Batteries and
Energy Storage:
Looking Past the Hype
Haresh Kamath
Senior Program Manager,
Energy Storage and Distributed Generation
Presentation to Tucson Electric Power
November 2, 2016
© 2016 Electric Power Research Institute, Inc. All rights reserved.
Together…Shaping the Future of Electricity
EPRI’s Mission
Advancing safe, reliable,
affordable and environmentally
responsible electricity for society
through global collaboration,
thought leadership and science
& technology innovation
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
The Growing Interest in Energy Storage
“Improvements in batteries and
distributed generation could partly or
completely eliminate some customers’
usage of the power grid…”
- Morgan Stanley Blue Paper,
Solar Power & Energy Storage
July 28, 2014
Courtesy Tesla Motors, Inc.
“…[the] solar generation/battery storage
combination is currently an order of
magnitude too expensive to cause much
grid defection.”
Tesla PowerWall 2
Home Battery
- Moody’s Investor Service, “Batteries are
Coming but Utilities are not Going Away”
January 6, 2015
Briefing objective: With no hype on the technology, provide realistic projections on
application and market outlook
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
Moving beyond the hype cycle…
The Gartner
Hype Curve
Microgrids
Behind-the-Meter
Energy Storage
Natural Gas
Distributed
Generation
Distribution
Energy Storage
Bulk Energy
Storage
Understanding the facts will help us to move beyond the peak of the hype cycle
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
What can storage do?
 Transmission Level
 Distribution Level
– Ancillary Services Frequency
Regulation
– PV Shifting/Smoothing
– Renewable Shifting/Smoothing
– Power Quality improvement
– Voltage/ Reactive Power Support
– Deferral of distribution upgrades
– Capacity/Congestion relief
– Demand charge avoidance
– Deferral of transmission upgrades
– Assist in many Transmission
applications on an aggregated
basis
– Deferral of peaking plant
installation/operation
– Increase PV accommodation
 Frequency Regulation
 Renewables Shifting/Smoothing
 Power Quality improvement
 Deferral of transmission upgrades
 Deferral of peaker installation/operation
Storage is a key element in enabling 2 way power
flow in the grid – some technologies can do it all
some are limited
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
The historical challenges are being overcome
Installed Cost
Operating Costs
2500
Round Trip Efficiency
800
Cycle Life
100%
700
1500
1000
Efficiency
600
$/kW-yr
$/kW
2000
500
400
300
80%
200
500
Mean Cycles before Failure
• Technical challenges
• Performance
• Life
• Efficiency
12000
10000
8000
6000
4000
2000
Advanced Technologies
100
0
60%
0
Lead-Acid
(2012)
Li Ion
(2015)
Target
(2020)
Lead-Acid
(2012)
Li Ion
(2015)
Lead-Acid
(2012)
Target
(2020)
Li Ion
(2015)
Target
(2020)
0
Lead-Acid
(2012)
Li Ion
(2015)
Target
(2020)
Lithium Ion Battery Cost
• Economic Challenges
• High Costs
• Small Value Streams
• Regulatory Challenges
• Lack of clear definition
• Framework designed
for existing grid
Vehicle Battery Pack Cost
$20,000
$15,000
For Illustration Only
Regulation
Services
$10,000
T&D Upgrade
Deferral
$5,000
Demand Peak
Reduction
Power Quality
and
Reliability
$0
0
500,000
1,000,000
1,500,000
2,000,000
Worldwide Vehicle Battery Production Capacity (packs/yr)
Lower costs
Costs of
Storage
Generation
Regulatory
Rulings
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
New Business
Models
Potential Benefits of Storage
Transmission &
Distribution
Load
Legislative
Action
Deployment of stationary storage continues
Cumulative Battery Storage Deployments by
Technology (MW)
Since 2013
 Investment is still relatively small
but rapidly growing
400.0
350.0
– Utilities are exploring options at the
transmission and distribution level
 Many if not most installations are
at the demonstration / pilot phase
– Benefits are understood, but
monetization can be difficult
 Note dominance of lithium ion
battery in deployments
300.0
AES 36 MW storage
in West Virginia
Duke 400 kW storage
in North Carolina
Source: EPRI
250.0
MW
– Developers are installing systems on
the customer side of the meter
Source: Duke Energy
– Storage to provide ancillary services
in energy markets is the largest
market
Source: AES
450.0
200.0
150.0
100.0
Chevron 2MW storage
in California
50.0
-
Lithium Ion
Lead Acid
Sodium Chemistries
Flow - Vanadium
Flow - Zinc
Other
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
Source: GreenTech Research
Storage Cost Estimates
EPRI 2015 Energy Storage Cost Estimates – Distributed & Bulk Technologies
Broad future
reduction in
cost seen for Li
Ion Batteries
Newer
technologies face
scaling challenges
– cost targets rely
on high
manufacturing
output
Very large, mature systems with
large capital requirements
* Pumped Hydro and CAES costs are estimated installed costs; all others are battery costs (not including power conversion or balance of plant)
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
Lithium ion battery prices continue to fall…
2010-2020 Vehicle Lithium-Ion Battery Cost Projections
900
800
Vehicle Battery Costs
($/kWh)
700
Sharp drop in prices in late 2015!
