Podcast Summary
Long-duration energy storage for grid reliability and stability: Form Energy's 100-hour battery is a game-changer for grid reliability, offering multi-day storage capacity beyond existing lithium-ion batteries.
As the energy sector transitions to renewable sources, long-duration energy storage will play a crucial role in ensuring grid reliability and stability. However, the term "long-duration energy storage" is often misused and can refer to batteries with varying capacities. Form Energy is currently the only company developing a 100-hour battery, which is significantly different from existing lithium-ion batteries and other so-called long-duration energy storage systems. Matteo Jaramillo, CEO and co-founder of Form, explains that lithium-ion batteries are the predominant form of energy storage on the grid today, but they have limitations in terms of duration and cycling capacity. As the grid becomes more reliant on intermittent renewable energy sources, longer-duration batteries like Form's multi-day storage asset will be necessary to address the challenges of energy storage and ensure a fully decarbonized grid. The conversation between Shail and Matteo delves deeper into the role of different classes of energy storage and the specific use cases for multi-day storage.
Lithium-ion batteries rule short-term grid storage, but not long-term: Lithium-ion batteries, though dominant for short-term grid storage, cannot deliver long-term solutions due to high cost, limiting them to hours of discharge at rated power.
Lithium-ion batteries currently dominate the energy storage market for relatively short duration functions on the power grid, ranging from minutes to hours. This is due to their high energy density, ability to cycle at slow rates, and increasing acceptance for providing peaking and ramping services. However, the economic limitation prevents them from delivering days, weeks, or seasons of storage at rated power. Longer duration applications will likely be served by other technologies, such as pumped hydro storage, compressed air energy storage, and flow batteries. The cost of lithium-ion batteries is a significant factor, with each hour of discharge at rated power adding to the overall cost. The industry typically compares costs on a dollar per kilowatt basis, and for lithium-ion today, that's roughly $100 per hour. While lithium-ion may continue to dominate the shorter duration applications, other technologies will be essential for longer duration storage solutions.
Understanding the Value of Energy Storage Durations: Lithium-ion batteries dominate energy storage industry due to scale and cost advantages from automotive sector. Different durations of energy storage have distinct values in power portfolios, extending lithium-ion's duration can displace other resources.
Lithium-ion batteries hold a dominant position in the energy storage industry, particularly in the intraday duration space, and displacing them is a challenging task. Despite the ongoing search for cheaper alternatives, the massive scale and cost advantages brought about by the automotive industry's shift towards electric vehicles make it difficult for new technologies to compete. In the context of long-duration energy storage, the term is often misused, and its definition varies widely, from hours to seasons. The value of energy storage in a power portfolio lies in its ability to provide specific durations that complement other generation, transmission, and storage assets. Lithium-ion batteries have already demonstrated the value of providing a few hours of duration, and extending that duration can displace other resources in the system. However, understanding the specific functions and values of different durations is crucial for optimizing the overall energy storage portfolio.
Energy storage duration impacts which power plants it can displace: Lithium-ion batteries can displace peaker plants with less than 5% operating hours, but replacing mid-merit gas plants with 20-70% operating hours requires around 100 hours of energy storage duration.
Energy storage duration plays a crucial role in displacing different types of power plants on the grid. Lithium-ion batteries can displace peaker plants, which operate less than 5% of the hours in a year. However, the value of energy storage increases significantly when it reaches around 100 hours or 4 days of duration. This is because it can start to replace mid-merit gas plants, which operate between 20% to 70% of the hours in a year. The precise value of energy storage between 10 to 20 hours or 20 hours to 40 hours is less clear. Form is building a 100-hour rated battery to replace mid-merit gas plants, as the ability to store energy for longer periods becomes increasingly important in grids driven by renewable energy and weather-dependent intermittency.
The value of cost-effective, multi-day energy storage: Cost-effective, multi-day batteries like Forum Energy Technologies' 100-hour model provide essential benefits to the grid, including reliability, capacity expansion, decarbonization, and resilience, and their introduction can be cost-effective at $20 per kilowatt-hour.
Cost-effective, multi-day energy storage, such as Forum Energy Technologies' 100-hour battery, is valuable and necessary in the electricity grid today, despite the argument that it may not be needed in a future world with high renewable penetration. This is because the grid currently lacks cost-effective, multi-day storage assets, and their introduction can help achieve various goals, such as reliability, capacity expansion, decarbonization, and resilience, more easily and effectively. The cost of these assets, specifically a 100-hour battery at $20 per kilowatt-hour, is crucial in making them an attractive investment for system operators. Forum Energy Technologies' customer commitments demonstrate this demand, as they see the value of this new asset class in addressing the grid's current underoptimization for long-duration storage.
Iron air batteries offer cost-effective energy storage solution for utilities: Iron air batteries, like Form Energy's technology, provide utilities with cost-effective, multi-day energy storage, enabling them to meet load growth, decarbonization, and reliability goals while keeping costs low, thanks to inexpensive raw materials and manufacturing processes.
