Energy storage: The key to a smarter power grid

Lightening Demand for electricity is set to soar due to efforts to reduce CO2 emissions

Energy grids across the world are struggling to cope with a surge in demand for electricity and increasingly volatile supply from renewable power sources.

Take the UK, where the government is committed to stringent carbon dioxide reduction targets. These can only be met by massively increasing electricity use - which currently accounts for about a third of all energy consumption - from renewables at the expense of oil and gas.

Peak demand on the UK grid is currently 60GW, but by 2050, the government estimates this will increase six-fold as demand for electric cars and household heating soars.

To meet this demand, more pylons and cabling will be needed, adding up to £1,000 a year to consumer bills, according to power services company S&C Electric.

And it's not just about higher demand and cost, as renewable power sources such as wind and solar are, by their very nature, variable - when the wind doesn't blow and sun doesn't shine, little or no power is generated.

As Mike Wilks, at Poyry Managing Consulting, says: "We need more flexibility in our energy mix."

Connectivity

Countries the world over, and particularly those investing heavily in renewable energy, are facing the same problem, and solutions are few and far between.

Fuelling the future

Increasing fast-acting generation in order to fill energy gaps is one answer, but as most generators of this type, such as diesel turbines, emit CO2, they are somewhat counterproductive.

Another way is to increase connectivity with other countries, but in a world in which national energy security is high on political agendas, this is far from ideal. And besides, as many weather patterns are regional, this is hardly a winning solution.

But there are two ways to help solve this critical problem that should work, both of which are attracting huge sums of money from governments and companies.

The first is energy storage - simply storing energy generated during periods of low demand to use during periods of high demand. Sounds simple enough and, as Anthony Price at the UK's Electricity Storage Network says, it's something that was commonplace 100 years ago.

Not only does storage help overcome the problem of variable supply from renewable energy sources, but it allows electricity grids to operate more efficiently and cost effectively, says Mr Price. This is simply because storage allows "the system to be run at average load rather than peak load", he says.

Electricity pylons Without storage, more pylons will be needed to cope with electricity demand

It would also end the absurdity of paying for wind turbines to be shut down when demand is being satisfied.

And the cost savings could be huge - Imperial College London's Energy Futures Lab has estimated that energy storage technologies could generate savings of £10bn a year by 2050 in the UK.

Booming industry

There are a whole host of technologies to store energy - from pumped hydro to powerful and efficient batteries - that are being developed and implemented around the world, primarily in Germany, Japan, the US and the UK.

Different ways to store electricity

  • Compressed air: Air is stored and compressed, then expanded to produce electricity
  • Pumped hydro: Water is pumped uphill and released when needed to produce electricity
  • Batteries: Many different types could be used, including lithium ion, sodium sulphur and liquid metal
  • Liquid air: Cools air and then liquefies it, before expanding with heat to produce electricity
  • Other technologies being explored are flywheels, pumped heat and various electromechanical systems.

Source: Electricity Storage Network

Indeed estimates by Lux Research suggest the global industry for energy storage could be worth $100bn in the next few years.

One pilot project is taking place in Painesville, Ohio, where Ashlawn Energy has installed its vanadium redox flow battery, which can discharge 1MW of power for up to eight hours.

"It's very clean, very safe, very long-lasting and can provide power for up to 1,000 homes," says Bill Hagstrand at energy enterprise firm Nortech.

Other installed battery storage projects hold up to 20 times the capacity of Painesville, while pumped-hydro projects can produce more than 1,500MW of power.

Indeed a key benefit of energy storage is that different technologies can be implemented depending on the demand for energy, from small, isolated rural communities to heavily populated cities.

Smarter grids

The other significant advantage is it allows power to flow two ways, and therefore complements perfectly the final solution to increasing flexibility of energy grids - demand-side management and smart grids.

Dinorwig pumped hydro station, Wales Pumped hydro is used for large scale energy storage projects

This does not involve reducing overall demand, but spreading it out to avoid the peaks that put energy grids under the such stress.

Smart meters may have been introduced to end the costly need for manually reading meters, but they have developed into far more than that. By monitoring constantly energy use in households and linking directly to smart appliances, the time will soon come when these meters take over some of our decisions about energy use.

