Imagine if a utility’s generation portfolio was comprised of only baseload generation, rather than a mix of baseload, intermediate, and peakers. While on paper this could lead to claims of the cheapest individual generator costs, as a portfolio the lack of flexibility would likely lead to higher realized costs and lower levels of service for utility customers.
Now imagine if a utility’s only technology option for adding carbon-free energy to its generation portfolio was solar. While early solar installations would indeed lower carbon emissions at a reasonable cost, incremental investments would have an ever-declining impact as less-efficient balancing resources were brought online to manage solar’s intermittency.
For the grid to deliver low-cost reliable electricity, neither solution alone is sufficient. The same paradigm holds true for energy storage: you need a team of assets with varying strengths working together. There is no question that lithium-ion batteries have proven how storage can enhance the generation and delivery of energy; indeed, storage is widely seen as the glue that will connect renewable generation to a cleaner energy future. However, since today’s storage applications are defined by lithium’s capabilities they are also constrained by lithium’s limitations. A more diverse mix of storage technologies working together would enable a broader range of applications, leading directly to benefits in costs, resiliency and sustainability.
Several new storage technologies are currently in development and could broaden capabilities well beyond those of lithium-ion batteries.
Investment in new stationary storage technologies is booming. According to the Volta Foundation, over $1.2 billion dollars was raised in 2021 alone by companies focused on developing emerging storage technologies including flow batteries, iron air batteries and compressed air. With utilities targeting broad adoption as soon as 2025, the first demonstration projects are being delivered now. Use cases include delivering longer duration storage and bearing the brunt of ancillary services through massive cycling.
Long-duration applications are particularly in focus, with newly established state and federal programs accelerating product development in this area. For example, the Department of Energy recently announced its $505M “Long-Duration Energy Storage for Everyone, Everywhere” program, and California has approved significant incentives for long-duration non-lithium energy storage projects within its $8 billion 2022 Clean Energy budget.
Vanadium Flow Batteries (VFBs) are the ideal first non-lithium storage technology to include in integrated resource planning and non-wires alternative assessments.
VFB technology opens the door to new storage applications by scaling to longer durations at smaller incremental costs and by operating over extremely long operating lives of 30 years or longer. In addition, VFBs’ unlimited cycling capabilities and flexibility to operate across a range of power and duration settings allows them to stack revenue sources on one project and vary dispatch strategies as market signals change. Finally, their lack of fire risk offers greater siting flexibility and can accelerate permitting.
Because of their ability to cycle heavily and last for decades, VFBs already enjoy a Levelized Cost of Storage (LCOS) lower than lithium batteries in many applications. Surveys of various companies’ product roadmaps suggest that LCOS for VFBs is expected to further decline as much as 70% over the next few years, as the technology and manufacturing matures. So including them in integrated resource planning and non-wires alternative assessments isn’t simply a theoretical exercise. Rather, it can very well deliver real value to utility customers within current resource planning horizons.
To ferret out new storage applications start with the customer in mind—not the technology.
Focusing on the highest value applications for a particular market can clarify and improve analysis of where storage fits best. Across most markets, long-duration energy storage (typically eight to twelve hours of storage), and shorter-duration heavy cycling to ensure power quality show up again and again as two high potential battery applications. In markets facing a significant duck curve due to heavy solar and wind penetration, fully cycling the battery twice a day – during both the morning and evening ramp – offers a compelling benefit.
As the significant rise in renewable energy resources across markets continues and likely accelerates, storage will help ensure that those resources contribute positively to a cleaner, more resilient energy future. To fully maximize this potential, a diverse set of underlying technologies will be required. In serving different applications, VFBs are not going to fully replace lithium-ion. Rather, the two technologies will carve out complimentary application spaces that create more value together as a team.
For utility leaders, resource planners, and policymakers, the benefits of considering emerging storage applications sooner than later could make a major difference in balancing utilities’ emerging sustainability objectives while continuing to deliver low-cost, reliable power.
