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Page added on March 6, 2014

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Schadenfreude and the Future of Energy Storage

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I had the pleasure this past week of attending the ARPA-E Summit in Washington, D.C. The ARPA-E Summit is always for me one of the most interesting programs on the industry calendar. Although the Summit focuses primarily on highlighting new energy technologies, much of its program is devoted to discussing the future of energy and the future of the economy more generally. These discussions are often more interesting than the individual new technologies themselves.

This year was no exception. Several speakers and panelists talked about the future of microgrids, distributed generation and distributed storage. Although there was plenty of good news about progress in those technologies and the market opportunities relating to them, the good news was tempered, as usual, by many bemoaning the high price of those new technologies and the need for utilities to move slowly in adopting them.

A new insight for me in thinking about these problems, however, came from David Crane, President and CEO of NRG Energy. Mr. Crane reminded the audience that for all the problems with new energy technologies, the challenges faced by traditional electricity providers may be even worse. Electricity demand in the United States is likely to fall, as electricity consumption becomes increasingly efficient. Mr. Crain opined that this trend will likely accelerate as energy efficiency becomes a function of automation rather than a function of choice. Customers are no longer going to be customers, in the traditional sense. Customers will increasingly be looking to compete with traditional utilities, rather than to just be served by them, with the most lucrative of those customers often being the first to reduce consumption or go off-grid entirely. The traditional electricity business, complained Mr. Crane, is a lousy business.

Schadenfreude is no virtue, but it does have its moments. David Crane reminds us that in thinking about the financial challenges of microgrids, distributed generation systems and distributed energy storage, it is important to remember the question: “Compared to what?”

Mr. Crane noted that one of the consequences of the challenges facing the traditional electricity business is that financing large grid scale projects will become more difficult, as the entities that have in the past owned or used those projects become less creditworthy. This probably means that the cost of traditional, centralized electricity will be going up over time. At the same time, the cost of microgrids, distributed generation and the energy storage devices upon which they depend will almost certainly be going down.

The economic challenges we face in deploying energy storage on the grid are real. But they do not exist in a vacuum. It may well be that because of changes that are happening in the wider electricity business, many new energy technologies, including distributed energy storage, may become economically attractive a lot sooner than many may think.

energy collective



10 Comments on "Schadenfreude and the Future of Energy Storage"

  1. Davy, Hermann, MO on Thu, 6th Mar 2014 1:28 am 

    I am afraid that when the contraction gains momentum we will find stranded energy sources. Some of these large production sources for example a large wind and or solar farm will be cut off because of grid issues. The large alternative energy sources require complex power balancing due to variability when the grid destabilizes areas will kick out. If the grid destabilization is great enough and long enough sources may be dropped from the mix. These dropped power sources will then be stranded investments without return and consequently without maintenance. It would be far better at this point if we go a low tech low cost approach of bringing small alternative sources directly to the end user. Even the more grandiose ideas of distributed power for a small region are better than trying to make the centralized grid more complex. We should also focus alternative energy on low draw items and leave the grid to power the high draw items. Lights become very important when the grid power goes off. Normal life shuts down when the lights go out. We can see what small solar has done to homes in Africa. Another gripe I have with this article is the claim that electricity use will get more efficient over time. I do not see that. In the not too distant future contraction will set in. As a society gets poor it makes choices based upon what it can do not what is the best choice or most efficient

  2. PapaSmurf on Thu, 6th Mar 2014 1:57 am 

    Davy, instead of just dismissing everything as doomed to fail, why not engage in the actual topic? It is intellectually lazy to just default to fetal position on every topic.

  3. rollin on Thu, 6th Mar 2014 3:46 am 

    The old school hates change and squirms, dragging their feet like little children. There is actually a huge amount of money in storage, they should get on the band wagon now.

  4. Makati1 on Thu, 6th Mar 2014 6:53 am 

    Papa and rollin…in case you haven’t noticed, the US is in debt for trillions of dollars. Ditto for most industry not in China. Ditto for the consumers that carry the load. We are in decline. Articles like this are nothing but techie porn. Ads disguised as info.

    BTW: The Energy Collective is sponsored by Siemens…and this was:

    “Authored by:
    James Greenberger

    Jim Greenberger is the Executive Director of NAATBatt, a trade association of companies in the advanced battery industry working to grow the market for advanced batteries in the United States, primarily in automotive and grid-connected energy storage applications.”

    How clearer can it get than that this is an ad for batteries. Sales are down and desperation is setting in all over the industrial world. A lot more propaganda to come.

  5. Davy, Hermann, MO on Thu, 6th Mar 2014 11:23 am 

    @Papa said – Davy, instead of just dismissing everything as doomed to fail, why not engage in the actual topic? It is intellectually lazy to just default to fetal position on every topic.

    Well yes and no, if that is the new reality and I believe it is, then there are multiple subtleties on that all important topic. If you find it intellectually lazy put in your “block sender fold”.

    @Makati said – Papa and rollin…in case you haven’t noticed, the US is in debt for trillions of dollars. Ditto for most industry not in China.

    Makati get a grip man, China corporate debt is the highest in the world!
    http://www.zerohedge.com/news/2014-03-04/china-verge-first-corporate-bond-default-once-more

  6. Makati1 on Thu, 6th Mar 2014 2:34 pm 

    Sorry Davy, it is not. The US is in for over 200 trillion dollars at last count if you consider obligations to Veterans, Retirement, and Medical for government employees. That is not even counting the major bank’s toilet paper they are calling assets.

    And, China is sitting on about $3+ trillion in reserves plus 8,000+ tons of gold. Hardly in debt. The US is the number one debtor/beggar in the world. The petrodollar is all that is keeping the house of cards up and maybe Russia is about to pullout the bottom card with the help of China. We shall see.

  7. ghung on Thu, 6th Mar 2014 6:14 pm 

    Meanwhile, I have batteries and you don’t. Hows that for a little Schadenfreude?

    I recommend folks stop worrying about the macro picture and get local. Have the courage to change the things you can, and to know the difference,, something like that. It’s clear that industrialism is spinning its wheels while getting stuck deeper in the quagmire of too many claims. Placing blame for who got whom stuck in which ditch is wasted energy at this point. Get out and start walking the walk.

    Meanwhile, I’m hoping these folks continue to spur the development of cheaper/better batteries so they’ll be available to those of us who’ll put them to good use rather than argue about if they’ll save industrial society. If batteries aren’t available in the future, at least some of us have a few other tricks up our sleeves, because we’re already working the problem at ground level without the overhead of keeping investors and a clueless society happy.

  8. GregT on Fri, 7th Mar 2014 7:37 am 

    “Meanwhile, I have batteries and you don’t.”

    I’m sure there will be a few batteries kicking around for a while. I heard the ones out of F-350s are the best.

  9. Davy, Hermann, MO on Fri, 7th Mar 2014 12:18 pm 

    G, 100% on local, from donations to preparations. The whole battery thing is important and I know the useful life scenario. Right now I have a small solar here on the farm. I have an impressive battery pack. I also have a battery powered atv for movement around my 400 acres. Works great and no fuel cost because the solar charges it. It is like a golf cart on steroids and very useful.

  10. GregT on Fri, 7th Mar 2014 5:37 pm 

    400 acres? In many parts of the world that would be like a small country. With solar AND local transport, sounds like a great plan!