Keeping the Lights On...Battery Energy Storage Systems (BESS)

Introduction

For the typical retail consumer, batteries may stir thoughts in one’s mind around mobile phones and their ecosystem of gadgets, personal GPS tracking systems for performance enthusiasts, or the latest Tesla model for autophiles. While optimizing the various types of battery technologies employed for these uses has its place in driving the world towards sustainability goals, batteries have much wider reaching industrial-scale implications than through transportation and making our favorite devices portable. This is where stationary batteries come in; while stationary batteries seem to receive diminished limelight across our media platforms relative to portable batteries, their applicability to grid-scale energy storage is not to be underplayed in the overall energy industry’s quest for carbon neutrality. As such, this NexantECA Blog Post highlights the potential of both portable and stationary batteries to play a crucial role in aiding industry progression towards reaching ‘Net-Zero’ targets across the world.

Portable Batteries

The portable batteries industry is growing exponentially in mobility applications as EV adoption continues to rise, facilitated by stricter government emissions regulations across many regions and innovations in battery efficiency and longevity driving falling battery costs. For this reason, there is potential for new global projects as part of the expansion of international EV companies. Tesla is a prime example of such companies: in April 2024, Elon Musk visited India’s Prime Minister Modi in New Delhi and is set to announce $2 to 3 billion investment primarily for the construction of a new factory. This is considering news from the previous month of the Indian government’s unveiling of a new EV policy lowering import taxes to 15 percent (from as high as 100 percent on some models), so long as the carmaker invests at least $500 million and sets up a factory in-country. Consequently, Tesla has already started scouting for showroom space in New Delhi and Mumbai, and its Berlin factory is producing right-hand drive cars it aims to export to India starting later this year. EVs and portable batteries in general are a major focus of media attention due to their association with the retail consumer market; companies are incentivized to advertise and update the public on trends and advancements in this sector in a pursuit to boost sales.

Stationary Batteries

Commercial & Industrial Uses

Conversely, stationary batteries—batteries remaining in fixed locations to carry out their end use—have many potential commercial and industrial uses outside of the retail consumer domain that are perhaps less well known. The primary offerings of stationary batteries, via battery energy storage systems (BESS), include but are not limited to baseload/continuous duty (typically with plant capacity factor (PCF) and plant availability factor (PAF) of 80 to 90+ percent), backup power, uninterruptible power systems (UPS), a critical characteristic for hospitals and some industrial processes, renewable energy integration, load shifting/ancillary services (managing supply-demand imbalances, primary/secondary frequency regulation, and voltage regulation) as well as grid reliability, resilience, and stabilization including transmission and distribution (T&D) congestion as well as energy arbitrage. There is also a vast potential for BESS to facilitate decentralized power solutions.

More effective renewables integration is a crucial hurdle to surpass in the race against time to meet Net-Zero targets. The inherently intermittent nature of renewable power sources (e.g., solar photovoltaics (PV) and wind), typically operating at ~15 to 20 to 40 percent ranges in PCF and PAF, facilitates the requirement to ensure energy reliability, availability, as well as load shifting. While some other energy sources such as commercial nuclear power facilitate this, a more direct approach avoiding secondary energy generation methods on top of solar PV and wind renewable energy generation is to store excess energy when renewables produce more than needed and to release it when demand exceeds supply. BESS units offer this niche buffer role as demand response agents, and as such serve as the “linchpin” for enabling the seamless integration of renewables into the electric utility grid.

In principle, industry has started to see this role for BESS units play out in California: renewables are able to supply nearly all the grid’s energy demand on sunny days (with so much solar power available on some days that oversupply can drive electricity prices into negative), however the grid is reliant on BESS units during the evening and into the night. In fact, on April 16, 2024, for the first time, BESS units were the single greatest power source on the grid in California during part of the early evening. Overall, batteries can be revolutionary in their potential for energy aggregation (collecting and storing surplus energy from multiple sources), and this has in fact translated to energy reserves now being traded on energy markets.

On the contrary, without such an essential BESS unit in place, the operating variability typically directly and indirectly impacts the electric grid system network with respect to grid electric impedance, grid electric inertia, grid load shedding, grid frequency regulation (primary and secondary frequency) and voltage variation along with fluctuations in grid electric harmonics/anomalies/excursions. In fact, the latter of these has been experienced in California, Texas, and various countries such as India, Dominican Republic, and Mexico, but has not been widely reported in mainstream media in place of the trendier retail consumer topic of portable batteries. Nevertheless, these inherent electric grid reliability and resilience challenges, barriers, and hurdles should be viewed as potential warning signs that could form ‘fissures’ as deeper market penetration along with reliance on renewable power sources increases.

