A Sun Soaked, Wind Swept World
Wind and Solar promise a pathway to a fossil free future, but only if we can solve the problem of intermittency with affordable electricity storage technologies.
The price of renewable energy has declined dramatically over the past 30 years. Wind is 30x cheaper, Solar 300x. Compared to other forms of energy, they are unbeatable on cost and sustainability.
Wright’s law is clear to see. For every cumulative doubling of wind and solar units produced, cost have fallen by a near constant percentage. This means it has become economically viable to increase the share of electricity as a percentage of total energy generation. The latest data from Ember, an independent energy think tank, calculates that solar and wind accounted for 12% of global electricity production in 2022. When nuclear and other renewables like hydro and tidal energy are added in, this number increases to 39%. These are exactly the additional clean Terawatt hours we need to charge our electric vehicles, and warm our homes with electric heat pumps.
So are we reaching a tipping point that heralds the decline of fossil fuel based electricity production?
Many analysts now believe the answer to this is question is “yes”, but it comes with an important caveat. The majority of new electricity capacity will come from wind and solar, but as Energy Brainpool’s EU Energy Outlook forecast shows, there will continue to be a stubborn seam of gas (the orange band), well into the future. This is because, in the absence of medium to long term electricity storage solutions, we will continue to rely on gas power stations to balance intermittent wind and solar supply.
If we are to eliminate gas from electricity generation, we will need to build a lot of medium and long term electrical storage capacity. This is because of the dreaded “Dunkelflaute”, a macabre sounding German word that describes multi-day periods where there is no wind and very little sun. If Wagner were alive today he’d compose an opera where ontologically doomed characters huddle together for warmth during the darkest and coldest days of winter, with no stored renewable energy to save them from their fate. But I digress.
During a Dunkelflaute the delta between energy demand and renewable energy supply averages a frightening 60%. After a few days, even cool headed German grid operators have no option but to issue a cry for help by scrawling over supply and demand charts in BIG RED FONT:
Saving for a dark, windless day
Managing renewable energy generation, distribution, transmission and storage is an incredibly complex balancing act. Which is why backing the right mix of technologies, and eliminating waste are so critical to success.
Sidebar : The UK alone is wasting between 6–8% of wind power because excess energy cannot be consumed by the grid or stored cost effectively. Curtailment means consumers end up paying three times for the power they’re getting: in the first instance to the wind farm for the electricity, then to turn off supply, and thirdly for gas generation. The last of these can be cripplingly expensive. For example, during a period of low wind in September 2021, owners of gas plants in the UK were receiving £2500 per MWh to deliver energy to the grid, 50 times the normal wholesale price of electricity. Daylight robbery just to keep the lights on.
So what storage options do we have? And are they environmentally desirable, technologically feasible, and economically viable?
Comparing the costs of storage
Before we dive into a veritable smörgåsbord of storage tech, it’s wise to start with current and forecast costs per MWh, then check round trip efficiency and discharge duration, i.e. how long they are designed to store electricity for, before coming to a verdict on what mix of technologies ladder up to a stable, affordable and efficient renewable energy grid.
So first, costs. For gravitational storage, hydrogen and lithium-ion batteries I was able to source credible cost forecasts up to 2030, so have included these so we can get a better understanding of how competitive these technologies could be a few years from now.
Levelised cost analysis (baseline = 2021 prices), which assumes a 10 hour discharge period for stored energy.
It is clear that storage costs will increase the cost of electricity at the plug. The current best case cost scenario is made up of onshore wind ($50 per MWh) + compressed air storage ($104) = $154. But this should not lead us to conclude that clean energy is unaffordable or even economically unviable.
It points to the fact that environmental costs are not reflected in energy prices. Fossil fuels are scandalously undertaxed, electricity is massively overtaxed.
I don’t have the space here to go into detail around how policy change is required to rebalance taxes and levies between electricity and the heating fuels that governments would like people to switch from, but thankfully others more qualified than myself have. I can strongly recommend this paper for those who want to double click into this topic. Our roadmap to net zero needs these reforms before anything else to make renewables plus storage competitive.
