Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Congressional research reportMar 27, 2012

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Energy Storage for Power Grids and Electric

Transportation: A Technology Assessment

/name redacted/

Specialist in Energy and Infrastructure Policy

March 27, 2012

Congressional Research Service

7-....

www.crs.gov

R42455

CRS Report for Congress

Prepared for Members and Committees of Congress

Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Summary

Energy storage technology has great potential to improve electric power grids, to enable growth

in renewable electricity generation, and to provide alternatives to oil-derived fuels in the nation’s

transportation sector. In the electric power system, the promise of this technology lies in its

potential to increase grid efficiency and reliability—optimizing power flows and supporting

variable power supplies from wind and solar generation. In transportation, vehicles powered by

batteries or other electric technologies have the potential to displace vehicles burning gasoline

and diesel fuel, reducing associated emissions and demand for oil.

Federal policy makers have become increasingly interested in promoting energy storage

technology as a key enabler of broad electric power and transportation sector objectives. The

Storage Technology for Renewable and Green Energy Act of 2011 (S. 1845), introduced on

November 10, 2011, and the Federal Energy Regulatory Commission’s Order 755, Frequency

Regulation Compensation in the Organized Wholesale Power Markets, are just two recent

initiatives intended to promote energy storage deployment in the United States. Numerous private

companies and national laboratories, many with federal support, are engaged in storage research

and development efforts across a very wide range of technologies and applications.

This report attempts to summarize the current state of knowledge regarding energy storage

technologies for both electric power grid and electric vehicle applications. It is intended to serve

as a reference for policymakers interested in understanding the range of technologies and

applications associated with energy storage, comparing them, when possible, in a structured way

to highlight key characteristics relevant to widespread use. While the emphasis is on technology

(including key performance metrics such as cost and efficiency), this report also addresses the

significant policy, market, and other non-technical factors that may impede storage adoption. It

considers eight major categories of storage technology: pumped hydro, compressed air, batteries,

capacitors, superconducting magnetic energy storage, flywheels, thermal storage, and hydrogen.

Energy storage technologies for electric applications have achieved various levels of technical

and economic maturity in the marketplace. For grid storage, challenges include roundtrip

efficiencies that range from under 30% to over 90%. Efficiency losses represent a tradeoff

between the increased cost of electricity cycled through storage, and the increased value of

greater dispatchability and other services to the grid. The capital cost of many grid storage

technologies is also very high relative to conventional alternatives, such as gas-fired power

plants, which can be constructed quickly and are perceived as a low risk investment by both

regulated utilities and independent power producers. The existing market structures in the electric

sector also may undervalue the many services that electricity storage can provide. For

transportation storage, the current primary challenges are the limited availability and high costs of

both battery-electric and hydrogen-fueled vehicles. Additional challenges are new infrastructure

requirements, particularly for hydrogen, which requires new distribution and fueling

infrastructure, while battery electric vehicles are limited by range and charging times, especially

when compared to conventional gasoline vehicles.

Substantial research and development activities are underway in the United States and elsewhere

to improve the economic and technical performance of electricity storage options. Changes to

market structures and policies may also be critical components of achieving competitiveness for

electricity storage devices. Removing non-technical barriers may be as important as technology

improvements in increasing adoption of energy storage to improve grid and vehicle performance.

Congressional Research Service

Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Contents

Introduction...................................................................................................................................... 1

Structure of the Report .............................................................................................................. 2

Other CRS Reports on Electricity Storage ................................................................................ 3

Technology Assessment Authorship .......................................................................................... 3

Acknowledgement ..................................................................................................................... 3

Chapter 1: Executive Summary ....................................................................................................... 4

Background................................................................................................................................ 4

Energy Storage for Electric Grid Applications .......................................................................... 5

High Power/Rapid Discharge Applications ......................................................................... 5

Energy Management Applications ...................................................................................... 5

Energy Storage for Transportation Applications ....................................................................... 7

Chapter 2: Background and Scope................................................................................................... 9

Organization of This Report ...................................................................................................... 9

Chapter 3: Overview of Storage Technology Applications and Benefits....................................... 11

Energy Storage for Electric Power Grids ................................................................................ 11

Current Storage Deployment for the Grid ......................................................................... 11

Applications of Energy Storage in the Grid ...................................................................... 12

Valuation of Storage for the Grid ...................................................................................... 14

Energy Storage and Renewable Energy ............................................................................ 17

Ongoing Barriers to Storage Deployment for the Grid ..................................................... 21

Current Grid Storage Policies............................................................................................ 23

Storage for Electric Transportation Applications .................................................................... 27

Transportation Storage Technologies and Pathways ......................................................... 27

Impacts and Benefits of Vehicle Electrification ................................................................ 28

Barriers to Deployment and Policies to Increase Vehicle Electrification .......................... 30

Chapter 4: Batteries for Grid Applications .................................................................................... 32

Overview ................................................................................................................................. 32

Technology .............................................................................................................................. 34

Description and Performance ............................................................................................ 34

Cost ................................................................................................................................... 37

Research and Development ............................................................................................... 40

Deployment Challenges .................................................................................................... 43

Conclusions ............................................................................................................................. 44

Chapter 5: Batteries for Electric Transportation ............................................................................ 46

Overview ................................................................................................................................. 46

Technology .............................................................................................................................. 48

Description and Performance ............................................................................................ 48

Cost ................................................................................................................................... 52

Research and Development ............................................................................................... 54

Deployment Challenges .................................................................................................... 59

Conclusions ............................................................................................................................. 60

Chapter 6: Hydrogen...................................................................................................................... 61

Overview ................................................................................................................................. 61

Technology .............................................................................................................................. 63

Description ........................................................................................................................ 63

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Performance ...................................................................................................................... 67

Cost ................................................................................................................................... 69

Research and Development ............................................................................................... 71

Deployment Challenges .................................................................................................... 72

Conclusions ............................................................................................................................. 74

Chapter 7: Compressed Air Energy Storage .................................................................................. 75

Overview ................................................................................................................................. 75

Technology .............................................................................................................................. 76

Description ........................................................................................................................ 76

Performance ...................................................................................................................... 78

Cost ................................................................................................................................... 80

Research and Development ............................................................................................... 82

Deployment Challenges .................................................................................................... 84

Conclusions ............................................................................................................................. 86

Chapter 8: Electrochemical Capacitors.......................................................................................... 87

Overview ................................................................................................................................. 87

Technology .............................................................................................................................. 87

Description ........................................................................................................................ 87

Performance ...................................................................................................................... 88

Cost ................................................................................................................................... 90

Research and Development ............................................................................................... 91

Deployment Challenges .................................................................................................... 93

Conclusions ............................................................................................................................. 94

Chapter 9: Pumped Hydro Storage ................................................................................................ 95

Overview ................................................................................................................................. 95

Technology .............................................................................................................................. 97

Description ........................................................................................................................ 97

Performance ...................................................................................................................... 98

Cost ................................................................................................................................... 99

Research and Development ............................................................................................. 101

Deployment Challenges .................................................................................................. 103

Conclusions ........................................................................................................................... 105

Chapter 10: Flywheel Storage ...................................................................................................... 106

Overview ............................................................................................................................... 106

Technology ............................................................................................................................ 107

Description ...................................................................................................................... 107

Performance .................................................................................................................... 108

Cost ................................................................................................................................. 110

Research and Development ............................................................................................. 111

Deployment Challenges .................................................................................................. 114

Conclusions ........................................................................................................................... 114

Chapter 11: Thermal Energy Storage in Buildings ...................................................................... 116

Overview ............................................................................................................................... 116

Technology ............................................................................................................................ 117

Description ...................................................................................................................... 117

Performance .................................................................................................................... 118

Cost ................................................................................................................................. 120

Research and Development ............................................................................................. 121

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Deployment Challenges .................................................................................................. 121

Conclusions ........................................................................................................................... 122

Chapter 12: Thermal Energy Storage for Concentrating Solar Power ......................................... 123

Overview ............................................................................................................................... 123

Technology ............................................................................................................................ 124

Description ...................................................................................................................... 124

Performance .................................................................................................................... 125

Cost ................................................................................................................................. 127

Research and Development ............................................................................................. 128

Deployment Challenges .................................................................................................. 130

Conclusions ........................................................................................................................... 130

Chapter 13: Superconducting Magnetic Energy Storage ............................................................. 131

Overview ............................................................................................................................... 131

Technology ............................................................................................................................ 132

Description ...................................................................................................................... 132

Performance .................................................................................................................... 133

Cost ................................................................................................................................. 134

Research and Development ............................................................................................. 135

Deployment Challenges .................................................................................................. 135

Conclusions ........................................................................................................................... 135

Figures

Figure 1. Estimated Life-Cycle Value of Several Electricity Grid Storage Applications .............. 15

Figure 2. Impact on Net Load from Using Wind Generation ........................................................ 18

Figure 3. Generation Dispatch in the WWSIS Study at 30% Wind Penetration............................ 21

Figure 4. Pathways to Vehicle Electrification ................................................................................ 27

Figure 5. Cost Components for an Installed NaS System .............................................................. 38

Figure 6. Extraction Costs of Elements in Grid Battery Couples .................................................. 39

Figure 7. Energy Storage Potential (ESP) of Battery Material Reserves ....................................... 44

Figure 8. United States Hybrid Electric Vehicle Sales................................................................... 47

Figure 9. Comparison of the Various Lithium-Ion Battery Chemistries ........................................ 49

Figure 10. Battery Cost Requirements for a Five-Year Payback from Fuel Savings..................... 53

Figure 11. Extraction Costs of Elements in Vehicle Battery Couples............................................ 54

Figure 12. FreedomCAR PHEV Energy Storage Goals ................................................................ 56

Figure 13. Practical vs. Theoretical Specific Energy for 27 Battery Chemistries ......................... 59

Figure 14. Energy Storage Potential (ESP) of Battery Material Reserves ..................................... 60

Figure 15. Electrolytic and Other Major Hydrogen Energy Pathways .......................................... 64

Figure 16. Schematic Representation of PEM Electrolysis ........................................................... 65

Figure 17. Location of Salt Deposits Across the United States ..................................................... 69

Figure 18. 110 MW CAES Plant in McIntosh, AL ........................................................................ 75

Figure 19. CAES System Diagram ................................................................................................ 77

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Figure 20. Comparison of CAES Dispatch Cost to Conventional Storage .................................... 80

Figure 21. Capital Cost Estimates for Conventional Diabatic CAES ............................................ 81

Figure 22. Comparison of Various Capacitor and Battery Topologies .......................................... 88

Figure 23. Comparison of Energy Storage Technologies .............................................................. 90

Figure 24. Comparison of Cost per Energy Throughput for Li-Ion Batteries and ECs ................. 91

Figure 25. Capacity of PHS in United States, 1956–2003 ............................................................. 96

Figure 26. Existing and Proposed PHS Facilities in the United States .......................................... 97

Figure 27. Pumped-Storage Hydropower Plant Configuration ...................................................... 97

Figure 28. Historical Efficiencies of PHS Plants in United States ................................................ 99

Figure 29. Installed Cost of PHS Plants in United States ............................................................ 100

Figure 30. Part of a 1 MW Flywheel System in the ISO-New England Grid .............................. 107

Figure 31. Electric Flywheel Components................................................................................... 108

Figure 32. Flywheel Cost Projections for a 20MW/5MWh Frequency Regulation Plant .......... 111

Figure 33. Illustration of a Chilled Water-Based TES System .................................................... 118

Figure 34. Electric Demand for Building Cooling With and Without TES ................................. 119

Figure 35. Two-Tank TES System at a 50 MW Solar Power Plant in Spain ............................... 124

Figure 36. Schematic of an Indirect Two-Tank TES System ....................................................... 125

Figure 37. Potential SMES Cost Ranges Based on Component Costs ........................................ 134

Tables

Table 1. Energy Storage Applications and Technologies ................................................................. 4

Table 2. Major Power Grid Applications of Electricity Storage .................................................... 13

Table 3. Example NaS Battery Installations in the United States .................................................. 33

Table 4. ARPA-E Supported Activities on Grid Battery Storage in FY2010-2011........................ 40

Table 5. ARRA Supported Grid Battery Demonstrations .............................................................. 41

Table 6. ARRA Supported Vehicular Battery Demonstrations ...................................................... 55

Table 7. Proposed CAES Plants in the United States .................................................................... 76

Table 8. Component Costs of a Conventional CAES System Deployed in a Salt Cavern............ 81

Table 9. Performance and Costs of Electrochemical Capacitors ................................................... 90

Table 10. Recently Completed or Proposed PHS Plants.............................................................. 101

Table 11. Flywheel Performance Characteristics ......................................................................... 110

Table 12. Flywheel Materials Characteristics .............................................................................. 112

Table 13. Technical Characteristics of a CSP System.................................................................. 126

Table 14. U.S. Department of Energy FOA Projects ................................................................... 129

Table 15. Potential Cost Reductions for CSP/TES Systems ........................................................ 129

Table 16. SMES Operating Parameters ....................................................................................... 133

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Appendixes

Appendix. Table of Acronyms ..................................................................................................... 137

Contacts

Author Contact Information......................................................................................................... 139

Congressional Research Service

Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Introduction

Energy storage technology has great potential to improve electric power grids, to enable growth

in renewable electricity generation, and to provide alternatives to oil-derived fuels in the nation’s

transportation sector. In the electric power system, the promise of this technology lies in its

potential to increase grid efficiency and reliability—optimizing power flows and supporting

variable power supplies from wind and solar generation. In transportation, vehicles powered by

batteries or other electric technologies have the potential to displace vehicles burning gasoline

and diesel fuel, reducing associated emissions and demand for oil.

In recent years, federal policy makers have become increasingly interested in promoting energy

storage technology as a key enabler of broad electric power and transportation sector objectives.

In remarks about the STORAGE Act of 2011 (S. 1845),1 which would provide investment tax

credits for storage systems connected to the electric grid, businesses and homes, Senate Energy

and Natural Resources Committee Chairman Jeff Bingaman remarked,

Deployment of storage technologies will make our nation’s electricity grid more reliable

while also enabling more efficient use of existing energy sources as well as new ones, such

as wind and solar.... These technologies have the potential to cut electricity bills, reduce peak

power demand and lower greenhouse gas emissions.2

Likewise, in a statement regarding new energy storage-related rules for wholesale electricity

markets, Federal Energy Regulatory Commissioner John Norris stated,

I believe today’s final rule is a positive first step by the Commission in recognizing the

unique characteristics and the value that storage resources offer.... As we move forward, I

strongly believe that storage will become ever more critical as we look to integrate

increasing amounts of variable energy resources.3

Referring to advanced batteries for electric transportation applications, Secretary of Energy

Steven Chu reportedly stated,

It’s now within grasp, that you can get a battery where the business plans are one-third of the

cost of today’s batteries, where you can get ranges now that would allow cars instead of 100

miles on a single charge, go 300 or more miles on the same charge…. It’s not a pipe dream

30 years from today or 20 years from today. It’s in the next decade.4

Statements such as those above highlight not only the technical opportunities for energy storage

in the grid and in electric transportation, but also the attention being paid to energy storage

technologies at the highest levels in the federal government. Nonetheless, many new energy

storage technologies continue to face significant technological and economic challenges to their

1

Storage Technology for Renewable and Green Energy Act of 2011 (S. 1845) introduced on November 10, 2011, by

Senator Ron Wyden and co-sponsored by Senators Jeff Bingaman, Susan Collins, and Robert Menendez.

