GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET

BLOOMBERG NEW ENERGY FINANCE SUMMIT 2011

SHU SUN
4 APRIL 2011

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GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET, 4 APRIL 2011

ENERGY STORAGE: TECHNOLOGIES AND APPLICATIONS

ENERGY STORAGE APPLICATIONS
Stationary storage
Grid Industrial Distributed Transport

Mobile storage
Consumer

ENERGY STORAGE TECHNOLOGIES

Pumped hydro CAES Batteries Flywheels Supercapacitors

NaS batteries

Flow batteries

Li-ion batteries

NiMH batteries

Pb-A batteries

/ / / / GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET, 4 APRIL 2011

BENEFITS OF STORAGE IN GRID APPLICATIONS

Lifetime benefits of energy storage at different stages of value chain ($/kWh of storage capacity)

Price arbitrage

67
80 1,152

Markets

Spinning reserves
Regulation

System Transmission

Renewable energy integration

104
414 134 157

Def er transmission investment

Transmission access charges Def er distribution investment

Distribution

Voltage support

9
377 66

Retail TOU energy charges

End user
Power quality and reliability

Note: Benefits are modeled using a battery configuration of 1MW, 2MWh, with 15-year life-time and a 10% discount rate.

Source: EPRI, Bloomberg New Energy Finance

/ / / / GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET, 4 APRIL 2011

ENERGY STORAGE PROJECTS WORLDWIDE (MW)

2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0 Sodium sulphur batteries Compressed Lithium-ion Lead-based Flywheels air batteries batteries Flow batteries Nickel cadmium batteries Announced / planning begun Financing secured / under construction Permitted Commissioned

Source: Bloomberg New Energy Finance

/ / / / GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET, 4 APRIL 2011

SODIUM SULPHUR BATTERIES

45% of total commissioned storage

capacity outside pumped hydro

55% of total future storage

capacity outside pumped hydro
Series6
Germany

Historical annual new NaS installations by location, 1995-2010 (MW) 90

80 70 60 50 40 30 20 10

United Arab Emirates France

US

Japan 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Note: Future storage capacity includes projects under the status of announced / planning begun, financing secured / under construction and permitted.

Source: Bloomberg New Energy Finance

/ / / / GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET, 4 APRIL 2011

SODIUM SULPHUR BATTERIES

45% of total commissioned storage

capacity outside pumped hydro
Future installations by status and location (MW)
1,200 1,200 1,000 1,000
800 800 600 600 400 400

55% of total future storage

capacity outside pumped hydro
NGK Insulators the only company producing NaS batteries

Series6 Series6
Malaysia Malaysia

Mexico Mexico
France France

Current manufacturing capacity stands at 150 MW/yr

200 200 0 0 Financing secured / Financing secured / under construction under construction Announced / Announced / planning begun planning begun

United Arab United Arab Emirates Emirates Japan Japan

Potential for future cost reduction questionable

Note: Future installations include projects under the status of announced / planning begun, financing secured / under construction and permitted.

Source: Bloomberg New Energy Finance

/ / / / GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET, 4 APRIL 2011

COMPRESSED AIR ENERGY STORAGE

41% of total commissioned storage

capacity outside pumped hydro
CAES technology

37% of total future storage

capacity outside pumped hydro

Fuel input

Efficiency

Maturity Technological uncertainty

Diabatic Isothermal Adiabatic

Yes No No

40-70% 70-90% 70%

Mature Developing Developing

Note: Future projects include projects under the status of announced / planning begun, financing secured / under construction and permitted.

Source: Bloomberg New Energy Finance

/ / / / GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET, 4 APRIL 2011

COMPRESSED AIR ENERGY STORAGE

41% of total commissioned storage

capacity outside pumped hydro
Future CAES projects

37% of total future storage

capacity outside pumped hydro

7 projects 1.1GW

>$1.3bn

?
Secured 8%

Financing of future projects questionable

Note: Future projects include projects under the status of announced / planning begun, financing secured / under construction and permitted.

Source: Bloomberg New Energy Finance

/ / / / GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET, 4 APRIL 2011

DISTRIBUTION OF US DOE FUNDS TO ENERGY STORAGE

DOE SMART GRID DEMONSTRATION GRANTS ENERGY STORAGE
Battery Sodium-ion 3% Battery Other 12% Flywheel 15% Battery - Lead carbon 1%

DOE ARPA-E GRANTS: GRIDS

CAES 3%

Fuel cell regenerative 8%

CAES 32% Battery - zinc manganese oxide 11% SMES 15% Flow batteries 31%

Total = $184.8m

Total = $27.7m

Flow batteries 17%

Battery - Liion 20%

Battery metal air 16%

Flywheel 16%

Source: US Department of Energy, Bloomberg New Energy Finance Source: US Department of Energy, Bloomberg New Energy Finance Note: GRIDS stands for Grid-scale Rampable Intermittent Dispatchable Storage

/ / / / GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET, 4 APRIL 2011

LITHIUM-ION BATTERY PACK COST, TRACTION BATTERY PRODUCTION, 201030

Total pack cost ($/kWh) Annual production (MWh)

1,200 1,000 800 600 400 200 0 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

360,000 300,000 240,000 180,000 120,000 60,000 0

Total size of batteries manufactured per year (MWh)

Note: Total pack cost includes the battery management system

Total cost of pack ($/kWh)

Source: Bloomberg New Energy Finance

/ / / / GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET, 4 APRIL 2011

10

COST OF LITHIUM-ION BATTERIES VS. OTHER STORAGE TECHNOLOGIES

System cost ($/kWh)

1,200 1,000 800 600 400 200 0 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Sodium sulphur battery

Flow battery

Pumped hydro Compressed air

Li-ion battery

Total cost of pack ($/kWh)

Note: System cost includes the cost of power control electronics and other components required to build a complete storage system.
Source: Bloomberg New Energy Finance

/ / / / GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET, 4 APRIL 2011

11

ACTIVITIES OF WORLDS LARGEST BATTERY COMPANIES

Consumer electronics Automotive battery (SLI) Automotive battery (traction) Industrial / back-up Grid-scale storage

12

Source: Bloomberg New Energy Finance

/ / / / GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET, 4 APRIL 2011

COPYRIGHT AND DISCLAIMER

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The information contained in this publication is derived from carefully selected public sources we believe are reasonable. We do not guarantee its accuracy or completeness and nothing in this document shall be construed to be a representation of such a guarantee. Any opinions expressed reflect the current judgment of the author of the relevant article or features, and does not necessarily reflect the opinion of Bloomberg New Energy Finance. The opinions presented are subject to change without notice. Bloomberg New Energy Finance accepts no responsibility for any liability arising from use of this document or its contents. Bloomberg New Energy Finance does not consider itself to undertake Regulated Activities as defined in Section 22 of the Financial Services and Markets Act 2000 and is not registered with the Financial Services Authority of the UK.

/ / / / GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET, 4 APRIL 2011

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GRID-SCALE ENERGY STORAGE: STATE OF THE MARKET

SHU SUN, SSUN46@BLOOMBERG.NET
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