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How Rapid Investment in Batteries and Storage Is Changing the Energy Industry

by kirkcoburn
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One of the most commonly asked questions (typically meant to act as a “gotcha” moment when the discussion comes up) about green energy is: What’s going to happen when the source of the energy isn’t available, but there is still a demand that needs to be filled?

What happens when the wind stops blowing, the sun goes down, etc., but people on the grid still need to charge their phones and run their lights? Because while we have the ability to harvest our energy from green and renewable sources — and there’s enough total energy out there to fill our needs several times over — we still need to have a consistent, reliable source of power so that our lives don’t get interrupted with the changing tides. …So to speak.

In short, we need some way to actually store all that energy we’re generating and to parcel it out over time so it can be used according to the demand.

The Technology Exists (But the Investment Didn’t)

Green energy is nothing if not innovative.

Methods of storing power so that it can be used at a later date have come in a rather stunning variety of solutions around the world. The ARES system, popular in parts of North America, uses spare electricity generated from green sources to pull weighted railroad cars up a grade and lock them in place. When additional energy is needed, the cars are released, and that force turns turbines to generate additional energy.

Another solution that’s been growing in popularity in both North America and Europe (particularly in Germany) is pumped hydro storage. According to Green Tech Media, these projects find a location where water can be pumped from a lower area to a higher one and then stored until it’s needed. Then, much like the ARES system, the water is let through a sluice gate, where it turns a turbine in a matter similar to a hydropower dam. Several old mines, many of which once produced coal, have been eyed for projects like this.

Some people favor hydrogen gas storage. This system uses spare green energy to split water into oxygen and hydrogen, which can then be turned back into electricity as needed.

However, while there are all sorts of options available on the market, one of the more common and reliable systems used by energy storage facilities are good old-fashioned batteries. In huge, industrial blocks, it’s possible to store a massive amount of electricity, and these facilities can be built absolutely anywhere. Whether a community is in the middle of a flat plain or up in the mountains, battery storage can be assembled on-site. Also, it can be scaled up or down to fit the generating capacity and power storage needs of any facility. The news has been full of isolated stories, such as Tesla installing huge battery storage capabilities on college campuses and in storm-ravaged Puerto Rico. But those “blips on the radar” were not considered indicative of deeper movements in the market. Green energy storage wasn’t dead — far from it — but it didn’t seem to be progressing at the rate that interest in the topic from a social and political stance would indicate.

Until, of course, that changed.

What Changed in 2019?

The short version is that 2019 marked the point that large energy-related projects with storage options attached to them (something that hadn’t been done as commonly in the past) finally closed their deals. The ink dried. It was, in other words, the first time we were able to clearly see some of the shifts that were going on below the surface. This new insight could (and did) give indications about what was going to happen in the future regarding ramped-up efforts to generate and store more green energy across the United States.

As a different article by Green Tech Media points out, energy storage in the United States is predicted to triple in the next year. It will double again in the year after that. Those are some impressive gains in a very short period of time, and it could mark serious interest in making sure that no energy goes to waste. It could also indicate that utilities, states, and corporations (the latter of which have been very keen on a cheaper, steadier way of powering their own facilities and reducing their overhead costs) are taking the steps necessary to topple fossil fuels out of their long-held thrones for good.

For example, state governments bought into battery storage in a big way in 2019. While California is the state everyone associated with green energy and efforts to de-carbonize the grid, Hawaii, Arizona, and Florida joined the race to add more of these facilities. All three of those states have growing green energy efforts, and they want to make the most of the solar and wind energy that they have in spades. Less expected, but still prominent, were deals signed in Oregon and Oklahoma. They intend to start boosting their own green energy efforts to replace older, less eco-friendly gas facilities and start reducing their own emissions without significantly changing their population’s energy use.

The bigger upsets, though, have come from the Southeastern states. These locations are typically thought of as more tightly controlled areas that are not politically friendly to change (particularly when it comes to a more “progressive” idea like green energy). But the numbers appear to be winning the battle for hearts and minds in those areas, too. Alabama, Arkansas, Georgia, and Tennessee have all been getting into the game. Duke Energy has put forth $500 million to install battery storage across the Carolinas, as well.

When you include the efforts of New York and Massachusetts to incorporate battery storage in their clean energy endeavors, as well as the continued efforts of European and big corporate interests in acquiring the last generation of green energy startups, then a picture really starts to take shape regarding just how big demand for these facilities is going to be over the immediate future.

What Will the Next 10 Years Look Like?

Pipes for a hydro pumped storage power plant in Australia

Creative (and profitable) mechanisms for storing green energy will continue to evolve to suit every region.

As I said back in My Energy Investment Thesis #3: The Energy Transition, you don’t look at investment potential when it comes to something like this in the short-term. You need to look at the next decade or so, and ask if it’s going to be worth getting involved now so that you can count on your profits coming in later.

If you take a step back to examine the big picture, this recent increase in battery storage definitely looks more like a trend than a fad.

The movements away from fossil fuels have been building politically for many years now. Also, coal has been in free fall as a market as fewer and fewer countries have been willing to allow its use. Advancements in green energy technology, as well as in battery storage, have made the technology a significantly cheaper option — once the initial, up-front cost has been paid. Even in red states like Texas with conservative politicians in power, green energy is winning out. One clear example is Republican mayor Dale Ross in Georgetown, Texas, who brought the city to 100 percent renewable energy.

It’s all about the numbers, and it’s reached a point where these energy solutions aren’t just competitive — in many locations, they are the obvious choice. Combining the lower cost with political energy (especially as more workers want to transition away from oil fields and coal mines to cleaner, more reliable jobs in the green energy sector) means there is less and less resistance to the green energy transition every day. Storage technology is, in many cases, the literal last hurdle that these clean energy technologies have to overcome before they’re wholeheartedly embraced.

What can we glean from this huge buy-in from big corporate interests, from state governments, and even from international governments all around the world? This is something that is going to snowball as the calls for more sustainable energy grow louder. And, of course, as technology improves, new storage systems will be designed to take over from older generations.

Battery storage solutions aren’t a project with an end date. They are an investment in a whole new way of doing things. As more old power stations are retired (particularly coal stations whose fuels are taken off the market), battery storage will become the new norm. When clean energy batteries become the new norm, they will also become standard in new construction projects — ensuring there’s going to be a steady demand as the years go on.

Fresh installations will be required, and old ones will have to be maintained, meaning that there is always going to be a fresh demand. It will level off, but any time there’s expansion, there will be a fresh spike. And that will be welcome news for those who have put their capital into making sure there are battery storage facilities ready to keep the grid going when the wind dies down, or the sun finally sets for the day.

Want to know about how the energy transition has shaped the energy market over the last decade? Read about it here, or read about all of the upheavals in cleantech and clean energy with my whole energy investment thesis series.

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