2

Office of Senator Ron Wyden, “Wyden, Collins, Bingaman Legislation Will Increase Investments in the Storage of

Renewable Energy,” press release, November 10, 2011.

3

Commissioner John R. Norris, “Frequency Regulation Compensation in the Organized Wholesale Power Markets,”

Docket Nos. RM11-7-000 & AD10-11-000, Item No. E-28, Federal Energy Regulatory Commission, October 20, 2011.

4

Michael Warren, “Energy Secretary Steven Chu on Electric Cars,” The Weekly Standard Blog, April 3, 2011,

http://www.weeklystandard.com/blogs/chu-electric-cars_556135.html.

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

commercialization and widespread deployment. The recent bankruptcy of Beacon Power, one of

the leading developers of flywheel energy storage technologies for the grid, is a prominent

illustration of commercial barriers to grid storage technology. Public concerns about elevated fire

risks from Chevrolet Volt electric car batteries, although shown to be exaggerated, are another.5

By contrast, increasing investments by AES Corporation in utility-scale battery storage for power

grids show continuing successful efforts to overcome technical challenges and market barriers to

bring new storage technologies into the market.6

Understanding the potential of energy storage in electric applications is complicated by a number

of factors. The first is the wide range of storage technologies either commercially available, in

development, or being researched. Because they are technologically diverse, it is difficult to gain

a balanced understanding of the fundamental capabilities, costs, and comparative advantages of

these different energy storage options. Second, there are multiple applications of energy storage,

each with distinct operational requirements. Certain storage technologies may suit certain

applications better than others. Finally, there are many aspects of market structure and economic

regulation that affect energy storage deployment. Taken together, these factors make the

development of an energy storage research and development portfolio challenging. While there is

general consensus that storage technology improvements are needed, there are multiple potential

pathways to such improvements that cut across different disciplines.

This report attempts to summarize the current state of knowledge regarding energy storage

technologies for both electric power grid and electric vehicle applications. It is intended to serve

as a reference for policymakers interested in understanding the range of technologies and

applications associated with energy storage, comparing them, when possible, in a structured way

to highlight key characteristics relevant to widespread use. The report also discusses how aspects

of policy and market structure affect competition among both mature and emerging technologies.

Structure of the Report

The report contains 13 chapters, starting with an Executive Summary, which provides an

overview of the report’s main findings. Context and background are provided in “Chapter 2:

Background and Scope” and “Chapter 3: Overview of Storage Technology Applications and

Benefits.” In particular, Chapter 3 provides an overview of electricity storage applications and

value, including their use to enable renewable electricity; current barriers to deployment; and

current initiatives to address technical, economic and market barriers. Chapters 4-13 discuss the

individual storage technologies. Each chapter can be read independently, but Chapters 2 and 3

offer the reader a more complete understanding of some of the more technologically focused

discussions in the subsequent chapters.

5

Jim Henry, “Chevy Volt Battery Fires Threaten All Electric Vehicle Makers, Not Just GM,” Forbes, December 12,

2011; National Highway Traffic Safety Administration, “NHTSA Statement on Conclusion of Chevy Volt

Investigation,” press release, January 20, 2012.

6

“AES Peaker-Sized Battery Proposals Show Company’s Vision of Storage Potential for the Grid,” Electric Utility

Week, Platts, January 2, 2012.

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Other CRS Reports on Electricity Storage

CRS has written two previous reports on electricity storage: CRS Report R40797, Electric Power

Storage, by (name redacted), and CRS Report R41709, Battery Manufacturing for Hybrid and

Electric Vehicles: Policy Issues, by (name redacted).

Technology Assessment Authorship

This technology assessment and report was prepared by the National Renewable Energy

Laboratory (NREL), Strategic Energy Analysis Center, with contributions from Paul Denholm,

Anne Dillon, Easan Drury, Greg Glatzmaier, (name redacted), Marc Melaina, Jeremy Neubauer,

Doug Reindl (University of Wisconsin-Madison), Shriram Santhanagopalan, Kandler Smith,

Darlene Steward, and Samir Succar (Natural Resources Defense Council). The work was

performed under contract to CRS as part of a multiyear CRS project to examine different aspects

of U.S. energy policy. (name redacted), Assistant Director, Resources, Science, and Industry

Division, served as the CRS project coordinator. (name redacted), Specialist in Energy and

Infrastructure Policy, served as the CRS reviewer and editor of the final report.

Acknowledgement

This report was funded, in part, by a grant from the Joyce Foundation.

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Chapter 1: Executive Summary

Background

Energy storage in electric applications can provide two significant benefits to the nation’s energy

system. First, it can improve the technical and economic performance of the electric power grid,

increasing reliability and potentially decreasing costs while allowing greater penetration of

intermittent sources like solar and wind generation. Second, it enables a potential transition from

an oil-based transportation system to one based on an array of domestically sourced electricity

options, greatly reducing dependence on petroleum. In both cases, a reduction in the burning of

fossil fuels could result in lower overall U.S. carbon emissions and conventional pollutants.

For purposes of assessment and comparison, it is helpful to organize the various energy storage

technologies under two industry sectors (electric grid and transportation) and two general

categories of application based on the amount of time the storage device is required to provide

service (high power/rapid discharge and energy management), further explained below. Table 1

lists the storage technologies considered in this report according to these categories. The report

provides an overview of the current capabilities and costs of each storage technology, including

the potential for technical and cost improvement. It also discusses non-technical barriers

including environmental, material, market, and policy challenges to widespread deployment.

Table 1. Energy Storage Applications and Technologies

Electric Grid (Stationary)

Transportation (Vehicular)

High Power /

Rapid Discharge

Batteries

• Lead-Acid

• Nickel

• Lithium-Ion

Capacitors

Flywheels

Superconducting Magnetic Energy

Storage (SMES)

Batteries

• Nickel

Capacitors

Flywheels

Energy

Management

Batteries

• Advanced Lead-Acid

• Flow

• High Temperature

Hydrogen

Compressed Air

Pumped Hydro

Thermal

• Concentrating Solar Power

• End Use

Batteries

• Lithium-Ion

• Lithium-Metal

• Metal Air

Hydrogen

Source: P. Denholm, National Renewable Energy Laboratory, 2011.

Note: Electric power and transportation applications may elsewhere be referred to as “stationary” and

“vehicular,” respectively.

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Energy Storage for Electric Grid Applications

It is possible to divide grid storage applications into two broad categories based on the length of

time a storage device needs to provide service: (1) high power applications where the device must

respond rapidly and be able to discharge for only short-term periods (up to about one hour), and

(2) energy management related applications where the device may respond more slowly but must

be able to discharge for several hours or more. Ideally, all storage devices would be able to

provide all services, but some technologies are technically restricted to provide only short-term

services. However, many of these services have very high value in the grid, so short-term storage

can still provide considerable benefits.

High Power/Rapid Discharge Applications

The rapid response category can be further divided into short-term discharge—less than one

minute—used to provide grid stability and power quality, and longer-term discharge—up to about

an hour. Though important, short-term discharge services can often be provided by non-storage

options such as power electronics. Furthermore, this class of grid services does not address the

primary challenge of renewables integration, which requires minutes to hours of discharge time.

Currently, capacitors and superconducting magnetic energy storage (SMES) are rapid response

technologies capable only of providing short-term discharge. Research efforts for both

technologies are focused on increasing energy density and decreasing cost, with capacitor efforts

being directed in part towards vehicle applications. While SMES research has been active

historically, current efforts are modest and there is no clearly defined pathway for SMES to be

competitive for applications requiring extended discharge.

Other grid applications require devices with up to about one hour of discharge to provide services

such as frequency regulation service (responding to random, rapid variations in demand) and

contingency reserves (rapidly responding to a generator or transmission failure). Longer-term

storage can also support renewables integration by providing the subhourly ramping requirements

which will increase as greater amounts of variable generation sources are added to the grid.

Flywheels have been deployed in significant demonstration projects providing frequency

regulation. Several battery types have been demonstrated for both frequency regulation and

operating reserves, including lithium-ion and various aqueous batteries (such as lead-acid, nickelcadmium, and nickel-metal hydride). Most aqueous chemistries are considered mature

technologies, but additional improvements are possible, even for 100+ year-old lead acid

batteries. Research and development efforts on lithium-ion batteries are focused on reducing cost

and weight for transportation applications, but these efforts should have spillover benefits to grid

applications. In addition, there are certain lithium-ion configurations that are probably unsuitable

for transportation applications but potentially suitable for the grid. A major effort by commercial

vendors of rapid response technologies such as flywheels and lithium-ion batteries has been

gaining access to markets for frequency regulation and full valuation of the response capabilities

of the technology.

Energy Management Applications

Grid storage devices for energy management applications can provide continuous discharge for

several hours or more. These devices would be potentially useful for shifting energy during

periods of low demand (or high renewable supply) to periods of high demand (or low renewable

supply). Many of them can also provide the same services as high power/rapid discharge devices.

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Pumped hydro storage (PHS) is the dominant technology in this category with about 22

Gigawatts (GW), equivalent to about 22 large power plants, operating in the United States for

decades. PHS has high reliability, high efficiency, and long lifetime, but is dependent on the

availability of suitable geologic conditions and requires long development times (~10 years

including permitting). Based on siting challenges and environmental opposition, PHS suffers

from the perception that these issues will prevent large-scale deployment in the future. However,

the actual technical potential is large and the number of proposed plants exceeds the current

installed capacity, with many of these proposed plants using “closed-cycle” designs that will not

interact with existing water bodies and have the potential to reduce both opposition and licensing

times. They may also use variable speed equipment improving their ability to provide rapid

discharge services.

Compressed air energy storage (CAES) is technically mature, and often considered the lowestcost option for “bulk” electricity storage, although only one such facility is deployed in the

United States. CAES is a hybrid technology which uses natural gas, and typically requires a large

underground formation. Major development efforts for CAES currently underway include

demonstrating the technology in bedded salt and porous rock. Use of such geologic formations

would open up much more of the country to CAES development. Other research and

development activities include work on CAES cycles that do not require natural gas fuel.

Hydrogen and other electricity-derived fuels are possible storage options with the advantage of

long-term (even seasonal) storage. They currently are among the least efficient (well under 50%)

and more expensive storage technologies available and have yet to be deployed beyond small

demonstration projects. Fundamental research efforts are required to decrease the cost and

increase the durability of electrolyzers and fuel cells. Most of the historic research on hydrogen

has been as an alternative fuel for transportation.

Two classes of batteries are currently the primary candidates for electric grid applications—liquid

electrolyte flow batteries and high-temperature batteries. High-temperature sodium-sulfur

batteries are the most mature and commercially available, with over 270MW deployed

worldwide, including installations in the United States. They also have the advantage of relying

on low-cost and abundant materials, although manufacturing costs have limited larger-scale use.

Sodium sulfur is the only high-temperature battery deployed at large scale, currently

manufactured by a single company in Japan. There are several alternative high-temperature

chemistries under various stages of research, development, and commercialization. Flow batteries

are in the early stages of development and commercialization, with a few U.S. demonstration

projects of vanadium and zinc-bromine technologies, with several other technologies under

development.

Thermal energy storage (TES) is often overlooked as an electricity storage technology option

because it does not store and discharge electricity directly. However, in some applications,

thermal storage can be functionally equivalent to electricity storage with efficiencies exceeding

90%, which is higher than most other storage technologies. There are two primary applications of

TES for electricity. The first is storing thermal energy from the sun which is later converted into

electricity. The currently deployed storage medium is a relatively low-cost molten salt. The

primary limitation is that TES is tied to a specific application, in this case concentrating solar

power (CSP), which has the challenges of high cost and limited deployment locations, mostly in

the desert southwest in the United States. The key research efforts include developing storage

materials with higher working temperature, which, when combined with higher temperature CSP

plants, will increase efficiency and decrease costs. CSP with thermal energy storage has been

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

deployed in Spain. Construction of a 250 MW CSP/TES facility in the United States is expected

to begin in 2012. The second application of TES is cold and hot storage in buildings. Cold

storage, used to reduce peak demand from air-conditioning, has been deployed on a relatively

large scale. This is a commercially mature technology that provides firm system capacity at very

high round-trip efficiency, with the capability of providing multiple grid services. The primary

barrier to deployment is capturing the benefits of this distributed technology in the current

regulatory and market environment.

Energy Storage for Transportation Applications

As with grid storage, energy storage for transportation applications can be loosely divided into

two primary categories: high power/rapid discharge and high energy/extended discharge. High

power devices provide short, rapid discharges for vehicle starting and acceleration. While they

cannot provide continuous discharge for electrified transport, they can dramatically improve fuel

efficiency, as demonstrated by the current generation of hybrid electric vehicles. Currently

deployed technologies for these applications include lithium-ion and nickel-based aqueous

batteries. Technologies being explored including capacitors, flywheels, and other battery types.

Some of these technologies, such as capacitors, may also be used as a fast-responding “buffer”

between the electric drive system and the battery or fuel cell in an electric vehicle (EV).

For high energy applications, where stored electricity is actually used to provide a significant

fraction of the driving energy, research and development efforts are currently focused on two

technologies—hydrogen and batteries. Conceptually, hydrogen is a simple storage technology,

produced by splitting water using electricity (among other options), storing hydrogen on board

the vehicle, and then converting it to electricity to drive an electric motor via a fuel cell. (Internal

combustion engines could also be used, but the low efficiency of that process is less attractive.)

The challenges of a hydrogen-based transportation system include the development of an entirely

new fueling infrastructure including hydrogen delivery systems and filling stations, with needed

safety standards and protocols. The low volumetric energy density of hydrogen makes storage

challenging without extremely high-pressure tanks, or advanced chemical storage still in the early

research phase. Finally, fuel cells for vehicles remain expensive, with limited lifetimes. There

have been demonstration fuel cell vehicle programs by several major auto manufacturers, with

announced plans for commercial deployment as soon as 2015. However, substantial research

efforts will be needed to reduce costs and improve performance for many of the technologies

needed for large-scale hydrogen based transportation. There are other electricity-to-fuel pathways

under consideration, but with limited research and development efforts in the United States. They

face similar challenges of requiring new fuel infrastructure and currently face much higher costs

than fossil fuel alternatives.

The primary alternative to electricity-based fuel production is battery electric storage in plug-in

hybrid electric vehicles (PHEVs) and EVs. Most commercially available and proposed EVs and

PHEVs (such as the Chevrolet Volt and Nissan Leaf) use lithium-ion batteries. Research and

development efforts are focused primarily on reducing cost and increasing energy density as well

as safety of lithium-ion technology. Earlier deployed technologies, such as lead-acid used in older

EVs and nickel metal hydride used in current HEVs, are not considered likely candidates in future

EVs due to fundamental limits of energy density. Concerns have been expressed about the largescale availability of several metals used in lithium-ion batteries, as well as its concentration in a

few geographic regions. In the longer term, lithium-metal and metal-air batteries are in the

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research and development phase, with the potential of much higher energy density than currently

available battery types.

