What is the most cost effective energy storage system?

To enable a high penetration of renewable energy, storing electricity through pumped hydropower is most efficient but controversial, according to the twelfth U.S. secretary of energy and Nobel laureate in physics, Steven Chu.

A combination of new mechanical and thermal technologies could provide us with enough energy storage to enable deep renewable adoption.

Chu’s analysis came as part of Stanford University’s Global Energy Dialogues series. His June 23 talk focused on the methods and costs of storing excess solar and wind power for when the sun sets and winds die down. Chu also addressed lessons learned from his time at the U.S. Department of Energy, where he oversaw unprecedented investments in clean energy via the 2009 American Recovery & Reinvestment Act. Here Chu stressed the need to hire good people, analyze real data and fight bureaucracy.

It turns out the most efficient energy storage mechanism is to convert electrical energy to mechanical potential energy, for example by pumping water up a hill, said Chu.

When the electricity is needed, the raised water is released through turbines that generate electricity. The 100-year-old technology dominates the global energy storage landscape today, with dozens of new installations under construction in China. Recent cost estimates show it to be competitive with any other utility-scale storage.

“The problem with (pumped) hydro is that it takes a long time to get permitting” in many countries, said Chu, noting that some environmentalists are “very much against hydro storage.” Nevertheless, there is a growing realization that increasing pumped-hydro storage substantially will be necessary if we are to increase wind and solar power beyond 50 percent of generated electricity.  

One audience member asked if small, modular pumped-hydro systems could be a good option. Chu responded: “I am a big fan of small, modular anything.” Built in factories and shipped around the world, he explained, modular units may be easier to approve than the big, “one-off” facilities we have today.

Newer energy storage methods

As we get more energy from renewables, our need for energy storage grows, said Chu, who is a professor in Stanford's Department of Physics and in the Department of Molecular and Cellular Physiology in its School of Medicine. Once we get to 50 percent renewable energy, we need far more storage than we have. The total electricity consumption in the United States in 2018 – 2019 was about 4,000 terawatt-hours (TWh) of energy with a generating capacity of about 1,200 GW. The United States currently has only 31 GW of stored energy power—only 2.5 percent of our current generating capacity. At 80 percent penetration of renewables such as wind and solar energy, it is estimated we would need four days of storage energy (100 hours) at our full generation capacity to minimize energy curtailment (the throttling back of renewable generation), Chu explained. Most regional U.S. grids could survive on large-scale electricity storage systems for a few minutes today.

The current full cost of lithium-ion battery storage is about $300/kWh, which is at least a tenfold higher cost than for even 12 hours of pumped-hydro storage. How can we reach the storage capacity we need in a way that is more cost-effective than lithium-ion batteries?

As an alternative to new dams, researchers are developing innovative mechanical storage technologies, Chu explained. This includes pumped storage by displacing water with air using isothermal compression and expansion in canisters one to two kilometers deep on the seafloor. Compressed air energy storage technologies using hollowed-out salt caverns with isothermal energy transfer also are being seriously considered.

“But, what about using electricity just to heat something up?” asked Chu. Within 10 to 20 years, wind and solar energy at the best sites in the world is expected to be as low as $15 /MWh (1.5 ¢/kWh) or equivalently $4.40/ MM Btu. Chu converted to MM Btu (million Btu) since this is the unit of energy used to price natural gas. At $4.40/ MM Btu, renewable energy will be less than the cost of natural gas in many regions of the world. Converting electrical energy directly into heat with resistive heating is thermodynamically inefficient since it creates excessive entropy. However, mechanical engineers and physicists alike have realized that there may be very efficient methods of using adiabatic compressors and expanders—such as Brayton turbines—to create a method of storing and extracting heat energy mechanically. Thus, heat storage begins to look like pumped-hydro storage, and for this reason the new technology has been dubbed a Brayton battery.

