By Rose Pengelly
Modular lithium-ion (Li-ion) energy storage systems could
soon offer a way to efficiently manage power generated from
renewable sources for the UK grid, according to one specialist
investment company backing the technology, although the concept
still presents barriers for large investors.
Dan Taylor, managing director of Camborne Capital Energy, a
privately-owned UK investment business with a focus on clean
energy, told attendees at a seminar in London in November that
the power storage sector is witnessing "a shift from innovation
to commercial business as usual".
Camborne recently began purchasing and installing energy
storage batteries from US-based electric vehicle (EV)
manufacturer, Tesla Motors Inc. and in September it installed
the first grid scale Tesla batteries, or "Powerpacks" in Europe
at an undisclosed solar farm site in Somerset, southwest
According to Camborne and Tesla, the combined solar and
battery installation has the capacity to provide power for over
The modular design of the Powerpacks, which resemble large
free-standing fridge-freezers, means that the batteries can be
installed in relatively unobtrusive clusters to achieve the
desired capacity for any given site.
Ben Hill, vice president for Europe, the Middle East and
North Africa at Tesla Energy Products, said that in addition to
its main automotive business, Tesla is now looking to supply
power storage products for both domestic and commercial energy
Tesla’s website, which allows you to "build"
your own battery order according to your energy requirements,
estimates the cost of installing a 1MW Powerpack and necessary
supporting hardware in the UK is around £1.48m ($1.84m*).
A 14 kWh Powerwall, Tesla’s domestic "home" energy
storage battery, costs around £6,400 in total to
Hill said that Tesla has made significant advances in its
battery technology in the last year, but admitted that costs
still need to come down – a feat the company hopes to
achieve with its new Gigafactory in Reno, Nevada.
"The new Li-ion cells from the Gigafactory in Reno are
double the density and therefore double the capacity of the
cells we were producing just six months ago," Hill said.
"That’s pretty cool technology."
|Tesla’s Powerpack’s could
offer a solution to the problem of storing energy
from renewable sources, but costs still need to come
Barriers to investment
Li-ion-based energy storage systems are beginning to gain
acceptance in the UK, with the help of backing from specialist
investors, although the business case for clean energy
solutions has yet to win over the wider investment
Juergen Heeg, vice president for power at US-based private
equity investor Denham Capital, said that private equity
investors "wouldn’t get out of bed" for projects
that are not worth sums in the "hundreds of millions of
Tesla’s biggest Powerpack contract to date is
with US energy supplier, Southern California Edison (SCE). In
September, Tesla announced it would supply 20 megawatts (80
megawatt-hours) of Li-ion based energy storage to SCE to help
prevent blackouts for energy users in southern California.
Tesla said that the Powerpacks are enough to power about 2,500
homes for a full day.
Part of the problem from the UK perspective is the
small-scale nature of renewable and energy storage projects,
owing to the country’s size and population density
which limit space for large installations.
Camborne’s Taylor admitted that banks and
private equity funds "probably aren’t at the point
of throwing cash into energy storage yet", but predicted that
there would soon be an acceleration in funding. He said that
the large opportunities private equity investors were looking
for were necessarily grid-scale projects, such as the Southern
California Edison contract.
But renewable energy generation is growing in the UK and
experts generally agree that finding a way to store
electricity from wind turbines and solar panels is vital to
the future of a low carbon energy mix. According to the
UK’s Department of Energy and Climate Change,
renewables accounted for 83.3 terrawatt hours (TWh –
one terawatt hour is equal to the sustained power of
approximately 114 megawatts for a period of one year), or
24.7% of the total 337.7 TWh generated from all the
country’s electricity sources collectively in
2015 – a figure that has the potential grow
significantly with the addition of mass storage.
Opportunities for raw materials
The proliferation of energy storage technology could provide
a sizeable new market for suppliers of battery raw materials,
including the lithium, graphite and cobalt needed to produce
Much of the attention on Li-ion technology to date has been
on EVs, but energy storage batteries are potentially a much
larger volume market, since storage cells tend to be bigger and
heavier than car batteries.
Junior mining companies have been queuing up to offer their
services to Tesla, with eyes on the ultimate prize of a
contract to supply the Reno Gigafactory.
However some exploration companies claim to have clashed
with Tesla over its alleged approach to engaging suppliers.
More than one junior mining company told IM that Tesla had
asked it to "build a prototype" energy module using material
made from their own mineral sources as their own expense
– a request which they said they flatly refused.
When IM put these claims to Tesla, the company asked for
further details on the assertions but said that it had no
comment to make on its sourcing policy at this time.
*Conversion made November 2016