By Allison Proffitt, Editorial Director, Battery Power Online
April 26, 2018 | Chris Campbell almost missed his Battcon keynote address because he was “adventure motorcycling” on the Blue Ridge Parkway and ran into some trouble. Thankfully, the VP of business development for Vertiv Critical Energy arrived in time to kick off the 2018 Stationary Battery Conference & Trade Show earlier this week in Nashville, Tennessee, and set the stage for three days of discussion.
Our electric power grids are among the most complex networks ever created by man, Campbell said, preparing the audience for his keynote address. Batteries in particular change the real-time nature of power grids by allowing energy to be moved through time, he claimed, making grids more resilient, and mitigating the potential for disruption created by new energy technologies.
Campbell opened Battcon with a forecast of trends for stationary energy storage, making bold predictions about the future of the grid.
Matching renewable energy with stationary storage is a balance of system costs, Campbell explained, and system costs are going down across the board. The price of converters is coming down. “Massive research” in Li-ion batteries for electric vehicles has improved chemistries. He predicted shifts in battery chemistry toward less cobalt use in NMC batteries from 1:1:1 to 8:1:1 and improvements in energy density. More energy in small spaces reduces the costs of containers, cooling, connections, and more, he explained. Overall, Campbell predicts dramatic system cost drops by 2020—about 20%—with slower declines after that.
Campbell sees a shift to longer duration deployments. The majority of new deployments in 2022—more than 50% by kWh—will be 4+ hours, he believes. There is opportunity in the market, he says, for very long duration, even seasonal, storage.
Next, Campbell predicted that “meaningful value stacking”, with more than three revenue streams, would begin in earnest in about 2020. He conceded that value stacking has become a bit of a buzzword, but he sees real opportunities, and says value stacking will be necessary to drive returns.
But for this to work, the wholesale market rules need to evolve. Campbell outlined needed changes: multiple use applications need to adopt rules and priorities for providing services to multiple end users; storage must be included in the option set for new IRPs and new builds; and improved sophistication for dispatch engines is needed to manage imperfect future knowledge.
There will be more aggregation, Campbell predicted, and he expects to see it from third party aggregators, possibly putting control mechanisms in place for how electric vehicles charge to better align with the grid operator. By 2022, he said, at least 50% of behind-the-meter storage assets will participate in an aggregation.
Campbell predicted a coming evolution of the UPS. Traditionally, the UPS focused on backup power and power quality, he said, and he acknowledged that the industry as a whole can be “generally resistant to messing with” the UPS. But the coming generation of UPS will offer demand management, energy arbitrage, and grid services. As batteries are replaced on existing UPS systems, more dense batteries will be installed that allow UPS’s in the future to provide grid services. These changes won’t endanger the core functions, he promised, thanks to high energy density Li-ion racks. By 2022, he said, new UPS systems will be actively managed to reduce energy costs or provide revenue.
Finally, Campbell made predictions about future financing. Any financing mechanism in the future will have a mix of sources, he said. And he predicted the weighted average cost of capital to decline by 300+ basis points by 2022.