As Andrew Jones, at S&C, says: "The real change will come when there are enough smart meters to know when to turn things off."

For instance, the meter will be able to turn a fridge off automatically for short periods when electricity is needed elsewhere in the system, or decide when to switch on a washing machine in order to balance the grid as a whole. Such smart appliances are already widely available in Germany.

And with two-way flows of power so essential, not just for energy storage but for small-scale power generation where households and businesses sell energy back into the grid, soon any appliance or device able to store power will be able to feed energy back into the grid.

Electricity storage sites in the UK

For example, an electric car battery becomes a potential energy source for the grid rather than just an energy store for the individual. The technology is not there yet, but this integrated smart grid is where we are heading.

And it could save us a fortune, says S&C. It estimates that rather than the £1,000 predicted to be added to UK bills by 2050 to pay for additional infrastructure to meet higher electricity demand, we'd be looking instead at a £100 increase if smart grids and energy storage were fully adopted.

Community power

But the story doesn't end there. Energy storage and smart grids mean energy generation and distribution no longer have to be done at a national level - individual households and communities are now able control their own power, and with it the price they pay and the security of supply.

Pilot projects have already been set up in countries such as Germany, Italy, India, China, the US and the UK.

National grids evolved to take advantage of economies of scale and to avoid over-building expensive generating capacity. But the advent of small-scale renewables and energy storage technologies, together with falling generation costs, means that in some instances it makes more sense for power to be generated and stored at a more localised level.

Just as it was, in fact, throughout much of history.

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    BANK POWERS 11:27:

    The Bank of England's Financial Policy Committee says it has deliberated over the Treasury's offer of more powers to manage risks from the housing market. It says it should receive the ability to cap how big a mortgage Britons can receive relative to their income and the value of their home.

     
  2.  
    OIL SLIDES 11:13:
    North Sea Brent Crude

    As the chart above shows, oil prices have made a sharp move lower today. The benchmark contract for North Sea Brent crude is down 2.3% so far this morning. On Wednesday Saudi Arabia recently cut its official selling price to Asian customers, which has rattled traders. From a high in mid-June of $115 a barrel Brent crude has fallen 20% to under $92 per barrel. Let's hope lower petrol prices are on the way.

     
  3.  
    Via Twitter Brian Milligan Personal Finance Reporter, BBC News

    tweets: "Bank of England's new powers will hit speculative landlords"

     
  4.  
    ROLLS-ROYCE 10:45:
    Rolls Royce chief executive Torsten Muller-Otvos

    So how much for an entry level Rolls-Royce? Well, that would be the Ghost model, says the chief executive of Rolls-Royce, Torsten Muller-Otvos on News Channel. It will set you back around £200,000, he says. And remember that's just your basic model, pretty soon you'll be wanting to upgrade...

     
  5.  
    WONGA 10:35: Via Email Pat McFadden MP, member of the House of Commons Treasury Committee.

    emails: "We cannot have the usual routine response to these findings, which is that the company involved claims it is all in the past, that everything has changed and urges everyone to move on... I believe Wonga should be called back before the House of Commons Treasury Committee to be questioned."

     
  6.  
    Via Twitter Rory Cellan-Jones Technology correspondent

    tweets: "Unusual alliance - Nat Rothschild & Ken Livingstone unite against Uber, backing community ride-sharing app Maaxi"

     
  7.  
    ROCKET CRASHES 10:07:
    Rocket internet

    Oh dear. Shares in Rocket Internet have fallen up to 14% on their debut on the Frankfurt Stock Exchange. The Berlin-based internet firm owns a host of online businesses, including food delivery, taxi hailing and a fashion retailer. The share sale raised €1.4bn.

     
  8.  
    OFCOM BOSS LEAVES 09:56:
    Ed Richards, Ofcom chief executive

    Ed Richards is standing down as chief executive of Ofcom, the regulator of television, radio and internet services. Patricia Hodgson, Ofcom chairman, said: "Under his leadership, Ofcom has helped to deliver superfast broadband, 4G, lower prices, innovation, competition, and sustainable public service broadcasting in the UK."