Discharge duration
What the above cost table fails to show, is how the unit economics of each solution are affected by discharge duration. Expensive lithium-ion batteries are only economically viable if they are charged and discharged multiple times a day, whereas hydrogen really comes into its own when held in underground salt caverns for a period of weeks or months. The long and the short of it is, that we will need to mix and match different types of storage, based on storage duration requirements.
We also need to consider how we connect up sunny and windy regions, to balance natural variations in renewable generation. This all points to an international renewable energy super grid, that runs south to north, rather than east to west like fossil fuel supply lines. (More on this in the final section of the article).
But first to the individual technologies themselves, and my tentative verdicts. I want to be clear that I am not a renewables storage expert, so my verdicts are based on my own research, analysis and critical thinking plus a handful of conversations with experts in my personal network.
Compressed Air Energy Storage (CAES)
Currently the most cost effective medium duration storage option available to us at $104 per MWh. Surplus power is used to run a rotary compressor that condenses air. This highly pressurised air is then packed into an underground cavern or container and can later be released in a turbine to generate power. However there are only two plants on the whole planet currently doing this, producing a meagre 430 MW.
Tentative verdict : 🔋🔋🔋🔋/5. Green, simple and more economically viable for mid-term storage than batteries. Crying out to be scaled up. What are we waiting for?
Liquid Air Energy Storage (LAES)
This is done using excess renewable energy to power a liquefier, which cools and compresses air into a liquid form at -196°C, available over a lifetime of 30 years, so this is genuinely long term energy storage. The main downside to LAES is energy loss during conversion, estimated at 50%.
Tentative verdict : 🔋🔋🔋🔋/5. Energy loss a concern, but on par with hydrogen when it comes to round trip efficiency. Storage capacity scales well (100+MW per site), and LAES systems can use industrial waste from thermal generation plants, steel mills and LNG terminals to improve system efficiency.
Pumped hydro
At its simplest, pumped hydro involves two dams, one high on a hill and one down in a valley, with pipes and turbines connecting them. Electricity is stored by pumping water uphill to the upper reservoir on sunny and windy days and turned back into power at night or during calm or cloudy days by letting the water flow downhill through a turbine. It’s just good old GPE suited to mid term discharge durations. PV storage would need to cycle daily (~350 cycles per year), and wind once to twice a week (50–100 cycles per year). An authoritative Australian study identified 616,000 suitable pumped hydro sites globally with a potential to store 23,000 TWh energy. To put that in context, global energy consumption in 2021 was close to 28,000 TWh. The authors argue that: “Pumped hydro energy storage is the largest, lowest cost, and most technically mature electrical storage technology available”. Closed loop off river systems are the most cost effective and least disruptive to wildlife, which was the main concern I had when evaluating this solution. It is by no means “bleeding edge” tech, my local Kraftwerk in Bavaria has been operating since 1923 and is located between two beautiful Alpine lakes (Walchensee and Kochelsee).
Tentative verdict: 🔋🔋🔋🔋🔋/5. Providing sites are carefully selected to minimise negative environmental impacts I see this as a proven technology with huge potential to scale. I have seen first hand how effective pumped hydro can be in mountainous regions without being an eyesore. Installations do not have to be massive dams that flood entire valleys to be effective. The main limitation is transmission costs and loss, so generation and storage should be regionalised. Ergo, this is a no brainer in hilly areas.
