1. Energy Storage – Definitions, Properties and Economics Andreas Hauer Latin America Public-Private Partnerships Workshop on Energy Storage for Sustainable Development April 16-17, 2015 Rio de Janeiro, Brazil

2. Content Basic Definitions Properties Economics Market Conclusions

3. Energy Storage – Basic Definitions

4. Definitions „Energy Storage“ What is energy storage? An energy storage system can take up energy and deliver it at a later point in time. The storage process itself consists of three stages: The charging, the storage and the discharging. After the discharging step the storage can be charged again. ChargingStorageDischarging

5. Definitions „Energy Storage“ What is actually stored? The form of energy (electricity, heat, cold, mechanical energy, chemical energy), which is taken up by an energy storage system, is usually the one, which is delivered. However, in many cases the charged type of energy has to be transformed for the storage (e.g. pumped hydro storage or batteries). It is re-transformed for the discharging. In some energy storage systems the transformed energy type is delivered (e.g. Power-to-Gas or Power-to-Heat). h

6. Relation between energy storage systems and their applications The technical and economical requirements for an energy storage system are determined by its actual application within the energy system. Therefore any evaluation and comparison of energy storage technologies is only possible with respect to this application. The application determines the technical requirements (e.g. type of energy, storage capacity, charging/discharging power,…) as well as the economical environment (e.g. expected pay-back time, price for delivered energy,…). Definitions „Energy Storage“ Electrolysis Hydrogen

7. Constant SupplyFluctuating Supply Matching Supply and Demand

8. „Storage of Power“„Storage of Energy“ e.g. Power Reserve e.g. Peak Shaving / Dispatchable Load Difference between Power & Energy Power Seconds - Minutes Hours – Days

9. Energy Storage – Properties

10. –Storage Capacity (kWh/kg, kWh/m³) –Charging / Discharging Power (W/kg, W/m³) –Storage Efficiency –Storage Period (Time) –Cost (€/kWh, €/kW) –Competing Technologies Phys. / Chem. Effect, Storage Material, Operation Conditions Storage Design & Engineering, Transport Phenomena,… Losses (Storage Period, Transformations) Hours, Days, Months, Years Investment, Number of Storage Cycles Properties of an Energy Storage System Transmission System, Smart Grids, Demand Side Management, Electricity Production

11. Storage technology Storage Mechanism PowerCapacity Storage Period DensityEfficiencyLifetimeCost MWMWhtimekWh/tonkWh/m 3 %# cycles$/kW$/kWh ¢/kWh- delivered Lithium Ion (Li Ion) Electro- chemical < 1,7< 22day - month84 - 160190 - 3750,89 - 0,98 2960 - 5440 1230 - 3770 620 - 276017 - 102 Sodium Sulfur (NAS) battery Electro- chemical 1 - 607 - 450day99 - 150156 - 2550,75 - 0,86 1620 - 4500 260 - 2560210 - 9209 - 55 Lead Acid battery Electro- chemical 0.1 - 30< 30day - month22 - 3425 - 650,65 - 0,85160 - 1060350 - 850130 - 110021 - 102 Redox/Flow battery Electro- chemical < 7< 10day - month18 - 2821 - 340,72 - 0,85 1510 - 2780 650 - 2730120 - 16005 - 88 Compressed air energy storage (CAES) Mechanical2 - 30014 - 2050day- 2 - 7 at 20 - 80 bar 0,4 - 0,75 8620 - 17100 15 - 205030 - 1002 - 35 Pumped hydro energy storage (PHES) Mechanical 450 - 2500 8000 - 190000 day - month 0,27 at 100m 0,63 - 0,85 12800 - 33000 540 - 279040 - 1600,1 - 18 HydrogenChemicalvaries indefinite34000 2,7 - 160 at 1 - 700 bar 0,22 - 0,501384 - 1408-25 - 64 MethaneChemicalvaries indefinite1600010 at 1 bar0,24 - 0,421--16 - 44 Sensible storage - Water Thermal< 10< 100hour - year10 - 50< 600,5 -0,9~5000-0,1- 130,01 Phase change materials (PCM) Thermal< 10 hour - week50 - 150< 1200,75 - 0,9~5000-13 - 651,3 - 6 Thermochemical storage (TCS) Thermal< 1< 10hour - week120 -250 0,8 - 1~3500-10 - 1301 - 5 Energy Storage Technology Properties

