, for example, to run on solar or wind, but deliver
> reliable power 24/7 without having to resort to diesel generators.
>
>
> In grid-based energy storage, there will always be sexy applications
> that grab an inordinate share of headlines and more mundane applications
> that grab the lion's share of the revenue. While we all like to think
> of ourselves as extraordinary in one respect or another, the reality
> is that most of our needs and wants are pretty average, no matter
> how good we may be in our personal sphere of excellence.
>
> When it comes to building a sustainable business, there is a much
> bigger future in catering to the mundane needs of the masses than
> there is in catering to the extraordinary needs of the few.
in europe there was substantial growth in solar prior to 2008. yet there was no indication of any need for power storage.
seekingalpha.com/artic...
seekingalpha.com/artic...
While it has not yet gotten the level of press attention that the rash of PHEV and EV proposals have seen over the last couple years, grid-based storage is more technology agnostic and has greater economic potential by as much as an order of magnitude.
So let me see if I've got this right, and please correct me if I don't. Batteries (and like serving technology) can be divided into 2 major categories: (1) motive energy storage, for transportation, and
(2) energy storage for smart grid applications. The latter category can be broken down further into 3 sub-categories: (1) generation; (2) transmission and distribution; and (3) end-user. As far as which companies do what, I think I'll leave that up to you since several of your articles, particularly the one cited above, tackle that much better than any of my primitive slicing and dicing.
It's also true that some companies' technology qualifies for both primary categories, though we're at such an unusual point of tectonic change, as the greentech revolution moves deeper into its nascent advance, no one company has a lock on which technology will be used where and for what, but that, too, will change. In fact, we're already seeing those green shoots popping up into the market place and defining their positions as the first crop of this technology moves in. It's really quite thrilling, with tremendous potential for being extremely profitable as well.
As always, thank you, John. You've helped make me a better investor and have assisted in adding another helping of excitement to my stock investing.
The starter battery in your car is designed to provide a big surge of power for 5 to 10 seconds of cranking before the engine kicks in. At that point the alternator takes over. While you can run the accessories for a while without running the engine, leaving the headlights on overnight can seriously damage the battery by drawing more energy than it's designed to deliver.
The battery in an uninterruptible power supply is designed to keep a mission critical system operational for 10 or 15 minutes in case of a power outage. It's goal is to keep things running smoothly in the event of a brief outage and permit an orderly shut-down in the event of an extended outage.
The battery in your laptop is never subject to a huge power drain but it's very important that it pack enough energy to keep the laptop running for hours while you're away from a plug.
Ultimately the choice of an energy storage device is controlled by the requirements of the application, and that's true regardless of whether the application is stationary or mobile.
Electric utilities have a wide variety of storage needs that cover the entire seconds, minutes and hours spectrum. Some of the better known high-value applications include "frequency regulation," which smoothes second-to-second fluctuations in the grid from changes in customer demand, "buffering," which is basically just a large UPS application, "upgrade deferral," which involves putting storage at weak points in the grid to defer the construction of new substations or transmission lines, and "load-shifting" which involves taking the power from a windmill at 4 a.m., storing it for 12 hours, and then delivering it to the grid at 4 p.m. when the need is greatest. Each application has it own technical requirements and economics and there is no single solution that will work best for all of them, but a small piece of a very big pie can still make for a very successful business.