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Plug in to Materials Trends for Smart Grid Applications

This article is based in part on research from Batteries and Ult ra-Capacit ors for t he Smart Power
Grid: Market Opportunit ie s 2009-2016
 
There is a general consensus that the current grid is not sufficient in
terms of efficiency, reliability, security, and its environmental impact to
supply the electrical power needs of our modern society. One solution
is to upgrade to a smart grid , the development of which presents
1  many opportunities. While there are several competing technologies
that can store electricity (pumped hydro, compressed air, flywheel,
chemical storage, ultracapacitor, superconducting magnetic),
NanoMarkets believes that the most exciting opportunities will come
from materials and systems applications of chemical batteries and
ultracapacitors.

Chemical batteries and ultracapacitors offer a compelling value

proposition compared to other solutions as they are the most
economical solutions for electrical storage and are not limited to
certain geographical locations. They also have an extremely small
carbon footprint, and offer significant potentia l applications today as
well as a roadmap to deeper market penetration as materials
improvements and manufacturing improvements/cost reductions
ev olv e over the next decade.

Smart grid storage can be categorized into short-term storage for load
lev eling and quality uses (less than a minute) and longer-term storage
for peak shaving/load shifting applications (storage for minutes or
hours). Ultracapacitors are well suited to load leveling and quality
applications as they have an extremely fast discharge and charging
response, have a high current capacity and can be cycled hundreds
of thousands of times without degradation to their storage ability.
Chemical batteries are id eal candidates for peak shaving applications
as they have higher energy densities and in many cases long service
lifetimes.

The near-term opportunities for load leveling storage are clear.

Approximately 90 percent of power outages la st for no longer than
two seconds, and 98 percent of outages la st, at most, 30 seconds, but
their economic effects are la rge. Estimates range from $75 to $200
billion per year impact from power interruptions due to lost time, lost
commerce, and damage to equip ment. While there is currently a
large growth market in UPS systems to protect critical infrastructure,
improvements to ultracapacitors both in capacity and manufacturing

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costs reductions will create new markets for them especia lly in new
industria l and commercia l construction.

Chemical battery storage represents a critical component for several

smart grid applications at several levels along the value chain. Bulk
price arbitrage, central generation capacity efficiency (peak
shav ing), transmission capacity/transmission congestion relief and the
integration of variable output sources such as wind and sola r are all
crucia l applications of storage in a successful smart grid. The need for
2 
storage to integrate solar and wind cannot be over emphasized.
Thirty states have renewable energy mandates that average 17-
percent integration of renewable energy sources by 2010–2025. Only
with a significant amount of electrical storage can this level of wind
and sola r be integrated into a stable electrical grid , so the value
proposition of new forms of electrical storage is difficult to
ov erestimate.

Quick Tour of Opportunities in Smart Grid Storage

The importance of the electrical grid is difficult to overstate. The

percent of overall energy consumption in the form of electricity has
risen form 10 percent in 1940, to over 40 percent today, and this is
projected to be the fastest growing source of end-user energy supply
throughout the world in this century. The term “smart grid” is a still-
ev olv ing, catch-all term to describ e all of the improvements currently
being made and proposed to the current electrical grid that will
increase efficiency, reliability and security [while reduce costs carbon
footprint –not sure what you mean here] .

Components of the evolv ing smart grid include smart metering of

electricity, smart materials to enable higher current overhead lines
and self recovery during outages, intelligent components (substation
components can communicate with the wid er smart grid), plug and
pla y components (new components will activ ely insert themselv es in
the intelligent network), reconfigurable components (can reroute
power effectiv ely and automatically when outages occur) and
storage of electricity for quality and peak shaving applications.

There are several driv ers to upgrade the electrical grid infrastructure.
For producers, there is a two-fold incentiv e. First, as the recent spike in
fossil fuel prices shows, feedstock prices are varia ble and can wreak
havoc with energy producers and their ability to provid e affordable
power. There is also an increasing incentiv e to use the existing power-
generating resources more efficiently—both as a more effectiv e use of

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capital and because the regula tory impediments to increase

generating capacity are becoming an ever-la rger hurdle to
investment in increased generating capacity. Because there is
currently no storage on the grid , there must be enough capacity to
meet maximum demand, which results in an overall usage of
generating capacity of about 40 percent. Increasing environmental
concerns is another driv er to develop a smarter grid, as it will help
reduce greenhouse gas emissions through more efficient use of
3  generating capacity.

