Magical Thinking about Energy Storage

Many advocates of a renewable revolution and the end of fossil fuels (and, for some in that cohort, the end of nuclear as well) are engaged in magical thinking. Wikipedia defines the phrase as “the attribution of causal or synchronistic relationships between actions and events which seemingly cannot be justified by reason and observation.” Topping the list for the renewables enthusiasts is the hype over electricity storage. Without economical storage, wind and solar can’t carry the load.

Today, only two realistic ways to store electricity exist outside of large coal piles, oil farms, and natural gas caverns: pumped storage and batteries. Neither are low-cost; batteries today are prohibitively expensive. Pumped storage can work in limited circumstances.

But the renewables community focuses mostly on batteries, as anything associated with hydro is tref. Their love of yet-unknown battery technology rests on predictions technology breakthroughs and the role of government. As in California, there is also a push for storage mandates similar to the state-wide renewables mandates of the 1990s. That’s based on the optimistic notion that if government mandates something, industry will build it.

It’s worth noting that it wasn’t state government renewable portfolio standards that produced the boom (off of a tiny base) in wind and solar power, but powerful government subsidies. So far, I haven’t come across any outcries for storage subsidies. Nor would I recommend that. There currently is no battery technology that comes close to doing the job that renewables dreamers want, despite constant hype.

The current leader of the pack is lithium-ion batteries, which first showed up about 1991 to power laptop computers and cell phones. Tesla got the idea to string together thousands of these batteries to power a snazzy, $100,000 sports car, leading to the rise of Elon Musk’s electric car empire, which appears to be mostly hype, as he loses big money on every car he sells.

Lithium ion technology isn’t sufficient to transform the electric sector, as Tesla has acknowledged, addressing the idea among some advocates that used Li-ion car batteries could be used to support the grid. Among the troubles facing Li-ion technology is that they degrade, even when not used; deep discharge can kill the battery; and they can generate enough heat to catch fire or explode (as with the Samsung Note 7 smart phone, which I almost bought until the battery problems surfaced).

Lots of effort is aimed at finding a successor to the Li-ion battery, including a decades’ old Department of Energy spawned program called the U.S. Advanced Battery Consortium, dating back to the Bill Clinton administration. Industry and government have been looking for an acceptable battery for a hundred years. So far, not much progress toward a commercial product.

1945 stock certificate
1945 stock certificate

The U.K.’s Daily Reckoning web magazine recently reported, “Researchers have been trying to come up with better batteries for decades. Every May for the last nine years, the US Department of Energy hosts a symposium on the topic called “Beyond Lithium-Ion”. It’s telling that the name hasn’t changed.”

An interesting policy question exists about the large-scale storage that would be required to make a major impact on the U.S. electrical system: who should own storage technology? While some dreamers think distributed storage – home-owned battery arrays at large scale – could do the job of transforming U.S. generation, that’s entirely pie-in-the-sky.

What will be required is utility scale, GW-sized, storage. That’s talking big bucks. So who should finance, build, and own these giant storage power plants necessary to accommodate the renewables revolution? Conventional, vertically-integrated utilities quickly raise their hands. We have the expertise and financial heft to maximize benefits from storage, they argue, including integrating the technology into the system to assure reliability. We can also take advantage of economies of scale. It’s a strong argument.

On the other hand, non-utility businesses also have a strong argument. Regulated utilities, they argue, have an incentive to gold-plate storage, as they earn a return on investment, and the higher the investment, the more they own. Nor do they have much incentive to innovate. We have every reason to be lean and come up with new, more efficient approaches. We are the path to lower consumer costs.

What’s the answer? Beats me, and we will probably see both models, and hybrids, if battery or other storage technologies become economically competitive.

I really hope that storage technologies can solve the problems of the intermittent renewable technologies economically. But it is foolish to assume that this “fields of dreams” approach will work. State actions mandating storage ahead of its time are mostly feel-good politics and magical thinking.