Sitting down after a conference and exposition to discuss the event with the team is one of those exercises I have not always followed; it’s a bit like flossing, you know it’s good for you but it can feel daunting to actually do it. Much like flossing too, it is a very useful in determining the value of why you actually go to these events, revealing a clearer picture to follow up on. The Energy Storage Association conference was the second energy storage (ES) conference and expo attended by Energy Canvas this year – the first was in Dusseldorf, German – and it won’t be the last ES event we will be attending this year! There were three key take-aways for us at this one in Charlotte.
When I was first actively looking into ES systems 5years ago, pickings were slim for commercialized technology. The only company I knew about was A123 who were containerizing what I thought of as laptop batteries on steroids. Of course they weren’t the only ones – there were and continue to be a large number of companies in the lead acid and lead acid replacement technologies, in flow cell batteries, and in other forms of energy storage. But where were they all hiding? Today’s events are filled with new companies, recalling what some people suggest it was like in “Solar PV 10 years ago” or “Wind 20 years ago.” I guess to some extent I agree, there is a definite buzz in the air and a sense of optimism. The major difference being that those industries carved an awareness that storage can implement faster, and in this regard it is amazing how fast things are growing.
Storage of course is more than just shifting energy from when it’s sunny or windy. Its more than just the “battery in a box” hardware; it’s also the software, the commercial awareness, and the legal support. With respect to this, there is a lot to be excited about! This broader eco-system of companies is increasingly finding implementers and innovators. I’d humbly like to include Energy Canvas in that group. Though we are definitely not alone, it is a new frontier and the future is very much open to new and improved products.
Increasingly interesting is how these products are addressing new market realities. With the ESA conference being based in the US, it definitely has a focus on existing markets. One of the big markets in the US is the PJM regulation market. PJM, for those unfamiliar, is a transmission system operator around the Mid-Atlantic (think Pennsylvania), who is responsible for making sure the system stays on from a technical point of view and have increasingly found value in integrating storage to be a good fit for their capacity to manage their system. As a result they have created this market. They are not alone – Hawaii, California and other US states are also leading but in other forms of battery system performance, particularly around offsetting renewable energy generation and controlling ramping associated with heavy solar implementation. Further afield, Japan, Australia, Germany and the UK are all actively looking for ways to support nascent markets and are watching carefully as the reality sinks in for what ES integration actually means for their system.
The other aspect of performance – beyond the technical – is the commercial performance. Almost all players in the market are getting more sophisticated. There is a real acknowledgment that today’s technology should be implemented because it makes sense today, but performance of the technology we’ll have in 10 years will dramatically outpace current tech, and therefore a decadal replacement strategy should be incorporate as part of the assets planning and finance. This is a challenge for project developers, owners and those system operators like PJM alike, as they ask the question, why here and now when tomorrow we will have better?
One of the other major considerations is also financial performance. How are energy storage systems valued? How do you value a bank account for energy? The answer of course is that in the world of “if it ain’t broke then don’t fix it” why do something now when we can watch and learn? At Energy Canvas we appreciate that most of these players, no matter where they sit on the innovation adoption curve, will eventually adopt so we focus on those early adopters that see the benefit first and help them find fun and interesting ways to grow how they use it. The sort of performance that we see today in smart phones for example is a long way from the good email centric devices like the old roller wheeled Blackberry; and in this way energy storage will evolve past a monochromatic world into something a lot more technicolour.
Performance today though is mostly compared to price – not facility, not revolutionised business models, not even on technical performance in some cases, just on price. From this point of view, lithium-based technologies are dropping in price dramatically! There are many forecasts on pricing/performance, building a cheaper mouse trap is important for implementing many mouse traps without breaking the bank, after all, and this will help to realize what broad spectrum implementation might look like to groups watching the early adopters like PJM. The one thing that is clear is that battery prices will be half of what they were two years ago in the very near future. Will there be a step change? Will there be a “new normal” for industry players? Cheaper isn’t always better but it sure helps on the way to appreciating quality.
The future is bright for energy storage! Greater storage spurs greater renewables implementation, which itself creates issues with other market players, structures and ways of thinking. Which technology will become the standard? Before there was Blackberry, there was Nokia, after Blackberry, though, came the eco-system, and if caught off-guard similar fates may follow those left holding onto their precious market position. We’re a fan of eco-system thinking particularly when we look beyond batteries to large scale systemic energy use and draw our own business plans. When compared to the human body, batteries could be a hand or even a finger, extremely useful by any measure and even more so when used expertly to create refined things from art, but maybe the next frontier is changing the experience of the rest of the body? Time of course will tell what the future holds, but what was noticed today at ESA was that energy storage is on its way to understanding some of its value and the rest of the energy system is starting to take notice. The future is bright!