While it has been one of the least talked about requirements to

achieve the desired smart grid, electrical storage is now starting to be
recognized as a crucia l piece of the smart grid puzzle. The U.S.
Department of Energy (DOE) is now developing a coherent national
pla n for energy storage research as part of the Energy Independence
and Security Act of 2007 (EISA). Perhaps the biggest driv er of this for
both short- and long-term storage is the pla nned addition of significant
intermittent generating sources (wind and solar) to the grid. The
intermittent nature of these generating resources requires stored
energy that can be released to the grid at a moments notice when
there are sudden fluctuations in power provided by the wind and sun.
Significant energy storage will be a requirement to reach the 2030
renewable energy state and federal mandates. As the percent of
wind and sola r on a grid passes above 10–15 percent instabilities can
occur if there is no storage capacity. In fact, Ireland put a moratorium
on the connection of new wind power to their national grid due to
instabilities as the wind generating capacity exceeded 7% of overall
grid capacity. Current estimated storage requirements for effectiv e
capacity firming of large wind farms is 15–20 percent of the wind farm
rated capacity. Capacity firming also reduces the transmission line
capacity requirements for moving energy from remote wind
generation facilities to population centers.

Large-scale energy storage is not a new concept. For example, a 31-

MW pumped hydroelectric pla nt came on line in the U.S. in 1929.
Pumped Hydro is one of the most efficient methods to store electrical
energy but is limited to areas with attractiv e geological features that
can store the pumped water. By 2000, about 3 percent (18,000 MW)
of the total power deliv ered to the grid was supplied through pumped
hydro facilities.

Compressed air energy storage (CAES) is also currently under

consid eration. A 115-MW demo plant was put into service in the early

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1990’s. Like pumped hydro, it is limited by attractiv e geologic features,

in this case namely underground formations such as depleted gas
fields and salt domes. CAES is used to augment the output of a
natural gas turbine plant. Thus, while its carbon footprint is less than a
pla nt without CAES, its carbon footprint is not zero like wind and sola r.

Other forms of storage such as flywheels and superconducting

magnets have also been tried, but because of cost and system
complexity issues we do not expect these to be used in the near future
4 
beyond certain niche applications. While there are many forms of
electrical energy storage available, Nanomarkets research indicates
that chemical batteries and ultracapacitors are two of the most
vigorous potentia l areas of storage growth.

Near-Term Applications for Chemical Storage on the S mart Grid

Currently, the most pervasiv e use of la rge-scale chemical energy

storage has been for power quality in the form of uninterrupted power
supplies (UPS). UPS is used to protect expensiv e electrical assets such
as computer data centers and critical infrastructure and represents a
10-billion dollar/year market. Such systems do not require high-energy
content as most power outages are less than a minute in length. Lead
acid and metal hydride batteries are the mainstay of this industry, but
it is an application where ultracapacitors and integrated
ultracapacitor/battery back-up systems may make significant inroads
as they have significantly quicker response times than batteries alone.

While ultracapacitors have been known since the 1950’s, their

application was limited due to la ck of demand when electrical costs
were low. Because the applications were mostly niche, the
manufacturing techniq ues were labor intensiv e, which resulted in a
high price point. Increased energy prices have driv en new
applications, which have in turn resulted in volume manufacturing and
of course significant price reductions enabling the use of
ultracapacitors in more and more applications. Their most v isib le
consumer application at this point is regenerativ e breaking systems in
hybrid vehicles where up to 80 percent of the energy lost in braking
can be recovered with the ultracapacitor system. The cost of
ultracapacitors has dropped 95 percent between 1980 and today,
and manufacturing improvements envision further cost reductions of
up to 50 percent. As these cost reductions become reality,
ultracapacitors will become more pervasiv e, especia lly in
combination with batteries, such that the market will expand beyond
data centers and certain mission critical applications such as hospitals

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to protection of electronic assets for retailers, office build ings

manufacturing facilities and ultimately in new home construction.

