Disruptive technologies – how renewables are evolving

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March 18, 2022

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Will gravity storage get off the ground? 

The $1.6-billion special-purpose acquisition and New York Stock Exchange (NYSE) listing by Novus Capital of US gravity storage developer Energy Vault in February 2022 has propelled the niche technology into the headlines. Gravity storage uses renewable electricity when it is cheap and plentiful to lift weights and store energy. At peak times, weights are lowered, and the energy is released to run turbines and generate power. As a grid-scale back-up for intermittent renewables with near-to-zero energy losses, zero emissions if run off renewable power, and a low levelized cost of supply (LCOS), gravity storage has weight. But how commercially viable is it as a form of grid storage and can it be deployed on a large-enough scale at low cost compared to alternatives? Rystad Energy has assessed the range of lifted weight storage (LWS) and buoyancy energy storage (BES) concepts being developed worldwide and how they stack up in terms of LCOS compared to other bulk electricity storage technologies such as pumped hydro and utility scale batteries.

Housed, rail, shaft, floating and subsea-based concepts under development 
Based on the hydraulic lifting of a large rock mass, a gravity battery works by using excess energy from the grid to raise a mass to generate gravitational potential energy, which is then lowered to convert the energy into electricity through an electric generator. A gravity battery stores gravitational or potential energy in an object resulting from a change in height due to gravity. If renewable energy is used as the feedstock, it is a sustainable form of energy storage with the potential to store and release affordable and clean energy on demand. The most common form of gravitational storage is pumped hydro with water released from a height to power turbines to generate electricity. However, constraints on the geographic suitability and availability of water for sizeable dams means pumped hydro has its limitations in many contexts.

As an alternative, a range of LWS concepts are being pioneered worldwide. Energy Vault’s long-duration storage concept uses multiple lifting arms to stack 35-tonne concrete blocks into towers in a purpose-built, above-ground facility. The arms are powered by locally sited renewable energy, with composite blocks lowered to run the lifting arms in reverse as a generator to release power when it is expensive. According to Energy Vault, the mechanisms are computer-controlled, can absorb or deliver power continuously at prices that are reportedly cheaper than lithium batteries, and are capable of storing energy at 90% efficiency over a 30-year lifespan. Other gravity storage concepts being pioneered include US-based ARES North America’s LWS, which runs mass weighted cars up and down rails on sloping land to store and release energy – a technology touted as non-explosive, non-flammable and non-degrading. Along similar lines, Fortescue Future Industries (FFI) announced this week that is developing a regenerating battery electric iron ore train using gravitational energy.

Below-ground cylindrical shaft hydraulic-lift LWS concepts are also being developed by UK group Gravitricity and New Energy Let’s Go (which acquired gravity storage developer Heindl Energy’s patent after it filed for insolvency in 2020). In addition, US-based Gravity Power and Russian developer Energozapas are looking to repurpose old coal mine shafts to store and release energy. BES technologies are also being pioneered by French group Sink Float Solutions, which is proposing a deep-ocean floating design to lower and raise weights underwater, and Canadian company Lift Renewable Energy, which deploys subsea motor-generated winches anchored to the seabed.

Over $1 billion pumped in nascent methane pyrolysis hydrogen production

While hydrogen derived from renewable-energy-powered electrolysis dominates project pipelines around the world, fossil-fuel-based production is likely to continue to play a key role in upscaling the hydrogen economy. And among a myriad of fossil fuel-based hydrogen production options, using methane pyrolysis – so called turquoise hydrogen – is quickly gaining traction. This is because it involves splitting natural gas or biomethane into hydrogen and solid carbon, which circumvents the capital expenditure-heavy carbon capture and storage (CCS) faced by blue hydrogen (steam methane reforming and CCS approach). Thus, despite only having a handful of commercial-scale projects in the pipelines, more than $1 billion in funding has been promised to the turquoise hydrogen sector. The expected pipeline of pyrolysis projects, currently dominated by US player Monolith Materials, aims to produce 10,000 tonnes of hydrogen by 2025 and is quickly growing.

Most companies involved in turquoise hydrogen production are start-ups, and their successful demonstration projects have triggered funding from different, more established industry players and governments. Monolith Materials, for instance, received a conditional grant of $1.04 billion issued under the US Department of Energy’s Title XVII Innovation Energy Loan Guarantee Program. This 20-year loan will be crucial to expanding the company’s hydrogen and carbon black production operations in Hallam, Nebraska. The planned facility is expected to become the largest of its kind. Monolith Materials is backed by major players including Japan’s Mitsubishi Heavy Industries (MHI) and Seoul-based SK Group, and the company is looking to expand its hydrogen business to South Korea.

