Everything You Need To Know About Energy Storage And Its Importance

What Is Energy Storage?

Renewable energy comes from the world around us. Clean energy can come from solar power, hydro power and wind power, to name a few. By nature, renewable energy generation is intermittent and depends on times of the day or even the year. So what happens when we have lots of sunlight one day, and very little the next? Or perhaps windy one day and still the next? That’s where energy storage comes in.

The Problem

Renewable energy is the way forward in replacing fossil fuels. Fossil fuels are the number contributor to global warming. They are slowly warming up our planet and one day, this will lead to our planet becoming uninhabitable. Not only are fossil fuels bad for the planet, but they are depleting and will one day run out.

Fossil fuels currently dictate how the world works, whether it’s pharmaceutical, transport, living or manufacturing, fossil fuels have a part to play. Renewable energy is the solution to these harmful fuels. The issue here is that renewable energy generation is intermittent, making energy storage vital to making renewable energy the appropriate solution.

The Way Forward

Energy storage occurs in the grid. The grid offers these clean sources of energy as an alternative to fossil fuels. Usually, this clean energy comes from wind, solar and hydro power. Energy storage can act as a generation, distribution or transmission asset.

Supply and Demand

There is the question of supply and demand and this is where energy storage is so important. If you have a solar panel lighting a house that relies on solar power and there is a lot of sun during the day and none at night, the product won’t run very efficiently at night. This means the demand is greater at night than the supply as it is dark and the sun won’t be of much use until the following day. This is where energy storage becomes crucial. Energy storage grids can collect the power during the day and release it evenly, so that the house in question can have power when the demand is higher, at night.

It’s all about balancing the grid to make sure the supply and demand meet each other. If the demand is high when the supply is low, renewable energy won’t work as well as it can when you involve energy storage. The balancing of the grid thanks to energy storage allows the grid system to become more flexible and reliable for the customer.

Energy storage is fast-acting. So fast, in fact, that the asset can balance the grid in real-time. This allows for constant high efficiency for the customer. This speed allows the grid to balance in real-time rather than having to plan or prepare what energy might be collected in a period of time. Renewable energy storage is known for being quicker than its fossil fuel counterpart. This is down to renewable energy’s high-speed storage grid.

Prices Plummeting

It must also be noted that the cost of renewable energy storage is coming down year on year. This is because of the lithium-ion battery. In mid-2021, a lithium battery costs about $140 per kilowatt-hour on average. Currently, this is more expensive than the more cost-competitive combustion ones. This is mainly because of what goes into them. The battery is similar to what is used for your laptop or mobile phone but at a much larger scale. There is also a ‘cathode’ in every cell that helps store and release energy. These cathodes are made of expensive metals such as lithium, cobalt and nickel.

For lithium-ion batteries to start becoming on-par in terms of cost with fossil fuels, the battery cost must reach below $100 per kilowatt-hour. Some say that this could happen by 2024, but this depends on various factors. The replacement of cobalt with nickel is the answer, but this comes with lots of safety adjustments that will be made in time. Simplifying the design of the battery packs will also result in a price drop.

Reaching Zero

Net Zero is an important term when discussing renewable energy. Net Zero refers to the balance between the number of greenhouse gases produced and the amount removed from the atmosphere. This relates to companies and countries alike. Ultimately, Net Zero is going to combat climate change. This is not attainable without energy storage. Net Zero is being tackled by groups all across the world to do so. Full dependence on renewable energy is risky for its users, but with smarter grids, it can be managed effectively. This will only be achieved by investment and support in energy storage.

Energy storage enables us to increase our use of renewable energy and virtually stop the use of fossil fuels altogether. The cost is on its way down and this will continue to attract companies and countries alike to switch to renewable energy. The world wants to aim for Net Zero and this will only occur with energy storage.

Author Bio: Will Coffey is an Investment Analyst: Joined Gore Street Capital in August 2020, working primarily on pipeline acquisitions and management of portfolio assets.

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