We don't fawn over battery technology like we do over shiny gadgets and smart apps, but know this: it's set to play an important role in our attempt to use more low-carbon energy like solar and wind.
Batteries and other energy storage equipment make it possible to store solar and wind electricity and use it whenever it's needed, not just when it's produced. That ability will help utilities to manage their power supply and demand. More interestingly, it will help businesses and homeowners to do the same as a growing number of them install solar panels on their roofs.
That's partly why
Photo by Eddie Shvartzman, courtesy of EnerVault
Here is my list of topics and trends to watch as tech companies and investors gather at the Energy Storage North America conference, which gets underway in earnest tomorrow in Silicon Valley:
1. The Policies: The new, clean energy storage market will not take off without policies and public investments. Technology tends to be pricy when it's new to the market. Utilities won't likely give it a whirl without mandates that come with mechanisms to compensate them for the investments. California took a lead last year by requiring its utilities to make use of energy storage to complement renewable energy generation and grid management. The utilities have spent the past year drafting rules for evaluating and buying energy storage services. New York budgeted $25 million to promote enegy storage development.
The Federal Energy Regulatory Commission also has passed rules to help make energy storage services attractive to utilities and grid operators as an option to regulate power supply and demand. PJM, a grid operator that covers a big swath of the East Coast including, Michigan, Maryland, New Jersey and Pennsylvania, was early in put those rules in practice. As a result, some of the largest energy storage projects have been built there, including flywheels by Beacon Power and lithium-ion battery project in West Virginia and in Ohio by
2. The Investors: Large banks and institutional investors tend to wait a bit to see how quickly the energy storage market takes off before placing their bets. Early investors will demand higher returns in exchange for taking the risk. Stem, a California energy storage service provider, lined up a $5 million project development fund from Clean Feet Investors last year, and it secured a $100 million fund this year through B Asset Manager in New York City.
3. The Tech Players: The energy storage market hasn't grown as quickly as some tech companies anticipated because the policies needed to give it a boost usually take a while to materialize. The federal government doled out billions of grants and loans to battery and other technology developers to commercialize their technologies for electric cars and renewable energy storage. Some of the early players changed business plans, went bankrupt or got scooped up for cheap because they couldn't find enough customers or raise the necessary funds for sales and deployment. The sale of A123 Systems and Xtreme Power are good examples.
Venture-backed battery developers in the market include Aquion Energy, Primus Power, Imergy Power Systems and EnerVault.
Energy storage service companies, which buy batteries and often develop their own software for controlling the charging and discharging, include AES, Solar Grid Storage, SolarCity, SunPower, Sunverge Energy, Stem, Sonnenbatterie (PROSOL) and Greensmith Energy Management Systems.
Then you have large battery makers such as Panasonic, which is supplying its lithium-ion battery cells to Tesla, which assembles the cells into battery systems and uses its own software to manage their operation.
4. The Technical Challenges: There's no shortage of technical challenges. Tech developers are working on combining materials that will create long-lasting batteries that can store a lot of energy. A set of solar panels is supposed to last two decades or more. But no battery makers can guarantee that their systems can match that. In order to attract customers and investors, battery service providers could structure their contracts to say they are willing to pay for fixes and replacements for a longer period of time than what their battery systems could technically last.
Fire prevention is important, too, for managing a battery system. Maintaining a property level of charging and discharging helps to prevent it from running too hot and start a fire.
