I am coming back from a hiatus in May. One of the areas that got my attention recently is the emergence of Energy Storage as an area of excellence in the Bay Area. Lawrence Berkeley Lab recently announced of a new accelerator for start-ups in storage technologies and hosted a conference last week on the future of Lithium-Ion technology.
With new Electric Vehicles (EV) coming to market this year -- Telsa shipped its first Model S, not to a Hollywood celebrity but to one VC partner from DFJ -- it has emerged as the most versatile storage technology because of its ability to handle high power and high energy density applications and its good efficiency. Lithium Ion is fairly recent as Sony launched it in the 1990's. It has since spurred different variations.
Lithium Ion batteries for EV's have certainly had its shares of challenge, however. Are new technologies looking at making a splash on the market? Electricity is definitely one tech market to watch out for as it is critical to integrate renewable energies into the grid and meet our daily energy needs. Here are our top-5 picks...
With tens of applications and storage technologies, let's get a "lay of the land" first thanks to the Electricity Storage Association. One of their studies (picture above - courtesy of ESA) measured the efficiency at 80% Depth-of-Charge (DOD). Compressed Air Energy Storage (CAES) for example is being trialed near Toronto, Ontario as an alternative to pumped hydro in urban areas. We considered for our ranking efficiency, versatility, and ability to be integrated into a grid environment.
- Lithium Ion (Li-ion) is our top pick. It came ahead of other electro-chemistries such as Nickel Cadmium. Li-ion has high efficiency, and recent investments in improving electrolytes and separators should lead to much improved safety and density. Historically, density has increased slowly by about 6 to 8% every year -- nothing compared to the rate of improvement in data storage doubling every two years. Yet, the renewed interest in innovation in that sector should significantly accelerate the rate of improvement. Already, costs of battery cells have fallen as the automotive industry is getting ready to switch to the "digital car" era. The battery system in the Model S is about $500 per kWh, and Tesla's CEO has come on record that he sees battery cells coming under $200 per kWh in the future.
- Sodium Sulfur (NaS) comes in second spot. NaS batteries are leading the early market in grid-scale storage, with first deployments in Japan now being replicated in North America. NaS is one type of Liquid Metal batteries. The challenge to integrate renewables into the grid has led reserachers like Dr. Dadoway at MIT to try other elements on the periodic table -- Manganese (Mg) and Antimony (Sb). Its technology got a lot of attention at TED. Dr. Sadoway and his students received since venture backing from Bill Gates and Khosla Ventures to commercialize a 2 MWh in a standard cargo container.
- Metal-Air could be the surprise. Unlike Lithium air that got a lot of attention in the press (IBM's PR machine) but is still questionable, metal air is making strides steadily. Actually, one VC-backed start-up that also received R&D funding from the Department of Energy, is focusing on delivering a grid-scale Zinc-air battery at less than $200 per kWh. This is possible because ambient air is the cathode, and therefore the battery takes less space. Superior density (kWh per cubic meter) leads to a significant cost advantages.
- Supercapacitors are fourth. Supercapacitors remains a bit of the "holy grail" for energy storage because electrostatic charging can be fabricated with semiconductor-like processes. However, it has not shown the versatility and efficiency hoped so far. Nonetheless, it is a very good complement to batteries in transportation or other applications that deal with high-current spikes. Supercapacitors can deliver high power much faster but for shorter duration. We chose high-energy capacitors over fly-wheels because of its immediate application in transportation and because of manufacturing scalability. Fly-wheels will be trialed however in a number of pilots in the US to provide peak-shaving on the grid but they do not meet yet current regulation requirements.
- Hydro pumped power ends the list. It is the most used energy storage technology in the world. Hydro power already represents 3% of the total energy production in the world. Why only #5? There is little innovation to be expected there except to switch the usage of hydro-power plants from load balancing to providing a base load. That would allow to turn off some coal plants like Ontario has done in the last few years by upgrading the hydro power plant near the Niagara Falls. Hydro pumped power still has great days ahead, and we do not believe CAES will take off that easily because of the Not In My BackYard (NIMBY) syndrome that has slowed down the deployment of wind turbines in the past.
The big loser in our count-down is lead acid batteries that are widely deployed in cars for 12 volt generation, but contain toxic materials. New non-toxic batteries may have an opportunity to take over them in the coming years as new vehicles are designed to reduce pollution. A second-hand market is developing in emerging countries to power cell phones, etc. African telecom operator MTN is distributing two thousand lead battery modules.
Let's hope developped countries do not just dumped used and toxic battries in land fields but see an opportunity to provide new solutions to the two billion people who are off the grid. Recycling batteries and managing second-life application is becoming an important part of the energy storage market.