Hydrogen storage
Uses over-generated electricity from wind and solar to make green hydrogen. Said Hydrogen is stored, either in underground salt caverns for large capacities (up to 500,000 cubic meters at 2,900 psi equating to about 100 GWh ) or pressurised tanks for smaller amounts. Estimated round trip efficiencies range vary from 30% for gas turbines to 60% for large scale combined cycle plants, but these numbers are affected by a number of variables like storage pressure, flame temperature, and how the hydrogen is converted back to electricity:
It is significantly more expensive than compressed air, and less efficient. But proponents of hydrogen storage, and hydrogen more generally, argue that Levelized Electricity Costs (LECs) will continue to fall, just as they have for other disruptive technologies. The most robust forecasts I could find estimate long term hydrogen storage will cost $150 per MWh by 2030, although Sir Chris Llewellyn Smith, an eminent Oxford physicist leading a Royal Society study into large-scale long-term storage, recently claimed a number closer to $110 (£90) on the influential “Cleaning Up” podcast hosted by Michael Liebreich, who like me, happens to be very critical of hydrogen hype.
Tentative verdict : 🔋🔋🔋/5. The jury is still out on what cost reductions hydrogen storage can achieve, but I think this is a use case well suited to the lightest element, despite my reservations towards hydrogen in general. This technology is certainly receiving a lot of attention and funding, so my biggest concern continues to be that it will divert capital and talent away from more proven projects like pumped hydro and CAES / LAES which can be expanded more quickly, at a lower cost, without delay.
Lithium-ion batteries
Ions move from the negative electrode to the positive electrode during discharge and back when charging. Typically deployed for energy storage under 10 hours.
Tentative verdict : 🔋🔋🔋/5. A vital part of the storage mix, and becomes more viable as the installed base of batteries grows with EVs, I see this as a great technology to deliver instant electricity to the grid during peak times. Costs are still borderline prohibitive, and given the rising cost of input materials, it is not certain that Wright’s law will continue to operate as it has historically. The rise of flow battery tech also gives me pause for thought, will lithium-Ion batteries be superseded?
Lithium-ion phosphate (LiFePO4) batteries
Are more expensive, but have a longer life cycle (estimated at 4–5x lithium ion) and are less likely to overheat and catch fire, an important consideration when building battery storage farms in densely populated areas.
Tentative verdict: 🔋🔋🔋🔋/5. There is clearly a upfront cost vs durability trade off here. If they are safer than Li-ion batteries and costs continue to fall, adoption should follow.
Vanadium redox-flow batteries
Use two tanks, containing positively and negatively charged liquid vanadium electrolytes that are pumped past a membrane in a cell. The batteries experience less degradation than Li-ion batteries, match capacity and have a longer life cycle.
Indeed, experts claim that they are:
“Safer, more scalable, longer-lasting, and there’s much more Vanadium than Lithium in the Earth’s crust. But commercialisation suffers from the high cost of Vanadium extraction. So researchers are working on how to store more electricity through improved chemistry, and improved cell and stack designs”.
Tentative verdict : 🔋🔋🔋🔋/5. The future of battery technology, with the only big uncertainty being if Vanadium extraction costs can be considerably improved. Time to go with flow?
Lower cost batteries using cheaper raw materials
Such as iron, sulphur and zinc are alternatives to lithium-ion. Form energy, claims that using “the most abundant materials on the planet — low-cost iron, water, and air” to manufacture their batteries does not compromise performance and can “store electricity for 100 hours at system costs competitive with legacy power plants”.
Verdict : Missing data. The same performance at a lower cost using abundantly available materials? Sounds amazing. But I am not enough of a battery tech expert to determine if this marketing claim holds true in practice, and have been unable to find a reliable study that compares like for like performance with flow, li-ion and LiFePO4 batteries .
Thermovoltaic storage
Stores energy as heat in molten salts, volcanic rock or concrete. Siemens Gamesa has built a thermal plant in Hamburg that houses 1000 tonnes of Norwegian volcanic rock, storing 130 MWh of energy as heat. This provides enough energy for 3000 german households. A German startup called Kraftblock (you could have guessed) have developed a nanotechnology granule that can be heated to 1300C, disguised as an unassuming portacabin, that delivers a storage capacity of up to 1.2 MWh per m³.
For the same surface area as a typical distribution warehouse it becomes possible to store 60+MW with a lifespan of 15,000 cycles. At a discharge rate of one per day, this would give you 40 years. Ne bad.
