The share of renewable energy is steadily increasing around the world. But storing such intermittent energy source and utilizing it when needed has been a challenge. In fact energy storage makes up a significant part of the cost in any renewable energy technology. Many storage technologies are now available in the commercial market, but choosing a right type of technology has always been a difficult choice. In this article we will consider four types of storage technologies. The California Energy Commission conducted economic and environmental analyses of four energy storage options for a wind energy project: (1) lead acid batteries, (2) zinc bromine (flow) batteries, (3) a hydrogen electrolyzer and fuel cell storage system, and (4) a Hydrogen storage option where the hydrogen was used for fueling hydrogen powered vehicle. Their conclusions were:
”Analysis with NREL’s (National Renewable Energy laboratory) HOMER model showed that, in most cases, energy storage systems were not well used until higher levels of wind penetration were modeled (i.e., 18% penetration in Southern California in 2020). In our scenarios, hydrogen storage became more cost-effective than battery storage at higher levels of wind power production, and using the hydrogen to refuel vehicles was more economically attractive than converting the hydrogen to electricity. The overall value proposition for energy storage used in conjunction with intermittent renewable power sources depends on multiple factors. Our initial qualitative assessment found the various energy storage systems to be environmentally benign, except for emissions from the manufacture of some battery materials.
However, energy storage entails varying economic costs and environmental impacts depending on the specific location and type of generation involved, the energy storage technology used, and the other potential benefits that energy storage systems can provide (e.g., helping to optimize
Transmission and distribution systems, local power quality support, potential provision of spinning reserves and grid frequency regulation, etc.)”.
Key assumptions guiding this analysis include the following:
approximately 10% of total energy provided in 2010 and 20% by 2020, with most of
this expansion in Southern California.
• Costs of flow battery systems are assumed to decline somewhat through 2020 and
costs of hydrogen technologies (electrolyzers, fuel cell systems, and storage systems)
are assumed to decline significantly through 2020.
• In the case where hydrogen is produced, stored, and then reconverted to electricity
using fuel cell systems, we assume that the hydrogen can be safely stored in
modified wind turbine towers at relatively low pressure at lower costs than more
conventional and higher-pressure storage.
• In the case where hydrogen is produced and sold into transportation markets, we
assume that there is demand for hydrogen for vehicles in 2010 and 2020, and that the
Hydrogen is produced at the refueling station using the electricity produced from
wind farms (in other words, we assume that transmission capacity is available for
this when needed)?
Key Project Findings
Key findings from the HOMER model projections and analysis include the following:
• Energy storage systems deployed in the context of greater wind power development
were not particularly well utilized (based on the availability of “excess” off-peak
electricity from wind power), especially in the 2010 time frame (which assumed 10%
wind penetration statewide), but were better utilized–up to 1,600 hours of operation per
year in some cases–with the greater (20%) wind penetration levels assumed for 2020.
• The levelized costs of electricity from these energy storage systems ranged from a low of
$0.41 per kWh—or near the marginal cost of generation during peak demand times—to
many dollars per kWh (in cases where the storage was not well utilized). This suggests
that in order for these systems to be economically attractive, it may be necessary to
optimize their output to coincide with peak demand periods, and to identify additional
value streams from their use (e.g., transmission and distribution system optimization,
provision of power quality and grid ancillary services, etc.)
• At low levels of wind penetration (1%–2%), the electrolyzer/fuel cell system was either
inoperable or uneconomical (i.e., either no electricity was supplied by the energy storage
system or the electricity provided carried a high cost per MWh).
• In the 2010 scenarios, the flow battery system delivered the lowest cost per energy
stored and delivered.
• At higher levels of wind penetration, the hydrogen storage systems became more
economical such that with the wind penetration levels in 2020 (18% from Southern
California), the hydrogen systems delivered the least costly energy storage.
• Projected decreases in capital costs and maintenance requirements along with a more
durable fuel cell allowed the electrolyzer/fuel cell to gain a significant cost advantage
over the battery systems in 2020.
