ENABLING TECHNOLOGIES AND

T

he remarkable growth in renewable energy production in recent years has been concentrated in the power sector;

meanwhile, the heating and cooling and transport end-use sectors have not seen commensurate growth . Most power sector growth has occurred among the variable renewable energy technologies (wind power and solar PV) raising concerns about potential challenges of integrating large shares of variable generation into existing power systems . Against this backdrop, certain enabling technologies – along with improvements in energy infrastructure, energy markets and related institutional frameworks – can serve two synergistic purposes: creating new conduits for renewable energy to reach all end-use sectors, and facilitating the successful integration of ever-growing shares of variable renewable electricity generation .

Enabling technologies can take many forms . For the purpose of this chapter, they are technologies that share the potential to facilitate and advance the deployment and use of renewable energy, and include:

n End-use technologies (e .g ., electric vehicles and heat pumps)

n Energy storage (e .g ., pumped storage; home-, commercial- or grid-scale batteries; thermal storage)

n Demand-side energy management technologies (e .g ., energy management systems in buildings; interruptible industrial load)

n Energy supply and delivery management technologies (e .g ., advanced distribution network management and systems control options) .¹

Overall, enabling technologies comprise both the physical infrastructure and the automation technology required to support, for example, greater systems integration, data collection and dissemination of system resources, and effective and efficient demand response . This can enhance the function and efficiency of energy systems and thereby facilitate greater deployment and use of renewable energy .

This chapter reports on current developments for three types of enabling technologies: energy storage, heat pumps and electric vehicles (EVs) . None of these technology groups has been developed for the specific purpose of facilitating wider deployment of renewable energy . For instance, energy storage historically has been deployed for use in consumer goods (e .g ., mobile phones), in modern manufacturing (for applications where uninterrupted power is critical) and to support large-scale grid power management (i .e ., via pumped storage) .² Heat pumps have been a primary option to improve efficiency in electrified water and space heating . EVs have been pursued largely for their potential to improve local air quality and to reduce the direct use of fossil fuels in the transport sector .³

This marks the first instalment of a chapter in the Global Status Report devoted to enabling technologies and energy systems integration.

The purpose is to convey information on current developments in various energy technologies, infrastructure, markets and institutional frameworks that advance and facilitate expanded deployment of renewable energy. Due to the emerging linkages between the advancement of various enabling technologies and continued growth in renewables, the GSR examines major themes and developments in this area.

06

These technologies present significant opportunities to bring additional benefits by creating new markets for renewable energy in buildings, industry and transport . For example, electrification of vehicles not only reduces local air pollution, but also allows for rapidly growing renewable power technologies to displace fossil fuels in a sector where renewables other than biofuels previously were barred from entry . Air quality is enhanced further, along with other benefits of expanded renewables deployment . Heat pumps allow renewable power to substitute for fossil fuels in buildings and industrial heat applications, and energy storage solutions help to balance grid-connected renewable energy supply against energy demand and facilitate off-grid renewable energy deployment .⁴

In addition to their potential to create new or expanded markets for renewable energy, enabling technologies can help better accommodate rapidly growing shares of variable renewable electricity generation . Power systems have always required flexibility to accommodate ever-changing electricity demand, system constraints and supply disruptions, but growing shares of variable generation may require additional flexibility from the broader energy system .⁵(p See Feature chapter.) This includes flexible generation; load response from energy consumers;

coupling of the electric, thermal and transport sectors; improved delivery infrastructure; and enhanced energy markets and associated institutions . The increased integration of the electricity sector with thermal applications in buildings and industry and with transport is one such approach, as is increased use of energy storage .⁶

While enabling technologies in their own right may present new opportunities for renewable energy, a wide range of additional considerations needs to be explored to promote broader energy system integration . These considerations span various technical, regulatory and market elements that may help to unlock greater synergies between renewable energy generation and various enabling technologies, possibly allowing more optimal outcomes, and they pertain to the following areas⁷:

Market design frameworks that allow both the proper valuation of and compensation for enabling technologies.

Enabling technologies can provide a range of services and

benefits to individual consumers, energy providers and the energy system as a whole, helping to balance supply and demand, to promote the stability of the power grid and to provide backup energy during power outages or energy shortages . However, there may not be a market framework in place either to establish the economic value of such services or to compensate the owner of the enabling technology once such value is established . This may reduce the attractiveness of investment in enabling technologies .

Legal and regulatory frameworks that allow the participation of enabling technologies, as well as the monetisation of their services. Depending on the jurisdiction, the participation of enabling technologies may not be allowed without changes to laws, regulations and grid codes . For instance, while an individual electric vehicle may be used for backup power during an outage, it may not be permitted to sell power into an electricity market .

