The Decade of Utility-Scale Batteries

As we begin a new decade, a hot topic in the Australian renewable market is the potential of energy storage. A lot of people predicted that utility-scale batteries will significantly evolve over the next decade. While there have been some notable grid-scale storage projects to date, it’s clear that the grid-scale storage market is still in its infancy in Australia. Developing stand-alone wind and solar projects will enable Australia to continue to improve its renewable energy resources but it will not be enough to support the grid in the long term. Renewable Energy projects combined with storage will improve long-term financial feasibility and will also improve grid strength and reliability.

The most common and easiest method of providing storage to a solar or wind project is by adding a battery energy storage system (BESS). Put simply, Batteries can store energy during times of low demand and release at times of peak demand. Moreover, batteries can also act as a power back up if there are issues with the grid or a power outage. As recently reported, South Australia’s big batteries earnt over $1 million across a two-day period in December. This highlighted not only how financially lucrative a BESS can be but also how well utility-scale batteries can support the grid. With the recent success of the big batteries, it begged the question of what battery technologies will we see dominate, what new technologies will emerge and how will this affect the job market?

Lithium-Ion Battery

Arguably the most popular form of battery storage is the Lithium-ion battery. It is typically used in electric vehicles (EV), households and grid-scale batteries. Australia is home to the world’s largest lithium-ion battery, located at The Hornsdale Power Reserve in South Australia, built by Tesla and managed by Neoen. As announced last year, the battery will have its storage and output extended by 50 percent which will improve the grid stability for the state.

So why is Lithium-ion so well-known among other utility-scale batteries and what are the benefits? There are four main performance factors which classify batteries – Energy Density, Power Density, Calendar Life and Cycle Life. Lithium-ion scores well in all four areas and is also currently cheaper than its counterparts. It is also currently seen to have a lower risk profile than other technologies both financially and from a health & safety perspective. Some accredit the affordability and development down to the growing EV market which uses where lithium-ion. Another factor that makes the lithium-ion battery popular is its ability to release a high amount of energy in a short period of time which is typically 1-4 hours. It is predicted by many across the sector that the majority of grid-scale storage projects delivered over the next 1-4 years will be lithium-ion however we will start to see other technologies emerge and compete.

Flow Battery

The battery technology that most believe will strongly develop over the next 2-3 years is the flow battery. Flow batteries use a very different form of chemistry to lithium-ion as they rely on liquid electrolytes stored in external tanks separated by a membrane, and are then pumped through electrochemical cells. The way in which the chemistry works enables the battery to be able to discharge at 100 percent without any negative effect on the battery’s performance. Therefore, the battery will have a better cycle life than its counterparts.

One of the other major attractions to flow batteries is the ability to discharge energy for over four hours which will be a huge benefit to the grid. The battery is also highly recyclable as other sectors could use most of its parts easily. The flow battery has performed well in the off-grid market but it is still unproven in grid-scale projects. However, It was announced mid last year that we will see a 50MW/200MHW vanadium flow battery storage system which will be built by CellCube and developed by Pangea which will be operational in late 2020. If the project is successful it could be a tipping point for flow batteries on the Australian grid-scale market. There are some other companies who many people believe will be very influential in developing their flow battery technology and are confident projects will start to move into delivery in the next 2-3 years.

Lead Acid Battery

Another battery of interest is the lead-acid battery which would be one of the oldest and most reliable forms of battery storage. It has been developed for over 100 years and typically is a slow charge and discharge however using Carbon as an additive does now speed up this process. The battery can be scaled up simply and therefore we may see the battery be used for larger-scale projects. It has already been used commonly in off-grid projects but with its scalability, we may see the battery used in the utility market. The main benefits include being extremely durable, it can be overused, used at very high temperatures and doesn’t shut down. It is very good for reserve power as it can be run dead and still not be damaged.

Whilst only 3 battery types have been listed it is likely many other forms of battery storage will develop over the decade. What is clear is that utility-scale batteries will be a very interesting and growing sector, which will lead to great improvements in Australia’s electricity grid and the performance of renewable energy assets. Whilst many are predicting a strong emergence of flow batteries in the next 2-4 years it is believed that we won’t see a specific technology truly dominate as each battery has its own unique benefits. It is important to understand that one battery type is simply not better than the other and when selecting a battery technology we must assess several variables that will influence the battery technology that is most suited to that particular project.

The Job Market

BESS will vastly develop over the next decade and we will soon see a large number of utility-scale batteries projects move into detailed planning and delivery. This will drive demand for energy storage specialist engineers; specifically Proposal Engineers, Design Engineers, Analysts and Application Engineers (Solution Architects). Employees with experience working on grid-scale Renewable Energy projects will have transferable skills for this emerging market and especially those with strong technical grounding or energy market appreciation.

Employers will largely be Renewable Energy developers, EPC contractors, engineering and management consultancies as well as companies closer to the technology including battery manufacturers, software companies and system integrators. Employees with a well-rounded knowledge of the energy markets and trading environment combined with analytical and forecasting skills will specifically be in high demand as the market takes off.

This is a hugely dynamic pocket of the Renewables market and one to keep an eye on for all parties involved in the sector – from a business and career perspective.

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