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Chapter 2: Background and Scope

In the United States, there are two major motivations for deploying energy storage technologies.

The first is to improve the technical and economic performance of the electric power grid (“the

grid”).7 This includes enabling more efficient utilization of conventional power plants (e.g., coaland gas-fired) supplying the grid through load-leveling and providing fast response grid support

functions (“ancillary services”), among other services. It also includes enabling greater use of

renewable energy sources such as wind and solar generation, which have variable output due to

changing weather conditions. Electricity storage is a potential source of grid flexibility to ease

integration challenges and decrease integration costs for these renewables.

The second motivation for energy storage is to enable greater use of electrified transportation.

The United States is largely self-sufficient for its electricity needs, and has substantial potential to

increase production of low-carbon, domestically sourced electricity from renewable and nuclear

sources (or from coal using carbon capture). Yet many of these sources cannot directly produce

the liquid fuels generally used in conventional vehicles. Electricity storage in batteries or some

other technology (including electricity-derived fuels such as hydrogen) could provide a pathway

to more electrically powered vehicles, and thereby to reducing U.S. dependence on petroleum.

This report provides information and analysis about the current status and future opportunities for

energy storage technologies in electric grid and electric vehicle applications. It attempts to

identify technologies which may have a key role in achieving the objectives stated above. It

discusses key technical and market barriers, along with research and development (R&D) and

policy efforts to reduce those barriers. The report:

•

Describes and discusses briefly how existing storage technologies work, their

most likely applications, and their advantages for particular applications.

•

Describes current limitations of each technology and whether those limitations

might be addressed through R&D efforts.

•

Describes economic or materials barriers that might impede development or

deployment (e.g., requirements for imported precious metals).

•

Assesses the costs (fixed and operational), safety, and effectiveness of each

technology.

•

Assesses the time horizon for market readiness of each technology.

•

Provides a technical overview and status of R&D activities for new and emerging

storage technologies.

Organization of This Report

This report contains 12 chapters, starting with Chapter 1, “Executive Summary,” which provides

an overview of the report’s main findings. Context and background are provided in Chapter 2,

“Background and Scope.” Chapter 3, “Overview of Storage Technology Applications and

7

In this report, the electric power grid, or “the grid,” refers to the electric power transmission and distribution (T&D)

network operated by electric utilities to deliver electricity from generation facilities (including storage) to end users.

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Benefits,” provides an overview of electricity storage applications and value, including their use

to enable renewable electricity; current barriers to deployment; and current initiatives to address

technical, economic, and market barriers. Chapters 4-13 discuss each individual storage

technology, including a general overview, status in the marketplace (including proposed projects),

estimates of current performance, service lifetime, and costs. They also discuss the status of

R&D, including key research needs to enable improvements in cost and performance, as well as

non-technical barriers including environmental challenges, availability of raw materials, and

safety. Each of Chapters 4-13 can be read independently, but Chapters 2 and 3 offer a more

complete understanding of some of the more technologically focused discussions that follow.

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Chapter 3: Overview of Storage Technology

Applications and Benefits

Energy Storage for Electric Power Grids

Electric utilities have long been interested in energy storage technology because of its potential to

support the operation of electric power grids. Historically, one of the most important grid storage

functions has been “load-leveling,” or storing off-peak electricity during periods of low demand

and releasing it during periods of high demand, enabling the decreased use of high-cost peaking

generation. This function has been extended to include support for renewable electricity

generation, given the variable production output of wind and solar plants. More recently, utilities

have also been considering how energy storage can provide a partial alternative to the

development of the power grid itself by helping utilities optimize the use of grid infrastructure

already in place and thereby avoid or defer building new power lines. Other key storage functions

include technical services called “ancillary services” needed to provide electric power

transmission service to a customer. They include actions taken to effect a power transaction (e.g.,

scheduling), services needed to maintain the integrity of the power grid, and services needed to

correct the effects associated with undertaking a power transaction (e.g., supply-demand

balancing).8 As the electric power grid has evolved into a wholesale marketplace for competitive

bulk power purchases while at the same time becoming strained by growth in electricity demand,

the potential for energy storage has grown in importance, driving continued interest in storage

technology development and deployment.

Current Storage Deployment for the Grid

There are approximately 22 GW of utility-scale electric storage capacity in the United States

today, which equates to approximately 2% of the nation’s total existing generation capacity.9

Nearly all of this storage capacity is in the form of pumped hydro storage (PHS), which works by

pumping water from a lower reservoir to an upper reservoir, releasing that stored water through a

hydroelectric generator when electricity is needed (further discussed in Chapter 9). While there

was some development of PHS starting as early as the 1920s, much of the nation’s PHS capacity

was initiated in the mid- to late 1970s.10 This development was the result of a combination of

factors including dramatic price increases in oil and natural gas used for meeting peak electricity

demand, along with concerns about security of supply. These factors culminated in congressional

passage of the Powerplant and Industrial Fuel Use Act of 1978 (P.L. 95-620) restricting use of oil

and gas in new power plants.11 During this period utilities expected to bring online many new

8

Federal Energy Regulatory Commission, Promoting Wholesale Competition Through Open Access Nondiscriminatory Transmission Services by Public Utilities; Recovery of Stranded Costs by Public Utilities and

Transmitting Utilities, Order No. 888, April 24, 1996, p. 198.

9

U.S. Energy Information Administration, Electric Power Annual, Table 1.2, April 11, 2011, http://www.eia.gov/

cneaf/electricity/epa/epat1p2.html.

10

American Society of Civil Engineers (ASCE),Task Committee on Pumped Storage of the Hydropower Committee of

the Energy Division of the American Society of Civil Engineers, “Compendium of Pumped Storage Plants in the

United States,” American Society of Civil Engineers, New York., 1993.

11

U.S. Energy Information Administration, “Repeal of the Powerplant and Industrial Fuel Use Act (1987),” web page,

October 18, 2011, http://www.eia.doe.gov/oil_gas/natural_gas/analysis_publications/ngmajorleg/repeal.html.

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coal-fired and nuclear power plants to meet relatively steady baseload demand, but were left with

limited options to provide generation capacity to meet daily and hourly load variations (“loadfollowing”) and peak demand.12 This limitation led utilities to actively develop PHS as an

alternative to fossil-fueled intermediate load and peaking generation.

During the 1970s, there was also significant research and development of other storage

technologies including several battery types, capacitors, flywheels, compressed-air, underground

pumped hydro, and superconducting magnetic storage.13 It was expected that deployment of

storage of all types would grow significantly during this period.14 However, most PHS

development, along with interest in and deployment of other emerging storage technologies,

ended in the 1980s after steep natural gas price reductions, improvements in natural gas turbines,

and repeal of the Industrial Fuel Use Act made deployment of flexible natural gas-fired

generation more economically attractive.

Other technical, market, and regulatory factors have also served to limit the deployment of

electricity storage historically. Many of these factors continue today. They are discussed in more

detail later in this chapter and in the individual technology chapters. Briefly, however, a primary

historical challenge of storage deployment has been the limited ability of utilities to estimate and

capture the full economic value of electricity storage, especially the many dynamic benefits to the

grid of fast responding storage technologies.15 Taken together, these factors have restricted

deployment of utility-scale electricity storage in the United States over recent decades. Besides 22

GW of PHS, deployment has been limited to a single 110 MW compressed-air energy storage

(CAES) facility, and a variety of smaller projects. Between 1990 and 2010, only 2 MW of new

PHS was constructed in the United States compared to over 300 GW of new generating

capacity.16

Applications of Energy Storage in the Grid

As noted above, energy storage can be used in many valuable applications for electric power

grids. A 2010 assessment by Sandia National Laboratories, for example, lists 17 distinct

applications and 26 associated benefits of electricity storage.17 Table 2 lists some of the most

commonly cited applications for electricity storage with a basic description of each. It does not

include other possible applications of electricity storage such as “black start” (providing power to

restart the grid after a blackout), power quality, voltage and transmission support, substation on-

12

Concern about the availability of oil and other peaking fuels in this period was so great that a 1979 international

conference on the subject, which included the U.S. National Academy of Sciences, described energy storage as “a vital

element in mankind’s quest for survival and progress.” J. Silverman,(ed). “Energy Storage: A Vital Element in

Mankind’s Quest for Survival and Progress,” Transactions of the First International Assembly held at Dubrovnik,

Yugoslavia, 27 May-1 June, 1979, Pergamon Press, 1980.

13

U.S. Department of Energy, “DOE Interagency Coordination Meeting on Energy Storage,” CONF 7709116, 1977.

14

D.W. Boyd, O.E. Buckley, and C.E. Clark, “Assessment of Market Potential of Compressed-Air Energy-Storage

Systems,” Journal of Energy, 1983, No. 7, pp. 549-556.

15

P. Denholm, E. Ela, B. Kirby, and M. Milligan, The Role of Energy Storage with Renewable Electricity Generation,

NREL/TP-6A2-47187, National Renewable Energy Laboratory, Golden, CO, 2010.

16

U.S. Energy Information Administration, Annual Energy Review, October 19, 2011, Table 8.11a,

http://www.eia.gov/totalenergy/data/annual/showtext.cfm?t=ptb0811a.

17

J. Eyer and G. Corey, Energy Storage for the Electricity Grid: Benefits and Market Potential Assessment Guide: A

Study for the DOE Energy Storage Systems Program, SAND2010-0815, Sandia National Laboratories, February 2010.

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site power, and supplemental reserves. Nor does it include the role of storage in supporting

variable generation, like wind and solar generation, which is discussed in the next section.

Table 2. Major Power Grid Applications of Electricity Storage

Application

Description

Timescale of Operation

Load Leveling/

Arbitrage/

Time-Shifta

Purchasing low-cost off-peak energy and

selling it during peak periods with high

prices.

Response in minutes to hours. Discharge time

of hours.

Firm Capacity

Provide reliable generation capacity to meet

peak system demand.

Must be able to discharge continuously for

several hours or more.

• Regulation

Service

Fast responding increase or decrease in

generation (or load) to respond to random,

unpredictable variations in demand.

Unit must be able to respond in seconds to

minutes. Discharge time is typically minutes.

• Contingency

Spinning

Reserveb

Fast responding increase in generation (or

decrease load) to respond to a contingency

such as a generator failure.

Unit must begin responding immediately and

be fully responsive within 10 minutes. Must be

able to hold output for 30 minutes to 2 hours

depending on the market.

Ramping/

Load Following

Follow longer-term (hourly) changes in

electricity demand.

Response time in minutes to hours. Discharge

time may be minutes to hours.

Transmission and

Distribution

Replacement and

Deferral

Reduce loading on electric power grid during

peak times. Provides an alternative to

expensive and often difficult to site power

lines and substations.

Response in minutes to hours. Discharge time

of hours.

• Time of Use

(TOU) Rates

Functionally the same as arbitrage, just at the

customer site.

Same as arbitrage.

• Demand Charge

Reduction

Functionally the same as firm capacity, just at

the customer site.

Same as firm capacity.

• Backup Power/

Power Quality/

Uninterruptible

Power Supply

Functionally similar to contingency reserve,

just at the customer site.

Instantaneous response. Discharge time

depends on level of reliability needed by

customer.

Operating

Reserves

End-Use

Applications

Source: P. Denholm, et al., The Role of Energy Storage with Renewable Electricity Generation, NREL/TP-6A2-47187,

National Renewable Energy Laboratory, 2010.

a.

Arbitrage, strictly defined, is the simultaneous purchase and sale of the same commodity to take advantage

of price differences in two different markets. Eyer and Corey (2010) consider the term arbitrage a

misnomer as applied to energy storage, however, its use is very common and it is used in this report as

well.

b.

Contingency reserves may be provided by both spinning and non-spinning units, depending on the market.

The requirements for non-spinning reserves are the same except the resource does not need to begin

responding immediately, but still requires full response within 10 minutes. These requirements depend upon

market and market reliability rules. For an example see PJM, PJM Manual 11: Scheduling Operations, Revision

43, September 24, 2009, http://www.pjm.com/markets-and-operations/ancillary-services/~/media/

documents/manuals/m11.ashx.

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The applications in Table 2 can be divided any number of ways into a number of different groups.

However, for purposes of assessment in this report, it is helpful to classify these applications into

two general categories based on the amount of time the storage device is required to provide

service because discharge time is a fundamental characteristic distinguishing most energy storage

technologies. The first category is storage for high power or rapid discharge applications where

the device must be able to discharge for periods of up to about one hour. The second category is

energy management applications where the device must be able to discharge for several hours or

more. Some applications may overlap both categories, depending upon the type of installation in

question, but these categories offer a valid basis for comparison of storage technologies

performing, at least to the first degree, similar functions.

Valuation of Storage for the Grid

Each application of electricity storage for the power grid offers distinct benefits. One of the

challenges facing electricity storage technologies is appropriate valuation of these benefits,

especially in providing multiple services in combination. For example, some storage technologies

can provide load-leveling (and associated benefits such as lower cycling-induced maintenance),

regulation service, contingency reserves, and firm capacity. Historically, it has been difficult to

quantify these various value streams without sophisticated modeling and simulation methods. The

emergence of wholesale electricity markets now provides more transparent data for both utilities

and independent power producers to consider the opportunities for electricity storage.18

Depending on the market, these data allow evaluation of both the economic yield and optimum

location of electricity storage devices for arbitrage, capacity, operating reserves, and other

ancillary services.19

18

As of 2009, wholesale energy markets exist in parts of more than 30 states and cover about two-thirds of the U.S.

population. Independent System Operators and Regional Transmission Organizations Council, 2009 State of the

Markets Report, prepared by the ISO/RTO Council, 2009, http://www.isorto.org/atf/cf/%7B5B4E85C6-7EAC-40A08DC3-003829518EBD%7D/2009%20IRC%20State%20of%20Markets%20Report.pdf.

19

R. Sioshansi, P. Denholm, T. Jenkin, and J. Weiss, “Estimating the Value of Electricity Storage in PJM: Arbitrage

and Some Welfare Effects,” Energy Economics, No. 31, 2009, pp. 269-277.

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Figure 1. Estimated Life-Cycle Value of Several Electricity Grid Storage Applications

Source: Compiled from Eyer and Corey, 2010 and Denholm et al., 2010.20

While there is significant variation and uncertainty in costs, most electricity storage assessments

indicate that few commercially available bulk electricity storage technologies are deployable for

less than $1,000/kW. For comparison, Figure 1 summarizes the life-cycle value of several storage

applications estimated in several previous studies in a number of locations. (The life-cycle value

can serve as a proxy for the capital cost needed for storage to be economically viable for each of

these applications.) As Figure 2 shows, $1,000/kW falls within the range of estimated life-cycle

value for all but one of the applications shown, indicating that the storage value could exceed

storage costs in specific applications. For example, energy arbitrage revenues, independent of

other storage benefits, would require a capital cost of less than $1,000/kW over most of the

locations studied. The value of electricity storage increases, however, when taking advantage of

other individual sources of revenue or even combined services. A device with sufficient energy

capacity for energy arbitrage would likely be able to provide system capacity as well. The

combination of these two services could, therefore, likely support a device costing somewhat

more than $1,000/kW.