BESS units could potentially offer business use cases and solutions to sub-optimal approaches to dispatch priority into the grid.  Currently, overarching regulatory framework and policy dictates that conventional power plants (coal, natural gas, crude oil, refined products, and commercial nuclear power) operate on ‘merit order dispatch priority’—lowest variable/energy cost dispatches first.  Furthermore, in recent years renewable power sources have been deemed by regulators as ‘qualified facilities (QF)’, ‘preferential status’ or deemed as ‘must-run’ plants—if a renewable power plant generates any ‘electrons’, regardless of time of day, season, etc., load dispatch centers must allow these ‘green’ electrons to be dispatched into the electric grid first and foremost—since they have ‘zero’ variable/energy costs and are exempt from ‘merit order dispatch priority’. This prioritization is made regardless of unfavorable direct and indirect impacts on electric grid reliability, availability, stability, and resilience. Stationary BESS units offer the potential solution: storage of surplus energy at times when there could be such negative consequences on grid function.

Retail Consumer Uses

Besides commercial and industrial applications, there are in fact some critical functions of stationary BESS units in both the wholesale and retail marketplace that end-users tend not to know about. For example, they can facilitate independence from the grid through decentralized power solutions—it is not beyond the realms of possibility that within the next 10 to 15 years the option to live in remote areas without electrical grid availability could be born from relevant technical feasibility and economic viability improvements of stationary BESS units. All the average life in the developed world’s energy needs could potentially be met via solar PV plants integrated with BESS units, respectively generating and storing sufficient power available on-demand.

Supply/Value Chain

The global battery chemistries, technologies and associated materials supply/value chain is a highly complex and integrated system and is one of the main elements of this industry holding batteries—both portable and stationary—back from much deeper market penetration. Current commercially advanced battery chemistries include, but are not limited to, lead acid, lithium ion, vanadium redox, sodium sulfur, as well as solid state batteries.

Imagine a unit of ore utilized in batteries manufacturing. This ore is destined to go on a journey, simplified as follows: it is first shipped to a mineral extraction facility to separate the ore’s constituents; those raw materials required for batteries are then shipped to a refinery; the resulting battery is shipped to an EV factory after that; and this is all before the vehicle is shipped elsewhere as a final product to end up with its eventual end-owner. As part of a phenomenon coined ‘molecular tourism’, a unit of raw material such as cobalt or lithium can travel over 100,000 km before the resulting EV is first powered up by its owner.  In addition, other key battery components include ultrahigh molecular weight battery separator film, cathodes, anodes, and ancillaries for completing a battery module.

To overcome resulting supply/value chain barriers, hurdles, inefficiency and lack of transparency, the US House of Representatives recently introduced a bipartisan bill HR 1817 on May 1, 2024, known as the ‘Critical Material Transparency and Reporting of Advanced Clean Energy Act’. The bill aims to create a digital tracker for battery components, tracking critical minerals as they move through global supply chains.  This is similar to the EU’s ‘Battery Passport’ planned to be mandated in February 2027, which dictates that battery makers in Europe will need to disclose the carbon footprint of their batteries and comply with a CO2 emissions limit according to EU regulation. Furthermore, new EU rules call for 40 percent of Europe’s critical raw materials to be processed within its member states, with the bonus of boosting the EU’s net-zero technologies and in doing so remaining competitive in a decarbonizing global economy whilst meeting sustainability goals.

Conclusion

What is clear as we move forward, with our ever-changing energy landscape shifting towards integration of renewable sources and therefore intermittent primary energy supply, is that we will become ever-more reliant on adaptable energy sources able to provide reliable, available, and resilient power. BESS units fill this niche in a definitive manner, keeping the lights on no matter how volatile renewables energy generation may be at any one time; batteries offer several key essential services that no other technology can effectively perform, including providing a portable energy source, storage of excess commercial and industrial-scale energy, and near instantaneous response times to changes in supply or demand.  The batteries industry is at a tangential point in its development: both stationary and portable batteries are seeing strong growth, with BESS in the power sector the fastest-growing commercial energy technology. Furthermore, not only is there potential for further improvement of profitability, efficiency, and energy intensity of batteries used in existing end uses, these improvements could result in batteries exceeding technoeconomic viability thresholds to allow for the implementation of new technologies and decarbonization approaches. To that end, batteries should be thought of as a ‘master key’ to unlocking technologies that will drive us towards global sustainability.

The Authors...

Jonathan Jones, Senior Analyst

Pat Sonti, Senior Consultant

Find Out More…

NexantECA’s Technoeconomics – Energy and Chemicals (TECH) program has been globally recognized for over 40 years as the industry standard source of process evaluations of existing, new/emerging, and embryonic technologies of interest to the energy and chemical industries.  Relevant TECH Reports published include:

• Advanced Carbon Applications in Lithium-ion Batteries (2021 Program)
• Industrial Graphite Electrodes (2023 Program)
• Electrochemical Energy Storage (2020 Program)
• Recycling of Lithium-ion Batteries (2020 Program)
• Cobalt Extraction Technologies (2019 Program)
• Flow Batteries for Large Scale Energy Storage (2019 Program)
• Advances in Battery Technology for Electric Vehicles (2017 Program)