Energy Storage and the Future of Energy

One of the main criticisms of wind and solar power is their nature as intermittent sources of energy. If the wind stops blowing on the plains of North Dakota, or clouds cover the desert in California, blackouts could occur across the country if these renewable energies were primary sources of power.

So the challenge for investors is finding who will supply the technology to smooth out those peaks and valleys. Some new technologies are now emerging that have the potential to play a big role in the future of renewables.

Battery storage
A123 Systems
(Nasdaq: AONE  ) and Ener1 (Nasdaq: HEV  ) have been testing battery storage in locations around the world with some success. Ener1 has a $40 million deal with the Russian Federal Grid Company, and A123 Systems is on its second deal with AES Energy Gener in Chile for a total of 32 MW.

Inverter manufacturer Satcon Technology (Nasdaq: SATC  ) has even talked about adding battery storage to their inverters to kill two birds with one stone.

The problem for battery storage is scale. Batteries may be able to charge quickly and release energy quickly, but right now they can't store mass amounts of energy for the grid -- something renewable power needs.

Pumped hydro
Store energy by pumping water uphill and release energy by capturing the energy of it running downhill. Simple, cost effective -- and so far, our best answer to energy storage. There are 21 GW of pumped hydro in the U.S. and 38 GW in Europe, but this isn't a solution for all problems. Wind-heavy areas like North Dakota and offshore aren't exactly conducive to this, nor are deserts where solar power is most effective.

Compressed air storage
Maybe the more immediate answer is compressed air storage. Think of this as a huge compressed air tank that is filled during off-peak hours and released as needed to provide electricity. There are two sites online in Alabama and Germany, with Pacific Gas and Electric (NYSE: PCG  ) and New York State Electric and Gas looking to get in the game.

The PG&E site in Kern County is 300 MW so the potential size of compressed air energy storage is much larger than battery storage right now.

Bottom line
Energy storage roadblock that may decide how quickly renewable energy becomes adopted on a wider scale. With GW of projects in the works at solar leaders First Solar (Nasdaq: FSLR  ) and SunPower (Nasdaq: SPWRA  ) , the next challenge may be out of their hands. Southern California can only handle so much solar power before the lights start flickering when a cloud passes overhead. Energy storage is the key to make sure that doesn't happen.

There are no sure-fire solutions, but batteries are sure to play a role in smoothing out energy supply. It may not be on a GW scale, but even on a much smaller scale, A123 and Ener1 are working to play a role in making the grid both cleaner and smarter.

Fool contributor Travis Hoium owns shares of First Solar and SunPower. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

First Solar is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (8) | Recommend This Article (3)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 11, 2011, at 3:29 PM, Retired31B5M wrote:

    You have to remember that the fatal flaw of all of these energy storage plans is 1) added cost and 2) the laws of thermodymanics. Remember that every time you convert one form of energy to another you have a loss of effencicy. Look at pumped hydro for example: You have to use electricity to run the pumps which loses energy to heat and friction. Then you lose energy again when you run the water back through your turbines to turn it back into electricity.

    Consider the cost of a 1GW stored water facility with the cost of a nuclear power plant that runs night and day - and wind or no wind.

  • Report this Comment On April 11, 2011, at 4:53 PM, hawkfishrmgw wrote:

    You left out molten salt thermal energy storage systems.

    Instead of using a solar thermal system to heat water, you use it to heat a huge insulated tank of salt during the day. You then used the stored heat to drive turbines at night. The Andasol plant in Spain does this.

  • Report this Comment On April 11, 2011, at 5:18 PM, okiepoor wrote:

    How about "Flywheel" tecnology? BECON

  • Report this Comment On April 12, 2011, at 5:24 AM, robber240 wrote:

    The incremental efficiency of pumped hydro more than offsets friction losses. First, hydro dams operate at much less than 40% capacity on avereage, the grid infrastructure and controls are already built into the hydro dam, land around hydro dams is typically cheap, available and not a nusance to populations (i.e. Hoover Dam). This may be the cheapest way to store energy and deliver it through existing grid systems, and much, much cheaper than nuclear, coal and oil if we are honest and include the cost to clean the air and clean every polluted river in America, and the resulting health care costs. Installing wind and solar near existing hydro dams should be a no-brainer.

  • Report this Comment On April 12, 2011, at 8:40 AM, earthunit wrote:

    Energy Conversions Devices HAS the solution NOW:

    http://www.energyconversiondevices.com/stationary.php

  • Report this Comment On April 12, 2011, at 2:18 PM, JoeBaggadoenits wrote:

    Previous posters make excellent points about efficiency losses every time you convert energy from one form (solar, thermal, gravitational, kinetic, electrical, etc) into another.

    The more subtle point here is that energy solutions are *extremely* dependent on location and application. Coal, nuclear, hydro, wind, thermal, solar, etc all make more or less sense depending on where you are, how dense the population is, and what you plan to do with the electricity.

    That's why I like energy storage companies like A123 -- regardless of the primary source, you need to be able to store it. Li-ion batteries have limited gravimetric and volumetric energy densities, so they may not be the permanent, long term solution for all-electric vehicles (depending on what kind of power and range you want), but they do offer the most straightforward way to efficiently store energy for grid applications where the size/weight of your storage container isn't as much of an issue.

  • Report this Comment On April 12, 2011, at 2:20 PM, catoismymotor wrote:

    LIT.

  • Report this Comment On April 21, 2011, at 3:26 PM, dirtyMAF wrote:

    Just wanted to point out flow batteries are being developed for this application. Large capacity storage is possible. I'm working at a startup that is focusing on this technology.

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