Brayton turbines are used in two ways to generate electricity. Natural gas turbines compress air, burn the fuel in a combustion chamber and extract mechanical work in the gas expansion stage. Alternatively, water heated to high pressures and temperatures well above the supercritical point, where there is no longer a distinction between liquid and vapor water, is used as an energy transfer fluid. After extracting work in the expansion stage, the cooled, low-temperature steam is returned to a high-temperature, high-pressure state through two stages of recompression. Energy “recuperators” are used the bring the steam to higher temperatures before adding fossil fuel heat. In this way the average temperature where the heat energy is added more closely approaches the idealized Carnot engine where the theoretical maximum thermal efficiency is η= (Thot – Tcold)/Tcold, where Thot is the temperature of a high-temperature reservoir and Tcold is the temperature where the waste heat is expelled.

In the past decade, engineers have begun to pilot the use of supercritical CO2 as the working turbine fluid. A new turbine designed to burn a mixture of natural gas and oxygen in which 94 percent of the mass of the fluid is high-pressure supercritical CO2 (The Allam Cycle) is being piloted in joint venture with a start-up company, NetPower, and Toshiba.

Note that the conversion between electrical power and mechanical power is up to 98 to 99 percent energy efficient. Because of this high-conversion efficiency, the round-trip efficiency of pumped-hydro storage is 75 to 85 percent energy efficient, despite all of the friction and turbulence generated in moving water. Similarly, an efficient Brayton turbine can be used to pump heat between thermal reservoirs. In a case using two cold and two hot thermal storage reservoirs, an estimated 75 percent efficiency may be achievable. In the new thermal storage schemes, energy recuperation also is essential to maximize the overall efficiency when heat is stored in the high-temperature reservoir in the charging mode and extracted in the discharging mode of the Brayton battery. While utility-scale thermal storage is still unproven, a number of companies are trying to commercialize these ideas.

Another way to store excess, inexpensive renewable electricity is to generate supplies of energy-rich chemicals. The first widely deployed technology is likely to be the generation of hydrogen via the electrolysis of water. While the production of hydrogen and oxygen by electrochemically splitting water has been known since the beginning of the eighteenth century, there is renewed interest in improving the overall energy efficiency and H2 production rate to be competitive with commercial hydrogen production. Virtually all hydrogen is produced from steam methane reforming (SMR), a process that extracts hydrogen from natural gas and releases carbon dioxide. While converting hydrogen into energy, either through combustion or through fuel cells, has no carbon emissions, “the full life cycle (of SMR-produced hydrogen) is not clean at all,” Chu explained. In the SMR process, seven kg CO2 are produced to produce one kg of H2 while burning diesel fuel releases 3.15 kg of CO2/kg of fuel. Even after accounting for the improved efficiency of a hydrogen fuel cell, a H2 powered truck only reduces the CO2 by 40 percent when compared to a conventional diesel heavy-duty truck. Similarly, burning natural gas produces about 0.55 kg of CO2/kWh of energy as compared to 0.21 kg of CO2/kWh in burning a kilogram of SMR-produced hydrogen.    

Producing hydrogen from water using solar power reduces the CO2 emissions to nearly zero. Better still, if hydrogen is produced from biomass that captures CO2 from the atmosphere and the excess CO2 is sequestered, the fuel can produce negative emissions of up to 20 kg of CO2 per kg of H2 used for energy.

The widespread use of hydrogen will require a new pipeline distribution system, according to Chu, noting that U.S. infrastructure lacks the ability to transport hydrogen. Repurposing natural gas pipelines is not feasible, Chu said, because of hydrogen embrittlement that will cause the steel pipes to crack under the stress of the high-pressure pipelines. Building new hydrogen pipelines with fiber-reinforced polymer materials could be as inexpensive as steel piping when deployed at scale. Also, using the existing natural gas right-of-way would help reduce costs of the hydrogen infrastructure.