Figure 1 shows that regulation service and contingency reserves, which are shorter-duration

applications requiring less energy capacity, have potentially higher value than energy arbitrage.

The challenge for these applications is that a device providing contingency reserves must be able

to respond rapidly, which is technically harder to do. Frequency regulation is particularly

demanding, requiring continuous changes in output, frequent cycling, and fast response. It is also

the highest-value opportunity for an electricity storage device, however, and has been the focus of

20

Both studies provide detailed explanation of sources and methods. Regulation value may exceed $4000/kW.

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many potential electricity storage applications, especially given its fairly small energy

requirements.21

Defining the Cost of Electricity Storage

When discussing the costs of storage technologies, a critical issue is that storage devices in electric applications have

both a power component (kW of discharge capacity) and an energy component (kWh of discharge capacity, which may

also be expressed as hours of discharge at rated output). The total cost of a storage application must account for the

ratings of both components, and may be expressed differently depending on the application or audience. Utilities, for

example, universally define the cost of power plants only in terms of rated power ($/kW), so they would expect to

see costs in these terms, with the hours of storage (kWh capacity) expressed separately. A grid storage plant might,

therefore, be expressed as costing $2000/kW for a device with eight hours of discharge capacity. On the other hand,

the battery community typically expresses costs in terms of rated energy ($/kWh), and may or may not include the

power component in the cost. So the cost of a battery might be stated as $500/kWh with the power capacity of the

battery established separately. When evaluating the economics of storage technologies, care must, therefore, be taken

to ensure that the costs for meeting both kW and kWh specifications are included and that both components are

“sized” properly for any specific application.

It is difficult to estimate the total market size for electricity storage in the U.S. grid. The most

comprehensive assessment of market size identifies hundreds of gigawatts of total applications.22

However, some of these applications overlap. For example, end use time-of-use (TOU) rate

management effectively duplicates load-leveling on the wholesale side. Furthermore, several of

the highest-value services, such as regulation service, have the smallest market opportunities.23

Even with these considerations, the potential market for electricity storage is large, and that

market is expected to grow in value and size with the increasing deployment of renewable energy

sources.

21

Frequency regulation theoretically is a net zero energy service over relatively short time scales, meaning the energy

capacity of the device can be much smaller than that of devices providing operating reserves and energy arbitrage.

Several power markets in the United States have changed or have proposed to change their treatment of regulation to

accommodate energy-limited storage technologies. Furthermore, it has been suggested that fast-responding storage

devices could receive a greater value per unit of capacity actually bid, because they could actually reduce the amount of

reserves needed. For example, “faster responsive resources can help to reduce California ISO’s regulation procurement

by up to 40% (on average)” and “California ISO may consider creating better market opportunities and incentives for

fast responsive resources.” Y.V. Makarov, J. Ma, S. Lu, and T.B. Nguyen, “Assessing the Value of Regulation

Resources Based on Their Time Response Characteristics,” Pacific Northwest National Laboratory, PNNL – 17632,

June 2008.

22

Eyer and Corey, 2010.

23

Requirements for frequency regulation resources are typically set for each Independent Service Operator (ISO) or

utility. Regulation requirements frequently change by the month, day, and hour. However, regulation requirements are

about 1% of peak capacity, based on NYISO and ISO-NE regulation requirements for 2009. 1% of peak capacity in the

entire United States corresponds to about 10 GW.

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Energy Storage and Renewable Energy

Renewable energy sources, such as wind and solar generation, create additional opportunities for

energy storage deployment due to the variability and uncertainty of the electricity they produce.

As variable renewable generation (VG)24 from these sources is added to the grid, it can have a

number of operational impacts on the grid, many of which can be mitigated with electricity

storage (or other enabling technologies):

•

Frequency Regulation Requirements—VG adds to the short-term (seconds to

minutes) variability in electric power frequency, which must be maintained very

close to the 60 cycles per second (hertz) for proper and reliable grid operation.25

•

Load Following Requirements—VG adds to the hourly requirements for

generation supply (ramping) on the grid, increasing the cycling and associated

maintenance of conventional generators.

•

Uncertainty in Net Load—Wind availability is less predictable than either the

variation in electric load or the availability of conventional generators. This

uncertainty can increase the cost of power system operation because it can result

in too many or too few generators being available to respond to variation in “net

load,” which is the electric load remaining on the grid after wind power supplies

are added.26

•

Ramping Range and Curtailment—VG increases the difference between the

daily minimum and maximum electricity demand (including an effective

reduction in minimum load) which can force conventional generators to reduce

output. In some cases this difference may force generation units that ought to be

running continuously to cycle off during periods of high wind output, or it can

force wind generators to curtail output, “wasting” renewable generation potential.

•

Transmission Requirements—Some renewable resources, like wind and

concentrating solar power, are remotely located, requiring new transmission to

supply the grid. New transmission is difficult to construct for economic and

24

The variable generation (VG) nomenclature is used by the North American Electric Reliability Corporation (NERC).

See NERC, Accommodating High Levels of Variable Generation, April 2009, http://www.nerc.com/docs/pc/ivgtf/

IVGTF_Outline_Report_040708.pdf.

25

The amount of additional regulation reserves required as a function of VG penetration has yet to be established

definitively, especially since the impact on minute-to-minute regulation requirements is mitigated by aggregating large

amounts of wind power with variability largely uncorrelated in the regulation time frame. However, a recent analysis

by the California Independent System Operator (CAISO) of a 33% renewable portfolio standard suggested that the use

of VG could increase regulation requirements by a factor of two to four. See CAISO, Integration of Renewable

Resources: Transmission and Operating Issues and Recommendations for Integrating Renewable Resources on the

California ISO Controlled Grid, November 2007.

26

This is actually the combination of the uncertainty in load and wind. As VG penetration increases, it begins to

dominate the net load uncertainty. This can also result in a shortage of available generation capacity. An example is the

ERCOT event of Feb. 26, 2008, where a combination of factors—including greater than predicted electricity demand,

forced outage of a conventional generation unit, wind forecast not being given to system operators, and lower than

expected wind production—resulted in too little generation capacity online to meet load. As a result, the ERCOT

system needed to deploy high-cost quick-start generation units and pay customers to curtail load. This issue has

important implications for the use of storage to mitigate uncertainty. Energy storage, like any other generation, must be

scheduled; a storage device used for load leveling may not be able to simultaneously provide hedging against underforecasted wind, because it may already be discharging. See E. Ela, and B. Kirby, ERCOT Event on February 26, 2008:

Lessons Learned, NREL/TP-500-43373. National Renewable Energy Laboratory, July 2008.

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policy reasons, however, and use of dedicated long-distance transmission for

wind or solar will be limited by the relatively low capacity factor of the resource.

Storage could increase line-loading and help reduce wind generation curtailment

due to transmission constraints.27

Figure 2 illustrates several of the above impacts on net load and corresponding operation of the

grid. In this figure, wind generation is subtracted from the load, showing the “residual” or net

load that the utility would need to meet with conventional sources. As the figure shows, the

change in generation the grid would need to provide for load-following purposes (ramp range)

can be much higher than overall load due to the variable contributions of wind power.

Figure 2. Impact on Net Load from Using Wind Generation

Source: P. Denholm, E. Ela, B. Kirby, and M. Milligan, The Role of Energy Storage with Renewable Electricity

Generation, NREL/TP-6A2-47187, National Renewable Energy Laboratory, 2010.

Note: This figure uses load data from the Electric Reliability Council of Texas (ERCOT) in 2005 along with 15

GW of spatially diverse simulated wind data from the same year.

Notwithstanding the potential contribution of storage technologies to grid operation, there is

considerable debate over the “need” for electricity storage with moderate penetration of

renewables. Many of the grid impacts listed above have been evaluated in various wind

integration studies attempting to evaluate the operational feasibility and associated costs of wind

integration. To date, most studies have found a relatively low cost of accommodating wind

27

Co-locating wind and storage has long been proposed to reduce the amount of transmission needed for new

development, coming at the tradeoff of less efficient use of energy storage. See P. Denholm, and R. Sioshansi, “The

Value of Compressed Air Energy Storage with Wind in Transmission-Constrained Electric Power Systems,” Energy

Policy, Vol. 37, pp. 3149-3158. This has been proposed to relieve congestion in the Texas grid, for example, where the

state’s best wind resources are located largely in the sparsely populated western part of the state, and transmission

capacity is limited. See N. Desai, et al., Study of Electric Transmission in Conjunction with Energy Storage

Technology, Lower Colorado River Authority, Texas State Energy Conservation Office, August 21, 2003.

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variability on the grid—typically less than $5/MWh (0.5 cents/kWh), adding less than 10% to the

cost of wind energy—when wind is providing up to 20% of a particular grid system’s demand.28

This low cost, mostly resulting from the large amount of flexible generation already available to

meet the variability in demand, has been used to argue that deployment of storage is not justified

based on variability impacts.29 However, many potentially significant costs, such as the

operations and maintenance costs of increased generator cycling, have yet to be quantified and

are not included in these studies.30 Furthermore, the studies do not consider the economic and

societal challenges associated with transmission expansion, or the option of storage as a method

to supplement new transmission.31 Consideration of these factors would almost certainly increase

the value of storage. A strong argument also can be made that VG will increase the value

proposition for storage, adding to the values that already exist in today’s grid. In general,

renewables are likely to increase the potential market size for electricity storage (for example, by

increasing the amount of certain types of generation reserves needed).

The operational value of combining a dedicated electricity storage device with a specific wind or

solar generation plant is also the subject of debate. Many storage applications dedicated to

individual renewable generators, such as renewables “firming,” which seeks to reduce variability

in renewable power output, are actually specific examples of the more general applications in

Table 2. For example, shifting wind power supply from periods of low demand to periods of high

demand is fundamentally the same as energy arbitrage. The economic benefits of this application

are greatest when the electricity storage operator can choose from all of the generators in a

system, storing electricity from any source instead of storing only wind generation, when demand

is lowest.32

28

J. DeCesaro, K. Porter, and M. Milligan., “Wind Energy and Power System Operations: A Review of Wind

Integration Studies to Date,” The Electricity Journal, Vol. 22, No. 10, December 2009, pp. 34-43.

29

Note that these studies have not necessarily focused on storage and generally do not attempt to determine the optimal

system (including the amount of storage if any) that provides the lowest cost of energy.

30

Wind integration studies typically use proprietary software and data sets, and do not always state which costs are

included or excluded. However, the Western Wind and Solar Integration Study (the highest penetration U.S. integration

study as of 2009) states: “‘Wear and tear’ costs due to increased or harder cycling of units were not taken into account

because these have not been adequately quantified.” See D. Lew et al., “How do Wind and Solar Power Affect Grid

Operations: The Western Wind and Solar Integration Study,” NREL/CP-550-46517, National Renewable Energy

Laboratory, September 2009.

31

The more recent U.S. studies of very high penetration (the Western Wind and Solar Integration Study and the Eastern

Wind Integration Study) require power and energy exchanges over larger areas than typically occur in the existing

system. See. M. Milligan, et al., Large-Scale Wind Integration Studies in the United States: Preliminary Results,

NREL/CP-550-46527, September 2009.

32

There are some exceptions when there are benefits of operationally combining VG and energy storage, typically

through co-location and sharing of certain high-cost components. The best example is integrating thermal storage into a

concentrating solar power (CSP) plant; another example is sharing power electronics in a distributed PV/battery

system. There are several other applications where co-location of VG and storage may make sense. Wind plants placed

in areas of weak transmission can potentially introduce power quality and stability issues, and storage can be a

mitigating technology; however, improved power electronics in modern wind turbines may be a lower-cost alternative.

Finally, combining wind and energy storage has been proposed as an alternative (or supplement) to developing new

transmission capacity. Despite these potential applications, the majority of storage deployed in the grid will likely be a

shared resource, which will benefit the entire system and not just a single generator or load. J.C. Smith et al., “Utility

Wind Integration and Operating Impact State of the Art,” IEEE Transactions On Power Systems, Vol. 22, No. 3,

August 2007. Just as loads are balanced in aggregate, the net load in the future grid—after all VG sources are

included—will be balanced by a mix of conventional generation, plus flexibility options that may include energy

storage.

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Grid Storage with High Renewables Penetration

Perhaps the strongest argument for energy storage in the grid occurs at relatively high penetration

of VG. The oft-cited limits of VG penetration in the range of 10%-20% and the associated “need”

for electricity storage appear to be moving targets as new grid integration techniques develop.

Recent studies have found that 30% penetration (on an energy basis) of renewables on the grid

appears to be feasible without an inherent need for storage to maintain system reliability.33

However, there appear to be some economic limits of VG at high penetration based on the limited

coincidence of VG supply and electricity demand patterns.34 At sufficiently high penetration of

wind or solar generation, VG supply can exceed demand for electricity, which results in curtailed

generation and decreased economic viability of VG. This problem is exacerbated by the cycling or

operational limits on conventional generators, many of which must remain on-line to provide

operating reserves or be available when wind and solar generation is insufficient to meet demand.

Such VG limits can be observed in the Western Wind and Solar Integration Study (WWSIS) with

30% wind penetration, at which wind power supply almost completely removes conventional

generation during high wind periods.35 Figure 3 shows the net load with wind in the study area,

along with the modeled operation (dispatch) of generation plants, which requires significant

ramping of coal generators. In one evening the net load (electricity demand minus wind supply)

drops to about 6 GW, meaning that wind is providing about 32 GW, even after much of the wind

generation is exported to surrounding areas. Doubling the amount of wind generation capacity

would produce a large amount of wind generation curtailment on this day, since the remaining 6

GW of load cannot absorb an additional 32 GW of wind generation, and the conventional

generation units are probably near or at their ability to ramp down or cycle off. Similarly, an

analysis of the Irish grid found limited wind generation curtailment at a wind penetration of 40%

on an energy basis.36 However, beyond this point, wind curtailment rates sharply increase and the

study found economic benefits of storage at the point where about 50% of the system’s energy is

provided by wind.

At higher penetration of renewable generation, the ability of conventional generators to reduce

output becomes an increasing concern. VG begins to displace units that are traditionally not

cycled, and the ability of conventional thermal generators to reduce output may become

constrained.37 Utilities in the United States have expressed concern about their systems

“bottoming out” due to the minimum generation requirements during overnight hours, and being

unable to accommodate more VG during these periods. Cycling operations, including

startup/shutdown, on-load cycling, and high frequency MW changes, can damage generation

equipment. However, the costs of such cycling can be very difficult to quantify.38 Minimum load

points would be less of a constraint if conventional power plants could be quickly shut down and

33

M. Milligan et al., Large-Scale Wind Integration Studies in the United States: Preliminary Results, NREL/CP-55046527, National Renewable Energy Laboratory, September 2009.

34

P. Denholm and M. Hand, “Grid Flexibility and Storage Required to Achieve Very High Penetration of Variable

Renewable Electricity,” Energy Policy, No. 39, 2011, pp. 1817-1830.

35

GE Energy, Western Wind and Solar Integration Study, prepared for National Renewable Energy Laboratory, NREL

Report No. SR-550-47434, May 2010.

36

A. Tuohy and M. O’Malley, “Impact of Pumped Storage on Power Systems with Increasing Wind Penetration,”

Energy Policy, Vol. 39, No. 4, 2011, pp.1965-1974.