600
500
400
300
200
Source: EPRI Estimates, 2016
100
2010
2015
Year
2020
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
2025
Lithium Ion Technology Outlook
Projected Capital Cost
2015
2020
11.5 W for 1 hour
Cell
$2.00-$2.50
$1.15-$1.40
$180-$225/kW
$100-$120/kW
10 kW for 1 hour (dc power)
Battery Pack
$3,500-$5,000
$2,000-$2,500
$350-$500/kW
$200-$250/kW
10 kW for 1 hour (ac power)
Residential
ES System
$10,000-$12,000
$5,000-$6,000
$1000-$1200/kW
$500-$600/kW
Costs can differ significantly at the cell, battery pack, and complete system levels
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
Lithium Ion Residential System Cost Breakdown
Cost Breakdown for a Residential
Lithium Ion Battery System
Installed system cost
can easily be 2 or 3
times the battery cost
250
Disposal
Battery Replacement
200
Operations and Maintenance
Lifecycle cost
(including battery
replacement, O&M,
and disposal costs)
could be close to
twice the installed
system cost
150
Installation
100
50
Auxiliary Equipment
Power Electronics
Battery
0
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
Lithium Ion Technology Outlook
Projected Capital Cost
2015
2020
11.5
W for
for 11 hour
hour (ac power)
10 kW
Residential
Cell
ES System
$2.00-$2.50
$1000-$1200/kW
$180-$225/kW
$1.15-$1.40
$100-$120/kW
$500-$600/kW
10kW
MWfor
for11hour
hour(dc
(acpower)
power)
10
Utility Scale
Battery Pack
ES System
$3,500-$5,000
$800-$1000/kW
$2,000-$2,500
$350-$500/kW
$200-$250/kW
$350-$500/kW
200
1 hour
power)
10
kWMW
forfor
1 hour
(ac(ac
power)
Residential
ES System
Gas
Turbine
$10,000-$12,000
$900-$1050/kW
$5,000-$6,000
$1000-$1200/kW
$500-$600/kW
$850-$1050/kW
For 1 hour
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
Lithium Ion Technology Outlook
Projected Capital Cost
2015
2020
10 kW for 1 hour (ac power)
Residential
ES System
$4000-$4800/kW
$2000-$2400/kW
10 MW for 1 hour (ac power)
$3200-$4000/kW
Utility Scale
ES System
$1400-$2000/kW
200 MW for 1 hour (ac power)
$900-$1050/kW
Gas Turbine
$850-$1050/kW
For 4 hours
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
The Case for Behind-the-Meter Storage in California
Example for illustration only
Policy Incentives
O&M Cost
Ancillary Services Revenue
Installed Cost of Storage
Demand Charge Reduction
PV Energy Shift
Reliability Value to Owner
COST
REVENUE
The business case presently relies heavily on federal and state incentives
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
Addressing the Remaining Challenges to Storage
 Costs and performance factors of
technology solutions must be better
understood
 Tools for understanding the value and
grid impacts of storage are being
developed
 Ensuring that storage technology
solutions are safe, secure, reliable,
affordable, and practical
 Create best practices for deployment,
integration, operations, maintenance,
and disposal
 Integrate storage technology into utility
planning and operations processes to
improve reliability and reduce costs
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© 2016 Electric Power Research Institute, Inc. All rights reserved.
Key Takeaways
Energy storage is potentially a game-changer: Low-cost batteries and other
energy storage technologies may transform the grid, making it more flexible and
more resilient, improving reliability and enabling more renewable penetration
Technology and costs for storage are improving significantly: Widespread
adoption of energy storage technologies on the grid is likely to happen in the next
10 years. Much of this deployment may be sited at commercial and industrial
customers.
There are still many technical and economic challenges to energy storage:
While the technology is now possible, there are still many questions that must be
addressed to ensure that storage is a safe, reliable, and cost-effective solution.
Utilities are well-positioned to be integrally involved in storage adoption:
While storage is sometimes considered a “disruptive technology” that may lead
consumers towards islanded solutions, storage is most valuable as part of an
energy network. It is far more likely that storage will be used to augment traditional
grid solutions, rather than to replace them.
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Together…Shaping the Future of Electricity
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