     
  9.  
    WONGA 09:52:

    The Financial Conduct Authority is sending a message to the payday loan industry. Clive Adamson, director of supervision, said: "We are determined to drive up standards in the consumer credit market and it is disappointing that some firms still have a way to go to meet our expectations. This should put the rest of the industry on notice - they need to lend affordably and responsibly."

     
  10.  
    Via Twitter Adam Parsons Business Correspondent

    tweets: "FCA says did deal with Wonga requiring company "to make significant changes to its business immediately....should put industry on notice""

     
  11.  
    Via Twitter Neil Hume, Financial Times Commodities Editor

    tweets: "It's turning into a rout. Brent down 1.4% to $92.86 this morning in the wake of the latest Saudi OSPs [oil sales price] "

     
  12.  
    WONGA 09:21:

    Payday lenders like Wonga were criticised last year by the Office of Fair Trading for the number of times debt was rolled over, extending the amount of time a borrower has to repay, but also increasing the overall cost of the loan. Earlier this week, Wonga said 2013 profits fell by 53% to £39.7m due to "remediation costs" - money it had to pay back to customers as a result of its own mistakes.

     
  13.  
    WONGA 09:09: Breaking News
    Wonga logo

    Wonga will write off the debts of 330,000 customers who are in arrears of more than a month. Another group of 45,000 customers who have been in the red for less time can pay their debt without interest and charges. Wonga is doing this following "discussions" with City watchdog the FCA.

     
  14.  
    DOMINO'S PIZZA 08:58:
    pizza

    Shares in Domino's Pizza are up 2.2% after the fast food firm said third-quarter sales were up 12.9%. The company says it has been helped by a shift to online sales.

     
  15.  
    CONSERVATIVE CONFERENCE 08:37:
    Prime Minister David Cameron

    The Daily Telegraph is swooning over Prime Minister Cameron's conference speech. "Electrifying," is how it describes the PM's pledge to raise the 40p tax threshold. The Telegraph doesn't quite claim credit for the move, but does remind us that it has been campaigning for such a reduction.

     
  16.  
    MARKET UPDATE 08:27:

    The FTSE 100 is down 0.24% in early trading following a 1.4% loss for the Dow Jones in on Wednesday.

     
  17.  
    PARIS MOTOR SHOW 08:11: BBC Radio 4
    Discovery Sport

    Jaguar Land Rover has plenty to boast about at the Paris Motor Show. It has doubled sales volume and employment in five years. On Today Andy Goss, global sales director says that 80% of its output is exported. But to compete it has to build plants abroad, he says. A new plant opens in China at the end of this year and one in Brazil around a year later.

     
  18.  
    VIRGIN MONEY FLOAT 08:03: Via Email Kamal Ahmed BBC Business editor

    emails: "Virgin Money's announcement of its intention to sell a stake on the London stock exchange brings to an end another chapter in the sorry story of Northern Rock. The functioning bits of the bank, which spectacularly collapsed in 2007 and was bailed out in February 2008 with £1.4bn of tax payers' money, were bought by Sir Richard Branson and US investor WL Ross for £747m in 2011."

     
  19.  
    MARKET REPORT 07:50:
    Share price board, Tokyo

    It has been a shaky session for shares in Tokyo, the Nikkei 225 index closed 2.6% lower at 15,661. The Hang Seng in Hong Kong, which has fallen more than 9% since hitting a six-month peak in September amid pro-democracy protests, is closed for a public holiday.

     
  20.  
    Via Twitter BBC Radio 4

    tweets: "'Downgrade could follow Brexit' says Standard and Poor's Mortiz Kraemer @EthicalMan"

     
  21.  
    HEADLINES
     
  22.  
    LORD HILL 07:33: BBC Radio 4
    Lord Hill

    "He showed no grasp of the issues," is the verdict of Phillippe Lamberts, co-chair of the Greens in the EU parliament, on Lord Hill's appearance before European members of parliament on Wednesday. "Behind his charm there was apparently little knowledge of the subject matter at hand," Mr Lamberts said on Today.

     
  23.  
    VIRGIN MONEY FLOAT 07:26:

    So, will ordinary folk be able to buy shares in the Virgin Money offering? Not until they start trading. The offer is open to "certain institutional investors". Although they are giving staff £1,000 of shares apiece.

