The Rise of Clean Energy Storage Solutions for Solar and Wind Power

Energy storage is a crucial part of the transition to green energy, and it is encouraging to see that the debate has moved from whether a grid could be 100% renewable based, to how energy storage will unfold and enable a purely green grid. As Marek Kubik explained, the “question isn’t really if we can solve this issue, but rather what the most cost-effective solution will be.” Marek is an energy storage specialist and Managing Director at Fluence Energy, a JV between AES and Siemens and a leading energy storage tech player, having designed and installed several battery-based energy storage systems, currently the solution of choice for almost all new energy storage worldwide.

The popularity of batteries is due to the fact they are ideal for second-to-second grid balancing and for keeping the grid stable when there is a lot of intermittent generation from wind and solar. Marek emphasizes that batteries are also well positioned to bridging daily imbalances – a 100MW solar farm with a 100MW/400MWh battery system “can more or less provide firm power around the clock, even at night.” It might be surprising, but Marek emphasizes that a grid does not need that much duration to deal with daily variability.

His view is that the longest durations we will see required are 6 to 8 hours, and batteries are already competitive for that. However, weekly or seasonal storage will be needed if we are to get the last 10 to 20% of electricity off fossil fuels. While wind and solar are somewhat complimentary – stronger winds in the winter and longer days in the summer, we still get periods where both will be insufficient. There are several solutions to seasonal storage – green hydrogen, compressed or liquid air, thermal storage, gravity-based and pumped hydro being the technologies attracting material investments.

The cost of solar

Solar panels have been on a deflationary slope since the 70’s. Between 2010 and 2020, the global weighted-average total installed costs of utility-scale solar PV went down by 81% (from $4,731/kW in 2010, to about $883/kW in 2020). Tony Seba and his team at RethinkX forecast that the combined capital cost of solar PV, wind power, and batteries will decline a further 75% by 2030, therefore reaching $221/kW by the end of the decade (by comparison, the Energy Information Administration estimates that the base cost for a natural gas fired combined cycle power plant in 2020 was $958/kW).

Seba, a specialist in energy system disruption, argues that “it is both physically possible and economically affordable to meet 100% of electricity demand with the combination of solar, wind and batteries by 2030 across the entire continental United States as well as the overwhelming majority of other populated regions of the world.”

Perhaps the most striking finding from RethinkX’s report was that, contrary to most simulations that aim to minimize curtailed energy, the team designed their energy system model to maximize energy surplus production. Seba argues that generation capacity can be maximized if sized to meet demand on a short cloudy winter day, with storage becoming far less of an issue. In other words, producing solar energy is likely to cost much less than storing energy. The cost competitiveness of this grid is such that RethinkX estimates it could be built at a cost equivalent to 1% of the U.S. GDP.

The U.S. Grid to 2035: Over 10x solar and 100x clean energy storage growth

The U.S. Department of Energy’s (DoE) published its Solar Futures Study; the U.S. had around 76 GW of solar capacity in 2020, which supplied about 3% of the country’s electricity demand. In the study, three scenarios to 2050 were modeled: a Moderate case, a Decarbonization case, and a Decarbonization + Electrification case that sees CO2 emissions fall 95% by 2035, with 90% of electricity produced by solar and wind by 2050.

By 2035, the study predicts that battery storage in the U.S. would jump from current 3 GW to 374 GW under the most positive scenario. In their Decarbonization + Electrification case the U.S. reaches 994 GW of solar capacity by 2035, versus 373 GW in the most moderate case. Clearly, the more solar the system has, the more it needs storage. In all scenarios, the duration of battery solutions until 2035 is mostly 4 hours and 6 hours, with 8-hour storage being less than 5% of all clean energy storage in the Decarbonization + Electrification case. In this accelerated decarbonization case, 78% of the electricity in the U.S. would come from wind and solar, and it is at the point that seasonal storage will be needed.

Salt caverns and other energy storage solutions

In the wake of the war in Ukraine, Germany is pushing forward its goal of reaching a predominantly green grid by 2035, as opposed to 2050. A recently published article by Oliver Ruhnay, PhD in Energy Economics gives us insights on the storage needed to enable such goal.

The authors looked at 35 years of hourly time series data for renewable generation and load, and concluded that the maximum energy deficit due to scarce wind and solar occurs over a period of 9 weeks. Solving for this, a potential solution based on a cost optimization model would require 56 TWh of storage (for an assumed annual electricity demand of 540 TWh).

The primary storage source would be hydrogen in salt caverns (54 TWh), sufficient to supply 24 days of average load (equivalent to 36 TWh of electricity, 7% of the annual load). Existing pumped hydro storage would contribute 1.3 TWh and batteries just 59 GWh (although this figure would represent a 40-fold increase vis-a-vis the 1.5 GWh recent installed capacity of small- and large-scale batteries in Germany). A striking point is that only 65% of the primary energy supply would be used to serve load (455 TWh), as 23% would be charged into storage (160 TWh) while 12% would be curtailed (84 TWh).

The final combination of long duration energy storage will be a function of the evolution of the different technologies and costs. The question is no longer if the energy grid can be 100% based on renewables, but when and how.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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