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

Content Basic Definitions Properties Economics Market Conclusions

Energy Storage – Basic Definitions

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

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

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

Constant SupplyFluctuating Supply Matching Supply and Demand

„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

Energy Storage – Properties

–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

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 - month ,89 - 0, Sodium Sulfur (NAS) battery Electro- chemical day ,75 - 0, Lead Acid battery Electro- chemical < 30day - month ,65 - 0, Redox/Flow battery Electro- chemical < 7< 10day - month ,72 - 0, Compressed air energy storage (CAES) Mechanical day at bar 0,4 - 0, Pumped hydro energy storage (PHES) Mechanical day - month 0,27 at 100m 0,63 - 0, , HydrogenChemicalvaries indefinite , at bar 0,22 - 0, MethaneChemicalvaries indefinite at 1 bar0,24 - 0, Sensible storage - Water Thermal< 10< 100hour - year < 600,5 -0,9~5000-0,1- 130,01 Phase change materials (PCM) Thermal< 10 hour - week < 1200,75 - 0,9~ ,3 - 6 Thermochemical storage (TCS) Thermal< 1< 10hour - week ,8 - 1~ Energy Storage Technology Properties

Energy Storage – 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 Economics Spending = Investment Cost Earning = delivered Energy = Storage Cycles Charging St € Storage € Discharg. St € Total Cost € 4 MWh per cycle, charge/discharge power 1 MW, 2 cycles per day, 1 MWh = 50 € 700 x 200 € = €/Jahr © ZAE Bayern

≈ €/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“

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.

Enthusiast: payback a, interest rate 1%, energy cost €/kWh Building: payback a, interest rate 5%, energy cost €/kWh Industry: payback < 5 a, interest rate 10%, energy cost €/kWh Top-Down Approach or „Maximum Acceptable Storage Cost“ Seasonal storage: €/kWh cap

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 - month ,89 - 0, Sodium Sulfur (NAS) battery Electro- chemical day ,75 - 0, Lead Acid battery Electro- chemical < 30day - month ,65 - 0, Redox/Flow battery Electro- chemical < 7< 10day - month ,72 - 0, Compressed air energy storage (CAES) Mechanical day at bar 0,4 - 0, Pumped hydro energy storage (PHES) Mechanical day - month 0,27 at 100m 0,63 - 0, , HydrogenChemicalvaries indefinite , at bar 0,22 - 0, MethaneChemicalvaries indefinite at 1 bar0,24 - 0, Sensible storage - Water Thermal< 10< 100hour - year < 600,5 -0,9~5000-0,1- 130,01 Phase change materials (PCM) Thermal< 10 hour - week < 1200,75 - 0,9~ ,3 - 6 Thermochemic al storage (TCS) Thermal< 1< 10hour - week ,8 - 1~ Energy Storage Technologies

Diurnal storage: €/kWh cap

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 - month ,89 - 0, Sodium Sulfur (NAS) battery Electro- chemical day ,75 - 0, Lead Acid battery Electro- chemical < 30day - month ,65 - 0, Redox/Flow battery Electro- chemical < 7< 10day - month ,72 - 0, Compressed air energy storage (CAES) Mechanical day at bar 0,4 - 0, Pumped hydro energy storage (PHES) Mechanical day - month 0,27 at 100m 0,63 - 0, , HydrogenChemicalvaries indefinite , at bar 0,22 - 0, MethaneChemicalvaries indefinite at 1 bar0,24 - 0, Sensible storage - Water Thermal< 10< 100hour - year < 600,5 -0,9~5000-0,1- 130,01 Phase change materials (PCM) Thermal< 10 hour - week < 1200,75 - 0,9~ ,3 - 6 Thermochemic al storage (TCS) Thermal< 1< 10hour - week ,8 - 1~ Energy Storage Technologies

Energy Storage – Market

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

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

Conclusions

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

Thank you very much for your attention!

26 UserEnergy costs / €·kWh -1 Storage annuity / % min.max.min.max. Industry Building Enthusiast Method: Top-down approach

27 UserEnergy costs / €·kWh -1 Storage annuity / % min.max.min.max. Industry Building Enthusiast Method: Top-down approach

28 UserEnergy costs / €·kWh -1 Storage annuity / % min.max.min.max. Industry Building Enthusiast Method: Top-down approach

Method: Bottom-up approach 29