Ski Lifts Help Open $25 Billion Market for Storing Power
By Louise Downing - Aug 31, 2012 2:05 PM ET
Technology developers are shuttling between caves and mountaintops to build a market for utilities set to attract $25 billion in annual investment within a decade.
To store surplus electricity from power plants, they’re trying to squeeze air into salt mines and run empty trains up hills, testing how to harness the energy released when the air bursts out and the cars roll back down. Trials are under way at companies from Germany’s Siemens AG (SIE) and RWE AG (RWE) to General Electric Co. (GE) and a startup backed by billionaire Bill Gates, which is experimenting with the momentum of ski lifts.
“Electricity is the only commodity in the world that isn’t really stored,” said Prescott Logan, who heads GE’s storage business in Schenectady, New York, where last month it opened a $100 million plant to make batteries for utilities. When storage becomes cheap and massive, “the impact will be huge.”
The $260 billion renewables industry needs storage so power companies can absorb surges from solar and wind farms from Texas to Mongolia. The devices will be key for plans by Germany to shift Europe’s biggest electricity market from atomic energy, said Gil Forer, Ernst & Young LLP’s clean-tech head in New York.
The consulting firm said annual investment in storage is currently about $2.6 billion, based on data from Pike Research. That’s set to grow to $9.2 billion in 2015 and then to $25 billion by 2021. Logan said Fairfield, Connecticut-based GE expects energy storage to generate $500 million to $1 billion in annual revenue by 2020.
Brad Roberts, executive director of the Electricity Storage Association in Washington, said the business in the U.S. alone may grow to $5 billion within five years.
Water Uphill
While pumping water up a hill has aided in power generation for more than 100 years, the technology is limited to mountainous terrain. Environmentalists have criticized those sites for being harmful to local wildlife, prompting developers to look for alternatives that can be used anywhere anytime.
“Energy storage solutions will catalyze growth in the market for renewable energy by enabling its use in greater volumes and in new applications,” Forer said.
Clean-energy investment rose 5 percent to a record $260 billion in 2011, Bloomberg New Energy Finance data show. China could use storage more than most, with faster-than-average growth of renewables and populations barely served by the power grid. Nations from the U.S. to South Korea are holding tests.
$25 Billion Estimate
Almost half of the 150 gigawatts that currently can be stored is in the Asia-Pacific region, according to Ernst & Young, citing Pike Research, with most of the rest in North America and Western Europe. Reaching $25 billion of investment requires boosting demand, especially with clean energy, which depends more on weather than coal or gas, said Keith Harrison, the firm’s lead analyst for global power and utilities.
“The mandated growth of renewable generation in place of fossil-fueled generation will drive the growth of battery based storage,” he said. Pumped water accounts for about 99 percent of the market, and Roberts from the ESA said he expects this to decrease to below 80 percent within 10 years.
Even the biggest power generators, from coal plants to nuclear, run most efficiently at a steady rate and take advantage of storage during off-peak hours.
Compressed-air energy storage is the most suitable for the biggest plants, Harrison said. Batteries, such as those being developed by GE and Siemens, aren’t yet capable of holding large amounts of power cheaply.
more:
http://www.bloomberg.com/news/2012-08-27/ski-lifts-help-open-25-billion-market-for-storing-power-energy.html
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