Another active area of science and technology development is the development of a new class of utility-scale electrochemical storage based on chemical flow batteries. For example, a novel sulfur-lithium or sulfur-sodium flow battery is being developed where the cost of the chemical materials is tenfold and one-hundred-fold lower when compared to the dominant vanadium redox flow battery used today. Just as wide-scale deployment of electric vehicles will demand a shift to lower-cost materials than cobalt, nickel and manganese, massive deployment of flow batteries cannot use vanadium. Sulfur is the most attractive material for both EV batteries and stationary utility batteries.

Lessons learned at DOE

As the U.S. secretary of energy, Chu was tasked with implementing a large part of the 2009 American Recovery & Reinvestment Act. Created to stimulate an economic recovery in response to the Great Recession, it included $35 billion for investments in clean energy and lower-carbon-polluting vehicles.

Asked to reflect on lessons learned while in federal government, Chu said, “You’ve got to get really good people and you've got to always fight the bureaucracy growth.” Federal programs create so much paperwork and come with so many reporting requirements that many companies think twice about participating in otherwise beneficial programs.

Successful Recovery Act programs included the initiation of ARPA-E and investments in the U.S. electrical transmission and distribution system. The co-investment on synchrophasor technology and the linking of these power measurement units are essential in building a more robust transmission and distribution system, especially as we use more wind and solar energy. The Recovery Act fund investments in renewable energy and advanced automobile technologies through its loan guarantee program were also successful. Although the DOE was heavily criticized for the failed loans of Solyndra and Fisker, it saved Tesla and Ford from certain bankruptcy while stimulating the development of greener vehicles. Additionally, the first five large solar farms with over 100 MW of generating capacity were financed at a time when Wall Street considered these projects as too risky to touch.

The loan program was an effective method of taking innovation from initial demonstration of technology to large-scale deployment by greatly leveraging debt and equity investments in the private sector. Out of the nearly $30 billion of disbursed loans, the actual and estimated losses as of March 2020 are only 2.74 percent of the invested government money. The downside of the loan program was that it demanded the loan recipient be under detailed government scrutiny, and the bureaucratic compliance added significant costs and discomfort. “It’s as if you have a government colonoscopy without anesthesia” for the life of the loan, Chu said.

Having hard data is also important to measure the success of government programs, according to Chu. The DOE weatherization program could have been more successful if it had established a baseline so it could monitor the program’s effect on energy bills and thermostat readings before weatherization and measure the money saved and comfort gained after the work was done. Instead advocates and critics ended up arguing over the estimates of the cost effectiveness of the program, which differed by an order of magnitude.

“Both sides used substantial modeling instead of real numbers,” Chu said in an interview after the talk. “Going forward, it is important to gather as much data as possible and to use control groups to estimate the energy costs and carbon reduction benefits with data.”

Thinking globally

Chu was interviewed by Stanford Precourt Institute for Energy co-directors Arun Majumdar and Sally Benson. Majumdar asked Chu what the global community—and the United States—should be doing to address climate change.

Global collaboration and leadership from developed countries is important, according to Chu. If the United States, China and Europe set a price on carbon, they could address much of the world’s emissions without punishing emerging economies.

If instead, the United States takes an insular attitude and “a look-out-for-number-one” mentality, “it comes back and bites you,” said Chu. He added that we have seen the outcome of this mentality in recent weeks, both in terms of different populations’ ability to deal with the COVID crisis and in how police treat different sectors of society.

“The consequences of ignoring the risks of climate change is a magnified version of ignoring the warning signs of a growing pandemic or risking societal instability by allowing unequal treatment by the police to continue. We live on the same planet and like it or not, we are all in it together,” he said in an interview after the talk.

Chu’s slide deck can be viewed here (pdf). Not all slides were shown during his Global Energy Dialogues presentation.

The next Global Energy Dialogues session will be July 7 and will feature Chad Holliday, chair of the board of Royal Dutch Shell plc. Global Energy Dialogues are free and open to all. Registration is required.

The Global Energy Dialogues are funded by the Stanford Global Energy Forum.

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