Energy Storage | Fuel Security , Presented at Energy Institute, London

Energy Storage | Fuel Security
The Energy Institute, 9th June 2011
Dr Graham Cooley, CEO, ITM Power plc

“Climate change is an opportunity. It isn't necessarily a burden. ……
This way of thinking - of focusing on the costs and not the opportunities
has contributed to getting us bogged down.” Joseph Stiglitz

ITM POWER | |Energy Storage | Fuel Security HLab to HFuel
POWER Electrolyser Technology: From

Energy Storage | Fuel Security
The Energy Institute, 9th June 2011
Dr Graham Cooley, CEO, ITM Power plc

Introduction
Fundamental Principles of Energy Storage
The Case for Energy Storage
A New Low Carbon Power System
Solutions for Balancing the Grid
Energy Storage and DSM
Sector Export
The Market for Hydrogen Fuel
Deployment for Hydrogen Infrastructure
Summary


A Perfect Storm

The Energy Sector | A Perfect Storm
A rare combination of events resulting in a unique situation
• Population growth | Load growth
• Peak oil | Energy security
• Need to decarbonise
• Nuclear being reassessed
• Intermittent renewables


A Compelling Business Proposition

Global Problem | Global Opportunity
Energy is the largest global market and it is being completely overhauled
• Demand growth
• Production overhaul
• Supply chain rethink
• Colossal global capital investment


The Missing Link

Energy Storage | The Missing Link
Impossible to decarbonise the energy sector without energy storage
• Matching supply and demand with intermittent generation
• Electrifying transport
• Electrifying heat
• Optimising energy systems
• Power | Transport | Heat


Market Size

Energy Storage | Market Size
The Boston Consulting Group report, Feb 2011
• Growth will track renewable energy deployment
• €10 billion annually by 2020
• Strong first mover advantage


Fundamental Principles Of Energy Storage

ITM POWER | |Energy Storage | Fuel power to aHLab to HFuel
ITM POWERElectrolyser Technology: From transport fuel
POWER | From intermittent Security

A Pure Commodity

Electricity is undifferentiated at the point of supply:
• Little incentive to differentiate
• How can competition be introduced
• What is the driving force for renewable introduction?
• Green supply contracts?

“A commodity is some good for which there is demand, but which is supplied without qualitative
differentiation across a market. It is a product that is the same no matter who produces it.” Wikipedia


Dynamic Coupling

Production & consumption dynamically coupled
• Supply matches demand in sub-second timescale
• The system has no energy storage solution
• How can we use unpredictable generation?

Dynamic Coupling

Customer
Fuel Generation Transmission Distribution
Services


The Case for Energy Storage


UK Electricity Demand

Demand varies daily, weekly, seasonally:
• Winter peak is 60 GW
• Base load plant
• Mid merit plant
• Peaking plant

Data from National Grid


UK Load Duration Curve

Plant utilisation over time:
• Huge utilisation of inefficient plant
• 40% fully utilised
Peak

Mid-merit

Base load



Bulk Commodity Storage

Shifting the peaks to fill the troughs:
• Turns mid merit in base load
• Reduces the need for peaking
• Increases system efficiency
• Day night arbitrage!



Bulk Commodity Storage

Shifting the peaks to fill the troughs:
• Turns mid merit in base load
• Reduces the need for peaking
• Increases system efficiency
Half Hourly Prices on 24/03/09
• Day night arbitrage! Source: BMRS website

160

140

120

100

80 £/MWhr

60

40

20

0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47

The Balancing Mechanism Reporting System (BMRS)
The BMRS website provides near real time and historic data about the Balancing Mechanism which is used by the National
Grid (System Operator) as a means of balancing power flows on to and off the electricity Transmission System in the UK.


UK Electricity Demand

Adding Intermittent Power: Add wind?
• Need take or break decisions
• Undermines Base load
• Increased need for spinning reserve
• Pushes you back down merit order




A System with Unshedulable Plant
You can control some of the plant some of the time …..
…..but not all of the plant all of the time!
• The old system controlled production
• The new system will focus on controlling consumption
• Energy storage is key

Steam flow 1

Steam flow 2 Light
Heat
Force etc.

production network consumption

At any time : Σ P cons = Σ P prod


Can the Grid Cope?