12. Energy Storage – Economics

13. Economics of an energy storage system depend on investment cost of the energy storage system number of storage cycles (per time), which limits the delivered amount of energy Economics Spending = Investment Cost Earning = delivered Energy = Storage Cycles Charging St.100.000 € Storage 100.000 € Discharg. St. 50.000 € Total Cost 250.000 € 4 MWh per cycle, charge/discharge power 1 MW, 2 cycles per day, 1 MWh = 50 € 700 x 200 € = 140.000 €/Jahr © ZAE Bayern

14. ≈ 10.000 €/kWh ≈ 250 €/kWh ≈ 100 €/kWh≈ 2,0 €/kWh © ZAE Bayern Economics Economics of an energy storage system depend on investment cost of the energy storage system number of storage cycles (per time), which limits the delivered amount of energy price of the replaced energy (electricity, heat/cold, fuel,…) „Benefit-Stacking“

15. Top-Down Approach or „Maximum Acceptable Storage Cost“ The maximum acceptable storage cost (price per storage capacity installed, €/kWh) can be easily calculated on the basis of Expected pay-back time Interest rate Energy cost Example: In the building sector a payback period of 15 to 20 years and an interest rate of 3% to 6% can be accepted. The price for energy is 0.06 – 0.10 €/kWh.

16. Enthusiast: payback 20-25 a, interest rate 1%, energy cost 0.12-0.16 €/kWh Building: payback 15-20 a, interest rate 5%, energy cost 0.06-0.10 €/kWh Industry: payback < 5 a, interest rate 10%, energy cost 0.02-0.04 €/kWh Top-Down Approach or „Maximum Acceptable Storage Cost“ Seasonal storage: 0.96 - 2.29 €/kWh cap

17. Storage technology Storage Mechanis m PowerCapacity Storage Period DensityEfficiencyLifetimeCost MWMWhtimekWh/tonkWh/m 3 %# cycles$/kW$/kWh ¢/kWh- delivere d Lithium Ion (Li Ion) Electro- chemical < 1,7< 22day - month84 - 160190 - 3750,89 - 0,98 2960 - 5440 1230 - 3770 620 - 2760 17 - 102 Sodium Sulfur (NAS) battery Electro- chemical 1 - 607 - 450day99 - 150156 - 2550,75 - 0,86 1620 - 4500 260 - 2560 210 - 920 9 - 55 Lead Acid battery Electro- chemical 0.1 - 30 < 30day - month22 - 3425 - 650,65 - 0,85 160 - 1060 350 - 850 130 - 1100 21 - 102 Redox/Flow battery Electro- chemical < 7< 10day - month18 - 2821 - 340,72 - 0,85 1510 - 2780 650 - 2730 120 - 1600 5 - 88 Compressed air energy storage (CAES) Mechanical2 - 30014 - 2050day- 2 - 7 at 20 - 80 bar 0,4 - 0,75 8620 - 17100 15 - 2050 30 - 1002 - 35 Pumped hydro energy storage (PHES) Mechanical 450 - 2500 8000 - 190000 day - month 0,27 at 100m 0,63 - 0,85 12800 - 33000 540 - 2790 40 - 1600,1 - 18 HydrogenChemicalvaries indefinite34000 2,7 - 160 at 1 - 700 bar 0,22 - 0,501 384 - 1408 -25 - 64 MethaneChemicalvaries indefinite1600010 at 1 bar0,24 - 0,421--16 - 44 Sensible storage - Water Thermal< 10< 100hour - year10 - 50< 600,5 -0,9~5000-0,1- 130,01 Phase change materials (PCM) Thermal< 10 hour - week50 - 150< 1200,75 - 0,9~5000-13 - 651,3 - 6 Thermochemic al storage (TCS) Thermal< 1< 10hour - week120 -250 0,8 - 1~3500-10 - 1301 - 5 Energy Storage Technologies

