Tuesday, November 18, 2008

Big Battery Boom

This short article surveys the expansion of effort on the creation of industrial sized batteries. It is not a business for the small light start up company, but is certainly within the purview of the larger concerns. What this is telling us is that while the demand is there, no clear winner stands out.

The advantages of Vanadium can be offset by the superior energy density of the alternatives. That opens the door for plenty of competition. This means that solar and wind energy can be combined with onsite storage for ultimate release into the grid itself.

Conventional energy producers can also benefit from energy storage established throughout the grid, provided the turn around cost is low enough. Major industrial users can tap the grid during off peak times to reload their battery banks in preparation for the days work.

These batteries are a necessary major step in smoothing out the energy delivery system and many will survive well past their original need.

What this article reveals is that the development of this infrastructure is now underway and will shortly be at a factory near you. Obviously the installed industrial battery bank will support the build out of adjacent windmills and solar plants.

NOVEMBER 16, 2008, 9:19 P.M. ET

Building a Better Battery

Finding alternative sources of energy is only part of the battle. You also need to store it.

industry thinks it can make wind and solar power a lot more useful -- by building a better battery.
One of the big problems with wind and solar is that they're often not generated when they're needed.
Winds are usually strongest at night, for instance, when demand for power is at its lowest. That makes it tough for utilities to effectively integrate alternative power sources into their energy mix.

The Journal Report

Now companies across the globe are working on a potential solution: batteries that can store wind and solar power and release it onto the grid at times of heavy demand. Developers are investing millions -- and in some cases billions -- of dollars into a slew of promising technologies.

The battery industry "is going through a major growth phase," says Craig Irwin, vice president of equity research at New York-based financial-services firm Merriman Curhan Ford Group Inc.

Powering Up

With the growing push toward alternative energy and away from fossil fuels, the market for batteries is potentially huge. According to a report from Lux Research Inc., which tracks emerging technologies, the batteries could represent a $50 billion market if only 10% of wind-power plants installed them. However, because of the long planning cycles and risk-aversion of utilities, Lux predicts the market will reach only about $600 million by the end of 2012.

Some in the industry -- unsurprisingly -- are anticipating a much stronger market. Premium Power Corp., a North Reading, Mass., battery maker, envisions a day in the not-too-distant future when large-scale batteries and other forms of energy storage are ubiquitous.

"In 10 years, you'll see every renewable-energy source be tightly integrated with an energy-storage system and be controlled by the grid," says Bic Stevens, senior vice president of business development at Premium Power.

Utilities and project developers are already beginning to deploy battery technologies. One device, which companies are hooking up to wind farms, is called a sodium sulfur battery.

In this technology, the electrochemicals that create the reactions that store the energy are housed inside the battery. That's roughly how traditional batteries work, but these are much bigger and have more reactive chemicals. For instance, one utility is employing a sodium sulfur battery system that's 30 feet wide and 15 feet high.

Right now, these batteries are getting a lot of attention from companies like Japanese wind-project developer Japan Wind Development Co. In May, the company started a 51-megawatt wind farm and linked it to a 34-megawatt battery system developed by
NGK Insulators Ltd. of Nagoya, Japan. The energy-storage system will have enough capacity to power approximately 26,000 homes, by storing the energy generated by the wind farm and then redistributing that power during the day.

Utilities like
American Electric Power Co. of Columbus, Ohio, are also working with NGK, although on a much smaller scale. According to Ali Nourai, AEP's executive in charge of distributed power generation and energy storage, the company has installed five NGK batteries with 7 megawatts of capacity in total, enough to power approximately 5,400 homes. AEP's batteries are already up and running in Ohio, and others in Indiana and West Virginia will be operational by the end of the year. The utility also has a 4-megawatt battery set to be installed in Texas.

Going With the Flow

Sodium sulfur batteries can store a lot of energy, which is why utilities like them. But because of the reactivity of the chemicals involved and the ceramic separator required to keep the chemicals apart, the batteries are expensive to manufacture. One estimate pegs the cost at $2,500 per kilowatt -- which means even a small-scale battery could run more than $10 million.

And that gives some utilities pause. "The technology is beautiful, but it is not inexpensive," Mr. Nourai says.

So, he's hunting for alternatives. He believes that one of the most promising is a technology called flow batteries.

Unlike sodium sulfur batteries or other traditional batteries, flow batteries have their chemical reactants stored in external containers. That means that the batteries can be easily tailored to any size to store more energy. What's more, Mr. Nourai says that the batteries may be able to deliver power more inexpensively than sodium sulfur models; flow technology uses less-reactive chemicals and thus should be easier to manufacture.

Mr. Irwin, at Merriman Curhan Ford, pegs the cost of flow batteries at roughly $1,000 per kilowatt -- less than half the cost of sodium sulfur models. But he points out that cost of materials for a flow battery is only about $200 per kilowatt. So the overall price tag for the technology could drop dramatically if companies find a way to bring down the cost of manufacturing.

Pilot Projects

To get a sense of how the batteries could work, utilities are rolling out pilot projects. AEP is working with Premium Power, which is backed by $21 million from investors including VantagePoint Venture Partners, according to data from Dow Jones VentureSource. Publicly held companies like VRB Power Systems Inc. and
ZBB Energy Corp. are developing similar technologies.

The companies' offerings have some important differences. Both Premium Power and ZBB Energy use zinc bromide electrolytes in their flow batteries, while VRB Power Systems uses vanadium.

The benefits of the different chemistries are still being proved, but some analysts and industry observers say that the zinc bromide batteries have cost advantages over the vanadium batteries. Advocates for vanadium batteries argue that they can be recycled more easily and have faster response times, which can be helpful for better regulating the flow of energy onto the grid.

It's far too early to tell which battery manufacturer will win out at the large scale -- and another big entrant is about to complicate the picture even further. In late October, Intel Capital, the venture arm of the chip-manufacturing giant, put its money behind yet another player in the market. Intel backed Beijing-based Net Power Holdings Ltd., which is developing its own version of the flow battery, potentially with a greater cost advantage, given the ability to capitalize on more inexpensive Chinese manufacturing capacity.

—Mr. Shieber is a staff reporter for Dow Jones Clean Technology Insight in Jersey City, N.J.

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