Tentative verdict: 🔋🔋🔋🔋/5. Genuinely innovative, and a flexible storage solution. However, there is little data available on the levelised costs of thermovoltaic storage, so I would like to see a clearer business case for backing this instead of competing technologies, like compressed air or pumped hydro. I like that storage materials are free of rare earths, boosting their full cycle sustainability credentials.
Gravitational energy storage
A mechanical process of lifting and lowering composite 30 tonne blocks to store and quickly dispatch kinetic energy which is turned into electricity, which can be delivered back to the grid at demand peaks. Solutions can be built in modular, 10MWh units by the likes of Energy Vault and work best when co-located with wind and solar farms. Gravitational energy provides a rapid response to demand, but offers more limited capacity than other options. Think of them as multi-level car parks fitted with an intricate system of mechanical weights. A proper first date conversation starter, just be careful to stay away from discussing discharge duration.
Tentative verdict: 🔋🔋/5. Significant Capex investment is required to manufacture the blocks and mechanical systems that hoist and release them, for relatively little storage capacity. I also struggle to see how this tech can compete with batteries in the long term, given that it requires in the region of 5000 annual cycles and a discharge duration of 30 minutes to be economically viable. That said, inaugurating a new desert storage facility with Slash from Guns N’ Roses as a special guest, whilst hundreds of blocks mimic the motion of the music, would be pretty sensational. I suggest Energy Vault make this promo video, and soon.
Towards an international renewable energy super grid
Generating and storing power locally, regionally or even at a national level won’t be enough consistently meet energy demand. This is because we live in a world where the sun shines and the wind blows in different places, at different times. To harness the full potential of our sun soaked, wind swept world will require us to build an international renewable energy grid that connects generation and storage across borders. Ambitious new projects like the Xlinks Morocco-UK power project provide a glimpse into this clean new world:
- A 10.5 GW solar farm in Morocco that is 1500 sq/ km, equivalent to the size of greater London.
- 20 GWh battery storage system and a 36GW High Voltage Direct Current (HVDC) inter connector that spans 3800km. This will meet 10% of UK home energy demand, equivalent to 7m households.
- Costs are estimated at £16 Bn to generate 3.6 GW. The closest alternative would be a new nuclear power station like Hinkley C in Somerset producing 3.3 GW and estimated to cost of £32.7 Bn.
- Estimated transmission losses are likely to be 20% (based on the fact that the cable is 4x longer than the one connecting Norway to UK, and this route experiences 5% transmission losses). However, it might be possible to bring transmission losses closer to 12% as newer HVDCs can carry electrons at 3% losses per 1,000 km. This is a massively important innovation in the context of connecting up regions.
- This exciting and complex project could be the first step towards a EU — North African wind and solar “supergrid”. The Fraunhofer Institut have kindly modelled what this could look like:
Challenging the conventional wisdom
Some say that a transition to net zero will be “expensive”, others go as far as “unaffordable”. So is the content of this article just pie in the sky? That depends on who you ask and how you frame the question. McKinsey, who are always on hand to deliver a forecast for the right fee, estimate that:
“Spending on physical assets on the course to net-zero would reach about US$275 trillion by 2050”, or in more relatable terms, “about half of global corporate profits, one-quarter of total tax revenue, and 7% of household spending”.
So there will be costs, but what are the costs of a slower transition, or none at all? A comprehensive new study from Oxford University concludes that:
“Compared to continuing with a fossil fuel-based system, a rapid green energy transition will likely result in overall net savings of many trillions of dollars — even without accounting for climate damages or co-benefits of climate policy [because] most energy-economy models have historically underestimated deployment rates for renewable energy technologies and overestimated their costs.”.
A renewable energy future, it turns out, is also an economically viable one. But the roadmap that gets us there is still up for grabs. This makes it all the more important to critically evaluate, probe and question the options available to us. I hope the last 15 minutes of reading have brought you closer to imagining what this roadmap could look like, and what technologies you would back if it was your capital that was funding them.