Sufficient availability and access to system data, and appropriate legal safeguards thereof. A healthy market for enabling technologies likely will require some level of access to consumer and grid data, such that utilities and possibly other parties may pursue the most valuable opportunities and promote economically efficient allocation of resources . This requires finding a balance between consumer privacy and protection of critical infrastructure data, with the objective of forming an efficient, dynamic and open market .

Adequate technology for grid operators to gather, process and act on system data in real-time and to reliably control and dispatch enabling technology installations from a distance. To maximise the effectiveness and efficiency of enabling technologies, it is necessary to know their moment-by-moment availabilities and capabilities and to understand how best to use them . An infrastructure that can support bi-directional information exchange is required in order to feed a continuous stream of data about the conditions of the power system as a whole, including the availability of enabling technology installations (individual or aggregated) to respond to automated commands based on real-time, system-wide resource optimisation .

ENERGY STORAGE

Energy storage has long been used for a variety of purposes, including to support the overall reliability of the electricity grid, to help defer or avoid investments in other infrastructure, to provide backup energy during power outages or other energy shortages, to allow energy infrastructure to be more resilient, to support off-grid systems and to facilitate energy access for under-served populations . In 2016, a primary driver for advances in energy storage was the demand for battery storage in EVs .⁸

Energy storage technologies can capture energy during periods when demand or costs are low, or when electricity (or heat) supply exceeds demand, and can surrender stored energy (electric or thermal) when demand or energy costs are high . Storage can

provide system benefits and flexibility to customers, system managers and utilities and can be applied from the household level (behind the meter) to utility-scale . Storage also can participate in a range of market segments, particularly in power markets, acting as a direct energy provider to the broader system, as hardware to support energy delivery or as a supplementary system for individual households or businesses .⁹(p See Figure 49.) Many ownership models are possible (e .g ., utility, third-party, customer level), along with a diverse mix of corresponding business and financing models to promote growth .¹⁰ A number of different energy storage technologies exist and are under development, and their characteristics (response time, discharge time, output capacity and efficiency) and functions vary widely . As of 2016, most electric energy storage capacity relied on pumped storageⁱ,

STORAGE

• Fast-response reserve power (spinning reserve)

• Frequency and voltage control

• Demand management (peak shaving and load levelling)

• Large-scale generation

• Wind farms

• Large solar PV plants

• Large-scale demand

• Large factories

• Heavy industry

Distributed generation, including

roof-top solar

Residential, commercial and

light industrial load

STORAGE

• Frequency and voltage control

• Demand management (peak shaving and load levelling)

• Emergency backup power

STORAGE

• Storage of grid power for load shifting and variable renewable energy integration

• Storage of self-generated power for later use

NET W ORK TRANSMISSION

NET W ORK DISTRIBUTION

NET W ORK LOW-VOLTAGE

Figure 49. Storage Applications in Electric Power Systems

Source: See endnote 9 for this chapter.

06

Cost (USD per person per day)

Pumped storage

150 ^GW

6.4 ^GW

Electro-chemical

Electro-mechanical

1.6 ^GW

1.7 ^GW

3.1 ^GW

Thermal storage

Source: See endnote 13 for this chapter.

Figure 50. Global Grid-Connected Energy Storage Capacity, by Technology, 2016

the oldest and most mature electricity storage option, as well

as the largest in scale (per system) .¹¹ Other electricity storage technologies include batteries (electro-chemical), flywheels and compressed air (both electromechanical) . Thermal energy storage, which stocks heating or cooling for later use (e .g ., molten salt, ice storage, etc .) also is present in some markets and can serve both thermal applications and electricity by conversion .¹² Only pumped storage is a highly mature technology; all others are undergoing development and transition . The potential for abundant, low-cost energy storage offers the prospect of reconceptualising how energy systems are planned and operated .

ENERGY STORAGE MARKETS

Global grid-connected and stationary energy storage capacity in 2016 totalled an estimated 156 GWⁱⁱ, with pumped storage hydropower accounting for the vast majority .¹³ (p See Figure 50.) More than 6 GW of pumped storage capacity was commissioned in 2016, for a year-end total of approximately 150 GW .¹⁴(p See Hydropower section in Market and Industry Trends chapter.) The rest of this section focuses on energy storage other than pumped storage .