37

For example, see M. Milligan, et al., The Impact of Electric Industry Structure on High Wind Penetration Potential,

NREL/TP-550-46273, National Renewable Energy Laboratory, July 2009.

38

S.A Lefton, and P. Besuner, “The Cost of Cycling Coal Fired Power Plants,” Coal Power, Winter 2006.

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

started up at low cost. However, with the exception of certain peaking power plants such as

aeroderivative turbines and fast-starting reciprocating engines, most conventional plants have

minimum up-and-down times, and require several hours to restart—at considerable cost.

Figure 3. Generation Dispatch in the WWSIS Study at 30% Wind Penetration

Source: GE Energy (for NREL), 2010.

In some markets, electricity prices have dropped below the actual variable (fuel) cost of

producing electricity on a number of occasions. This indicates that power plant operators are

willing to sell energy at a loss to avoid further reducing output. At this point an increasing

fraction of wind generation will simply be unusable by the system and electricity storage becomes

an increasingly attractive method of shifting otherwise curtailed wind generation to times of

lower wind generation (and/or higher loads). Overall, the increase in energy storage value or

market size associated as a function of increasing VG penetration is not well quantified. In

addition, financial mechanisms for energy storage installations to recover their costs as VGenabling technologies are incomplete.

Ongoing Barriers to Storage Deployment for the Grid

Historically, the primary barriers to energy storage deployment for the grid have been establishing

a positive benefit/cost ratio for storage and actually capturing the economic value that storage

provides. While the emergence of restructured wholesale electricity markets has provided new

storage opportunities, electricity storage still faces significant non-technical barriers to

widespread market acceptance and adoption, further discussed below.

Unquantified and Uncaptured Benefits

Before wholesale electricity markets began to be restructured in the 1990s, the value of ancillary

services and other grid support functions was largely hidden in electric utilities’ cost of service.

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For example, the value of providing operating generation reserves, which affect the ability of a

power plant to respond to the electric grid’s dynamic operating needs, was rarely calculated.39 The

Federal Energy Regulatory Commission (FERC), which regulates wholesale transmission grid

tariffs, and grid operators are increasingly recognizing the value of these services, and the

advantages of electricity storage in providing them, especially because they generally require fast

response and limited energy delivery for which storage devices are well-suited. However, much

of the nation remains in a traditional regulated utility framework, where the benefits of storage in

providing grid support services remain undervalued. Furthermore, wholesale electricity markets

do not capture all the costs of generation plant operation, especially those related to cycling and

ramping. Quantifying the full value of energy storage remains challenging due in part to the

limited ability of utility models to simulate realistic power plant and storage system operation

over multiple time scales.

Wholesale electricity markets also do not capture all the potential benefits of storage to the

electric distribution system (which connects the high voltage grid to electricity end users),

including deferral of new equipment and reduced power line losses.40 Deploying storage in the

distribution system will likely be particularly challenging since distribution will almost certainly

remain a regulated monopoly utility service, with limited exposure to market conditions that

provide incentives for new technologies.

Finally, there are currently few mechanisms in place for potential energy storage operators to

capture economic benefits associated with enabling renewable energy sources. Some value may

be captured indirectly. For example, if VG increases regulation service requirements, then it also

increases market opportunities for storage. However, there are few comprehensive mechanisms to

capture any potential synergies between VG and storage.

Regulatory and Market Uncertainty and Risk

Utilities tend to be risk averse. To meet electricity supply requirements, they tend to rely on

mature generation technologies with which they have long-term experience rather than new

technologies. Conventional generation options, including flexible natural gas-fired turbines,

continue to be the primary option for load following, peak power generation, and ancillary

services. Market uncertainty, combined with a lack of incentives for risk taking in regulated

utilities, discourages the deployment of technologies that are new or have long lead times. Long

development times and risk are a particular challenge for the two leading options for bulk energy

storage—compressed air and pumped hydro. PHS, in particular, faces unique environmental and

other siting challenges (including new transmission requirements), and also faces long permitting

and construction times. The regulatory treatment of energy storage for the grid is often unclear,

and has complicated the financing of large storage projects.41 These issues are discussed in more

detail in the technology sections.

39

S.J. Jabbour, and W.M. Wells, “Optimal Dispatching of Storage Plants with Dynamics,” Proceedings of the Second

International Conference on Compressed Air Energy Storage, EPRI TR-101770, Electric Power Research Institute,

December 1992.

40

A. Nourai, V. I. Kogan, and C.M. Schafer, “Load Leveling Reduces T&D Line Losses,” IEEE Transactions on

Power Delivery, Vol. 23, No. 4, October 2008, pp. 2168-2173.

41

A recent example is the Lake Elsinore Advanced Pumped Storage Project, which applied to be considered a

transmission facility for purposes of utility rate recovery. FERC denied this request, forcing it to recover costs through

an alternative mechanism, such as the more risky (at least for the developer) generation market. Federal Energy

(continued...)

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Lack of Incentives for Customer-Sited Storage

As with deployment by utilities or independent power producers, customer-sited storage faces

challenges of valuation and capturing that value. The benefits of customer-sited storage can

exceed that of centrally deployed storage. In addition to providing load-leveling and ancillary

services, customer-sited storage can provide additional advantages of reduced distribution losses

and increased grid capacity. Some customers, particularly large commercial and industrial

consumers, can capture some of the benefits of load-leveling and peak capacity via time-of-use or

demand-based electricity rates. But many storage benefits, particularly the value of ancillary

services, cannot be captured through their rates. This makes electricity storage uncompetitive for

many electricity end users.

In summary, energy storage for the grid faces significant barriers to being evaluated on the same

economic terms as conventional grid options perceived to be less risky for utilities both in

restructured markets and in traditional integrated utilities. Storage also faces increasing

competition from a variety of technical and market options for providing grid flexibility. New

market mechanisms are being deployed to share generation, reserves, and net loads—all of which

can increase overall power system flexibility.42 Demand response also may compete against new

storage options as a significant source of operating reserves. In many locations in the United

States, demand is increasingly used as a source of grid services. In Texas demand response

typically provides half of the contingency reserve requirements. Other regions also use (or are

evaluating) load to provide regulation. Greater participation of load providing reserves and load

shifting will require regulatory and policy changes in addition to new technologies.

Current Grid Storage Policies

Recognition of the potential value of energy storage for grid applications has led to efforts by

federal and state agencies to engage in storage R&D efforts ranging from analysis of benefits to

providing direct incentives.

Analysis of Storage Benefits

Federal and state agencies have supported a number of studies to evaluate the potential role and

value of energy storage. These studies have demonstrated the potential benefits of traditional

storage applications discussed above.43 Other analyses have identified the unique benefits of fast

response electricity storage technologies (e.g., flywheels) in providing frequency regulation more

efficiently and with fewer emissions than conventional generation.44 Due in part to such analysis,

(...continued)

Regulatory Commission, “FERC Encourages Transmission Grid Investment,” Docket No. ER06-278-000, March 20,

2008.

42

Greater aggregation of loads and reserves has historically been one of the least-cost methods of dealing with demand

variability, especially because it often requires operational changes and relatively little new physical infrastructure.

This includes introducing sub-hourly markets that allow systems faster response to variability. See M. Milligan, et al.,

“The Impact of Electric Industry Structure on High Wind Penetration Potential,” NREL/TP-550-46273, National

Renewable Energy Laboratory, July 2009.

43

Many of these studies have been performed by the Department of Energy’s Energy Storage Systems Research

Program, managed by Sandia National Laboratories.

44

Makarov et al. 2008. As noted earlier the ramp requirement of 1 MW/min could easily be provided by a 1 MW

(continued...)

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there is a growing consensus, for example, that fast-response resources should be paid a premium

for regulation services in wholesale power markets to accurately reflect the value they add to the

electric system.45 As the Chairman of the Federal Energy Regulatory Commission has stated,

Regarding compensation, some storage technologies appear able to provide a nearly

instantaneous response to regulation signals, in a manner that is also more accurate than

conventional resources. These two characteristics can reduce the size, and hence overall

expense, of the regulation market. Most existing tariffs or markets do not compensate

resources for superior speed or accuracy of regulation response, but such payment may be

appropriate in the future....46

Other studies have demonstrated the potential benefit of electricity storage in supporting the

deployment of variable generation47 and reducing distribution losses.48 Analytic efforts like these

help guide policy and market reforms to appropriately capture the value of grid storage services.

Research, Development, and Demonstration Projects

Federal and local agencies have supported basic research, engineering, technology development,

and demonstration programs for many energy storage technologies in grid applications. Until

recently, Department of Energy (DOE) R&D efforts in grid electricity storage were relatively

modest. From 1992 through 2008 the annual budget for the Energy Storage Systems Program

within the DOE’s Office of Electricity Deliverability and Energy Reliability was typically less

than $10 million per year.49 (Programs supporting storage primarily for transportation

applications are discussed in the next section.) In 2010 the DOE budget was increased to $14

million. The American Recovery and Reinvestment Act of 2009 (ARRA) also greatly increased

funding for storage R&D through several programs. Applied research has been supported through

the Advanced Research Projects Agency–Energy (ARPA-E) program, with $30.6M awarded for

FY2010 and $37.7 awarded for FY2011.50

(...continued)

flywheel, but would require about 2 MW of hydroelectric capacity, 3 MW of gas-fired combustion turbine capacity, or

30 MW of gas-fired combined cycle or coal capacity. As a result, using fast responding energy storage to provide

regulation can reduce the amount of regulation required, potentially reducing system costs.

45

Federal Energy Regulatory Commission, Order Accepting Tariff Revisions, Docket ER09-836-000, May 15, 2009.

http://www.nyiso.com/public/webdocs/documents/regulatory/orders/2009/05/

FERC_Ordr_NYISO_Intgrtd_LESRs_NYISO_DAM_RTM_05_15_09.pdf

46

Jon Wellinghoff, Chairman, Federal Energy Regulatory Commission, Testimony before the Senate Committee on

Energy and Natural Resources Hearing on Energy Storage, Dec. 10, 2009.

47

KEMA, Inc., Research Evaluation of Wind Generation, Solar Generation, and Storage Impact on the California

Grid, prepared for the California Energy Commission, Public Interest Energy Research Program, CEC-500-2-1-010,

June 2010.

48

A. Nourai, V.I Kogan, and C.M. Schafer, “Load Leveling Reduces T&D Line Losses,” IEEE Transactions on Power

Delivery, Vol. 23, No. 4, October 2008, pp.2168-2173.

49

J. Boyes, “FY07 DOE Energy Storage Program Peer Review,” Sandia National Laboratories, slide presentation,

2007. http://www.sandia.gov/ess/docs/pr_conferences/2007/boyes_snl.pdf

50

M. Johnson , “Gridscale Rampable Intermittent Dispatchable Storage (GRIDS) Program,” presentation to the DOE

Annual Storage R&D Review Meeting, November 2010. http://www.sandia.gov/ess/docs/pr_conferences/2010/

johnson_doe.pdf

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Electricity storage demonstrations have been funded directly through the ARRA with a total

funding of $185 million.51 Demonstration programs are particularly important in the electric

utility sector, since regulated utilities are typically not rewarded for risk taking, and have few

incentives to be the first to deploy new technologies. These funding activities are discussed in

more detail in the technology chapters. State agencies have also supported electricity storage

demonstrations, often with co-funding from federal agencies. Examples include New York State

Energy Research and Development Authority (NYSERDA) support of demonstration programs

for flywheels and several battery technologies.52 The California Energy Commission (CEC) also

has supported at least 20 storage research and demonstration projects since 1990.53

Market Rules

Securing the ability of energy storage to compete on common terms against traditional generation

assets is a critical challenge for grid storage developers. The creation of wholesale markets allows

increased participation of electricity storage devices, but the level of participation varies by

market. In 2007 FERC issued Order 890 requiring wholesale markets to consider non-generation

resources for grid services. The order required that non-generation resources (including energy

storage and demand response) be evaluated on a comparable basis to services provided by

generation resources in meeting mandatory reliability standards, providing ancillary services, and

planning the expansion of the transmission grid.54

Since that time Independent System Operators (ISOs) and Regional Transmission Organizations

(RTOs), the entities that operate regional power grids, have increased market access, including

creating new tariffs for electricity storage.55 56 In October 2011, FERC issued Order 755 requiring

a new compensation method for grid regulation service “to remedy undue discrimination” against

faster-ramping resources such as energy storage.57

Several large-scale grid storage projects have been proposed or constructed to take advantage of

high-value ancillary service markets. Examples of operating projects include a 20 MW flywheel

facility in New York and a 12 MW battery facility in Chile.58 However, market rules are still

51

E. Christy, “Energy Storage Systems Program: 2010 Update Conference” National Energy Technology Laboratory.

November 2, 2010. http://www.sandia.gov/ess/docs/pr_conferences/2010/christy_doe.pdf

52

G. Huff, “NYSERDA/DOE Joint Energy Storage Initiative,” Sandia National Laboratories, November 2, 2010.

http://www.sandia.gov/ess/docs/pr_conferences/2010/huff_snl.pdf

53

P. Kulkarni, “California Energy Commission Support for Electricity Energy Storage,” California Energy

Commission, May 6, 2009. http://bscleantech.org/bscc3/presentations/Technology%20-%20CEC%20%20Pramod%20Kulkarni.pdf

54

Federal Energy Regulatory Commission, Preventing Undue Discrimination and Preference in Transmission Service,

Order No. 890, February 16, 2007.

55

For example, the New York ISO created a “limited energy storage resource”(LESR) tariff. In its approval of the

tariff, FERC stated “We find that the proposed tariff revisions to incorporate LESRs will benefit NYISO’s markets by

providing them with a new source of regulation service with unique operational characteristics that enable very fast

responses to needs for regulation.” Federal Energy Regulatory Commission, Order Accepting Tariff Revisions, Docket

ER09-836-000, May 15, 2009. http://www.ferc.gov/EventCalendar/Files/20090515142559-ER09-836-000.pdf

56

Federal Energy Regulatory Commission, Order Conditionally Accepting Stored Resources Compliance Filing,

Docket No. ER09-1126-001, May 10, 2009.

57

Federal Energy Regulatory Commission, Frequency Regulation Compensation in the Organized Wholesale Power

Markets, Order No. 755, October 20, 2011.

58

Sonal Patel, “Milestones for Flywheel, Lithium Battery Grid-Scale Projects,” Power, August 1, 2011.

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

evolving in some regions and much of the United States has no access to restructured energy

markets to begin with.59 Uncertainty remains as to how storage assets should be able to capture

multiple value streams. Challenges remain in gaining access to distribution and customer-sited

storage. One storage company has developed a business model in which customer-sited storage is

owned by the utility as a peak generation and load shifting asset.60

Incentives for Deployment

There have been a number of financial incentive programs for grid storage technologies offered

by the federal government. In addition to the direct funding of demonstration programs, the

ARRA amended the DOE’s Loan Guarantee Program making certain electricity storage

technologies eligible.61 This program has been applied to a large solar plant in Arizona, discussed

in Chapter 12. The ARRA also established a manufacturing tax credit that could potentially be

applied to electricity storage manufacturing facilities. Several states have incentives supporting

deployment of renewable energy and energy efficiency devices which could be applicable to

storage-related equipment including fuel cells and cold thermal storage, but the impact of these

programs on actual adoption has been modest. Finally, certain renewable generators are eligible

for a 30% federal investment tax credit (ITC), currently scheduled to expire in 2016. This means

that thermal energy storage for concentrating solar power is eligible, since it is integrated into a

renewable generator. However, stand-alone storage technologies are not covered, since they are

typically not integrated into individual renewable generation installations.

