2016 and 2017 Have Broken Size and Cost Records for Energy Storage
As we close out the end of 2017, we can celebrate four consecutive records broken for the largest battery storage projects to ever be commissioned. Here is the timeline:
- January 2017 – Tesla Aliso Canyon 20 MW/80 MWh
- January 2017 – Greensmith Altagas Pomona 20 MW/80 MWh
- February 2017 – AES 30 MW/ 120 MWh
- November 2017 – Tesla South Australia 129 MWh
At the end of 2016, the Altagas/Greensmith project was announced at a cost of $45 million which penciled to $562/kWh, which was one of the lowest public turnkey costs ever announced. At the end of 2017, the Tesla South Australia project has been advertised to cost $50 million, which computes to $387/kWh. GM recently announced in their partnership with LG that the 2015 announcement of $145/kWh for the cells is now outdated; they expect their economy of scale to push cell costs below $100/kWh before 2020, and $80/kWh with the first years of that decade. This is consistent with DNV GL’s message that system costs in the $100-$200/kWh range are completely conceivable within the 2020-2022 timeframe (Listen to my latest podcast here: How will deployment of storage accelerate? Look at Moore’s Law.).
Keep watching…the size record is bound to be broken again and again and costs will continue to drop. UET announced intent in 2016 to build an 800 MWh project with Rongke Power. Lyon Group announced in March 2017 that they will build a solar + storage facility in South Australia that will have a 100 MW / 400 MWh battery system.
These large, consolidated projects aren’t the only part of the discussion. Behind the meter (BTM) growth remains strong with distributed project awards being issued in California in 50 MW tranches, such as the AMS/MacQuarie award in March of 2017. It is important to point out that aggregated, distributed BTM storage is a utility-scale solution, as it defers distribution upgrades and helps alleviate the duck curve in solar-heavy states.
There was once a time when only pumped hydro was considered to be cost effective for energy storage projects of this size. If you’ve been in energy storage as long as I have, you might remember ten years ago when the Energy Storage Association (ESA) created energy storage bubble charts depicting megawatts on one axis and megawatt hours on another, or megawatts on one axis and hours of duration on the other. Pumped hydro was always the big bubble in the upper right quadrant of the chart. Batteries are invading that quadrant of those charts; in fact, batteries are starting to cover the whole chart, which is likely why these charts haven’t been part of the storage conversation for some time.
The energy storage world has changed rapidly in just a few years. Li-ion batteries were once considered only practical for power applications and frequency regulation. Flow batteries were only demonstrated in pilots and demonstrations. These days, a four-hour Li-ion battery is commonplace. Commercial flow battery projects are happening across the globe. And as turnkey system costs are now in the $300/kWh range, we are witnessing hockey stick growth. I’ve been working in energy storage for over a decade now, and in 2007 I hoped for breakthroughs that would get Li-ion battery cell costs below $1000/kWh. I watched the “Community Energy Storage” concept blossom with great anticipation for distributed storage. I participated in working groups that made cost projections to the numbers that we see now, and we hoped we’d get there by 2020.
I’m fundamentally impatient, and it has been an agonizing wait to get where we are today. While it felt like it took forever to get here, in hindsight the data shows the opposite—the growth is happening faster than anyone thought it would. For me personally, I can say the energy storage world today is better than I thought it would be. It is better than what I and other colleagues predicted.
We’re witnessing a boom.