Energy storage is seen by some as the Holy Grail for renewable energy, not least in PV systems. So it's no surprise that energy storage is a big theme at this year's Intersolar North America conference.

But this transition from renewable energy to renewable capacity could be painful as balance sheets turn red and storage technologies are slow to scale.

Dr Matthias Vetter at the Fraunhofer Institute in Freiburg said that Germany's solar “growth corridor” to 52GW could not be achieved without energy storage.

"We have installed 26GW-27GW of PV. We have now 3% of PV of annual energy production and want to increase it to 10%. Without integrating storage this plan will not have any success. At the moment, we are discussing schemes [and] incentives for storage. This is very promising, but also very difficult because decentralized storage is not the only solution."

Some might argue that even California's Renewable Portfolio Standard of 33% renewables by 2020 will not be achieved without energy storage lest PV projects wreak havoc on the state's grid.

Ramesh Ramamoorthy, director of the SunShot Initiative, has bold ambitions to achieve US$1/w installed costs. Not content with a "solar landing", Ramamoorthy in his opening remarks to the official opening of the conference yesterday [Tues] said that he wanted to reinvent the "solar system"… albeit of manufacturing in the US.

"For the United States, this is a very important point in evolution because solar has almost become the poster child of competitiveness.

"For us in the manufacturing and deployment area we need to get more competitive and develop new pathways to address the manufacturing issue.

"The big question is are we walking away from manufacturing? That's a shame, because manufacturing is like eating food, it's a very big part of your existence as an economy. You just can't become a service-based economy."

SunShot began in 2010 with an installed system price of US$5.71, but the "big gorilla" that many ignored was the US$2 soft costs, he said.

Over the past year, SunShot has backed 14 companies that are explicitly attempting to reduce these soft costs.

"We can get to 50c/w for panel costs, our Chinese colleagues will help us with that. But we can't get to US$1/w unless we solve these soft costs issues," he said.

Sunpath II is an attempt to reduce risks for companies through the manufacturing valley of death (see image 2). But he said that further mainstreaming was essential for success.

"Why can't you make solar panels that looks like your TV? If you go back in history, many years ago especially when I came from India we had permitting for TVs and people figured out it's just not worth it. You might as well sell a lot of TVs and let people use it and make it very simple… plug and play."

As well as making PV as easy to buy as a TV, Ramamoorthy said that over the next two to three months his team was "going to put out some serious solicitations in the storage area."

"We are very concerned and very committed to issue of variability. [But] the concept of storage is not simple. You can't go and get the lithium ion battery from your car and put it in because the levelized costs of energy are just not there – it would double your cost. So that's not the right way to do it. We can do it on a local scale, but you can't do it at the terawatt scale. I believe we need new technologies for storage."

On Monday, Brian Carey a cleantech advisory lead at PricewaterhouseCoopers, shared his company's outlook for energy storage and industry he valued at around US$160bn by 2017.

The historical evolution of battery performance suggests there may be better technologies than li-ion, but not in mass adoption over next 12-25 years, he said.

"Which battery storage technologies are going to win? There's no clear-cut winner. Some of the next-generation lead acid batteries are cheap with low cycles but not very efficient. Lithium-ion has good round-trip efficiency and a reasonable number of cycles, but costs are still too high."

Although li-ion beats most other available technologies on energy density and efficiency, its price needed to come down from US$650/kwh in 2012. Carey said he estimated that US$300-350/kwh would be an achievable 2020 target for li-ion as storage providers looked to offer solutions, not just technologies.

"As storage moves out of this demonstration phase, and storage providers change their market strategy what are they looking at? From an applications standpoint if you look at 2-3 years ago, a lot of the battery tech companies were just focusing on their technology – how great was their tech and how different is it from something else that's out there.

"Now they're looking at solutions – how can they address a problem as opposed to bringing this exciting technology to market? They are beginning to realize that in order to get to the scale that you need you can't just look at one application."

Successful energy storage companies were likely to partner with Fortune 500 companies to increase their credibility and bankability, he said.

"There's a lot of consolidation in the space, we're already starting to see it. So I expect more of that to happen so companies want to have partnerships with players that are going to survive."

A lot of work needs to be done on the national regulatory front to stimulate adoption beyond the Investment Tax Credit, which can only be used if coupled with solar, he said.

At the state level, California has made efforts to stimulate this nascent industry. The Self Generation Incentive Program was recently extended to storage integrated with solar and will offer US$2 a watt for a project up to 3MW. Applications jumped from two in 2009, to 147 last year – most of them for lithium-ion battery energy storage projects run by Solar City in partnership with luxury electric vehicle maker, Tesla.

From October next year, AB2514 will set procurement 2015 and 2020 targets for California's utilities to purchase energy storage.

Most of this procurement will be designed to help meet RPS targets and the need to stabilize the grid, said Carey.

"One of the exciting things about storage – it's not a matter of if, but when. As the renewables percentage increases it's going to be hard to manage a stable grid when you get to 20-25%; you have to have storage to manage your generation ups and downs. In areas where they already have high penetration of renewables they've already seen that they can't live without storage."

Most Californian utilities can live without storage – but only for a limited time. San Diego Gas & Electric has four storage projects underway to attempt to integrate the spiky demand and load caused by high penetrations of PV and electric vehicle purchases.

Mark Rawson, project manager at the Sacramento Municipal Utility District (SMUD), said that his utility was also moving swiftly on several energy storage projects. He said the utility, which serves around 1.4m customers, began to consider new energy technologies more seriously after costs for a 400MW pumped hydro plant came with a sticker price of US$600m-1bn.

SMUD wanted to better understand the technologies available for bulk and distributed storage that would better match the solar generation peak with the utility peak load, usually several hours later. Department of Energy grants helped support its US$5.9m Anatolia Solar Smart project that started at the end of June using lithium ion storage. Other projects used different technologies such as zinc bromine and sodium-nickel chloride batteries, he said.

Regardless of the preferred flavour, if energy storage is to be the Holy Grail for an industry struggling to hold its own against natural gas and a collapse in prices, it had better happen fast.

Joe Berwind, managing partner at Alternative Energy Investing, told conference delegates that the market was experiencing a dramatic shakeout and would not stabilize until 2015. Abound Solar, which formally went into liquidation early this month, Schott Solar, which last month announced withdrawal from c-Si PV manufacturing and GE, which has suspended its CdTe expansion, all point to a dramatic consolidation, especially in thin film, he said.

Companies will need to adapt quickly to survive until 2015 – and the innovation will not necessarily be in the technology, he told me in exclusive comments for PV Tech.

"Those companies that will survive are going to adapt new methods of distribution and finance that allow them to capture the market wherever the market is in a low cost manner. They are going to utilize new software platforms that allow them to close customer deals either immediately or over time in such a way that those deals will be built at no upfront cost to homeowners in the residential market.

"There will be innovation downstream in the market for financing systems for residential, commercial and industrial side that will make all the difference, dovetailed into new distribution systems. That will determine survival."

Earlier in the day, Dr Michio Kondo, director of the National Institute of Advanced Industrial Science and Technology in Japan, called for an "ark" to enable the industry to cross the Darwinian sea. But energy storage can only be an adaptation strategy in the evolution of an industry where companies are struggling to stay afloat if the technology arrives in time.

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