The United States and China are in a race to the top of the energy storage game. Last year, the energy storage industry exploded in China, with Wood Mackenzie projecting that the country was poised to completely take over the sector, as its “cumulative energy storage capacity is projected to skyrocket from 489 megawatts (MW) or 843 megawatt-hours (MWh) in 2017 to 12.5 gigawatts (GW) or 32.1GWh in 2024,” a significant increase ”in the installed base of 25 times.” As Oilprice reported in July, “thanks to the country’s major push for storage deployments in the last year, deploying 580MW (1.14GWh) to reach a cumulative market size of 1.07GW (1.98GWh) in 2018, China has already secured its position as the second biggest energy storage market in the Asia Pacific region in terms of deployment, with South Korea coming in first place.”
Since then, a lot has changed. While the U.S. was never far behind China in energy storage deployment, it looks like they’re catching up. Just last month the Financial Times proclaimed in a headline that: “U.S. solar industry powers ahead as investors back batteries.” These batteries are being employed primarily as a complement to solar energy.
While the renewable energy sector is gaining a lot of traction and holds a lot of promise for reducing greenhouse gas emissions and decarbonizing the global economy in time to avoid the fast-approaching tipping point toward catastrophic climate change, wind and solar energy have a major drawback: they’re variable. Being dependent on the weather means that sometimes you’ll get a lot of energy flow to the grid–even more than is needed–or none at all. This is where energy storage becomes essential to regulation and maintaining an even flow of energy to the grids that power our cities.
“Thanks to a wave of investment, solar farms across the US are increasingly being built with industrial-scale battery packs on site so that noontime surpluses can be stored for release in the evening hours when people come home to switch on lights, appliances and air conditioners,” reported the Financial Times.
Now, the energy storage industry is set for some major disruption (and not just from COVID-19’s dramatic slowdown of China’s booming energy storage sector). Norwegian energy and shipping consulting firm DNV GL has stated in their report, “The Promise of Seasonal Storage” that a major competitor to battery storage is coming, and it will be cost-competitive by 2050. That competitor is hydrogen, the buzzworthy poster child of seemingly every other green energy enterprise these days. DNV GL is modeling round-the-clock hydrogen production each summer, powered by market electricity.
“The hydrogen would be compressed and stored underground in salt caverns or depleted gas fields, and the following winter would be converted nonstop to electricity, using fuel cells,” reports PV Magazine. “Daily balancing would be achieved using batteries and pumped hydro. To the extent the entire grid ran on renewables in the summer, the hydrogen would be ‘green,’ or renewably produced.”
Green hydrogen is a booming sector in and of itself as of late, as even supermajor oil companies get into the game. Last month Royal Dutch Shell announced that they would be producing green hydrogen in a pilot project involving offshore wind farms in the Dutch North Sea. Two weeks earlier, co-chair of the Hydrogen Council (and chief executive of Air Liquide) Benoît Potier told Forbes: “2020 marks the beginning of a new era for energy […] A clean energy future with hydrogen is closer than we think because the industry has been working hard on addressing key technology challenges.”
A Utah-based project running under a similar model, using subterranean salt caverns, plans to be online by just 2045, at which point it will be able to help the city of Los Angeles adhere to its sustainability guidelines and goals for renewable energy use. The Utah project also plans to mix hydrogen with natural gas in its early stages to be used for combustion in turbines, which falls in line with DNV GL’s projection that “a seasonal storage business will be preceded by a market for synthetic fuels.”
The firm also projects that by 2050, when they say that their hydrogen storage will be competitive in energy storage markets, “ample short-term storage capacity will be available, in the form of grid batteries, electric vehicle-to-grid applications, and pumped hydro, ‘to accommodate daily and weekly cycles’ in both renewable generation and electricity demand.”