Future cost of energy storage and its impact on CO 2 emissions from the power sector

Transcription

1 Future cost of energy storage and its impact on CO 2 emissions from the power sector Oliver Schmidt, Kate Ward, Iain Staffell International Association for Energy Economics 6 September 217 Vienna

2 Product Price (US$ 215 /kw) Experience curves are a scientific tool to model these cost reductions Cost projection method Solar PV (23%, Module) ,1,1, Cumulative Installed Capacity GW) Source: Liebreich, M. Keynote - Bloomberg New Energy Finance Summit 216. (Bloomberg New Energy Finance, 216). 2

3 Product Price (US$ 215 /kwh cap ) We derive a 1 st -of-its-kind experience curve dataset for storage technologies Dataset ,1,1, Cumulative Installed Nominal Capacity (GWh cap ) System Pack Module Battery Pumped hydro (Utility, -1±8%) Lead-acid (Multiple, 4±6%) Lead-acid (Residential, 13±5%) Lithium-ion (Electronics, 3±3%) Lithium-ion (EV, 16±4%) Lithium-ion (Residential, 12±4%) Lithium-ion (Utility, 12±3%) Nickel-metal hydride (HEV, 11±1%) Sodium-sulfur (Utility, -) Vanadium redox-flow (Utility, 11±9%) Electrolysis (Utility, 18±6%) Fuel Cells (Residential, 18±2%) Source: O. Schmidt, A. Hawkes, A. Gambhir & I. Staffell. The future cost of electrical energy storage based on experience rates. Nat. Energy 2, 1711 (217) 3

4 Product Price (US$ 215 /kwh cap )... that enables evidence-based cost projections Capital cost projection (capacity) Price ranges System Pack Module Battery Pumped hydro (Utility, -1±8%) Lead-acid (Multiple, 4±6%) Lead-acid (Residential, 13±5%) Lithium-ion (Electronics, 3±3%) Lithium-ion (EV, 16±4%) Lithium-ion (Residential, 12±4%) Lithium-ion (Utility, 12±3%) Nickel-metal hydride (HEV, 11±1%) Vanadium redox-flow (Utility, 11±9%) Electrolysis (Utility, 18±6%) 5,1,1, Cumulative Installed Nominal Capacity (GWh cap ) Fuel Cells (Residential, 18±2%) Source: O. Schmidt, A. Hawkes, A. Gambhir & I. Staffell. The future cost of electrical energy storage based on experience rates. Nat. Energy 2, 1711 (217) 4

5 Product Price (US$ 215 /kwh cap ) The cost of installed utility-scale lithiumion systems fall to $/kwh by 23 Capital cost projection (time) Lithium-ion (Utility, 12±3%, System) Experience Rate uncertainty + Growth Rate uncertainty $/kwh $/kwh 29 $/kwh Source: O. Schmidt, A. Hawkes, A. Gambhir & I. Staffell. The future cost of electrical energy storage based on experience rates. Nat. Energy 2, 1711 (217) 5

6 Storage Installed Capacity (GW) Energy Output (TWh) Baseline Installed Capacity (GW) Energy Output (TWh) We model storage in the power system where it reduces CO 2 emissions at a cost Modelling scenarios Carbon Price: Strike Price: Renewables: Curtailed: Emissions: Net Spend: /ton 89.5 /MWh 7 GW 159 TWh 3.14 GT 113 bn Solar Wind OCGT Gas CCS Gas Coal CCS Coal Nuclear Storage capacity: 14 GW (2%) Storage duration: 6 hours Storage efficiency: 75% Curtailed: 117 TWh (-25%) Emissions: 2.94 GT (-6%) Net Spend: 13 bn Storage Solar Wind OCGT CCGT CCS CCGT Coal CCS Coal Nuclear Source: Own analysis 6