18. Diurnal storage: 16 - 38 €/kWh cap

19. Storage technology Storage Mechanis m PowerCapacity Storage Period DensityEfficiencyLifetimeCost MWMWhtimekWh/tonkWh/m 3 %# cycles$/kW$/kWh ¢/kWh- delivere d Lithium Ion (Li Ion) Electro- chemical < 1,7< 22day - month84 - 160190 - 3750,89 - 0,98 2960 - 5440 1230 - 3770 620 - 2760 17 - 102 Sodium Sulfur (NAS) battery Electro- chemical 1 - 607 - 450day99 - 150156 - 2550,75 - 0,86 1620 - 4500 260 - 2560 210 - 920 9 - 55 Lead Acid battery Electro- chemical 0.1 - 30 < 30day - month22 - 3425 - 650,65 - 0,85 160 - 1060 350 - 850 130 - 1100 21 - 102 Redox/Flow battery Electro- chemical < 7< 10day - month18 - 2821 - 340,72 - 0,85 1510 - 2780 650 - 2730 120 - 1600 5 - 88 Compressed air energy storage (CAES) Mechanical2 - 30014 - 2050day- 2 - 7 at 20 - 80 bar 0,4 - 0,75 8620 - 17100 15 - 2050 30 - 1002 - 35 Pumped hydro energy storage (PHES) Mechanical 450 - 2500 8000 - 190000 day - month 0,27 at 100m 0,63 - 0,85 12800 - 33000 540 - 2790 40 - 1600,1 - 18 HydrogenChemicalvaries indefinite34000 2,7 - 160 at 1 - 700 bar 0,22 - 0,501 384 - 1408 -25 - 64 MethaneChemicalvaries indefinite1600010 at 1 bar0,24 - 0,421--16 - 44 Sensible storage - Water Thermal< 10< 100hour - year10 - 50< 600,5 -0,9~5000-0,1- 130,01 Phase change materials (PCM) Thermal< 10 hour - week50 - 150< 1200,75 - 0,9~5000-13 - 651,3 - 6 Thermochemic al storage (TCS) Thermal< 1< 10hour - week120 -250 0,8 - 1~3500-10 - 1301 - 5 Energy Storage Technologies

20. Energy Storage – Market

21. Energy Storage Systems are clean! Energy storage systems used for the integration of renewables or the increase of energy efficiency deliver CO 2 -neutral energy to their customers. Rising prices for CO 2 certificates would support the economics of energy storage! e.g. power reserve

22. Fair Market Entry! No subsidies & no „market-entry-programme“ needed! As soon as „flexibility“ will be adequately remunerated, energy storage systems are competitive! Energy storage systems are no „final consumer“ and do not have to pay the related fees! Japan: Ice storage for air conditioning due to high electricity prices in peak hours

23. Conclusions

24. Energy Storage Process = Charging + Storage + Discharging Energy storage can match supply & demand Energy storage systems can either focus on the storage of energy or power Energy storage systems will have an increasing market share, if their benefits will be adequately remunerated The economics depend on the investment cost, the cycle number in an actual application (per time) and the price of the replaced energy Conclusions

25. Thank you very much for your attention!

26. 26 UserEnergy costs / €·kWh -1 Storage annuity / % min.max.min.max. Industry0.020.042530 Building0.060.10710 Enthusiast0.120.1646 Method: Top-down approach

27. 27 UserEnergy costs / €·kWh -1 Storage annuity / % min.max.min.max. Industry0.020.042530 Building0.060.10710 Enthusiast0.120.1646 Method: Top-down approach

28. 28 UserEnergy costs / €·kWh -1 Storage annuity / % min.max.min.max. Industry0.020.042530 Building0.060.10710 Enthusiast0.120.1646 Method: Top-down approach

29. Method: Bottom-up approach 29