About 0 .8 GW of new advanced energy storage capacity became operational in 2016, bringing the year-end capacity total to an estimated 6 .4 GW .¹⁵ Most of the growth was in battery (electro-chemical) storage, which increased by 0 .6 GW for a total of 1 .7 GW .¹⁶ Lithium-ion batteries comprised the majority of new capacity installed .¹⁷ The remaining additions were mainly in the form of thermal storage, which was up by 0 .2 GW (mostly molten salt storage at CSP plants), for a year-end total of 3 .1 GW .¹⁸ Very little electro-mechanical storage was added in 2016, with the total remaining at 1 .6 GW .¹⁹ Emerging technologies such as conversion of surplus electricity to hydrogen or other gases are in the earlier stages of development and demonstration and have not yet seen large deployments .

The United States added the most new non-pumped storage capacity in 2016 (0 .3 GW), followed by the Republic of Korea (0 .2  GW) and by Japan, Germany and South Africa (0 .1 GW each) .²⁰ The United States also had the most non-pumped energy storage capacity (1 .5 GW) at year’s end, followed by Spain, Germany and Chile . For stationary battery storage alone, the United States was in the lead, followed by the Republic of Korea, Japan, Germany, Italy and Chile .²¹ (p See Figure 51.)

i Pumped storage hydropower involves pumping water to a higher elevation to store its potential kinetic energy until the energy is needed . Pumped storage can be implemented in a stand-alone (closed-loop) application or as part of a conventional reservoir hydropower facility (open loop) . Without pumping capability, a conventional reservoir hydropower facility can serve as storage only in the context of deferred generation, meaning that generation can be held off to accommodate other generation (such as solar PV and wind power), but excess grid power cannot be captured for storage .

ii This total aims to include all storage with the exception of off-grid storage or batteries in EVs, but it may exclude some thermal storage in district heating systems .

The 0 .3 GW of non-pumped storage capacity added in the United States during 2016 included 0 .1 GW of molten salt thermal storage at a CSP plant in Nevada, with the remainder being mostly battery storage, comprising primarily lithium-ion technology .²² A large portion of the battery storage additions was installed in California in anticipation of an electricity shortfall due to a natural gas leak .²³ By one estimate, about 20% of new US battery storage capacity was in residential and commercial behind-the-meter installations .²⁴

The Republic of Korea’s additions (0 .2 GW) in 2016 were all in the form of electro-chemical storage, bringing the national total to 0 .3 GW .²⁵ The electric utility deploying the technology noted the importance of owning and operating emission-free resources to support its frequency control markets .²⁶

Deployment of energy storage capacity also is rising rapidly in Japan, where more than 0 .1 GW was brought online in 2016 for a year-end total of 0 .25 GW .²⁷ Following the March 2011 earthquake, Japan’s government began to explore options to increase power system reliability and cross-regional co-ordination of the electric grid through market liberalisation .²⁸ Energy storage has been deployed to provide flexibility to the country’s rapidly increasing output of variable renewable energy (particularly solar PV) .²⁹ In Europe, Germany saw the largest additions of non-pumped storage during 2016, with 36 MW of large-scale projects commissioned for a year-end total of 1 .1 GW .³⁰ The country’s residential storage market (behind the meter) is expanding as a growing share of solar PV systems is paired with battery storage;

rising from 14% of PV systems in 2014 to more than half of new installations in 2016 .³¹ An estimated 25,355 home energy storage systems were installed in Germany during 2016, accounting for about 80% of Europe's annual market .³²

Also in Europe, a 20 MW battery storage project was installed in the Netherlands in 2016 as a replacement for a natural gas peaker

generation plant .³³ The United Kingdom committed to significant additional future capacity when National Grid (the owner and operator of the transmission grid in England and Wales) procured 0 .2 GW of Enhanced Frequency Response services through an auction in mid-2016; all winning bids were in the form of storage solutions that are to be implemented in 2017–2018, at a total cost of USD 81 million (GBP 66 million) .³⁴

China has relatively little storage capacity to date, beyond pumped storage . However, this could soon change due to a pilot programme, launched in 2016, to address curtailment of solar and wind power in three of the country’s northern regions . This programme is designed to allow energy storage to provide services such as peak shaving and frequency regulation and to receive payment for services provided .³⁵

Australia, with one of the world’s highest penetrations of residential solar PV, is a small but rapidly expanding market for small-scale, behind-the-meter battery storage systems .³⁶ Battery storage systems are being used to increase on-site use of distributed generation . Rising electricity prices, falling costs of solar PV systems and declining feed-in-tariffs have combined to drive Australia’s market for residential battery systems in conjunction with solar PV .³⁷ Many solar suppliers have begun to offer battery solutions as part of their solar installations, and the market is growing rapidly from a small base .³⁸ In 2016, the annual residential storage market grew 13-fold, with nearly 7,000 systems installed .³⁹

While most advanced storage capacity added in 2016 was in the form of batteries (electro-chemical), thermal storage is playing an increasingly important role alongside CSP plants . In South Africa, 0 .1 GW of molten salt thermal storage came into operation during 2016 at two CSP plants, providing several hours of plant operating capacity .⁴⁰ China also added a small amount of CSP-linked storage capacity .⁴¹ (p See CSP section in Market and Industry Trends chapter.)

