Li-ion Energy Storage for Dummies (Part 1)
Energy storage is booming. Here’s your dummies guide on how grid storage batteries are changing the landscape of renewable energy, by our contributor Kush.
Part one (of two, in case you just can’t get enough!) will cover:
The scale of the industry.
What do we use battery storage for?
Duration and P rate.
What a typical storage project looks like.
The battery itself.
As of February 2024 in the US, 9GW of battery power capacity was already online, and the US pipeline currently includes >49GW of planned storage power capacity. 94% of this is co-located with solar farms. Over 300 energy storage projects above 500kW are in operation at US Power plants with another 373 planned. See more stats here.
To give you an idea of the size of some of these projects, here are some recent headlines:
The largest US Solar + Storage project is now online in California’s mojave desert.
1.9 Million solar modules from First Solar.
120,720 batteries from LG Chem, Samsung and BYD.
Over 4,600 acres.
3.287GWh of capacity, 875MW of power.
Construction has begun at Australia’s largest ever battery project.
2GWh of capacity, 500MW of power.
To give you a sense of the scale of these numbers, the average American home uses about 10.8MWh of energy in one year. This is around 29.5kWh per day. That means that when fully charged, the Edwards & Sanborn project above has enough battery capacity to power 111,088 homes for a full day.
Energy storage is also proving to be highly profitable. In Q3 of 2023, Tesla’s energy storage business achieved a profit margin of 24%. This is the first time that Tesla’s profit margin from energy storage has surpassed that of EVs.
The Use Cases
OK, so we are building a lot of energy storage. But why do we need it?
Grid Balancing for renewables. There are some times when renewables such as solar and wind produce an excess of power and some days where they don’t provide enough. Battery storage helps to soak up excess energy when available and discharge it when it’s needed. This is the reason why increasingly, battery storage is being co-located with solar and wind farms. Having storage co-located with solar reduces transmission losses and latency.
Grid Stability and Frequency Regulation. Grid frequency and voltage can drop due to outages or increases in demand. Batteries can respond extremely quickly to provide or absorb power from the grid to stabilize frequency and voltage.
Arbitrage. Charging the batteries when electricity prices are low and discharging when prices are high is a good way to make money.
Peak shaving. During times of high demand for electricity on a site, batteries will provide power to avoid high cost of electricity from the grid during peak times. This can also be achieved by reducing electricity consumption.
Back up power supplies for critical infrastructure such as hospitals and data centers.
Reliability. Batteries can be introduced on parts of the grid where there’s faulty equipment causing power outages.
Duration and P Rate
Now we need to size our storage system. Energy storage projects are usually defined by the capacity and power of the system. For example a 500MWh/250MW project has 500MWh of capacity and a planned charge/discharge rate of 250MW. A system such as this would discharge in 2 hours and can also be described as a ‘2 hour system’. For Li-ion energy storage, 2 hour and 4 hour systems are most common, although there is a trend towards longer duration systems, up to 8 hours.
We can also classify a project by its ‘P rate’, which is like a battery C rate, but for a constant power discharge. A lower P rate therefore translates to a longer time period that the battery will discharge for (a longer duration).
For the above example, the project would be 0.5P. Energy storage projects usually use constant power charging and discharging as electricity prices are per KW.
Other important parameters for sizing an energy storage system:
Lifetime - energy storage systems are now being designed for up to 25 years but as we know, capacity degrades over time. We either need to oversize the system at the beginning of life (BOL) or use augmentation (we’ll cover this in part 2) to ensure we can provide the required energy and power over the lifetime of the project.
Number of cycles per year.
Depth of discharge for the cycles.
Operating location, temperature, humidity and altitude. Most battery containers have liquid cooling/heating systems and dehumidifiers to make sure the cells stay within their limits.
What a typical storage project looks like
A typical BESS (Battery Energy Storage System) project consists of more than just batteries. First off you need inverters, which are more commonly known as PCS (power conversion system). The batteries operate on DC but the grid is on AC, so the PCS’ convert the DC from the battery to AC for discharging and vice-versa for charging. After this we have a medium voltage transformer (MVT) which steps up the voltage to an intermediate level. The MVT can be integrated with the PCS or it can be separate, depending on the manufacturer. This usually constitutes one ‘block’, as shown above.
Multiple blocks will then connect to a high voltage transformer (HVT) which steps the voltage up to the grid voltage at the POI (point of interconnection).
One thing to note here is that the project capacity and power requirement will usually be considered at the POI, and so you need to make sure that you have enough capacity and power from the batteries even after all the losses from the PCS, MVT, HVT and cables are considered. Losses are roughly 0.2% for the DC cables, PCS 1-2%, MVT 1-2%, MV cables 0.2%, HV cables 0.2%, HVT 1%.
The amount of power you can put through one PCS is limited. So even if you have enough battery capacity, you may not have enough power throughput due to the PCS limit, so you need to add PCS.
Project sites will have a host of software to ensure everything is communicating and that battery and PCS limits aren’t exceeded.
The BMS will monitor and look after the battery, making sure current, voltage and temperature limits aren’t exceeded and also alerting the battery container’s fire suppression system if there is an issue.
A SCADA (Supervisory Control and Data Acquisition) is responsible for allowing real time monitoring, control and data acquisition of the battery site. Operators can remotely set power limits, charge/discharge and issue dispatch commands.
An EMS (Energy Management System) will talk to all the batteries and PCS’ and optimize the operation of the battery system to ensure it is operated in the most efficient and cost effective way. It considers things like degradation, energy prices and state of charge levels to schedule the charging and discharging. The EMS can sometimes include the functionality of the SCADA so you don’t need separate software.
The battery itself
BESS usually come in 20ft containers, containing 3-5MWh of capacity. Leading manufacturers include CATL, Tesla, BYD, Hithium and Sungrow.
LFP is the dominant chemistry for energy storage, thanks to its high cycle life and thermal stability. The lower specific energy of LFP isn’t so much a factor as the batteries are stationary and usually in the middle of nowhere. Sodium ion has the potential to be utilized in energy storage but as of now is still in its infancy.
Stay Tuned…
That’s all for part 1, but stay tuned for part 2 of this energy storage series where we’ll be exploring augmentation, standards and regulations, tier 1 list suppliers, the storage battle between Texas and California and the future of energy storage.
🌞 Thanks for reading!
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