A venture capitalist idly glancing through business plans probably wouldn’t give an energy storage business a second glance. All the glamorous companies are focused on finding cheap ways of making low cost energy. Storage is down-market, and ever so slightly dull. This will to have to change. Without cheap, robust and very large scale electricity storage, electricity grids are going to find it very difficult to cope with the unpredictability of vastly greater supplies of electricity from wind, wave or sun. HIghview Power, a UK company that has operated in what private equity calls ‘stealth mode’ for several years, went public yesterday with an intriguing proposal for a new form of energy storage – air liquefaction. The energy commentators read the press release and politely yawned. Were they right?
The economics of this technology look interesting. What is even more compelling is that you could bolt together a large plant using conventional components freely available today from a variety of major suppliers. Unlike some of the really wacky suggestions for storing energy, we pretty much know that Highview’s ideas will work. A 350 kW pilot plant alongside the Slough power station has been through extensive testing for the last six months or so.
So how does it operate? You take ambient air and put it through a liquefaction plant using electricity. (Hundreds of these plants around the world today make liquid nitrogen, oxygen or natural gas). Liquefaction works by expanding a gas, which causes its pressure, and thus its temperature to fall. This technology is a hundred years old. The process uses substantial amounts of energy.
Allowing liquid air to expand increases its volume many hundred fold. This will produce high pressure in any sealed container. If the gaseous air is allowed to escape through a turbine, electricity can be generated. This second phase produces about 55% of the input energy, says Highview. This relatively low number can be improved to perhaps 70% by using waste heat from nearby industrial processes, such as the hot water from the cooling processes in a nuclear or fossil fuel power station.
How does efficiency this compare? Here are some very rough figures for other means of storing electricity.
|Pumped hydro||70%||Water is pumped uphill to a reservoir. When electricity is needed it flows through turbines back into the lower reservoir|
|Lithium ion batteries||80%||Lithium ion cells are used in electric cars and electronics. They are still expensive and have limited life|
|Compressed air||60% but perhaps more||Spare electricity drives a compressor. The air is stored at high pressure in deep caves. When released it drives an air turbine.|
|Hydrogen||40%||Electrolysis uses electricity to make H2 and O2 from water. Hydrogen in a fuel cell generates electricity.|
(A previous article on Carbon Commentary assessed the economics of using stored hydrogen for electricity production).
The huge advantage of Highview’s plant, if it works as planned, is that each of the main alternative storage technologies have intrinsic problems. Hydrogen is inefficient and the equipment is expensive. Compressed air requires large amounts of storage. Lithium batteries are expensive and don’t like being discharged too often. (Other battery systems are less problematic but they have other disadvantages). Pumping water uphill is cheap and well-understood. There just aren’t many places where it can be done economically.
Highview quoted me a figure of £1,000 per kilowatt of output power. Let’s be clear about what this means. The Slough pilot plant can produce 350 kW of electricity. So the cost of a commercial plant would be about £350,000. (The cost of the pilot was much greater, of course). The Slough kit can deliver about 2.5 megawatt hours when fully charged. That is, it can work for seven or eight hours at full power. If it can be achieved, £1,000 per kilowatt of electric power is highly competitive with most other storage technologies, particularly since operating costs are so low. A large pumped hydro plant would be comparable, but hydrogen could be four or five times as expensive.
Build an air liquefaction plant and expansion plant to Highview’s designs and what do you get? A megawatt plant would have a capital cost of a million pounds or so. To be cautious, we’ll assume £2m. This plant can be used in several different ways.
First, it can respond to short-term grid problems. Highview says it might take the plant a couple of minutes to start producing useful power to respond to a power station failure or grid problem. This isn’t quite fast enough for the real (but rare) emergencies when gigawatts suddenly disappear from the grid. But is good enough to help respond, for example, when wind farms start having to close because of excess wind speeds. The reverse situation, when National Grid has to pay wind operators to close down because of an excess of national electricity supply, can be addressed by Highview plants. They can also absorb surplus power while the generator close down other sources of supply. National Grid pays for the small producers, such as the emergency diesel generators at hospitals and sewage farms to be available to produce electricity at less than half hour’s notice. The disadvantage is that these facilities can’t take in surplus power whereas Highview's plants can act like batteries, either taking in electricity or discharging.
Second, they can provide extremely useful ‘peak shaving’. Electricity demand varies throughout the day. Individual large customers pay both for their total usage of electricity and for the amount of capacity they are using at the times when the total UK demand is at its peak. Such a customer might invest in Highview’s system to reduce its annual capacity payments. Each time the real-time grid information indicated that a peak in electricity was being reached (usually at around 5pm in the winter), the air liquefaction plant would be switched to electricity production, minimising the peak demand of the user and hence reducing the payment for maximum capacity used. In countries such as South Africa, which have electricity grids that are sometimes unable to cope with peak demands, Highview technology could be particularly useful.
Third, the plants could use electricity when it is very cheap and sell it when it is expensive. Typically this means storing power at night and then discharging at the early evening peak. But remember that if the efficiency (input electricity versus output electricity) is only 55%, the price difference will have to be large to make this worthwhile.
What the plants cannot do - because they will never have enough capacity to work uninterruptedly for days - is to replace wind power at times when the turbines are stalled because of metrological conditions. We will always need to have gas turbines for these events. Nevertheless, air liquefaction looks to be potentially the cheapest and most robust way of adding the several gigawatts of energy storage capacity that the UK grid needs if it is to deal with the unpredictability of 10,000 offshore wind turbines. At present, I suspect the financial calculations won’t quite provide the incentive to make the investments necessary. But the future electricity market will only work if there is a strong financial signal that encourages storage investments. It must happen eventually. Venture capital really should be interested.