A federal direct incentive program was proposed in 2010, which included a 20%-30% ITC for

new storage investments depending on size and application.62 Various other federal energy and

climate-change proposals have included language either providing financial incentives for or

otherwise encouraging energy storage deployment for the grid, but these proposals have yet to be

enacted.

Storage Portfolio Standards

Recently there have been proposals for government-mandated energy storage portfolio standards,

similar to renewable portfolio standards (which require utilities to purchase a certain portion of

their energy supplies from renewable generators).63 One example that has been enacted in state

law is California’s AB 2514, which as originally proposed required certain utilities to install

59

See, for example: “Revised Draft Final Proposal for Participation of Non-Generator Resources in California ISO

Ancillary Services Markets.” California Independent System Operator, March2010.

60

Ice Energy, “SCPPA to Undertake Industry’s Largest Utility-Scale Distributed Energy Storage Project,” press

release, January 27, 2010. http://www.ice-energy.com/content10197

61

The loan guarantee program was created to support the deployment of innovative clean energy technologies pursuant

to Section 1703 of Title XVII of the Energy Policy Act of 2005. Title XVII was amended by the American Recovery

and Reinvestment Act of 2009 to create Section 1705, a new program for deploying renewable energy and electric

power transmission projects.

62

“Storage Technology for Renewable and Green Energy Act of 2010,” S. 3617, 111th Cong., 2nd Sess, 2010.

63

Brian Nese, “Energy Storage Developers Call for National Storage Portfolio Standard,” Renewable + Law, Internet

blog, July 21, 2009. http://www.lawofrenewableenergy.com/2009/07/articles/power-storage/energy-storagedevelopers-call-for-national-storage-portfolio-standard/

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

storage devices to meet 2.25% of peak demand. As passed, the bill requires the California Public

Utilities Commission to determine targets by March 1, 2012.64

Storage for Electric Transportation Applications

Transportation Storage Technologies and Pathways

The primary purposes of electrifying transportation are to reduce dependence on oil, which

currently provides most of the nation’s transportation fuel, and to reduce vehicle emissions. There

are two pathways to store electricity for use in electric vehicle (EV) fleets (Figure 4).65 The first

is switching from oil-derived fuels to one of several electricity-derived fuels, either gaseous or

liquid, with hydrogen receiving the most attention in recent years. These alternative fuels can be

produced using electricity (for example, by splitting hydrogen from oxygen atoms in water) either

centrally or near the point of use. They can then be burned in a vehicle using a modified internal

combustion (IC) engine and a conventional drive train. Such fuels can also be burned in an IC

engine-electric drive train (hybrid-electric) vehicle configuration (HEV), or in a similar fuel cell

electric vehicle (FCEV) configuration. The second pathway for electrified transport is to store

electricity on board the vehicle, primarily using batteries, and to use that stored electricity to

power an electric motor. The vehicle can be either a “pure” battery electric vehicle (BEV) or a

vehicle that uses both stored grid electricity and an IC or fuel cell engine, typically referred to as

a plug-in hybrid electric vehicle (PHEV).

Figure 4. Pathways to Vehicle Electrification

Source: P. Denholm, National Renewable Energy Laboratory.

Key: B = battery, EV = electric vehicle, FC = fuel cell, H = hybrid, IC = internal combustion, P = plug-in.

64

California Legislature, A.B. 2514 (introduced), February 19, 2010. http://leginfo.ca.gov/pub/09-10/bill/asm/ab_25012550/ab_2514_bill_20100219_introduced.pdf ); and A.B. 2514 (approved), September 29, 2010.

http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_2501-2550/ab_2514_bill_20100929_chaptered.pdf

65

This report does not consider alternative fuels, such as ethanol, that are not primarily derived from electricity.

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Impacts and Benefits of Vehicle Electrification

The most obvious benefit of vehicle electrification is reduced dependence on petroleum-derived

fuels. The amount of displaced petroleum depends on the degree of electrification of individual

vehicles and of the fleet as a whole. An FCEV running on hydrogen or a pure electric vehicle uses

no gasoline, while a PHEV could reduce a large fraction of gasoline use, depending on battery

size and driving patterns.

Shifting from gasoline to electricity may have a number of impacts on the electric power grid.

One possible outcome is a need for new generation capacity for battery charging. However, the

availability of off-peak generation is estimated to be sufficient for a large number of vehicles

assuming some level of “smart” charging. A 2007 study estimated that spare generating capacity

could have electrified 73% of light-duty gasoline vehicles in 2002.66 This level of vehicle

electrification would displace petroleum equivalent to more than 50% of the nation’s oil imports.

Another study used a somewhat more conservative methodology to estimate that the bulk power

system in 2002 could have supported electrification of approximately 37% of vehicle miles

traveled (VMTs).67 The Electric Power Research Institute (EPRI) analyzed a scenario with 20%

of VMTs in the United States powered by electricity in 2030; the modeled electric generating

capacity was just 1.7% higher in this scenario compared to the base case scenario that assumed no

EVs or PHEVs.68 Other, regional studies similar have concluded that, essentially, if vehicles

charge off-peak, a large number of vehicles can be accommodated, but if on-peak charging is

allowed, there could be increased generation requirements during peak periods of electricity

demand.69 On the electric distribution side, the impacts of vehicle electrification are more

complex. In some locations, a concentration of vehicle charging could exceed the capacity of

distribution systems, and increased loads could shorten the lifetimes of distribution transformers.

Distribution system impacts and the need for upgrades, as well as the ability to reduce the impacts

via smart charging schemes, will need to be further evaluated, typically on a local level.70

EVs and PHEVs generally produce lower greenhouse gas emissions per mile than conventional

vehicles. The amount of reduction depends on numerous assumptions about vehicle performance

and the mix of electricity supplies used for charging. One estimate is that a PHEV powered by an

average proportion of coal-generated electricity produces carbon emissions per mile similar to

those of an HEV.71 If the PHEV is charged using the current grid average emissions, carbon

66

M. Kintner-Meyer et al., Impacts Assessment of Plug-In Hybrid Vehicles on Electric Utilities and Regional U.S.

Power Grids. Part 1: Technical Analysis, Pacific Northwest National Laboratory, 2007.

67

The biggest difference between the methods is estimating which generating capacity is available and economical to

use to charge vehicles during the peak months. C.H. Stephan and J. Sullivan, “Environmental and energy implications

of plug-in hybrid-electric vehicles,” Environmental Science & Technology, Vol. 42 No. 4, 2008, pp. 1185-1190.

68

M. Duvall and E. Knipping, Environmental Assessment of Plug-In Hybrid Electric Vehicles. Volume 1: Nationwide

Greenhouse Gas Emissions, Electric Power Research Institute, 2007.

69

Examples include: P. Denholm and W. Short, An Evaluation of Utility System Impacts and Benefits of Optimally

Dispatched Plug-In Hybrid Electric Vehicles, NREL/TP-620-40293, National Renewable Energy Laboratory, 2006;

and K. Parks, P. Denholm, and T. Markel., Costs and Emissions Associated with Plug-In Hybrid Electric Vehicle

Charging in the Xcel Energy Colorado Service Territory, NREL/TP-640-41410, National Renewable Energy

Laboratory, 2007.

70

C. Farmer et al., “Modeling the Impact of Increasing PHEV Loads on the Distribution Infrastructure,” 43rd Hawaii

International Conference on System Sciences (HICSS), January 5-8, 2010. http://www.cems.uvm.edu/~phines/

publications/2010/farmer_2010_phev_distribution.pdf.

71

In the worst case scenario for a PHEV, net CO2 emissions are about the same as those of a conventional vehicle. Any

electricity supply mix less than 100% coal-generated will be cleaner. See C.H. Stephan, and J. Sullivan,

(continued...)

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emissions per mile are reduced by almost 60% compared to a conventional vehicle.72 Air

pollutant emission changes due to EV and PHEV penetration are complicated because they

depend on the type of generators used for electricity production, the pollution control equipment,

and policies that limit emissions. A California study projects that PHEVs would reduce nitrogen

oxide (NOx) and volatile organic compound (VOC) emissions per mile by 87% and 97%,

respectively, due to limits on the emissions of these pollutants.73 Estimates from other regions

project changes over a large range, including some locations where net emissions could increase

if current power plants do not install new pollution control devices.74 For example, one study

found that life cycle NOx emissions changes could range from -70% (assuming charging with

renewable generation) to +38% (charging with uncontrolled coal-fired plants) assuming no

pollution control policies.75 The actual impact on air quality is even more complex because

PHEVs displace emissions from urban areas to rural areas where power plants are typically

located and fewer people live. Estimates using air quality models generally indicate improved air

quality in urban areas as a result of vehicle electrification.76

When parked, vehicles could potentially provide various grid services. Charging of EVs can

potentially be controlled and can provide a source of dispatchable demand and demand response.

Controlled charging can be timed to periods of greatest VG output, while charging rates can be

controlled to provide contingency reserves or frequency regulation reserves. Vehicle-to-grid

(V2G) (where EVs can partially discharge stored energy to the grid) may provide additional value

by acting as a distributed source of energy storage. Most proposals for V2G focus on short-term

response services such as frequency regulation and contingency. Their ability to provide energy

services is more limited by both the storage capacity of the battery and the high cost of battery

cycling. This could restrict their ability to provide time shifting (energy arbitrage) beyond their

ability to perform controlled charging.77 The role of V2G is an active area of research. Because

(...continued)

“Environmental and Energy Implications of Plug-in Hybrid-Electric Vehicles,” Environmental Science & Technology,

Vol. 42 No. 4, 2008, pp.1185-1190.

72

One study shows slightly less relative reductions in life cycle carbon emissions because the carbon emissions due to

vehicle production (excluding the batteries) are similar, and battery production represents 2-5% of life cycle carbon

emissions from a PHEV. See C. Samaras and K. Meisterling,“Life Cycle Assessment of Greenhouse Gas Emissions

from Plug-in Hybrid Vehicles: Implications for Policy,” Environmental Science & Technology, Vol. 42 No. 9, 2008,

pp. 3170-3176.

73

J. Pont, Full Fuel Cycle Assessment: Well-to-Wheels Energy Inputs, Emissions, and Water Impacts, California

Energy Commission, 2007.

74

The Electric Power Research Institute (EPRI) has projected that, although coal-fired power plants would provide

much of the charging for PHEVs in 2030, most charging would nonetheless be from sources with pollution control

equipment (new, existing, and retrofitted). Emissions of NOx, SO2, and VOCs were therefore projected to go down with

PHEV penetration. See M. Duvall and E. Knipping, Environmental Assessment of Plug-In Hybrid Electric Vehicles.

Volume 2: United States Air Quality Analysis Based on AEO-2006 Assumptions for 2030, Electric Power Research

Institute, 2007.

75

L. Gaines et al. (2007), “Sorting through the Many Total-Energy-Cycle Pathways Possible with Early Plug-In

Hybrids,” Electric Vehicle Symposium (EVS23), Anaheim, CA, December 2-5, 2007.

76

EPRI used an air quality model to project that the PHEVs would reduce population exposure to ozone and particulate

matter. Another study used a utility simulation model to project that PHEV charging in Colorado would come primarily

from natural gas-fired power plants if there were no change in the electric generating fleet. This would lead to

significant reductions in NOx and VOC emissions in the Denver metro area, leading to modest improvements in ozone

concentrations. See G.L. Brinkman et al. “Effects of Plug-In Hybrid Electric Vehicles on Ozone Concentrations in

Colorado,” Environmental Science & Technology, Vol. 44 No.16, 2010, pp. 6256-6262.

77

This conclusion depends on the anticipated cycle life and cost of EV batteries. However, controlled charging

(without V2G) is still a potentially significant source of flexibility, with the ability to raise the minimum load and avoid

(continued...)

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electric vehicles in any form have yet to achieve significant market penetration, assessing their

potential as a source of grid flexibility is difficult. However, analysis has demonstrated potential

system benefits of both controlled charging and V2G.78

Barriers to Deployment and Policies to Increase Vehicle Electrification

A primary barrier to deployment of electric vehicles is their cost and availability. After the

discontinuation of commercially produced electric passenger vehicles in the early 1990s, and

before the introduction of the Nissan Leaf and Chevrolet Volt in late 2010, there were no massproduced electric passenger vehicles available in the United States.79 The costs of the current

generation of EVs and PHEVs are high—with recent prices for the Leaf and Volt about $35,000

and $39,000, respectively.80 The earliest projected deployment of fuel cell vehicles is 2015. While

the performance of battery technologies continues to improve, it is unclear when costs will reach

the point needed for large scale adoption.81

There are a number of federal and state policies targeted towards increasing the use of battery

electric and fuel cell vehicles. These include R&D efforts through the American Recovery and

Reinvestment Act of 2009 (ARRA, discussed in detail in the corresponding technology chapter).

ARRA also provides $2 billion toward grants for the manufacturing of advanced battery systems

and electric vehicle components. These funds are intended to support domestic manufacturing of

advanced lithium-ion batteries and hybrid electric systems and components. To incentivize

adoption, ARRA supports tax credits for the purchase of PHEVs. A comprehensive summary of

current federal and state incentives is provided at the Alternative Fuels & Advanced Vehicles Data

Center.82

Other critical barriers include a lack of existing infrastructure for vehicle fueling and charging.

For hydrogen fueled FCEVs or HEVs, entirely new infrastructure is needed for fuel production,

transport and refueling. (These issues are discussed in more detail in the hydrogen chapter.) For

EVs, lack of charging infrastructure, combined with limited range of pure electric vehicles

(...continued)

curtailment. For additional discussion of the impact of battery life and cycling on the value of V2G, see S.B. Peterson,

J.F. Whitacre, and J. Apt, “The Economics of Using PHEV Battery Packs for Grid Storage,” Journal of Power Sources,

No. 195, 2010, pp. 2377-2384; and R. Sioshansi, R. and P. Denholm, “The Value of Plug-In Hybrid Electric Vehicles

as Grid Resources,” The Energy Journal, Vol. 31 No. 3, 2010, pp. 1-23.

78

Short, W., and P. Denholm. (2006) “A Preliminary Assessment of Plug-In Hybrid Electric Vehicles on Wind Energy

Markets” NREL/TP-620-39729.

79

Some non-highway, low speed vehicles (neighborhood electric vehicles, or NEVs) were available over this time.

80

Prices are manufacturer’s suggested retail price (MSRP) before federal tax incentives. Nissan USA, “Nissan LEAF,”

Web page, 2011. http://www.nissanusa.com/leaf-electric-car/index#/leaf-electric-car/index; General Motors, “2011

Volt,” 2011. http://www.chevrolet.com/volt-electric-car/.