7 Curtailed Energy (relative) Abatement (relative) Curtailed Energy (relative) Abatement (relative) The varying impact on renewables curtailment and CO 2 abatement... Impact of Energy Storage Penetration Storage duration % 12% 9% 8% -25% 1% 7% 6 hours, 75% AC-AC 8% 5% 6% 4% 3% +6% 4% 2% 1% 2% % % % 5% 1% 15% 2% 25% 3% Energy Storage Penetration (% of Renewables) % 9% 8% 7% 6% 5% 4% 3% 2% 1% % 12% -25% 1% 8% 6% +6% 2% Share, 75% AC-AC 2% % Storage Duration (hours) The impact of storage duration on curtailment reduction and abatement improvement appears more pronounced than that of higher storage penetration Source: Own analysis 7

8 Marginal abatement cost ($/t CO2 )... is reflected in the marginal abatement cost of different storage technologies Marginal abatement cost curve PtG5 PtG1 PtG15 PtG2 PtG3 Redox5 Redox2 Redox15 Redox1 Redox3 Li-ion5 Li-ion1 Li-ion15 Li-ion2 Li-ion3 PtG Redox Li-ion Duration 2h 6h 3h Efficiency 3% 75% 85% Lifetime 15y 15y 15y ~3 5 Abatement Potential (MT CO2 ) Source: Own analysis 8

9 Questions? Oliver Schmidt PhD Researcher in Energy Storage Grantham Institute - Climate Change and the Environment Imperial College London, Exhibition Road, London SW7 2AZ Tel: +44 () o.schmidt15@imperial.ac.uk Website:

10 GWP of battery manufacturing Source: M. Hiremath, K. Derendorf, T. Vogt, Comparative life cycle assessment of battery storage systems for stationary applications., Environ. Sci. Technol. 49 (215) doi:1.121/es54572q. 1

11 Product Price (US$ 215 /kwh cap ) Product Price (US$ 215 /kwh cap ) Product Price (US$ 215 /kwh cap ) Vanadium redox-flow & Power-to-Gas Electrolysis (Utility, 18±6%, Pack) Experience Rate uncertainty + Growth Rate uncertainty Redox-flow (Utility, 11±9%, System) Experience Rate uncertainty + Growth Rate uncertainty Fuel cells (Residential, 18±2%, Pack) Experience Rate uncertainty + Growth Rate uncertainty

12 Raw Material Cost (US$ 215 /kwh cap ) Raw material costs suggest that these cost projections are not infeasible Sanity Check 1 Raw material cost System Pack Module Battery Pumped hydro (Utility, -1±8%) Lead-acid (Multiple, 4±6%) Lead-acid (Residential, 13±5%) Lithium-ion (Electronics, 3±3%) 1. Lithium-ion (EV, 16±4%) Lithium-ion (Residential, 12±4%) Lithium-ion (Utility, 12±3%) Nickel-metal hydride (HEV, 11±1%) Vanadium redox-flow (Utility, 11±9%) Electrolysis (Utility, 18±6%) Fuel Cells (Residential, 18±2%) 1,1,1, Cumulative 72 Installed 52 Nominal 51 Capacity (GWh cap )

13 Storage vs. Renewable capacity Annual emissions (Gt CO2-eq /year) The power sector needs to be close to complete decarbonisation by 25 Introduction IPCC Fifth Assessment Report Annual emissions from power generation must reduce to max. 5 Gt CO2 by 25 (glob.) 1-1 The power sector is among the first energy sectors to completely decarbonize -2 Baseline 45ppm with CCS 45ppm w/o CCS 25% 2% 15% National Grid Future Energy Scenarios The UK targets an 8% reduction of emissions by 25 compared to 199 levels 1% 5% National Grid foresees storage capacity at 5-25% of renewable capacity to succeed % Source: Climate Change 214: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Core Writing Team, R.K. Pachauri and L.A. Meyer (eds.)], IPCC, Geneva, 214.); Future Energy Scenarios, National Grid,

14 Including storage cost forecasts in power system models informs on abatement cost Methodology Experience Curves Power System Model (UK) 1. Determine experience rates for storage technologies 2. Combine with market forecasts to project future cost of three storage technologies Lithium-ion 15y, 3h, 85% AC-AC Redox-flow 15y, 6h, 75% AC-AC Power-to-Gas 15y, 2h, 3% AC-AC 1. Model baseline scenario for 8% emission reduction by Model storage scenario for three technologies at 5-3% share of Ren. 3. Determine marginal abatement cost for 8%+ emission reduction with storage 14