Electricity Storage

Electricity Storage

          
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Electricity Storage

Making Large-Scale Adoption of Wind and Solar Energies a Reality
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    The growth case for using renewable energy remains very much intact—the effects of a global economic downturn notwithstanding—and the prospects for wind and solar photovoltaic (PV) power appear particularly strong. To realize that potential, however, these technologies will have to overcome a key hurdle: the challenge posed by their intermittent nature. Unlike other forms of renewable energy—such as hydropower and geothermal energy—the energy generated by wind and solar PV fluctuates. This fluctuation poses a sizable challenge to their integration into the power grid—and their widespread adoption as bona fide mainstream power sources.

    While there are several potential answers to the challenges of intermittency, the most viable, we believe, is a credible form of electricity storage. Yet there is little on the immediate horizon to suggest that a storage solution is imminent. Unless and until that vital enabler exists and is practical, fluctuating renewables will struggle to become key players in the global push toward carbon dioxide–free energy sources.

    In this paper, which is based on extensive research and more than 30 interviews that BCG conducted with industry experts in late 2009, we look at the current state of play in electricity storage. (Although we take a global perspective, we focus particularly closely on Europe, which will be the first region to experience large-scale storage challenges.) We examine why the need for storage will only grow; what the key technologies are, where they are developmentally, and what their prospects are for adoption; and what the potential alternatives to storage are, and why none is sufficient on its own. We also discuss implications for stakeholders. Among our key findings:

    • Electricity storage will be essential for successful, critical-mass adoption of fluctuating renewables. Although alternative solutions such as interregional compensation, demand-side management, and conventional backup power exist and will continue to play important roles, the extent and degree of fluctuation resulting from increased deployment of fluctuating renewables will demand the use of storage technologies.

    • Because the financial logic for investing aggressively to advance storage technologies is currently not compelling, incentives will be necessary to ensure that sufficient storage capacity is online in time to meet governments’ green-energy targets.

    • Players that actively participate in shaping the technological, political, and market frameworks that determine the future use of storage technologies stand to gain a clear competitive edge, since technologies will be chosen and established, policies will be negotiated and deployed, and R&D partnerships and customer relationships will be established and strengthened in the coming years.

    We refer to wind and solar PV as “fluctuating renewables” throughout this paper. Furthermore, we use the term to refer to the electricity generated from fluctuating renewables. We also distinguish between solar PV and concentrated solar power (CSP), the other main solar technology. In many cases, CSP has an internal-storage capability to compensate for fluctuations. Thus, it already feeds a “flattened” power curve into the grid and does not typically require external grid storage. Hence, in this paper, we confine our discussion of solar energy to solar PV.
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