Such systems can also help operators cope with tougher rules about subsidies, such as in Brazil.
Last year, the Brazilian Ministry of Mines & Energy introduced new rules for companies bidding for renewable energy subsidies. The ministry introduced its P90 target that says wind farm operators must be able to predict with 90 percent certainty the minimum level of energy that a wind turbine is likely to produce, which is an increase from the P50 target — or 50 percent — that it replaced. Subsidies are tied to whether operators can meet these targets, which is tough given fluctuations in wind.
Therefore, battery storage developments enable businesses to predict with a great degree of accuracy how much energy they can send to the grid and when. We expect more governments to introduce tougher rules surrounding subsidies, as Brazil is doing.
The technology may still be at an early stage, but developments in Brazil and Puerto Rico show us that governments are going to become more demanding about battery storage. They want to know that they are buying energy from reliable sources that will be there when they did them, which is one reason to explain the enduring appeal of coal and oil that can be available all day and night.
One challenge for integrating this technology into individual schemes is its current cost. However, there are plenty of firms looking to develop new types of batteries and drive down costs.
4. Encourages Private Investment
The International Energy Agency reported in March that in China, India, the European Union and the U.S. would invest $380 billion investment in energy storage, including batteries, by 2050. It is a market that technology firms want to capitalise on, but to do so they need funding, and private equity does not come with the same onerous commitments as borrowing from the public sector.
For example, in May, we saw an investment by Trinity Capital and CapX Partners in a $20 million debt loan to meet existing and future debt financing needs at Aquion Energy, which is an early-stage battery storage company with what it says is a disruptive battery technology. This follows a $55 million equity funding in January where it raised money from investors including Bill Gates.
The deal does not look especially remarkable, other than the inclusion of Gates, but it does show that there are companies out there seeking money to develop new types of batteries. These will include a range of battery systems from lithium ion and lead acid to zinc air and flow batteries.
There is an opportunity here for investors to back companies developing these types of technologies.
The most prominent wind player in this market is currently General Electric, which has built its Brilliant Turbine platform to include integral battery storage. This allows the turbines themselves to capture excess wind energy and then export it to the grid later. The company says this enables the wind farm operator to make money from selling excess power that they would previously have lost.
But there will be plenty of smaller companies looking to go up against these big players, and some of these are likely to present attractive investment opportunities to canny investors.
Find out more about battery storage and other markets: Hidden Investment Opportunities is the second of five special reports published by A Word About Wind in 2014. Renewable Energy World readers can download a complimentary copy of the report, by requesting a free one-month trial here.