Long Duration Storage, the solution to the energy crisis
With European and British energy markets currently in a state of flux and the energy landscape seemingly boiling over, questions abound about how to make the best of the situation.
However, for Alan Greenshields, European Director of ESS Inc., renewables and long duration storage provide a lens through which one can spot opportunity in the face of such straits.
By Yusuf Latief
What is your take on the current bills crisis in the UK? And in your opinion, what has led to this perfect storm?
It’s gas and gas and gas.
The UK has done a tremendous amount of progress in renewables. But according to the last numbers, they still generate around 36% of their electricity from gas.
There is also a massive price spike in the wholesale prices of gas which directly impact gas customers for gas heating, but also indirectly, heat electricity prices. This is because a significant amount of it goes into intergeneration, especially as the role of gas is to take up the slack in the system.
Because of this, there’s a disproportionately large impact if the marginal cost of energy is driven by the gas price.
What are your predictions about how the situation will unfold over the next few years?
I think we’re going to have two very difficult years, because any measures to ease the crisis will have a significant lead time. There’s a two-year period where several measures can be taken, but it’s extremely difficult to do anything significant short term.
The only thing which can be done short term is conservation, reducing energy consumption where we can.
The problem with this is that politicians around the world have already asked consumers to do that to the extent possible.
But in terms of the supply side, it’s hard to do much too quickly.
How can we mitigate this crisis while increasing renewables and storage?
From a geographical point of view, renewables are the most secure sources of energy one can have. They’re not imported, they’re coming straight to you.
So the increased use of renewables is for sure one of the most effective ways to protect against the cost of imported commodities.
The second part of that, though, is that one has to look at the move to renewables in two stages:
- The early stages, which is where most economies are, can integrate renewables into a grid, which has a significant amount of conventional generation – in particular gas generation – by using gas generation as compensation to balance supply and demand. That varies depending on the precise structure of the energy economy. But typically, that threshold is probably around about 30%.
- Above 30% leads to a situation where renewables can also take on that function. And up to 30% of the principle storage task is helping keep the grid stable, keeping frequency and voltage intolerance above 30%. It’s more about matching fundamental supply and demand. And that can’t be done without long duration storage.
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What scale of long duration storage will be needed going forward?
The Long Duration Energy Storage Council actually looked at this and concluded that the amount required for global complete decarbonisation was between 85 and 140TWh.
For Europe as a whole, this numbers roughly 20TWh. For the UK, for full decarbonisation, single digit terawatt hours are needed. But there will always be some variation in these numbers.
The principal source of this variation is based on how big of a role one assumes green hydrogen will play in the future. If the assumption is that green hydrogen costs can be brought down dramatically so that it becomes a cheap and plentiful material, less long duration storage would be needed. But if it is believed that duration storage is a more cost effective solution, it will be a larger number.
One should, however, assume that long duration energy storage, certainly for intraday storage, is more cost effective than using hydrogen.
What is your opinion on the policy side of things?
Policy plays a crucial role.
For long duration storage, things like capacity markets are really important. The issue with power grids stems when providing multiple functions.
The main problem with storage is making sure that the people who own assets are the ones who are also getting the benefits.
For example, capacity markets are a very useful tool for doing that because there are things we take as granted. We currently do have storage, but we have it in the form of burning gas, or coal or oil when we need it. And so we’ve taken that function for granted.
And in the current scheme of things, because there’s no penalty for using fossil fuels, we treat this instant availability of energy as something for free – and it’s not for free. A price has to be attached to this to encourage people to build the assets required.
What’s also needed are incentives to get the ball rolling. And there have been some mechanisms that have been successfully tried, like cap and floor, where regulators can encourage specific asset classes to be built.
And what’s important when getting to cost points is getting to scale. If one looks at the oil and gas industry, it’s been slowly built up over more than 100 years.
We have to get to scale in alternative means of delivering the same much, much quicker than that – we can’t wait 100 years.
Also of interest:
Why the grid needs long-duration energy storage
Why storage is the Swiss Army knife of energy transition
Do you think there is sufficient focus on storage for security of supply?
No. There needs to be more. There’s still too many existing players in the utility industry who think of storage as batteries, as small battery packs bought in supermarkets.
And there’s a train of thought that they’re not big enough or tough enough to play a significant role in the energy sector. But there is evidence of the contrary. One just need to look at what’s already been built in the UK, where there have been large deployments of batteries by existing schemes for shorter term durations. They play a very valuable role and they’ve allowed large amounts of new renewable energy to be integrated.
So we can, by analogy, say that for other technologies, which are more appropriate for long duration storage, that the same will happen.
The next question is, is it enough? It’s been enough for short duration storage, because we’re at the point where these markets are well set.
After that – could it have been faster? And the answer is maybe. For long duration energy storage, I think we can afford to be bolder.
10, 15 years ago, the thought that we were generating this percentage of energy from renewables we do now was viewed as a pipe dream. People would laugh at the thought of windmills and solar panels, saying that’s never going to work, and it does work.
So we really have to view long duration storage as the last piece of the puzzle. We’ve got the generation, we’ve got the short term storage, we now need long duration storage so that we can displace more and more natural gas, which is taking up this peaking function. And that is really the next big step.
When you think about the current energy landscape, what makes you excited and what makes you anxious?
I have always been hopeful that renewable energy generation costs would come down, so it’s incredibly exciting to see what’s happening.
Looking at the surge in activity in things like offshore wind, one can see realistic prospects of hydrogen production as a cost effective option.
Hydrogen production is one of the most important use cases for long duration storage because of electrolysing water. One needs to have their electrolyser operating 24/7 and for that, a battery between that and renewable energy sources is really important.
I am quite concerned though about the next two years – not because of renewable energy – but rather about the current geopolitical situation.
With energy becoming weaponised, a solution needs to be implemented. But what this has led to is massive interest in East European states in accelerating everything they’ve been doing in renewable energy and storage.
Had they already been in that situation, the ability of Russia to use this as leverage for political and war purposes would have been severely diminished.
And the big picture right now is that this is happening and we’re past the point of no return.