• Sizing the electrolyzer/fuel cell system to match the flow battery system’s relatively
high instantaneous power output was found to increase the competitiveness of this
system in low energy storage scenarios (2010 and Northern California in 2020), but in
scenarios with higher levels of energy storage (Southern California in 2020), the
Electrolyzer/fuel cell system sized to match the flow battery output became less
• In our scenarios, the hydrogen production case was more economical than the
Electrolyzer/fuel cell case with the same amount of electricity consumed (i.e., hydrogen
production delivered greater revenue from hydrogen sales than the electrolyzer/fuel
cell avoided the cost of electricity, once the process efficiencies are considered).
• Furthermore, the hydrogen production system with a higher-capacity power converter
and electrolyzer (sized to match the flow battery converter) was more cost-effective than
the lower-capacity system that was sized to match the output of the solid-state battery.
This is due to economies of scale found to produce lower-cost hydrogen in all cases.
• In general, the energy storage systems themselves are fairly benign from an
environmental perspective, with the exception of emissions from the manufacture of
certain components (such as nickel, lead, cadmium, and vanadium for batteries). This is
particularly true outside of the U.S., where battery plant emissions are less tightly
controlled and potential contamination from improper disposal of these and other
materials are more likely. The overall value proposition for energy storage systems used in conjunction with intermittent renewable energy systems depends on diverse factors.
• The interaction of generation and storage system characteristics and grid and energy
resource conditions at a particular location.
• The potential use of energy storage for multiple purposes in addition to improving the
dependability of intermittent renewable (e.g., peak/off-peak power price arbitrage,
helping to optimize the transmission and distribution infrastructure, load-leveling the
grid in general, helping to mitigate power quality issues, etc.)
• The degree of future progress in improving forecasting techniques and reducing
prediction errors for intermittent renewable energy systems
• Electricity market design and rules for compensating renewable energy systems for their
“This study was intended to compare the characteristics of several technologies for providing
Energy storage for utility grids—in a general sense and also specifically for battery and
Hydrogen storage systems—in the context of greater wind power development in California.
While more detailed site-specific studies will be required to draw firm conclusions, we believe
those energy storage systems have relatively limited application potential at present but may
become of greater interest over the next several years, particularly for California and other areas
that is experiencing significant growth in wind power and other intermittent renewable.
Based on this study and others in the technical literature, we see a larger potential need for
energy storage system services in the 2015–2020 time frames, when growth in renewable produced electricity is expected to reach levels of 20%–30% of electrical energy supplied.
Depending on the success in improved wind forecasting techniques and electricity market
designs, the role for energy storage in the modern electricity grids of the future may be
significant. We suggest further and more comprehensive assessments of multiple energy
storage technologies for comparison purposes, and additional site- and technology-specific
project assessments to gain a better sense of the actual value propositions for these technologies
in the California energy system.
This project has helped to meet program objectives and to benefit California in the
• Providing environmentally sound electricity. Energy storage systems have the
Potential to make environmentally attractive renewable energy systems more
competitive by improving their performance and mitigating some of the technical issues
associated with renewable energy/utility grid integration. This project has identified the
potential costs associated with the use of various energy storage technologies as a step
toward understanding the overall value proposition for energy storage as a means to
help enable further development of wind power (and potentially other intermittent
renewable resources as well).
• Providing reliable electricity. The integration of energy storage with renewable energy
sources can help to maintain grid stability and adequate reserve margins, thereby
contributing to the overall reliability of the electricity grid. This study identified the
potential costs of integrating various types of energy storage with wind power, against
which the value of greater reliability can be assessed along with other potential benefits.
• Providing affordable electricity. Upward pressure on natural gas prices, partly as a
function of increased demand, has significantly contributed to higher electricity prices in
California and other states. Diversification of electricity supplies with relatively low-cost
sources, such as wind power, can provide a hedge against further natural gas price
increases. Higher penetration of these other (non-natural-gas-based) electricity sources,
Potentially enabled by the use of energy storage, can reduce the risks of future electricity.”
(Source: California Energy Commission prepared by University of Berkeley).