But calculating the true costs and benefits of energy storage is still difficult math.
Many years ago, I was part of a U.S. Air Force program with the goal of reducing the battery weight carried by airmen and soldiers by 25 percent. The Air Force Program Office, after scouring the market for the ideal battery solution, quickly learned that no rechargeable battery could meet the power density, energy density, lifetime, and size/weight requirements.
However, they did not abandon the project — they took a hybrid approach to the problem.
Batteries are typically designed for high-power applications (i.e., “sprinter” mode that provides lots of power in short bursts) or energy-dense applications (i.e., “marathon” mode that provides consistent lower power over long durations), and there are lifetime, performance, and cost penalties for using them in unintended ways.
For that particular military application, fuel cells and primary zinc air batteries provided great energy density but couldn’t provide bursts of power needed by certain equipment.
Rechargeable lithium-ion 18650 batteries could deliver high power, but did not have the energy density for the duration of the missions.
A hybrid approach that integrated these solutions with a central power manager was the only viable solution, and ultimately the program successfully met all of its goals. The same hybrid approach merits exploration for providing stationary energy storage solutions today.
The energy storage industry has just begun exploring grid-scale hybrid solutions, called hybrid energy storage systems (HESS), that combine two or more energy storage technologies with complementary characteristics to provide an optimal solution not achievable by any one technology. These systems typically include storage technologies that separately cover sprinter loads required for fast response and marathon loads required for peak shaving and load shifting.
The expected advantages are lower cost, increased system efficiency, and increased system lifetime due to optimized operation and the ability for hybrids to do more and last longer with less overall storage capacity.
Duke Energy just announced that it will use a HESS at its Rankin Substation in North Carolina to support a 1.2-megawatt solar installation. The system incorporates fast-response ultracapacitors to provide power to manage solar smoothing and uses a 100-kilowatt/300-kilowatt-hour battery for load shifting. The hypothesis is that the total energy throughput of the battery is much reduced and the typical thermal stresses caused by high discharge rate responses are mitigated by integrating ultracapacitors. The hybrid approach reportedly lowered the cost of the Rankin installation by 10 percent to 15 percent compared with a battery-only system. Other types of hybrid systems could drive energy storage costs even lower.
Last year Lazard published an in-depth and comprehensive analysis of energy storage costs and introduced the concept of “levelized cost of storage” (LCOS) analysis. The report addresses the cost of different energy storage technologies depending on the application — a critical aspect of energy storage often overlooked by people outside the industry. As previously discussed, comparing energy storage technologies is not that easy because how you use a storage technology greatly impacts its cost and performance.
Unfortunately, the Lazard report only presents energy costs ($/kWh or $/MWh) and does not address power costs ($/kW or $/MW) by application, which is simply the capital cost divided by instantaneous power capacity. Understanding power costs is important because they vary across technologies just like energy costs, and while a $/kWh may look attractive for marathon mode, the $/kW may not be economical for sprinter applications.
A levelized cost of power (LCOP) is needed in future analysis, as understanding power costs will be an important component of modeling hybrid solutions. Storage developers need this insight to combine the lowest-cost LCOS technology with the lowest-cost LCOP to optimize systems to provide both sprinter and marathon services. The idea is to increase the project’s lifetime megawatt-hours delivered in both of these modes while also right-sizing the energy storage solution instead of oversizing it, as is often necessary to preserve lifetime when trying to use a single technology. In addition to advantages on the cost side, there may be additional benefits on the revenue side through enhanced benefits stacking.
A 2015 Rocky Mountain Institute (RMI) study of the economics of battery storage examined using energy storage for multiple services to extract the most value. However, a complicating factor to this study’s otherwise solid analysis is the likely negative impacts of benefits stacking on an energy storage system. Such performance issues are likely not addressed because they are so difficult to quantify. But by combining two technologies that are optimized for sprinter and marathon modes, hybrids make this issue much less of a concern. In addition, while the RMI study only addresses the benefits of providing one service at a time, a HESS could simultaneously provide multiple services that allow for two value streams concurrently. For example, a hybrid system could provide frequency regulation and PV self-consumption functions simultaneously and continuously instead of consecutively per the RMI analysis.
The ability of energy storage assets to provide multiple services simultaneously is great in theory, but there are very few examples of commercial systems that are actually doing this. One example is the 1-megawatt/4-megawatt-hour flow-battery project at Avista Utilities that is reportedly providing peak shaving and frequency regulation services simultaneously. Hybrid systems could open up even more revenue streams not currently possible with a single energy storage technology.
In addition to ultracap/battery combinations like the Duke Energy Rankin project, economic HESS combinations might include ultracap/lead acid or lithium titanate/flow battery, among others. Companies like Lockheed Martin, which is commercializing complementary energy storage technologies (lithium-ion and flow batteries) and GE, which has reset with a more energy storage technology-neutral and holistic approach, are particularly well positioned to explore the benefits of HESS.
Given the tremendous growth and interest in exploring stationary energy storage solutions, expect more HESS projects to be announced over the next 12 months.
Hybrid energy storage systems merit a closer look for stationary applications as part of comprehensive energy storage deployment strategies. If HESS technology can achieve double-digit percent decreases in capex and opex, increase system operating life, and boost revenues by simultaneously providing multiple services, these hybrid solutions may be a good solution. Of course, the energy management hardware (inverters, converters, etc.) and software needed to manage two different storage technologies for multiple use cases are not trivial. Electricity market and regulatory barriers aside, the million-dollar question is: do the benefits of HESS outweigh the added complexity of HESS? Like most questions with energy storage, the answer will likely emerge as more hybrid commercial projects are contemplated, deployed and studied.