81

General Motors, in its recent IPO stated “In some cases, the technologies that we plan to employ, such as hydrogen

fuel cells and advanced battery technology, are not yet commercially practical and depend on significant future

technological advances by us and by suppliers. For example, we have announced that we intend to produce by

November 2010 the Chevrolet Volt, an electric car, which requires battery technology that has not yet proven to be

commercially viable. There can be no assurance that these advances will occur in a timely or feasible way.” Securities

and Exchange Commission (2010) Amendment to No. 9 to Form S-1 Registration Statement under the Securities Act of

1933 General Motors Company http://www.sec.gov/Archives/edgar/data/1467858/000119312510262471/

ds1a.htm#rom45833_2

82

U.S. Department of Energy, Alternative Fuels and Advanced Data Center, “Federal & State Incentives and Laws,”

website, 2011. http://www.afdc.energy.gov/afdc/laws/state.

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presents a barrier to large-scale adoption, especially for those who do not have access to secure

charging at home.83 Current electric rate structures also create a barrier, preventing both

maximum benefit of controlled charging to the grid, and lowest-cost charging for the consumer.

83

For more discussion of charging infrastructure issues see T. Markel, Plug-in Electric Vehicle Infrastructure: A

Foundation for Electrified Transportation, Report No. CP-540-47951, National Renewable Energy Laboratory, 2010.

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Chapter 4: Batteries for Grid Applications

Overview

Batteries are devices that store energy chemically. This report focuses on “secondary” batteries,

which must be charged before use and which can be discharged and recharged (cycled) many

times before the end of their useful life. For electric power grid applications, there are four main

battery types of interest:

•

Lead-acid

•

High temperature “sodium-beta”

•

Liquid electrolyte “flow” batteries

•

Other emerging chemistries84

Lead-acid batteries have been used for more than a century in grid applications and in

conventional vehicles for starting, lighting, and ignition (SLI). They continue to be the

technology of choice for vehicle SLI applications due to their low cost. Consequently, they are

manufactured on a mass scale. In 2010, approximately 120 million lead-acid batteries were

shipped in North America alone.85 Lead-acid batteries are commonly used by utilities to serve as

uninterruptible power supplies in substations, and have been used at utility scale in several

demonstration projects to provide grid support.86 Use of lead acid batteries for grid applications is

limited by relatively short cycle life. R&D efforts are focused on improved cycle-life, which

could result in greater use in utility-scale applications.

Sodium-beta batteries include sodium-sulfur (NaS) units, first developed in the 1960s,87 and

commercially available from a single vendor (NGK Insulators, Ltd.) in Japan with over 270 MW

deployed worldwide.88 A NaS battery was first deployed in the United States in 2002.89 There are

now a number of U.S. demonstration projects, including several listed in Table 3. The focus of

NaS deployments in the United States has been in electric distribution deferral projects, acting to

reduce peak demand on distribution systems, but they also can serve multiple grid support

84

Several of the battery types discussed in this chapter have been demonstrated or proposed for transportation

applications as well. However, they also have challenges in achieving the energy density or other characteristics needed

for storing large amounts of energy in mobile applications. Batteries for electric vehicles are discussed in Chapter 5.

85

Battery Council International, “Breakdown of North American Battery Shipments (2001-2010),” Chicago, November

4, 2011. http://www.batterycouncil.org/LeadAcidBatteries/BreakdownofShipments/tabid/173/Default.aspx

86

Electric Power Research Institute and U.S. Department of Energy (EPRI/DOE), EPRI-DOE Handbook of Energy

Storage for Transmission and Distribution Applications, Palo Alto, CA, No. 1001834, December, 2003. A 10 MW, 40

MWh lead-acid battery was built in Southern California in 1988. It operated for about nine years. A 21 MW, 14 MWh

lead-acid plant was built in Puerto Rico in 1994 to provide spinning reserves. It operated for about five years.

87

X. Lu et. al., “Advanced materials for sodium-beta alumina batteries: status, challenges, and perspectives,” Journal

of Power Sources, No. 195, 2010, pp. 2431-2442.

88

D. Rastler, “New Demand for Energy Storage,” Electric Perspectives, Edison Electric Institute, September 2008.

89

Nourai, A., “Installation of the First Distributed Energy Storage System (DESS) at American Electric Power (AEP):

A Study for the DOE Energy Storage Systems Program.” SAND2007-3580. Albuquerque, NM: Sandia National

Laboratories, June 2007. http://www.electricitystorage.org/images/uploads/docs/Sandia_First_Storage_AEP.pdf

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services. An alternative high-temperature battery, sodium-nickel-chloride, is in the early stages of

commercialization.90

Table 3. Example NaS Battery Installations in the United States

Installation

Date

Sizea

(MW/MWh)

Developer

Location

0.1/0.72

AEPb

Gahanna, OH (First U.S. demonstration)

2002

1.0/7.2

AEPb

North Charleston, WV

2006

2.0/14.4

AEPc

Bluffton, OH; Balls Gap, WV; East Busco, IN

2008

1.0

New York Power Authorityd

Long Island, NY

2008

4.0

AEPc

Presidio, TX

2009

1.0/7.2

Xcel Energye

Luverne, MN

2009

Source: National Renewable Energy Laboratory compilation.

a.

Continuous rating.

b.

A. Nourai, Installation of the First Distributed Energy Storage System (DESS) at American Electric Power (AEP): A

Study for the DOE Energy Storage Systems Program, SAND2007-3580, Sandia National Laboratories,

Albuquerque, NM, June, 2007.

c.

AEP, Energy Storage in T&D Applications, slide presentation, May 2009. http://www.aeptechcentral.com/docs/

NAS-Presentation.pdf

d.

G. Sliker, “Long Island Bus: NaS Battery Energy Storage Project,” slide presentation, New York Power

Authority, September 29, 2009. http://www.sandia.gov/ess/docs/pr_conferences/2008/sliker_nypa.pdf

e.

Xcel Energy, “Wind-To-Battery Project,” fact sheet, November 2008. http://www.xcelenergy.com/staticfiles/

xe/Corporate/Environment/wind-to-battery%20fact%20sheet.pdf

“Flow” batteries, in which a liquid electrolyte flows through a chemical cell to produce

electricity, are in the early stages of commercialization. In grid applications there has been some

deployment of two types of flow battery: vanadium redox and zinc-bromide. There are a number

of international installations of vanadium redox units, including a 250 kW installation in the

United States to relieve a congested transmission line.91 There are also a number of zinc-bromine

demonstration projects.92 Several other flow battery chemistries have been pursued or are under

development, but are less mature.

In addition to the three battery types discussed above, there are several emerging technologies

based on new battery chemistries which may also have potential in grid applications. Several of

these emerging technologies are being supported by DOE efforts such as ARPA-E and are

discussed briefly in the R&D section of this chapter.

90

J. Baker, “New Technology and Possible Advances in Energy Storage,” Energy Policy, Vol. 36, 2008, pp. 4368–

4373.

91

EPRI/DOE, 2003. The U.S. unit was installed by Pacificorp in 2004 in Moab, UT.

92

EPRI/DOE, 2003.

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Technology

Description and Performance

Lead-Acid

The lead-acid battery consists of a lead dioxide positive electrode (cathode), a lead negative

electrode (anode), and an aqueous sulfuric acid electrolyte which carries the charge between the

two. During discharge, each electrode is converted to lead sulfate, consuming sulfuric acid from

the electrolyte. When recharging, the lead sulfate is converted back to sulfuric acid, leaving a

layer of lead dioxide on the cathode and pure lead on the anode. In such conventional “wet”

(flooded) cells, water in the electrolyte is broken down to hydrogen and oxygen during the

charging process. In a vented wet cell design, these gases escape into the atmosphere, requiring

the occasional addition of water to the system. In sealed wet cell designs, the loss of these gases is

prevented and their conversion back to water is possible, reducing maintenance requirements.

However, if the battery is overcharged or charged too quickly, the rate of gas generation can

surpass that of water recombination, which can cause an explosion.

In “valve regulated gel” designs, silica is added to the electrolyte to cause it to gel. In “absorbed

glass mat” designs, the electrolyte is suspended in a fiberglass mat. The latter are sometimes

referred to as “dry” because the fiberglass mat is not completely saturated with acid and there is

no excess liquid. Both designs operate under slight constant pressure. Both also eliminate the risk

of electrolyte leakage and offer improved safety by using valves to regulate internal pressure due

to gas build up, but at significantly higher cost than wet cells described above.93

Lead-acid is currently the lowest-cost battery chemistry on a dollar-per-kWh basis. However, it

also has relatively low specific energy (energy per unit mass) on the order of 35 Wh/kg and

relatively poor “cycle life,” which is the number of charge-discharge cycles it can provide before

its capacity falls too far below a certain percentage (e.g., 80%) of its initial capacity. While the

low energy density of lead-acid will likely limit its use in transportation applications, increase in

cycle life could make lead-acid cost-effective in grid applications.

The cycle life of lead-acid batteries is highly dependent on both the rate and depth of discharge

due to corrosion and material shedding off of electrode plates inside the battery. High depth of

discharge (DoD) operation intensifies both issues. At 100% DoD (discharging the battery

completely) cycle life can be less than 100 full cycles for some lead-acid technologies. During

high rate, partial state-of-charge operation, lead sulfate accumulation on the anode can be the

primary cause of degradation. These processes are also sensitive to high temperature, where the

rule of thumb is to reduce battery life by half for every 8°C (14°F) increase in temperature above

ambient.94 Manufacturers’ warrantees provide some indication of minimum performance

expectations, with service life of three to five years for deep cycle batteries, designed to be mostly

discharged time after time. SLI batteries in cars have expected service lives of five to seven years,

with up to 30 discharges per year depending on the rate of discharge. Temperature also affects

93

94

D. Linden and T. Reddy, Handbook of Batteries, 3rd ed., McGraw Hill, New York, 2002.

Ibid.

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capacity, with a battery at -4°C (25°F) having between roughly 70% and 80% of the capacity of a

battery at 24°C (75°F).95

For many applications of lead-acid batteries, including SLI and uninterruptible power supply

(UPS), efficiency of the batteries is relatively unimportant. One estimate for the DC-DC (direct

current) efficiency of utility-scale lead acid battery is 81%, and AC-AC (alternating current)

efficiency of 70%-72%.96

High Temperature Sodium-Beta

Sodium-beta batteries use molten (liquid) sodium for the anode, with sodium ions transporting the

electric charge. The two main types of sodium-beta batteries are distinguished by the type of

cathode they use. The sodium-sulfur (Na-S) type employs a liquid sulfur cathode, while the

sodium-nickel chloride (Na-NiCl2) type employs a solid metal chloride cathode. Both types

include a beta-alumina solid electrolyte material separating the cathode and anode. This ceramic

material offers ionic conductivity similar to that of typical aqueous electrolytes, but only at high

temperature. Consequently, sodium-beta batteries ordinarily must operate at temperatures around

300°C (572°F).97 The impermeability of the solid electrolyte to liquid electrodes and its minimal

electrical conductivity eliminates self discharge and allows high efficiency.98

Technical challenges associated with sodium-beta battery chemistry generally stem from the high

temperature requirements. To maintain a 300°C operating point the battery must have insulation

and active heating. If it is not maintained at such a temperature, the resulting freeze-thaw cycles

and thermal expansion can lead to mechanical stresses, damaging seals and other cell

components, including the electrolyte.99 The fragile nature of the electrolyte is also a concern,

particularly for Na-S cells. In the event of damage to the solid electrolyte, a breach could allow

the two liquid electrodes to mix, possibly causing an explosion and fire.100

Na-S batteries are manufactured commercially for a variety of grid services ranging from shortterm rapid discharge services to long-term energy management services.101 The DC-DC efficiency

is about 85%. Calculation of the AC-AC efficiency is complicated by the need for additional

heating. The standby heat loss for each 50 kW module is between 2.2 and 3.4 kW. As a result of

this heat loss, plus losses in the power conversion equipment, the AC-AC efficiency for loadleveling services is estimated in the range of 75%-80%.102 Expected service life is 15 years at

90% DoD and 4500 cycles.103

95

EPRI/DOE, 2003.

This estimate is of the Chino 10 MW battery with 96% inverter efficiency. EPRI/DOE, 2003.

97

X. Lu et al., “Advanced Materials for Sodium-Beta Alumina Batteries: Status, Challenges, and Perspectives,”

Journal of Power Sources, No. 195, 2010, pp. 2431-2442.

98

D. Linden and T. Reddy, 2002.

99

Ibid.

100

X. Lu et. al, 2010.

101

B. Norris, J. Newmiller, and G. Peek, NAS Battery Demonstration at American Electric Power, SAND2006-6740,

Sandia National Laboratories, 2007. NGK sells a “PS” module rated for continuous discharge for load-leveling

applications and a “PQ” module rated for short discharge applications such as frequency and contingency reserves.

102

75% from Nourai, 2007 and 80% from A. Nourai, V.I. Kogan, and C.M. Schafer,“Load Leveling Reduces T&D

Line Losses,” IEEE Transactions on Power Delivery, Vol. 23, No. 4, 2008, pp. 2168–2173.

103

EPRI/DOE, 2003.

96

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The primary sodium-beta alternative to the Na-S chemistry, the Na-NiCl2 cell (typically called

the ZEBRA cell).104 Although ZEBRA batteries have been under development for over 20 years,

they are only in the early stages of commercialization.105 Nickel chloride cathodes offer several

potential advantages including higher operating voltage, increased operational temperature range

(due in part to the lower melting point of the secondary electrolyte), a slightly less corrosive

cathode, and somewhat safer cell construction, since handling of metallic sodium—which is

potentially explosive—can be avoided.106 They are likely to offer a slightly reduced energy

density.107

Liquid Electrolyte Flow Batteries

Flow batteries use liquid electrolytes that are pumped through a “stack” which contains either an

ion-exchange membrane or an electrode array. Energy is stored primarily in active materials

dissolved into electrolytes, which are stored externally and passed through the electrodes during

charge and discharge. The electrodes are separated by an ion exchange membrane to keep the

cathode-side and anode-side electrolytes separate. The advantage of flow battery technology is

that the power component (MW) and the energy component (MWh) can be sized independently,

with the electrolyte materials held in large external storage tanks for multi-MW applications. The

power rating of a flow battery is determined by the size of the battery stack, and the energy rating

by the size of the electrolyte storage tanks.

As stated earlier in this section, the two main types of flow battery in early commercialization are

vanadium redox and zinc-bromine. Vanadium redox batteries are part of a large class of flow

batteries using an ion-exchange membrane similar to that used in fuel cells. (Hence, they are

sometimes called regenerative fuel cells.) In a redox flow battery, the active materials are always

dissolved in the electrolyte. While a number of electrolyte materials have been proposed or are

under development, vanadium has the greatest degree of commercialization, with a number of

installations and active vendors. Other redox flow battery chemistries have yet to be

commercialized but have the potential to provide cost-effective alternatives and are discussed in

the R&D section of this chapter.

The redox flow battery offers several benefits over conventional batteries. First, the amount of

energy storage available is limited only by the size of the tanks and the amount of electrolyte

available. An additional benefit is avoiding the need to correct for differences among individual

battery cells (cell balancing) typical in multi-cell storage configurations using other battery

technologies, which allows for relatively simple construction of higher voltage redox batteries.

