Please ensure Javascript is enabled for purposes of website accessibility

Energy Storage and the Future of Energy

By Travis Hoium – Updated Apr 6, 2017 at 10:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Batteries and compressed air will play a role in making renewable energies more effective.

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

First Solar, Inc. Stock Quote
First Solar, Inc.
FSLR
$129.85 (-1.46%) $-1.92
PG&E Corporation Stock Quote
PG&E Corporation
PCG
$12.61 (-2.70%) $0.35

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.