CSP to benefit as the worlds appetite for storage increases
With the growth in demand for energy storage as the world adds more renewables, CSP thermal energy storage may well be poised to benefit too. One effect might be to place a market value on the thermal storage that can be included with CSP.
IHS has just released a forecast predicting that there will be more than 40 GW of energy storage added globally by 2022. California alone has mandated a requirement for 1.3GW of storage by 2020, as part of its journey to cutting greenhouse gas emissions to 80 percent below 1990 levels by 2050.
The drivers for California are similar to the drivers globally. Whether it is part of a CSP project or stand-alone batteries, storage helps states or nations optimise and stabilise the grid, reduce transmission investment, and integrate more renewable energy, thus meeting greenhouse gas reduction goals.
“I don’t think it’s an either/or, I think it's an ‘and’ and an ‘and’. Because batteries do different things than say molten salt can, so I guess I don't think of them as an either or,” says California Energy Storage Alliance (CESA) founder Janice Lin. “I think we need both.”
California jump-starting demand
Lin is already seeing a real effect from the California mandate for storage. Membership in CESA has grown 100% in just the last year and a half.
“There's definitely been a very strong response,” she says. “In the RFO (Request for Order) to replace the plants that are going to be retired, they got something like a thousand bids and half of them had storage.”
“The first procurement target under that long-term 1.3 GW procurement is starting December 1,” she explains.
“And meanwhile, in parallel to that RFO, there is a regular biannual winter procurement planning conference. The commission also ordered the utilities; Southern California Edison, San Diego Gas & Electric and PG&E to procure energy storage as part of that regular conference.”
Anything procured through long-term procurement funding would count towards that 1.3 GW target. Every couple of years, a new RFP will be issued until the goal is met.
But California’s mandate will provide just over one of those 40 gigawatts that IHS estimated by 2022. Where will the rest come from?
Other storage markets
“There’s a number of markets internationally where they are mandating storage because they can’t deal with the intermittency that PV provides,” says Smith.
The small island nation of Puerto Rico has already hopped aboard with a requirement that new utility-scale renewables must now include a third of their capacity in storage.
Hawaii doesn't have a mandate per se, but is an island nation like Puerto Rico, reliant on expensive diesel generation, has good DNI, and is buying a lot of storage.
Germany and Japan are also offering inducements to add storage to PV, as is Ontario in Canada.
When batteries work best
Obviously Germany, Japan and Ontario are never going to become CSP markets, with their low DNI. To meet these storage requirements; batteries are likely the only option.
“We have looked at some battery to try to even out the spikes a bit on PV, and some countries have mandated to try and use some kind of RAM control so you don’t have the big dramatic swings, but in that case we are talking about battery storage for seconds or minutes as opposed to hours,” says Kevin Smith, CEO of SolarReserve, which, along with the CSP with storage it is known for, also has “hedged” the immediate solar market with some PV.
Batteries have their advantages. They can be connected directly to the grid, and since they don’t rely on heat generation, they can also be included with any energy source.
CSP storage is cheaper
Because CSP already turns the radiation from the sun into thermal energy to drive turbines to make electricity, storing that thermal energy comes readily. So, unlike PV and other renewables, CSP can incorporate its own energy storage in heat.
“We believe that CSP with thermal energy storage is an integral part of the energy mixture and we see a strong play for CSP with thermal energy storage in the future, in the United States, and the rest of the world as well,” says Ranga Pitchumani, Chief Scientist and Director of the Concentrating Solar Power and Systems Integration programs for the US Department of Energy SunShot Initiative.
And the price of CSP with storage is going down rapidly, from 21 cents a kilowatt-hour in 2010 to just 13 cents today - unsubsidised. Batteries are much more expensive.
“The batteries that I have seen are anywhere from $500 a kilowatt hour and up into to the thousands,” Pitchumani points out, but adds that there are a lot of investments going into batteries.
“We expect that battery costs will also come down as the years progress. But, thermal energy storage is here today to serve the storage needs of the grid cost-effectively.”
A return on investment
The US Department of Energy (DOE) is largely responsible for this trajectory, investing in Loan Guarantees that have spurred unprecedented scaling up of the CSP industry and in technology innovations that have driven down costs, through the SunShot Initiative.
“The storage side of CSP is probably five to ten times cheaper than batteries,” says Smith. “And at large scale you practically need a football field of a battery.”
While acknowledging that at some point, the technology will be competitive, it could be five - or 25 years. “At some point they’ll get there. But battery storage for wind and PV is a ways away.”
“One key difference is cycle life,” he explains. Like pumped hydro storage, there is no cycle limit in CSP storage. “Basically we’re just filling a tank with hot molten salt, and we can do that as much as we want. No limit.
“It’s expected that the cycling will be every single day for the full life of each project. By contrast, batteries still face limits to the number of cycles.”
Meanwhile, while utilities want - and will increasingly need more - storage, none have been eager to offer a premium for what CSP with storage brings to the grid.
But perhaps the increasing adoption of utility-scale storage commercially will finally establish to the utilities the practical market value for CSP’s thermal energy storage – validating the assessment of its worth, as already shown by theoretical studies to date.
To respond to this article, please write to the author, Susan Kraemer.