Originally published January 6, 2010 on SmartGridNews.com

Energy storage technologies will have a large role to play in the electricity grid of the future, with demand being driven by the growth of intermittent renewable energy sources such as wind and solar, the development of the Smart Grid and a shift to plug-in hybrid and electric vehicles.

In a recent Pike Research study on the stationary energy storage market, we concluded that:

• The adoption process for energy storage technologies will be long and uncertain, a reflection of utilities trying to figure out how to pay for the technologies and incorporate them into the grid infrastructure. Energy storage technologies’ key value is potentially supplanting expensive peaking generation.
• The stimulus bill signed by President Obama, together with significant venture capital investment, will both direct or indirectly benefit a variety of energy storage technologies, including lithium ion battery technologies.
• Lithium ion battery technology developers will leverage a versatile platform to reduce cost and develop specialized applications with varying energy and power requirements.

The energy storage market made huge strides during the course of 2009. Of $185 million granted from the DOE for 16 projects, $83.1 million went to 11 battery technologies. Also:

• AES Energy Storage and A123 Systems recently announced a 12 MW frequency regulation and spinning reserve project at an AES Gener substation in Chile.
• Southern California Edison (SCE) has received a $25 million grant to build the world’s biggest lithium-ion grid storage battery with technology from A123 Systems.
• Altair Nanotechnologies has deployed a 1 MW, 250 kilowatt-hour battery storage system at the PJM Regional Transmission Organization (RTO) as part of a joint development agreement with AES Energy Storage.
• American Electric Power (AEP) has informally announced plans for community energy storage (CES) or energy storage distributed at the neighborhood level, and based on lithium battery technology.
• Seeo won a $6.2 million grant for a 25 kWh prototype battery for the power grid using its nano-structured polymer electrolyte developed at Lawrence Berkeley National Labs and with backing from Khosla Ventures.

We forecast a significant increase in the demand of lithium ion battery technology for stationary energy storage applications. Advanced lithium ion batteries will be a technology, cost and volume leader in their focused applications. The technology has potentially dramatic growth potential.

David Link is a senior analyst with Pike Research, a market research and consulting firm that provides in-depth assessment of global clean technology markets.

Stationary Utility Battery Storage Technologies, World Markets: 2008-2015