Energy storage demands rising – Pioneer briefing

Increasing volatility in energy supply and demand mean energy storage is becoming a priority for business as well as the public sector, according to a risk briefing held by insurer Pioneer Underwriters in London this week. 

Power grids need to instantaneously balance supply and demand, despite facing regular spikes in energy consumption as well as fluctuating supply, particularly from renewable energy sources such as wind turbines.

Electricity production and fuel costs are volatile, in recent years because of volatility in oil and commodity prices, while there is currently very little energy storage in the supply chain, according to Anthony Price, founder and director of Swanbarton, a UK-based energy storage advisory, speaking at the event in London.

“The cost of keeping the system balanced is phenomenal,” said Price, noting the need to generate surplus power as a reserve, while accurately predicting the future demand curve.

Price noted that the opportunities of energy storage include providing capacity more efficiently and reliably to meet demand, reducing wastage while also enabling integration with renewable energy sources.

Quickly meeting peaks in demand are the time of best use for energy storage, he suggested. “This is the thesis for storage,” Price explained.

Pumped hydro and batteries, of the lead and lithium varieties, are the most mature forms for energy storage technology, he suggested.

Price also cited spin off from other technologies leading to greater focus on energy storage, including electric vehicles.

Increased use of lithium batteries, particularly as storage requires bigger and bigger batteries, could face future regulatory action, he suggested, as their decay and disposal presents environmental risk.

“Lead batteries, though much criticised, are 99% recyclable, which you don’t get with lithium,” he added.

When deciding on locations for energy storage batteries, locating assets alongside power generation facilities can present the risk that damage to one asset will also damage the other, leading to greater effects of outage and consequent business continuity risk.

“Increasingly popular” containerised batteries offer risks such as safety and reliability concerns, particularly if they are moved, Price suggested.

“Taking the Samsung mobile phones fire risk product recall as one example”, said Price, “even a reputable manufacturer can get it wrong”, he said.

“It’s crucial to have a very good monitoring system for energy storage,” Price added.

He also highlighted the “huge commercial risk” attached to relying on a supplier, as many firms are entering the market and prices for the technology are falling – meaning many market entrants will likely fall by the wayside or, under pressure, seek to reduce maintenance costs.

“If [a supplier] only has one product, it’s a very high commercial risk, for replacement and maintenance services for customers if that supplier goes out of business,” Price suggested.

Previous storage projects offer useful lessons, he explained, not least that although the components, taken individually, are often mature and well tested, integrating them together within a system is still prone to risks and failures.

Meanwhile, public sector bodies responsible for granting permissions to put batteries in place are – at present – naïve to some of the risks

“Risks are slipping through the planning process because authorities do not understand the risks at present,” Price warned.

Industry faces an 80% carbon emissions reduction target by 2050, noted Martin Maeso, technical and knowledge director at the Energy Institute, a non-profit industry group for energy sector firms in Europe.

Energy storage, along with smart electricity grids and flexible generation capacity, were the top three challenges for a flexible energy system, according to an annual study conducted by the Energy Institute in 2017.

“Investment and cost” was by far the most cited barrier to take up of energy storage technology, Maeso noted.

Energy storage was cited as the technology with the greatest need for innovation within the sector, according to respondents to the same survey.

This is likely to increase as interest in electric vehicles takes greater hold, Maeso suggested.

Respondents to that study and those in previous years have spared their greatest criticisms for inconsistency in government policy – particularly in supporting new technology, research and innovation.

“There has been a pretty damning response across the board in terms of [policy] on new technology,” said Maeso.

He added that next year the Energy Institute would release its own guidance material for operating energy storage projects, including for fire safety, maintenance risks, disposal, and working with local authorities on planning procedures.