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Batteries will revolutionize the energy sector

Blog post   •   Apr 11, 2017 14:51 CEST

Batteries have just begun transforming the mobile and transport sectors. Next in line is the energy sector where batteries can deliver multiple services and at the same time enable the integration of high levels of renewable energy.

In the early 1980s the researcher Akira Yoshino got the task from Sony to develop a safer and better battery for portable camcorders. After a few years intensive work he was able to demonstrate the first safe and commercially usable lithium battery with an energy density three times higher than previous battery types. This was the start of a revolution in batteries in multiple applications.

The lithium battery was in fact instrumental to make it possible to build the IPHONE introduced in 2007 with high-resolution screens lasting for at least one day. 2010 the IPAD was introduced with a capacity as a computer and both these inventions were rapidly followed by similar products. The market uptake was extraordinary fast and the large production volumes resulted in the rapidly increasing price performance of the lithium batteries. The prices have roughly dropped by 90% in ten years.

Today new industries are at the doorstep of a total transformation. First in line is the transport sector where the rapid cost performance in batteries has been instrumental in the development. The pattern from other sectors is repeating itself. From very small volumes the production of electric vehicles is increasing rapidly leading to additional price reductions. In the last two years, the price of battery packs for EV:s has dropped by 50% and major car producers are today predicting that they by 2020 will be able to have electrical vehicles in the market at a price comparable to a diesel car.

So now it is time to look at what batteries could mean for the energy sector. There are many reasons for this:

  • Electricity production is rapidly being transformed towards a higher share of renewable energy with variable production. Local production is becoming a realistic alternative.
  • The use of electricity is generally becoming more efficient e.g. lighting. and this reduces the minimum load. At the same time, the maximum load can be increased e.g. by EV charging. In short, the variability is increasing.
  • Security of supply is becoming more important.
  • The electricity market is by digitalization becoming more advanced and open for hourly metering and billing and aggregated sales of system services from distributed resources.

These changes open new market opportunities for batteries in the energy system. Batteries can deliver multiple services on different levels in the energy system. The end user can reduce energy and power tariffs and distribution companies can reduce their grid investments and new actors will enter the balancing market.

Batteries can increase the possibilities for local electricity production and self-consumption since 24 h storage is realistic. Some international examples. In Australia, the sales of home battery storage increased tenfold and in Germany, more than 40.000 units were installed by the end of 2016. In UK and US, large scale batteries for delivery of system services such as balancing and frequency regulation are in service and under construction.

A recent study, based on actual hourly data from a large database, shows that a battery size of 1 kWh for households and 5-10 kWh for single family homes can reduce the max power by 40%. In addition, other services such as local emergency storage, energy arbitrage and potentially also selling aggregated system services can add to the value of a local storage.

Just imagine a future where 25 % of all cars are electric and thus can add something like 5 kWh additional storage per household and we have a completely new electricity system.

If this sounds remote, remember that we only have seen smartphones for 10 years. If you ask me - batteries will revolutionize the energy sector. With a battery enabled electricity system that is more robust and with local storage for up to 24 hours, and that at the same time allows very high integration of renewable electricity production. And there are more exciting times ahead!

Blog Post by Bo Normark, Technical Advisor to Northvolt, InnoEnergy Thematic Leader for Smart Grid and Energy Storage, and Member of The Royal Swedish Academy of Science