Are mega batteries the next step for renewable energy?

Utility-scale storage could be a game changer, but entry barriers are still too high.

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Many countries have put carbon neutrality as a top agenda, targeting to peak CO2 emissions by the middle of this century. Some countries like the United Kingdom plan to ban the sale of gasoline and diesel vehicles by 2030. Others like the People’s Republic of China are replacing coal with renewable energy.

Boosting the output of energy from intermittent renewable energy sources requires efficient battery storage. While storage capacity limits and high costs have been the main barriers to scaling up battery usage, recent technological advances, together with cost reductions in renewable energy and battery capacity, offer promising new potential.

An important breakthrough has been the utility-scale battery energy storage system which can store large amounts of energy from a renewable energy generator on a commercial basis.

The system is becoming a more feasible option to support renewable energy development, replacing traditional technologies like thermal and pumped hydropower generation.

Relevant Sustainable Development Goals

One of the major challenges developing countries face in setting-up a grid-connected battery energy storage system, however, is that existing electricity laws and regulations do not accommodate an independent market player who provides ancillary services with a battery energy storage system plant.

Therefore, without proper regulation, a private company planning a battery energy storage system plant may need to go through lengthy procedures and discussions on charging/discharging tariffs and business licensing with government agencies. This can be a significant entry barrier for the private sector.

As an interim solution, some countries have laws and regulations that allow transmission companies, responsible for maintaining power grid reliability, to operate a battery energy storage system plant.

In Italy, Terna, an independent operator responsible for national electricity transmission, operates a 35MW battery energy storage system plant to address transmission congestion, mainly caused by renewable energy plants.


A fast-changing sector

Another major challenge is fast-changing battery technology. A battery energy storage system plant can choose the right battery technology to achieve the expected benefits, such as grid stabilization and load shifting. Some technologies are good at producing high power, while others are good at storing a large amount of electricity.

The problem here is that the best technology today would not necessarily remain the best next year, due to severe competition and advances in battery development.

Therefore, locking in the technology at the tendering stage might risk disqualifying a potentially better technology at the time of evaluation.

One countermeasure is to specify performance requirements, such as charge/discharge capacity and round-trip efficiency, instead of technology specifications. This would enable a battery energy storage system plant project to efficiently achieve the expected benefit without missing the right battery technology options.


“Mega batteries promise to increase the share of renewable energy for the grid, and for energy consumers.”


The third major challenge is recycling batteries. Spent battery cells from battery energy storage system plants need to be recycled or properly treated and disposed of. In many developing countries, however, because relevant recycling facilities are unavailable, battery suppliers tend to be responsible for recycling and disposal.

Because no suppliers are free from bankruptcy risk before the battery cell life ends, the project country ideally owns domestic recycling facilities as a permanent solution. Similarly, environmental regulation on spent battery cells needs to be enhanced to promote the development of battery energy storage system plants.

The fourth major challenge is fire risk. Batteries carry the risk of fire and explosion, so adequate fire protection systems need to be carefully designed. Appropriate battery operation regulation guidelines also need to be developed and observed by plant operators to mitigate fire risk from over-charging/discharging battery modules during plant operation.


Local experience is important

The last major challenge is lack of experience with operating battery energy storage systems. Some battery energy storage system development projects outsource operation and maintenance to overseas contractors. It is preferable for developing member countries to operate and maintain the system with their own staff for sustainable benefits.

Capacity building would support domestic utility operators operating as full-fledged battery energy storage system operators.

Further, because of the shorter lifetime of battery modules compared with traditional power facilities like transformers, replacing battery modules, including financial resources, needs to be well planned. The relevant guidelines are expected to be developed by the plant owner.

Innovative solutions are needed to reduce dependence on fossil fuels. Mega battery energy storage is one technology that holds significant promise for increasing the share of renewable energy available for the grid, and for energy consumers.

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Atsumasa Sakai

Senior Energy Specialist, Asian Development Bank

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