Source: See endnote 21 for this chapter.

Figure 51. Global Grid-Connected Stationary Battery Storage Capacity, by Country, 2006-2016

Megawatts

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Rest of World

Seasonal storage for heat generated by renewable energy for district heating systems (heat is fed in the summer, taken out in winter) continued to be used in several European countries and in Canada in 2016 .⁴² Such systems often are combined with the electric grid, using excess electricity for stored heat .⁴³

ENERGY STORAGE INDUSTRY

The year 2016 was characterised by the diversification of utilities, renewable energy companies, vehicle manufacturers and oil and gas companies into the storage industry in order to capture rapidly growing markets . For example, Innogy SE, the renewable energy subsidiary of German utility RWE, took over the solar and energy storage business of Belectric Solar & Battery, and Total (France) acquired a majority stake in Saft Groupe (France) .⁴⁴The year also was marked by the expansion of product options and manufacturing capacity, increased pairing of storage with other systems (including solar PV and wind power) and ongoing advances in a range of storage technologies .

As of 2016, Panasonic (Japan) dominated the production of lithium-ion batteries for EVs and other applications, with double the output of its nearest competitor .⁴⁵ The company collaborates with Tesla (United States) through the latter’s US-based Gigafactory, which started mass production of lithium-ion batteries in late 2016 .⁴⁶ Other leading manufacturers of batteries for EVs include Samsung SDI and LG Chem (both Republic of Korea) .⁴⁷ Chinese manufacturers are rapidly gaining market share, including BYD and Contemporary Amperex Technology, which reportedly benefit from preferential domestic treatment over their three Japanese and Korean competitors, which are pursuing battery manufacturing in China .⁴⁸

In the power sector, several companies advanced new home storage options to compete in this rapidly growing market . For example, Daimler AG (Germany) started delivery of its Mercedes-Benz stationary residential energy storage units using lithium-ion batteries that were originally designed for automotive use, and committed to mass development of a lithium-ion battery line in California .⁴⁹ Germany’s second largest utility, E .ON, launched a residential solar-plus-storage option in its home country .⁵⁰ Sonnen (Germany) launched a home battery for self-consumption in the United States, priced at 40% below the company’s existing residential system .⁵¹ In the first half of 2016, Sonnen held a 23% market share across Australia, Europe and the United States, followed by LG Chem (Republic of Korea) and Deutsche Energieversorgung .⁵²Numerous partnerships were launched or announced to develop or distribute solar-plus-storage solutions during the year .⁵³ For example, solar PV inverter manufacturer Sungrow (China) and Samsung (Republic of Korea) launched a joint venture to provide complete energy storage systems .⁵⁴ US-based solar technology company Enphase Energy joined Tesla, LG Chem and others in the battery storage market in Australia in response to the country’s surge in rooftop solar power .⁵⁵ In addition, wind turbine manufacturer Envision (China) and GE Ventures (United States), among others, acquired stakes in Germany’s Sonnen to increase their presence in fast-growing energy storage markets in Australia, Europe and the United States .⁵⁶

Several utility-scale renewable energy-plus-storage plants were completed in 2016, including Tesla’s first solar-plus-storage installation in the United Kingdom and a Sungrow facility in China .⁵⁷

Renewable Energy Systems (United States), an international wind and solar power developer, has begun diversifying into large-scale storage and had built 70 MW of storage capacity in North America by early 2016 .⁵⁸ In May of that year, solar PV developer SkyPower (Canada) and BYD announced an agreement to bid for up to 750 MW of solar-plus-storage capacity in India’s upcoming tenders .⁵⁹ E .ON continued to expand its industrial-scale battery

Renewable Energy Systems (United States), an international wind and solar power developer, has begun diversifying into large-scale storage and had built 70 MW of storage capacity in North America by early 2016 .⁵⁸ In May of that year, solar PV developer SkyPower (Canada) and BYD announced an agreement to bid for up to 750 MW of solar-plus-storage capacity in India’s upcoming tenders .⁵⁹ E .ON continued to expand its industrial-scale battery

In document Renewables 2017 Global Status Report (Page 135-149)