After power quality, peak shaving—storing energy generated or

purchased during low demand time periods at low prices and either
using or selling the stored energy at times of high demand and high
prices—will be the next application of smart grid storage to
experience rapid growth. The model here will be similar to that of
thermal storage, which has been used successfully to reduce air-
5 
cooling costs in some new commercial office construction.

In addition to peak shaving, storage will also be crucia l to efficiently

manage the transmission capacity necessary to realize the wind
energy goals for the U.S. By adding energy storage, wind farms
located in remote areas can store energy from peak periods, which
allows lower cost, lower capacity transmission lines to move the
electricity to market as the generated electricity does not have to be
used in real time when storage is available. It also adds the benefit of
having power availa ble to sell for maximum profit at peak usage
periods, which do not usually correspond with peak wind output
periods.

The applications described above will become more and more

attractiv e as more advanced battery and ultracapacitor materials
become available. Currently, lead acid and sodium sulfur systems
have the most extensiv e track record. In the 1980s, lead acid batteries
for utility peak shaving were tested, but the lifecycle characteristics
and economics at that time did not support further build out; however,
incremental improvements over time in lead acid technology and
increased energy costs have changed the situation such that the
capital cost of a modern lead acid storage solution can be realized in
new commercia l construction in 1–3 years. In addition, recent
innovations such as Firefly's 3D2 lead acid technology have
demonstrated three to four times the energy density with improved
lifetimes over conventional lead acid batteries.

Future Advantages of Chemical Storage on the S mart Grid

There are several materia ls advances that are likely become readily
available in the next 3–8 years that paint an attractiv e future for grid
energy storage. Beyond lead acid and sodium sulfur, flow batteries
such as vanadium and ZnBr show great promise. Flow batteries have
good efficiencies (over 75 percent) and long lifetimes (over 10,000
charge discharge cycles) and are scalable (battery size determined

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by electrolyte holding tank size). Vanadium flow batteries of 800 kW to

1.5 MW have been successfully demonstrated in applications such as
UPS for semiconductor manufacturing, island grid capacity firming
and grid peak shav ing applications. Several ZnBr systems in the 200–
500 kW range have been demonstrated for peak shaving and isla nd
grid applications. While the current cost of such flow batteries is high
compared to lead acid , there are ample opportunities for cost
reductions of these new technologies compared to mature
6  technologies such as lead acid where most cost reduction
opportunities have already been realized.

Liquid metal batteries are another exciting concept that may provid e
up to 10x the current capacity of current batteries in a simple system
that can best be describ ed as an extension of the sodium sulfur system
where a molten salt electrolyte is sandwiched between two different
metals. Like the sodium sulfur battery, it is a high-temp stationary
solution, but if the current storage capacity is as high as reported, it
may be a lower cost, durable solution that may be commercia lized
within the time period covered by this report.

The ultracapacitor roadmap also looks exciting through the length of

the reporting period. Beyond the refinement and cost reductions
associa ted with manufacturing improvements and volume production
of current activ ated carbon based ultracapacitors, several new
materials warrant close examination. Nanostructured ultracapacitors
based on nanostructured metal oxid es, pervoskites, nanotubes and
graphenes are currently under investigation. These materials are
reported to increase ultracapacitor capacity 5–10 times compared to
current activ ated carbon ultracapacitors.

Nanomarkets research indicates that one of the most promising

technologies is the combination of ultracapacitors and lead acid
batteries into what SIRO in Australia refers to as an ultrabattery. Their
ultrabattery hybrid electric car has already demonstrated over 100,000
miles on one set of ultrabatteries. Maxwell is also working on
integrated ultracapacitor/battery ultrabatteries.

For additional information on this and other reports from Smart Grid
Analysis, please visit us on the web at www.smartgridanalysis.com

Smart Grid Analysis | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-360-2967 | FAX: 804-270-7017