Energy Storage: A Game Changer for the Energy World. Florian Mayr, Partner Dubai, April 26, 2017

Transcription

1 Energy Storage: A Game Changer for the Energy World Florian Mayr, Partner Dubai, April 26, 2017

2 Apricum The Cleantech Advisory. Apricum at a glance Business Founded in 2008 Industry focus Team >200 successful projects Cleantech. Strong focus on solar, wind, water, energy storage and digital energy >40 experts Clients Companies, investors and public institutions Services Locations Transaction advisory Strategy consulting HQ in Berlin, Germany Branch offices: Abu Dhabi, Dubai Representative offices in South and North America, Europe, MENA and Asia 2

3 Apricum has been active in MENA for several years. Globally, increasing projects in the energy storage space. References from the MENA region (examples): References from global players / energy storage companies and many more 3

4 Drastic market growth expected for energy storage increasingly appreciated by the financing world. Global energy storage installations [GWh] Navigant 30 times up Apricum 1 BNEF Energy storage: An underappreciated disruptor (Feb 8, 2017) Energy storage: An underappreciated Energy storage will grow disruptor exponentially (Feb 8, 2017 (Feb 9, 2017) 1) In cooperation with Cairn ERA 4

5 We see three principal drivers for future growth of the global energy storage market. Increasing demand for Reducing costs 1 flexibility in the power system replacements/expansion of grid and generation infrastructure optimization of (combined) sources of power supply Market for energy storage Capex Lifetime costs Outside of the storage box Improving frameworks Remove barriers for storage to participate in markets 2 3 adequate quality and reliability of power supply Incentives to push early market 5

6 There are four basic categories of demand, resulting in multiple use cases for energy storage. Demand for Key drivers of demand Energy storage use case A Increased flexibility in electricity systems Increasing share of intermittent renewable energy Loss of inertia (decommissioning of fossil plants) Need for higher grid resilience Increasing rural electrification Ancillary services (frequency/voltage control, microgrid islanding, black start) Direct RE 1 integration (e.g., ramp control, RE smoothing, RE firming) B Replacement/ expansion of generation/grid infrastructure Aged/strained grid and peak generation infrastructure Rising (peak) power demand/supply Increasing rural electrification Peaker replacement (peak shaving 2, peak shifting 2, demand response 2, energy arbitrage) RE time shift (PV, wind) T&D deferral/avoidance Grid congestion relief C Optimization of (combined) sources of power supply High prices for retail electricity Decreasing FiT High prices for fossil fuels Increasing rural electrification RE self-consumption optimization (residential, RE-hybrid systems) Optimization performance of fossil generation (replacement of spinning reserve, load firming) D Adequate quality/reliability of power supply Weak/strained generation/transmission infrastructure (Perceived) unreliable power generation Backup UPS Source: Apricum analysis; 1) Renewable energy; 2) Behind-the-meter use cases, but incentivized by utilities to create value in-front-of-the-meter, i.e., avoiding additional infrastructure investments 6

7 Demand drivers and potential applications for storage depend on the individual challenges in a specific region. Challenges in different global regions and resulting use cases (examples) Examples of challenges: Aging infrastructure Time-of-use pricing, demand charges Natural disasters Typical use cases for ES 1 : T&D deferral Peak shifting/shaving Microgrid islanding Source: Apricum analysis; 1) Energy storage Examples of challenges: Decreasing FiT C&I demand charges High penetration of intermittent renewables Typical use cases for ES 1 : RE self consumption opt. Peak shaving Frequency control Examples of challenges: Electrification of rural areas Insufficient infrastructure Expensive/inefficient diesel based generation Typical use cases for ES 1 : T&D avoidance Anc. services in microgrids Opt. perf. fossil generation 7

8 In the MENA region, there is a high potential for energy storage as all principal demand drivers are present Examples of MENA energy storage projects, use cases and drivers NEPCO battery procurement, Jordan Rated power/status: 20 MW/announced Use case: Direct renewables integration Demand driver: Increasing share of intermittent RE Afourer Pumped Storage Scheme, Morocco Rated power/status: 465 MW/operational Use case: Renewables time shift Demand driver: Strained grid infrastructure Masdar rural electrification project, Morocco Rated power/status: ~5 MW (17,610 batteries)/under construction Use case: Renewables self consumption optimization Demand driver: Increasing rural electrification B C A Dukhan Oil Field, Qatar Rated power/status: 2 MW/contracted Use case: Direct renewables integration, backup Demand driver: (Perceived) unreliable power generation D 8

9 which has already led to an increasing number of energy storage installations in different stages of implementation. Energy storage installations announced, contracted and operational, as of April MW 815 MW 161 MW 5 MW 30 MW 0.02 MW 2.25 MW 0.1 MW 8 MW Energy storage technologies Mechanical (Pumped hydro) Thermal (Electro)-chemical Plus an undisclosed number of 1 MW storage pilots announced by DEWA Source: DoE, Apricum analysis 9

10 Increasing cost competitiveness of energy storage will further increase demand in the region. Price forecast for lithium-ion battery system prices 1 for large-scale stationary storage applications [USD/kWh] % Significant cost decreases expected due to: Technological improvements, in particular growing energy densities Economies of scale due to rising battery sales to multiple industries Declining costs not only for battery cells, but also for packaging and other system components Source: Apricum BESS cost model Q1/2017; 1) On DC level 10

11 Missing piece: Regulatory framework to create a level playing field for energy storage in MENA (and elsewhere). International examples for regulatory activities supporting energy storage USA: Reward benefits India: Set storage targets UK: Remove barriers PJM followed order 755 from the Federal Energy Regulatory Commission (FERC) Performance payments for MW-mileage Central Electricity Authority (CEA): Storage seen as necessary to realize solar dream 10 GW of pumped hydro storage by 2022 Call for Evidence by the Dept. of Business, Energy and Industrial Strategy (BEIS) Aim to define clear framework for storage Energy systems and regulations were designed for a pre-storage world Barriers for storage need to be removed, no state incentives needed necessarily Individual approach for each geography required Energy storage will play an increasing role in MENA be prepared! 11

12 Various energy storage technologies exist but which is the right one for the targeted use case? Overview storage technologies Energy storage technologies Mechanical Electrical (Electro)- chemical Thermal Pumped hydro Double layer capacitors Power-to-X Sensible heat storage Pressured air Superconducting coils Batteries Latent heat storage Flywheel Thermochemical storage Mechanical springs Lead-acid Lithiumbased Redox- Flow Sodium batteries 1 Others 2 Source: Apricum, ISEA, Avicenne; 1) Includes NaS, NaNiCl and Sodium-ion batteries; 2) e.g., Zinc-Air, liquid metal batteries, NiMH, NiCd 12

13 Energy storage value chain offers various opportunities to participate in the market but which are most attractive? Example: Battery energy storage system (BESS) value chain non-residential Upstream PE/PCS 4 provider DERMS 5 provider Downstream High-level controls (EMS 1 ) provider Materials Low-level controls (SMS 2 ) provider Cell mfg. Module/ pack mfg. BMS 3 mfg. Storage provider Integrator Developer Construction ( EPC ), maintenance System operator/ service provider System owner Manufacturing electrodes, electrolyte, binders Containerized solution Physically integrating hardware and software into a working system Financing, site selection System management, aggregation Benefitting from storage/selling BESS as a service Source: Apricum; 1) Energy Management System; 2) Storage Management System; 3) Battery Management System; 4) Power Conversion System; 5) Distributed Energy Resource Management System 13

14 What can we do for you? Meet me at the conference or contact: Florian Mayr Partner T M