During my talk last week at the Electricity Storage Association (ESA) meeting in Washington, I started my presentation with an important, if not always well-considered, question:  Why storage?  Part of the answer, certainly, is that storage is an innovative, new tool for grid operators.  It adds a new dimension to the grid:  Traditional wires and switches move electricity over space; storage provides the ability to move electricity over time.  This new dimension, when properly deployed, should make the grid more efficient and better able to serve the needs of consumers.

But if electricity storage is just a tool, why are we so fixated on it as a technology?  The grid works reasonably well today.  Other incumbent power electronics technologies already provide most if not all of the grid benefits claimed by storage, such as integrating renewable energy onto the grid, providing redundant sources of power, and relieving transmission congestion.  Isn’t it reasonable to expect that natural market forces will cause utilities and grid operators to deploy electricity storage systems when the costs of those systems fall below the costs of the incumbent technologies with which they compete?  Until then, why should the public or the government care any more about whether a utility buys a storage system or upgrades a distribution line than they would care about whether the utility buys a standard or Phillip’s head screwdriver?

As the storage industry prepares its public advocacy strategy, we must be able to the question, Why Storage?  It is one thing to say that electricity storage is an innovative, new technology that will one day make the grid more efficient and be deployed in quantity.  That is a good message, but one suitable for the market, not policy makers.  It is quite another thing to say that taxpayers should subsidize the development of electricity storage technology. 

So why should taxpayers support the development of storage technology?  Answering that question was one of the objectives of the recent NAATBatt white paper (see:  The white paper discusses the unrecognized social benefits of distributed energy storage (DES) technology and advocates for more DES deployment.  But even addressing the question of unrecognized benefits does not answer the question whether the benefits provided are unique to storage or whether those benefits can be provided by multiple technologies, of which storage is only one, that will ultimately be vetted by the market.

In thinking back on the ESA meeting and reviewing the NAATBatt white paper, it seems that a lot of storage’s claim to be a unique solution (as opposed to a competitive solution) turns on its ability to promote electric drive and help break the monopoly that petroleum holds on transportation fuels.   Deploying storage (or at least the right kinds of storage) on the grid will do this in at least two unique ways.

First, by using the same types of batteries in DES systems as in automotive applications (or at least batteries of similar chemistry produced in similar processes), the battery industry will be able to scale more quickly and drive down the costs of both DES systems and of electric vehicles (EV’s).  In the white paper, NAATBatt estimates that the size of the DES market may be 3-6 times that of the automotive market by 2022.  Achieving economies of scale in the battery industry will probably not in itself be enough to drive battery prices low enough to allow EV’s to compete with gasoline-powered cars in the mass consumer market, but it will do much to drive battery costs and promote EV adoption.

The second and more important unique impact that DES systems will have on the rate of EV adoption is that a large and vibrant combined market for EV and DES advanced batteries will be a greater attraction for investment and innovation than a small, early stage EV market standing on its own.  The key to reducing the costs and increasing the energy density of advanced batteries to the point where EV’s will be able to compete with gasoline-powered cars in the mass consumer market lies in making significant advances in the science of electrochemical energy storage.  This will not happen unless there is a market for electrochemical energy storage of a size sufficient to attract both capital and talent.

It is not clear that the automotive market alone will provide an advanced battery market of sufficient size and immediacy to attract the necessary capital and innovation.   Using a potentially larger market for the deployment of similar batteries in DES systems on the grid to leverage the automotive market, however, would make for a large, combined market and open a more attractive world of possibilities for investors and innovators.  No gas turbine, transmission line or other technology that provides storage-like benefits on the grid can claim to do that.
Image Credit: cardiae /Shutterstock