Similarly, other demonstration and pilot programs have been supported by giants in the chemicals and energy industries, including BASF’s pilot plant in Germany which is backed by local conglomerates Thyssenkrupp and Linde, and German research institutes. Likewise, Australian chemicals company Hazer Group is backed by the Australian Renewable Energy Agency (ARENA), while California-based C-Zero is supported by Bill Gates’ climate tech fund Breakthrough Energy Ventures (BEV), Southern California Gas Company (SoCalGas), UK venture capital firm AP Ventures, MHI, and Italy’s Eni. Meanwhile, Baker Hughes has a 20% stake in Canada-based Ekona. Other companies in this sector are university spinoffs, like Aurora, Spark Cleantech and EH Group, working on novel technologies to produce carbon-free hydrogen and are supported by grants.

Battery operators play rising role in Australia's frequency response, ancillary services market

The Frequency Control Ancillary Service (FCAS) market in Australia’s National Electricity Market (NEM) has grown from under A$50 (US$36 million) to over A$390 million over the past seven years. FCAS revenue has traditionally been awarded to coal, gas and hydro generators but the introduction of just 700 megawatts (MW_AC) of batteries has seen the technology become the second-largest participant in the FCAS market after coal. Batteries are well suited to the FCAS market given their ability to ramp from 0% to 100% capacity in under a second, for either generation or load. This is most evident when reviewing Neoen’s FCAS revenues which have made the company the NEM's fifth-highest earner of total FCAS revenue in the past 10 years. The company’s portfolio of 420 MW_AC of operational batteries has earned it over A$100 million in FCAS revenue since 2017.  

What is FCAS?
Energy within Australia’s NEM is dispatched every five minutes in line with operational demand. Within these five minutes, generation and demand can still vary resulting in a need for facilities which can quickly ramp up or down in response to generation/demand balance. FCAS is an intra five-minute market  that can respond to supply/demand fluctuations within the NEM. The aim of FCAS is to maintain the frequency of the market between normal operating range of 49.85 Hz and 50.15 Hz. Frequency deviations are caused by relative changes in demand and generation. The simple cause and effect relationship is summarized below:

• Demand increases relative to generation: frequency decreases
• Demand reduces relative to generation: frequency increases

The Australia Energy Market Operator (AEMO) procures sufficient FCAS from eight markets, with prices set at a state level. Regionally, the highest FCAS revenues are earnt in South Australia and Queensland which sit at the edge of the grid. These markets are more vulnerable to either a transmission disconnection event, such as decoupling the state from the NEM and thus its FCAS suppliers, or a large-scale generator outage. Despite the price signals for both FCAS and energy arbitrage showing that Queensland is an obvious market for utility scale batteries, it is still the Australian state with the smallest pipeline of utility batteries under construction or in operation at 113 MW_AC.

What role will batteries and hydrogen play in a decarbonized electricity system?

Storage – either via batteries or hydrogen – will play a key role in decarbonizing the energy system. But with renewables being intermittent, and storage covering periods that range from hours to an entire season, selecting the right type of storage depends on flexibility requirements. Rystad Energy has analyzed the role battery energy storage systems (BESS) and hydrogen energy storage systems (HESS) have in a fully decarbonized electricity system, and the opportunities and challenges emerging as these technologies develop further. At the current stage of the energy transition, short and medium duration storage are, and will continue to be, effectively tackled by BESS technologies like lithium-ion. However, as renewable energy penetration grows, developing HESS assets for long duration storage applications will become essential to reach climate targets (and could also become one of the cheapest storage technologies in the process). As such, BESS and HESS should be allies rather than competitors in the decarbonization race. 

To decarbonize the energy system, we need energy storage. But as variable renewable energy (VRE) sources are intermittent, storage can be categorized as:

• short duration energy storage (SDES), for up to 10 hours, also called intraday energy storage,
• medium duration energy storage (MDES), for 10 to 24 hours,
• and long duration energy storage (LDES), which can discharge at maximum power for more than 24 hours. For LDES in the range of weeks and months, seasonal energy storage is also a commonly used.

The SDES market is currently dominated by utility-scale lithium-ion batteries. However, the MDES and LDES markets are still in their infancy because the share of VRE in the power mix is not high enough for either to be crucial for daily operation – yet. Rystad Energy expects high levels of VRE penetration by 2030, meaning steps towards MDES and LDES must be taken now.

Decarbonizing and electricity system – case study
To better understand the effect of high VRE penetration on the energy system, we analyzed Germany’s electricity generation and consumption in 2021. We found periods with high renewable energy generation, mainly wind, followed by several days of low generation. This is compensated by increased fossil fuel electricity generation (mainly coal). But to build a robust and reliable fully decarbonized electricity grid, fossil fuel electricity generation must be replaced. Implementing MDES and LDES is one solution to the challenge as energy could be stored during periods of high renewable generation and delivered to the system as needed.

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