As director of the Copper Development Association’s Sustainable Energy Division, I am often tasked with examining emerging trends for copper in U.S. electricity generation and infrastructure, as well as in other important energy markets.
Copper has long been prized in electrical systems because of its unmatched reliability, efficiency and performance, and because it is the most durable material for energy-driven systems that rely on electrical motors and transformers. These same properties make copper a material of choice in wind turbines, photovoltaic panels and other renewable energy generators, which is why there is ample and continued enthusiasm among U.S. copper producers and fabricators for our nation’s increasing reliance on renewables.
With more than 30 U.S. states having already implemented renewable portfolio standards (RPS) — and with additional potential impacts from U.S. EPA’s recently proposed emissions limits on greenhouse emissions from power plants — renewables in our electricity generation mix is only expected to increase.
With the copper industry’s interest in renewables comes a related interest in grid energy storage. It is a technology that is still in the development phase, but an extremely promising partner to renewables generation because of its key role in addressing intermittency issues and transmission constraints.
In 2011, the Copper Development Association, CDA, commissioned the respected research consultancy firm DNV GL (formerly KEMA) to examine the near-term market for grid energy storage in the U.S., and recently, I presented an update on the key findings from that report at the TechConnect World Innovation Conference and Expo, which was held in National Harbor, Maryland.
The CDA-DNV GL study forecasts the annual market size for grid storage — electrochemical, mechanical and thermal — through 2016, incorporating information on current and planned domestic grid-storage activities, known grid-storage market trends and proposed energy storage incentives. Analyses of these data points were supplemented with information on longer term market drivers, including the impact of financial investments, and government policies that encourage growth and other external factors.
The study reveals a highly robust market that is on the cusp of explosive growth and tremendous potential. Estimates show that between 2 to 4 gigawatts of energy storage could be developed over the next five years. In other words, grid energy storage could quickly leap from theoretical technology with limited, experimental deployment to full-scale reality.
The report finds that many new technologies are under development, with a handful ready for commercialization. The most mature technologies are thermal energy storage, pumped hydropower and compressed air energy storage (CAES). In the near term, battery technologies and thermal storage are expected to have the strongest growth areas.
Challenges in the industry continue to include the ability to scale quickly and bring down costs. In the next five years, costs are expected to come down via improved system integration, increased production and enhanced distribution capability.
Still, the impact of other financial incentives to decrease costs and grow the market cannot be overstated. The promise of a fully developed energy storage market is there — as long as financial incentives keep pace.
Continued interest by angel investors and venture capital firms will be crucial, but so will state and federal government support. In 2011, when the KEMA study was first conducted, Department of Energy Smart Grid Demonstration Grants had invested $772 million into grid storage development, resulting in 537.3 megawatts of stored power. Late last year, the California Public Utilities Commission unveiled a major new program that mandates the state’s big three utilities to add 1.3 gigawatts of energy storage to their grids by 2020.
Fittingly, the CDA-DNV LG study finds that tax incentives and other mandates are the key to elevating storage technologies beyond the experimental stage. Federal legislation continues to be introduced to implement tax incentives, but it has received little broad support in our divided Congress. Yet, according to the CDA-DNV LG report, it will be exceedingly difficult — if not virtually impossible — for the industry to mature without these policies in place.
Why is the copper industry so keenly interested in continuing to benchmark and track the success of grid energy storage? Well, because the copper intensities are expected to be huge — ranging from zero to over four tons per megawatt (MW), depending on the installation configuration, type of electrical equipment and storage type. Total incremental copper demand associated with grid energy storage is estimated to range from roughly 900 tons of copper to over 3,000 tons. These are opportunities that are hard to ignore.
Lead image: Copper wire via Shutterstock