     
  24.  
    VIRGIN MONEY FLOAT 07:11:

    Virgin Money has announced details of its share sale. The firm hopes to raise £150m from the sale of about 25% of the bank, it said. If the sale is successful the Treasury will receive £50m, which was part of the deal when Virgin Money took over assets from Northern Rock.

     
  25.  
    ECB MEETING 06:57: BBC Radio 4
    Eurozone sign

    The European Central Bank (ECB) hosts its monthly meeting in Naples today, amid worries that the eurozone economy is deteriorating. "The ECB can buy time for governments to act... but it cannot generate lasting growth," says Moritz Kraemer from Standard & Poor's on Today. He says Europe needs to reduce the debt load of households, firms and governments.

     
  26.  
    PIMCO EXODUS 06:48: BBC Radio 4

    Investors have taken £14.5bn out of the investment firm Pimco since its founder Bill Gross resigned last week. Andrew Balls, chief global investment office at Pimco, says "it's calmed down very quickly though". The departure was not a huge surprise, he reckons. Mr Balls reminds listeners to Today that Mr Gross was 70 "and wouldn't be there [Pimco] for ever". Ouch.

     
  27.  
    PARIS MOTOR SHOW 06:40: BBC World News
    Rolls Royce chief executive, Torsten Muller-Otvos

    "We are on the roll ja," says the German chief executive of Rolls Royce Motor Cars, Torsten Muller-Otvos on World Business Report. He expects the company to have another record year. He is standing in front of a limited edition Rolls-Royce Phantom, only 20 were made and, sorry readers, they are all sold out.

     
  28.  
    SHARING ECONOMY 06:31: Radio 5 live

    What is the sharing economy? "The sharing economy defines the assets you own and skills you have" says Debbie Wosskow, chief executive of Love Home Swap on 5 live. (Are we clear now?) Customers need protection, but regulation needs to keep up with this emerging market, she says. She's writing a review into the sharing economy.

     
  29.  
    CONSERVATIVE CONFERENCE 06:17: Radio 5 live

    Lord Digby Jones, the crossbench peer and businessman is on 5 live after his appearance at the Conservative Party conference. He is worried people think money grows on trees, rather than coming from business, but also says business should mend its image: "I don't want chief executives paying themselves big bonuses [right now]. They may deserve it, but it sets a lousy example."

     
  30.  
    ARGENTINA 06:13: Radio 5 live
    President Cristina Fernandez

    The boss of Argentina's central bank has resigned. Juan Carlos Fabrega had been calling the government to tackle inflation and rein in spending. That created conflict with the nation's economy minister. The BBC's South American Business Reporter Katy Watson says the resignation doesn't make President Cristina Fernandez de Kirchner look good either.

     
  31.  
    PARIS MOTOR SHOW 06:07: Radio 5 live

    Jurgen Stackman, chairman of carmaker Seat is on Radio 5 live. Ten years ago electric vehicles were seen as the future, so what went wrong? Industry watchers were very optimistic about the speed of people picking them up, he says. Electric cars still have mileage and range limitations and families with one car don't want to rely on an electric car, he adds.

     
  32.  
    US SHARES SLIDE 06:00: BBC World News
    New York Stock Exchange

    There were sharp losses for US shares overnight. On World Business Report, Michael Hewson, chief analyst at CMC Markets reminds us that the US market has had a good run recently. But there is not much to be positive about at the moment, he says. The recent economic data from China and Japan has not been great. Traders are also preparing for higher interest rates in the US, Mr Hewson says.

     
  33.  
    06:00: Howard Mustoe Business reporter

    Good morning. You can get in touch via email bizlivepage@bbc.co.uk and on twitter @BBCBusiness

     
  34.  
    06:00: Ben Morris Business Reporter

    There were sharp losses for US shares overnight, so it will be interesting to see how Europe responds to that later. Plus we'll have reports from the Paris Motor Show. It should be a fun morning, so stay with us.

     

Features

From BBC Capital

Programmes

  • European Union's anti-terrorism chief Gilles de KerchoveHARDtalk Watch

    Anti-terrorism chief Gilles de Kerchove on the threat from returning Islamic State fighters

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.