Why companies are storing energy for a rainy day

 —  Article by Laura Agadoni
solar panels on outside of building to produce energy
Image credit: Shutterstock

Electric cars, LED lighting, reusable bags; many a green innovation has gone mainstream in recent years – and now energy storage is joining the list.With new tech start-ups entering the scene this year to produce storage batteries, costs for storing energy are set to fall, making 2016 the year of battery storage around the world.

Why the focus on storage? More companies are turning to wind and solar energy but weather patterns are far from consistent. By storing the energy produced in batteries, it can be released for use when it is needed, and not only throughout the day, but from season to season as well.

Energy storage has already taken off in some markets around the world, driven by renewable energy generation, but has largely been overlooked so far in Britain, mainly because of the high cost of implementing storage technologies. In some markets, such as the US, Germany, and Japan, energy storage is being used commercially. In the US, about 13 percent of electricity comes from renewable sources and in Germany it equates to around 30 percent of electricity consumed. And the Japanese Ministry of Economy, Trade and Industry (METI) pumped $700 million into energy storage for Japan in 2015.

Thinking ahead

Investing now to build energy storage systems that take advantage of local, renewable resources could ultimately save companies money by paving the way to energy independence. “It’s a huge advantage to keep energy locally and bring it back locally when you need it, without having to transport it across the country,” says Franz Jenowein, Sustainability Consulting Director at JLL.

The cost of energy storage needs to come down for the commercial real estate industry to embrace it. “Although there’s excitement around the numbers, it might take up to 10 years for companies to get their return on investment,” says Jenowein.

Knowledge of a new technology is one thing; actually using it is quite another. The photovoltaic (PV) effect, responsible for converting light into energy, for example, isn’t new: a 19-year-old French physicist discovered it in 1839. “Solar PV panels were first used by space satellites in the late 1950s. And battery storage technology has come a long way, but it’s only really come onto the radar with Tesla,” says Jenowein who noted that the premium, electric vehicle automaker used a “very clever communications strategy to make something as geeky as a battery attractive.”

Introducing super batteries

Batteries, pumped-storage systems, ice storage, and heat thermal storage make up some of the more common energy storage technologies for use during peak demand to bring grid usage down and to compensate for peak electricity tariffs. But super batteries, the same types that power electric vehicles, are the current focus of tech companies ever since Tesla introduced the Powerwall energy storage system for homes in May 2015.

Energy stored in batteries provides a promising way to store renewable energy for buildings, too. They can power lights, computers, heating and cooling equipment during peak times, can take over during power outages, and they provide an alternative to fossil fuel powered back-up generators.

Storage battery systems have two functions. “The beauty is that you not only generate energy, but you also have an energy holding technology. Batteries can be connected to the power grid, potentially playing a key role in the emerging smart grids,” says Jenowein. Once you put energy storage systems in buildings and connect to the grid, they become part of this new energy ecosystem.

Getting into the act

More UK tech start-ups are getting into the act by developing their own storage batteries, which they can sell to commercial building owners, in a sort of “storage war” competition, with companies such as Powervault, Moixa Technology, and redT. Powervault, for example, plans to “take on Tesla” by providing home energy storage systems for British homeowners. Moixa’s system is for residential and commercial uses, and redT’s is for industrial and utility-scale usage.

Although this technology is still prohibitively expensive for widespread use, as production increases and more companies get into the game, prices will go down. “Costs are expected to fall 40 percent over the next five years,” according to JLL’s 2016 Sustainability Trends report.

Jenowein paints a picture of the environment in the UK today: a recognition by building managers of higher electricity rates during day peak times and a willingness to do something about it, and the technology solutions of the batteries. He says that lots of components need to come together for energy storage to become more prevalent, such as regulatory elements, subsidies and incentives, and software to integrate the technologies.

“The challenge is to make it all work together,” says Jenowein. His prediction: energy storage for use in commercial office buildings will be more commonplace, but probably not before 2025 or 2030.

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