Multi-day energy storage using iron air batteries, specifically Form Energy's technology, can significantly help utilities reach their goals in areas like load growth, decarbonization, and reliability, all while keeping costs low. This is possible due to the cost-effective chemistry and manufacturing processes used, which start with inexpensive raw materials and maintain low costs throughout the manufacturing process. For instance, iron air batteries have active materials that cost less than a dollar per kilowatt hour compared to lithium ion's 30-35 dollars unprocessed. The 15 megawatt, 1500 megawatt hour battery project with Georgia Power is an example of this, as the utility is looking to build more capacity and incorporate more renewable energy to meet increasing demand and customer expectations, while keeping costs low.
Benefiting utilities with long-duration energy storage: Long-duration batteries, like a 100-hour one, enable utilities to integrate intermittent resources, precisely value reliability, and reduce land usage and new generation, simplifying the process of meeting load growth and decarbonization goals.
Having access to cost-effective, long-duration energy storage solutions, like a 100-hour battery, can significantly benefit utilities in various ways. For instance, it allows them to integrate intermittent, lower-cost resources to meet load growth without compromising reliability or capacity. Moreover, it enables utilities to put a precise value on reliability, which is a significant advantage for those not part of wholesale markets. Additionally, multi-day storage reduces the need for new generation and land usage, making achieving decarbonization goals easier and more efficient. This was exemplified by Georgia Power in the Southeast US, focusing on load growth and renewables, and Xcel Energy in the Midwest, prioritizing wind energy and wholesale markets. Both utilities demonstrate how energy storage solutions can simplify the process of meeting their goals, whether it's reducing land usage or decarbonization commitments.
Utilities reconsider energy strategies with electric industry growth: Utilities like Excel Energy seek longer energy storage durations for more renewables, load growth, wholesale market participation, and price hedging. Energy storage also helps address transmission bottlenecks and congestion.
The electric industry is experiencing a period of growth, leading utilities to reconsider their energy strategies. Excel Energy, for instance, is aiming for a longer duration (around 100 hours) of energy storage to accommodate more renewables and meet load growth. This longer duration storage also allows utilities to participate more effectively in wholesale markets and hedge against price spikes. Another application of energy storage is addressing transmission bottlenecks, which have become a significant issue due to the surge in renewable energy generation and insufficient new transmission construction. Energy storage can help alleviate congestion and operational challenges by buffering energy at one or both ends of the transmission lines, making them more efficiently utilized. Overall, energy storage is becoming an essential tool for utilities to navigate the changing electric industry landscape.
Large-capacity battery's dynamic role in electrical grid: Large-capacity batteries provide reliability, capacity, and balance supply and demand on the electrical grid, while maximizing their value through constant state of charge adjustments.
The operation of a large-capacity battery on the electrical grid is not as simple as charging and holding a charge for a few days during extreme weather events to make a profit. Instead, the battery is used dynamically throughout the year to provide reliability and capacity to the grid, as well as to balance supply and demand during periods of oversupply or deficit. The battery's state of charge is constantly being adjusted to maximize its value and ensure it is never used to a negative value. The dispatch profile of the battery shows a net trend lasting days to weeks to seasons, but with frequent ups and downs as the battery charges and discharges to meet various grid needs. Ultimately, the battery's primary role is as a multi-day duration capacity resource, but it also provides additional value through its ability to respond to grid needs in real-time.
Meeting the demands of the future grid with diverse resources: The future grid will require a mix of resources, including batteries with varying durations, to meet decarbonization and load growth goals. Form Energy's 100-hour battery is one solution, but the competitive landscape includes lithium-ion batteries, carbon capture, hydrogen, and more transmission.
The future grid will be a mix of various resources, with the continued growth of intermittent renewables being a fundamental principle. Form Energy, a battery company, is introducing a 100-hour battery to address the bulk of the market, but they acknowledge that different regions may require batteries of varying durations. The competitive landscape includes not only lithium-ion batteries but also other technologies like carbon capture, hydrogen, and more transmission. The goal is to find cost-effective solutions that can help meet both decarbonization and load growth goals. The electric grid is expected to need to be twice its current size by 2045-2050 due to increasing demand and renewable growth. The race is on to find scalable, cost-effective solutions to help meet these challenges.
Discussing Form Energy's long-duration energy storage and innovative ideas with CEO Matteo Harmillo: Form Energy's cost-effective multi-day energy storage solution can significantly contribute to the electric system, and CEO Matteo Harmillo proposes moving a Bitcoin mine on a barge between hemispheres for excess energy absorption, highlighting his skepticism towards Web 3.
Form Energy's long-duration energy storage solution, which offers cost-effective multi-day storage, can significantly contribute to the electric system as an impactful asset class. Form Energy's CEO, Matteo Harmillo, also suggested adding his Bitcoin mine on a barge idea to the discussion. This concept involves moving the barge between the northern and southern hemispheres to absorb excess generation in each region. Although not explicitly mentioned, it seems Harmillo is a Web 3 skeptic. This was a fun and insightful conversation, and we thank Form Energy's CEO for sharing his innovative ideas. For more information on today's topics, visit canarymedia.com. This podcast is a co-production of Latitude Media and Canary Media, supported by Prelude Ventures, which invests in climate innovation visionaries. Tune in for more thought-provoking discussions on Catalyst.
