Market view: Batteries set to break records

What can the world of battery technology learn from athletics? At the time Roger Bannister ran the mile in under four minutes, many believed that the human frame was not capable of doing so. This was also borne out of experience on the track – several athletes had come tantalisingly close but could not get under the mark. Roger Bannister himself did not believe there was anything particularly different between four minutes one second and three minutes fifty-nine seconds.

Then, in 1954, it finally fell, and very quickly others repeated the achievement. Now Hicham El Guerroujnow’s record run in 1999 stands almost seventeen seconds below the “Everest” achievement.

Bannister’s view of athletic improvement – echoed in many other sports nowadays – is being mirrored today in the world’s electricity industry in both batteries and photovoltaics. New performance benchmarks have recently been set that have the potential to shake all participants to the core.

Although batteries have been more in the news recently for setting mobile phones on fire, their ability to provide almost instant power delivery is bringing them to the fore as a key tool for transmission system operators to embrace wind and solar power on their systems.

In August, National Grid announced the winners of its auction for enhanced frequency reserve capacity: these are systems that can turn on in under a second and then carry on delivering electricity for at least half an hour. This respite allows National Grid to bring forward other measures in its control to keep the system frequency within the proper range.

Shockingly, the winning projects priced their bids at levels far below expectations – with the lowest at an eye-wateringly low level £7/MW/week. Industry analysts are still trying to work out how many of the winning projects were able to draw on “special” sites that had very low or sunk connection costs – or find clever ways of financing them.

Some have suggested that such a low figure was simply down to the way the tender was specified – and that this was a special situation – but the real point is that a benchmark has now been laid down for the world’s power industry to price against. The reason is irrelevant, as companies now go all out to beat it using all the technical and financial means they can think of. Bannister’s record caused other great athletes to re-examine their own training regimes to improve themselves.

In rather comparable circumstances, earlier this year the world of photovoltaics had a similar experience when a tendered auction for a PV installation in Dubai produced a winner at ¢3/kWh (2.4p/kWh). At the time, this was greeted with disbelief, but already this week we see that suppliers are moving beyond the traditional emotional responses of anger and denial to one of acceptance and action to improve themselves.

The benchmark set by the Dubai auction was smashed in September when Marubeni’s project in Abu Dhabi won at ¢2.4/kWh. We see the supply chain now determinedly reworking its business models, its technologies, its production processes, and many other incremental gains to further lower the bar.

I heard professor John Goodenough, the inventor of lithium ion batteries, being interviewed on the radio recently. At the age of 94, he still is working every day much like his batteries, which continue to deliver energy in millions of devices across the world. Yet the first commercial lithium ion battery was sold just 25 years ago.

In looking at power systems, lithium ion batteries seem to easily be the most preferred technology for the very short-term backup for transmission system operators, but there are plenty of early signs that this technology has the potential to move into more widespread grid-level storage applications as well as being deployed “behind the meter” where they can optimise on-site generation, or further enhance flexible power demand. Furthermore, batteries can help network operators manage peak flows and save or defer investments in transformers or more copper in the ground.

In combination with lower cost PV systems, the potential marketplace for batteries can grow even further because they can move power to where it is needed at either a local level or on national power systems.

And yes, there is a third part of this story that is beginning to play out: there is a natural symbiosis between the static batteries used in power systems and houses, and the mobile ones used in cars. By “recycling” batteries to static facilities after their useful life on the road, and giving them a few more years of useful life, the entire business model could dramatically lower costs.

So the current world records do not look like they will stand for very long – and we should now be expecting batteries to move centre stage.