Will energy storage live up to the hype?
By Jennifer G. Gallegos, Director of Programs and Communications, Yotta Energy
In recent months we have seen a radical shift in looking at renewable energy alternatives as a result of the ongoing energy crisis† What used to be just a vision for the future or “something we would eventually move into” has quickly been pushed to the forefront of our reality as we strive to build energy resilience and break free from fossil fuel dependency. Despite many renewable energy options emerging, such as solar, wind and even hydrogen, there is one common theme: we need innovative energy storage solutions. Although the energy storage industry is still in its infancy, it is constantly evolving with innovative technologies. For example, key factors are driving growth in the energy storage sector and accelerating development and implementation in the coming years. This article examines the key growth drivers for energy storage, how they are shaping the renewable energy industry, and why energy storage must live up to the hype to play a prominent role in the global energy economy.
Power shortages and outages
In recent years, natural disasters, from wildfires to winter storms, have destroyed our existing electrical grid and disrupted the flow of energy. Texas power outage last winter, caused by three winter storms, left millions of homes and businesses without power for days. And history could easily repeat itself if: state leaders continue to push for local communities to be prepared for potential power shortages.
California also faces similar challenges at the other end of the spectrum from natural disasters. With wildfires causing planned and unplanned power outages, California residents see an increased risk of: electricity cables catch firecausing massive damage. Although California has been facing these problems for years, the state has yet to develop a solution to address them.
Hurricane Ida too left hundreds of thousands of businesses and homes from Louisiana to Massachusetts with extreme flooding and no power for over a week, which: limited rehabilitation efforts and led to many deaths. We have learned that no part of the country is immune to power outages due to natural disasters. As natural disasters become more frequent and intense, we need to develop and implement ways to strengthen the existing power grid. Deploying more renewable energy and energy storage in our communities are two ways we can increase grid antifragility.
Increased policy by the new government
During the first two years of his presidency, Joe Biden has made it clear through planned and already passed legislation that he is driving the development and adoption of innovation in renewable energy and energy storage technology through federal policy.
The infrastructure bill was off to a good start and included $14 billion for resilience programs — where energy storage is a likely investment — as well as $11 billion in grants to states, utilities and other energy storage operators looking to invest in resilience, according to up to News about energy storage.
In addition, Joe Biden recently invoked the Defense Production Act, allowing the United States to secure sources of critical materials such as lithium, nickel, cobalt, graphite and manganese used to make batteries for electric vehicles and energy storage. This is because gas prices have risen significantly since last year.
We need even more federal legislation to support research into technological innovations and the rollout of renewable energy and storage initiatives. We also need local and state governments to adopt policies to deploy more renewable energy and achieve carbon reduction targets. Some states have already started doing this, such as: California† Introducing more federal and state policies will be a huge incentive and necessary for greater deployment of renewable energy and storage.
Shortages in the supply chain
With COVID-19 still taking a global economic and social toll, including foreign conflicts, the global shortage of supply chain extends over almost every sector. The ongoing disruptions of the supply chain will be an important factor in the energy transition. We have already started seeing several new initiatives that will bring manufacturing back to America. For example, Tritium announced its new production facility to build chargers for EVs in Tennessee earlier this year, and Intel has released plans for a new semiconductor plant in the Midwest.
Adding to the misery in the supply chain is: a new investigation in circumvention tariffs on solar products from Cambodia, Malaysia, Thailand and Vietnam. This problem has led the solar and storage industry to inquire about increasing production in the state. With those four countries supplying 84% of U.S. imports and many deliveries canceled due to the investigation, there is a major market gap that needs to be filled to advance the adoption of solar and storage. It is difficult to predict whether this research will increase domestic production of solar panels. New solar module technologies can now have an advantage as companies try to take over and install what is currently available on the market.
More investment in climate technology
Last year, climate technology $37 billion in global venture capital2.5 times pre-pandemic investment levels.
When the United States rejoined the Paris Agreement and attended COP26 last fall, it signaled that renewable energy initiatives were once again a top priority for the US government. Likewise, VCs have followed suit and increased capital investment for renewable energy companies and clean technology startups. The influx of capital will drive innovative companies to further research, develop and scale their technology, allowing the industry to thrive and grow at a much faster pace.
Growth of EVs
The increasing adoption of EVs is also a huge factor in advancing energy storage. The rising growth in EV sales is mainly due to the influx of new EV types available for purchase and rising gas prices. if Electric car sales skyrocket, increasing adoption of on-site energy storage and solar solutions will logically be the next step in the energy transition. People will look for solutions that reduce electricity costs by adding EV chargers on site.
Due to international instability, especially in Ukraine, there is a strong impetus for countries around the world to reduce dependence on fossil fuels. Natural gas has now reached historically high prices because of sanctions against Russia. This price increase will be another factor to fuel the growth of energy storage investments, especially in the United States.
In addition, cobalt and other rare metals come from unstable countries with growing social unrest† Ukraine and Russia are also suppliers of lithium and nickel, which are used to manufacture EV batteries. These global conflicts could potentially dictate how we obtain the materials needed to build batteries for energy storage systems. Depending on the outcome, the industry may need to look elsewhere or to other chemistry to support the scaling and growth of energy storage technologies.
The world is constantly changing and evolving, posing unique challenges for all industries, including energy. Despite waves of turmoil and conflict rippling across the globe, there is a silver lining – all indications are that we need to initiate a significant shift in the way we produce, store and use energy. Renewable resources and energy storage have emerged as the most practical and economically viable solutions. The factors mentioned above will continue to boost the renewable energy sector and lead to many new trends that we have yet to see in energy storage implementation and technological innovation. We do not know exactly what the future of energy storage will look like. However, we can see that it will increase the existing power grid as we move to fully utilize the clean energy we produce.
Stay tuned to Solar Power World for the second part of this series of articles.