Redox flow batteries can also be recharged mechanically by replacing the electrolyte. The

disadvantages generally stem from the complexity of electrolyte pumping and storage; control

system complexity; and relatively low specific energy and energy density (typically less than that

of lead acid cells). The use of an ion-exchange membrane introduces other challenges and

benefits. Leakage across the membrane is possible, causing mixing of the cathode-side and

anode-side electrolytes. In a vanadium redox battery, the impact of leakage is mitigated by the

104

The name derives from the Zeolite Battery Research Africa Project which invented the technology in 1985.

See, for example, Daimler AG, “The New Mercedes-Benz A-Class E-CELL,” web page, September 15, 2010,

http://media.daimler.com/dcmedia/0-921-941776-1-1331063-1-0-0-0-0-0-11702-614316-0-1-0-0-0-0-0.html; J.L.

Sudworth, “The Sodium/Nickel Chloride (ZEBRA) Battery,” Journal of Power Sources, Vol. 100, 2001, pp. 149-163.

106

C. Dustmann, “Advances in ZEBRA Batteries,” Journal of Power Sources, Vol. 127, 2004, pp. 85-92.

107

D. Linden and T. Reddy, 2002.

105

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fact that both electrolyte materials are identical. However, using alternative chemistries, mixing

can seriously degrade performance. The challenge of cost-effectively manufacturing reliable ionexchange membranes is cited as a primary reason for the limited development of some of the

earliest flow battery chemistries. The claimed calendar lifetime for a vanadium battery stack is at

least 10 years with more than 10,000 cycles.108

The primary alternative to redox flow batteries is a flow battery where at least one of the active

materials is plated onto an electrode. Several chemistries have been investigated, with zinc

bromine being the most well developed. During charging, zinc is plated onto the negative

electrode. When discharging zinc is dissolved into the electrolyte. This configuration benefits

from a low-cost electrolyte and a slightly improved energy density, but problems can arise with

formation of sharp particulates during zinc plating. A 2003 estimate of cycle life is about 2000

cycles or 6000 hours of continuous operations.109 Commercial units have cycle life ratings from

1500 to over 2000 cycles.110

The DC-DC round-trip efficiency for flow batteries is in the range of 70%-80%.111 However, as

with all batteries, DC-AC losses reduce this efficiency further, and flow batteries have additional

parasitic loads of electrolyte pumps. As a result, estimates of AC-AC roundtrip efficiency is in the

range of 65%-72%.

Cost

The ability to estimate the capital cost of batteries varies by commercial maturity and application.

Lead acid batteries are the most mature and lowest-cost technology with one 2008 estimate in the

range of $150-$200/kWh.112 To this must be added the costs of a storage installation equipment in

addition to the battery cell itself (balance of plant), which were estimated at $265/kW in 2003;

however, more recent estimates are considerably higher.113 On a cost basis alone, this makes leadacid batteries appear competitive for a wide variety of applications. However, this total cost must

be placed in context of the relatively short cycle life of current lead-acid technology, restricting its

use to applications which require few actual cycles per year.

One 2009 estimate for the cost of NaS battery is about $350-$400/kWh and about $450-$550/kW

for the balance of plant.114 This corresponds to about $2970-$3450/kW for a 7.2 hour device. It is

108

EPRI/DOE, 2003.

EPRI/DOE, 2003. Data from current vendors indicate longer lives are possible with periodic maintenance. Since

zinc-bromine, like all flow battery technologies are in the early stages of commercialization, additional field trials will

be necessary to establish calendar and cycle life estimates.

110

P. de Boer, and J. Raadschelders, “Flow Batteries,” white paper prepared for Leanardo ENERGY, June 2007,

http://www.leonardo-energy.org/webfm_send/164; G. P. Corey, “An Assessment of the State of the Zinc-Bromine

Battery Development Effort,” RedFlow Limited, Brisbane, Australia, October 2010, http://www.redflow.com.au/docs/

assessment__zinc_bromine_battery.pdf.

111

EPRI/DOE, 2003; D. Rastler,“New Demand for Energy Storage,” Electric Perspectives, September/October 2008

http://www.eei.org/magazine/EEI Electric Perspectives Article Listing/2008-09-01-EnergyStorage.pdf.

112

D. Ton, et al. “Solar Energy Grid Integration Systems – Energy Storage (SEGIS-ES),” U.S. Department of Energy

and Sandia National Laboratories, May 2008, http://www1.eere.energy.gov/solar/pdfs/segis-es_concept_paper.pdf.

113

EPRI/DOE, 2003.

114

D. Rastler, “Overview of Electric Energy Storage Options for the Electric Enterprise,” slide presentation, Electric

Power Research Institute, Palo Alto, CA, 2009, http://www.greentechmedia.com/images/wysiwyg/News/

EPRIEnergyStorageOverview%20DanRastler.pdf

109

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unclear whether or not this estimate considers potential deployment at scale. Another estimate

from the first large NaS project in the United States claims that when initial project costs are

removed, NaS would cost about $2500/kW for a 7.2 hour device (Figure 5).115

Figure 5. Cost Components for an Installed NaS System

Source: A. Nourai, 2007.

Notes: PCS=Power Control Station. The factory-to-site shipping costs are considerable: “The total

transportation costs from factory to site, including customs and handling charges plus a few other items shipped

by air, translated to approximately $140/kW.”

Limited cost estimates are available for both vanadium and zinc-bromine batteries. Lack of recent

large-scale installations also makes cost estimates highly uncertain. A 2004 estimate for the cost

of a vanadium flow battery is $236/kWh and $566 for the balance of plant, or about $2450/kW

for an 8-hour device.116 While total costs are not provided, a 2010 estimate for a proposed

vanadium plant provides a cost breakdown of 35% electrolyte, 9% membrane, 17% other stack,

and 5% power control station, with the remaining 34% for engineering, management, and balance

of plant.117

A 2003 estimate118 for Zinc-Bromine is $353/kWh and $576 for the balance of plant, or about

$3400/kW for an eight hour device, while a 2011 manufacturer’s estimate is about $780/kWh for

the entire system, with projected costs of about $400/kWh for a next generation system at “full

production levels.”119 More recent, unpublished estimates place flow battery costs in excess of

$4000/kW for multi-hour devices, while a 2009 EPRI estimate places the projected costs of a

generic flow battery at $1545-$3100/kW for a 4 hour device.120 Manufacturing and deployment at

115

A. Nourai, 2007.

Electric Power Research Institute and U.S. Department of Energy (EPRI/DOE), EPRI-DOE Handbook Supplement

of Energy Storage for Grid Connected Wind Generation Applications, No. 1008703, December 2004.

117

. J.F Startari, “Painesville Municipal Power Vanadium Redox Battery Demonstration Project,” slide presentation,

Ashlawn Energy, Painesville, OH, 2010. http://www.sandia.gov/ess/docs/pr_conferences/2010/startari_ashlawn.pdf

118

EPRI/DOE, 2003.

119

The manufacturer also projects future costs at “grid scale production” of close to $100/kWh. ZBB 2011 “Investor

Presentation,” http://www.zbbenergy.com/investor-relations/presentations/.

120

D. Rastler, 2009.

116

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scale will be necessary to establish better estimates of flow battery costs. Deployment at scale

will also be needed to determine longevity as well as operation and maintenance requirements.

Some perspective on the overall cost reduction potential for certain battery types is provided in

one recent analysis of different battery chemistries.121 Figure 7 shows the cost of various

chemical pairs (couple elements) for battery types considered in this chapter. For many types,

such as the NaS battery the cost of raw materials is, theoretically, a trivial component. Most

others have couple element costs of about $10/kWh or less (assuming costs in the study year).

One chemistry that stands out as a potential cost challenge is vanadium, with the couple element

costs close to $100/kWh, primarily due to the high cost of vanadium. Figure 6 also shows goals

for the Department of Energy’s ARPA-E grid storage and electric vehicle (EV) programs. The

ARPA-E goal of $100/kWh appears to include both the power and energy component, including

power conditioning equipment, installation, and other balance of system components. This would

correspond to $800/kW for a device with eight hours of storage capacity, which would require

battery costs of well below $100/kWh considering balance of system is currently a considerable

fraction of $800/kW. The goal for the EV battery pack is discussed in the next chapter.122

Figure 6. Extraction Costs of Elements in Grid Battery Couples

Source: C. Wadia, P. Albertus, and V. Srinivasan, 2011.

Notes: Calculated from U.S. Geological Survey element prices. The EV battery pack goal of $100/kWh includes

only the cost of the battery itself.

121

C. Wadia, P. Albertus, and V. Srinivasan, “Resource Constraints on the Battery Energy Storage Potential for Grid

and Transportation Applications,” Journal of Power Sources, Vol. 196, 2011, pp. 1593-1598.

122

U.S. Department of Energy, Grid-Scale Rampable Intermittent Dispatchable Storage (GRIDS), DE-FOA-0000290,

CFDA Number 81.135, poncept paper, April 23, 2010.

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Research and Development

The federal government, industry consortiums, and other groups support R&D efforts across a

range of battery technologies, including a number of emerging battery chemistries that do not fall

under the categories summarized above. The latter include alkaline, sodium ion, and liquid metal

batteries. To illustrate these efforts, Tables 4 and 5 list federal battery R&D activities supported

by ARPA-E and ARRA, according to general battery type and chemistry. Activities associated

with specific battery types are discussed below. Note that these tables include several lithium-ion

and metal-air batteries, both of which are thought of as prime candidates for transportation

applications. (These two battery types are discussed in greater detail in the following chapter.)

However, some forms may be more suitable for grid applications and supported through gridoriented R&D efforts.

In addition to federally supported efforts, there are grid battery technology R&D activities funded

by other groups and among private companies (whose details may be proprietary). For example,

the Stanford University’s Global Climate and Energy Project has awarded grants to outside

researchers for new grid-oriented battery technologies including enhanced electrolyte and solid

oxide flow battery systems.123

Table 4. ARPA-E Supported Activities on Grid Battery Storage in FY2010-2011

Lead Research Organization

Battery Type /Chemistry

Funding ($Millions)

CUNY Energy Institute

Other (Zinc-Manganese Oxide)

3.00

Fluidic Energy, Inc.

Metal Air (Zinc Air)

3.00

General Atomics

Lead-Acid/Flow

1.99

Lawrence Berkeley National Lab

Flow (Hydrogen-Bromine)

1.59

Primus Power

Flow (Zinc Chloride-Zinc Chloride)

2.00

United Technologies Research Center

Flow (To Be Determined)

3.00

Univ. of Southern California

Metal Air (Iron-Air)

1.46

Arizona State University

Metal Air (Zinc-Air)

5.13

EaglePicher Technologies

Sodium-Beta (Sodium Sulfur)

7.20

Envia Systems

Lithium-Ion

4.00

Inorganic Specialists, Inc.

Lithium-Ion

2.00

Massachusetts Institute of Technology

Other (Liquid Metal)

6.95

Source: Sandia National Laboratories, “ARPA-E Awarded Projects in Energy Storage,” web page, 2010,

http://www.sandia.gov/ess/docs/ARPA-E_FY10-11_combined.pdf.

123

Mark Shwartz, “GCEP Awards $3.5 million for Energy Storage Research,” Stanford Report, Stanford University,

September 23, 2011.

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Table 5. ARRA Supported Grid Battery Demonstrations

Awardee

Battery Type /Chemistry

Size (Power/Energy)

Funding ($Millions)

Duke Energy Business Services

TBD

24 MW

$21.81

Primus Power

Flow (Zinc-Chloride)

25 MW (75 MWh)

$14.00

Southern California Edison Co.

Lithium-Ion

8 MW (4 hrs)

$24.98

City of Painesville

Flow (Vanadium Redox)

1 MW (6-8 MWh)

$4.24

Detroit Edison

Lithium-Ion

25 kW (20 units, 50 kWh

each)

$5.00

East Penn Manufacturing Co.

Lead-Acid (with ultracapacitor)

3 MW (1-4 MWh)

$2.54

Premium Power Corp.

Flow (Zinc-Bromine)

5-500 kW (6 hrs)

$6.06

Public Service Company of NM

Lead-Acid

500kW (2.5MWhr)

$2.51

Aquion Energy, Inc.

Other (Sodium-Ion)

10-100 kWh

$5.18

Ktech Corp.

Flow (Iron-Chromium)

250kW (1MWhr)

$4.76

Seeo, Inc.

Lithium-Ion

25 kWh

$6.20

Source: Sandia National Laboratories, “ARRA Energy Storage Demonstrations,” October 13, 2010,

http://www.sandia.gov/ess/docs/ARRA_StorDemos_10-13-10.pdf.

Lead-Acid

The primary disadvantages of lead-acid batteries are their poor energy density and short cycle

life. Marginal gains to specific energy can be achieved by improving the active material and

design of the electrodes, but will always be limited by the chemistry’s relatively low theoretical

boundaries. Cycle life potentially can be increased by adding carbon in various forms to either the

anode or cathode,124 or by replacing the traditional lead acid anode with a carbon anode similar to

that of an asymmetrical electrochemical capacitor.125 Another approach to improve cycle life is

the so called lead acid flow battery, in which lead is dissolved in an aqueous methanesulfonic acid

electrolyte. This system differs from traditional flow batteries by using of just one electrolyte and

the subsequent lack of troublesome electrolyte separators.126 If long deep discharge cycle life is

proven and costs can be kept low, these technologies may be promising for grid-based bulk

electricity storage applications.

Sodium-Beta

There are several R&D efforts associated with sodium-beta batteries. One is to develop a stacked

planar cell design that could cut cell costs in half.127 This departure from the traditional tubular

124

P.T. Moseley et al., “The Role of Carbon in Valve-Regulated Lead-Acid Battery Technology,” Journal of Power

Sources, Vol. 157, 2006, pp. 3-10; Enos, D., Hund, T., Shane, R. (2010) “Carbon-Enhanced VRLA Batteries.” DOE

Energy Storage Systems Research Program Annual Peer Review. http://www.sandia.gov/ess/docs/pr_conferences/

2010/enos_snl.pdf

125

L.T. Lam and R. Louey, “Development of ultra-battery for hybrid-electric vehicle applications,” J. Power Sources

158: 1140-1148 (2006); P.T. Moseley et al (2006).

126

Hazza, et. al., “A Novel Flow Battery: A Lead Acid Battery Based on an Electrolyte with Soluble Lead(II). Part I:

Preliminary Studies,” Phys. Chem. Chem. Phys., 2004 (6) 1773-1778.

127

Pacific Northwest National Laboratory, “EaglePicher Teams with PNNL to Transform Large-Scale Energy

(continued...)

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Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

design has the ability to increase specific energy and power (the latter a limiting factor for the use

of these batteries in many applications), improve packing efficiency, and improve modularity. It

also presents the opportunity to address long term corrosion problems. However, planar designs

face sealing and material selection challenges.128 Other R&D efforts focus on low temperature

sodium based chemistries using new cathodes and/or sodium ion conductors.129 While cost is a

major R&D focus, longevity and reliability still have room for some marginal improvement using

improved cell configurations and designs.

Liquid Electrolyte

Flow battery R&D efforts include improving the performance of commercially available products

and developing new chemistries. For vanadium redox cells, research seeks to decrease the

vanadium required a

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