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Summary:

If utilities are looking for a magic bullet for energy storage, which can help add clean power to the grid, prevent outages and manage peak load, they’re not going to find it. At least not among the current storage options, according to a report from Lux Research.

If utilities are looking for a magic bullet for energy storage, which can help add clean power to the grid, prevent outages and manage peak load, they’re not going to find it. At least not among the current options for grid storage, including batteries, compressed air storage, ice thermal energy, flywheels and pumped hydro, according to a report out today from Lux Research.

Lux studied the opportunities for grid storage in three disparate regions — a crowded urban city with a distant power source, a more environmentally conscious community with progressive regulations, and a micro-grid style island ecosystem — and found that the different regions differed greatly in what kind of energy storage would be most economical and beneficial. For example a (hot) region where air conditioning is the major driver of peak load, using ice for thermal energy storage, like the service delivered by Ice Energy, offers a solid option. But in an area where stability is a problem for the grid, lithium-ion batteries provided the best choice.

The research is one indicator that it’s still an early market for grid storage. The current power grid works by constantly balancing supply and demand (generation and load) and must be kept at a specific frequency and perfect balance. Without energy storage that’s a difficult task. When demand spikes, utilities are forced to turn to expensive plants that utilities power up as a last resort as well as generators that can smooth out the load. The whole system is complex, expensive and volatile. PJM, a regional transmission organization serving a population of 51 million, commonly pings generators to control regulation as often as hundreds of times per day.

Lux reports that the early stage of the energy storage market means there’s a lot of opportunities for innovation and disruption. New business models, and new technologies will play a significant role in the growing storage market, says Lux and points to AEP’s community energy storage pilot concept, Beacon Power’s business model of a “vertically integrated electricity storage utility,” and Ice Energy’s next-generation storage-focused demand response service as examples of storage innovation.

For more research on smart grid check out GigaOM Pro (subscription required):

Smart Algorithms: The Future of the Energy Industry

New Opportunities in the Smart Grid

The Developer’s Guide to Home Energy Management Apps

Image courtesy of pcgeek86’s photostream.

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  2. Good report, but this topic is far too important to let a statement like, “…where stability is a problem for the grid, lithium-ion batteries provided the best choice,” go unchallenged. Lithium-ion’s one clear advantage is energy density. For many storage applications — particularly those in which transportability and/or small size are requirements — lithium-ion is a no-brainer, whatever the cost. But why in the world would lithium-ion be the “best choice” for stationary grid-scale apps, especially one like providing stability which will involve 6,000 or more full charge/discharge cycles per year? For this app, a technology that is has unlimited cycle life would seem to be the clear “best choice.” Please dig deeper!

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