19 June 2010
A new low carbon power system
Can the grid cope with this new system?
• Power surging need for energy storage and demand reserve
• Intermittency need for energy storage and demand reserve
• Diversity increase need for power conditioning
• Unit size decrease need for power conditioning



Stranded Wind Energy: Recent UK Event
Report from Sunday Times, 1st May
• Excess wind energy caused grid instability
• A transmission fault prevented the energy being transmitted to England
• Wind energy production halted across six Scottish wind farms
• £890,000 for a few hours over 5th & 6th April 2011
• 20 times the value of the electricity which would have been generated

ITM POWER | |EnergyResults Presentation, 30 July 2010
POWER Final Storage | Fuel Security

UK Generation

CO2 targets to be met by power & heavy industry
• 16% reduction in GG emissions by 2020
• 31% renewable generation by 2020
• This cannot be achieved without energy storage!


UK Generation

DECC 2050 Pathways Analysis
• Analysis document, 252 page PDF
• Reference case + six major scenarios
• Online access to the analysis tool
• No modelling of energy storage or sector export to hydrogen fuel!


Renewable Energy Management

Wind Energy: The UK
The third largest wind resource in the world
• Best Wind resources in Europe
• Entering Phase Three of construction in UK
• Onshore capacity factor 30%, offshore 40%


Renewable Energy Management

Wind Energy: The Case for Denmark
Study by CEPOS Sept 2009
• 20% of its generating capacity is wind
• Only 5% of demand is met by wind
• Negative electricity prices
• 50% is exported
• Sweden and Norway used as energy storage


Solutions for Balancing a Low Carbon Energy System


The Old System

Production & consumption dynamically coupled
• Supply matches demand in sub-second timescale
• The system has no energy storage solution
• How can we use unpredictable generation?

Dynamic Coupling

Fuel Generation Transmission Distribution Electricity User

Supply Side Demand Side


The New System

Dynamic Coupling is Undermined
Shifting control from production to consumption
• Energy storage
• Demand side management
• Sector Export


Wind



The New System

• Energy storage
• Sector Export

Bulk Energy Storage Distributed Energy Storage


Wind



The New System

• Energy storage
• Sector Export

Bulk Energy Storage Distributed Energy Storage DSM


Wind



The New System

• Energy storage
• Sector Export

Bulk Energy Storage Distributed Energy Storage DSM


Wind Sector Export Fuel User



Energy Storage and Demand Side Management


Energy Storage Applications

Segmented by size and storage time:
• Commodity storage (already discussed)
• Renewable energy management
• Power Quality
• Customer Energy Management


Energy Storage Technologies

Segmented by size and storage time:
• Supercapacitors
• Flywheels
• Batteries
• Flow cells
• Hydrogen Hydrogen

• Compressed Air
• Pumped hydro



Pumped Storage: Dinorwig
• On-line in 1984
• 1890MW for 5hrs; 70% efficient
• Cost $310m ($164/kW, $33/kWhr)
• Frequency regulation services
• 8 sites were surveyed by CEGB



Flywheel Energy Storage
• Instantaneous response
• Frequency regulation services
• 20MW Beacon Power

Aerial view of Beacon Power’s 20MW flywheel energy storage plant in Stephentown, New York,
which began operating in January. The facility stores and returns energy on a moment-to-
moment basis to provide grid-stabilizing frequency regulation services.



Supercapacitors: Short time scale storage
• High energy efficiency
• Short power boost
• Good in combination with batteries



Batteries: Mid time lapse (2hrs in discharge)
• Early trials using lead acid batteries
• Cannot separate power and energy
• A123 system uses spent EV batteries



Flow Cells: Separates power and energy
• Ideal for long term bulk storage
• Modular design
• Designed and built in UK



Flow Cells: Separates power and energy
• Little Barford; 100MWhr (10MW x 10hr)
• Demonstrated the scalability of electrochemical technologies
• Valued by CSFB at £1bn



Power/H2O

Hydrogen Energy Storage:
• Electrolysers produce H2 & O2 from power
• Fuel cells produce power from H2 & O2
• Combinations from energy storage systems for backup power

O2 Storage
H2 Storage Power/H2O

Summary:

Energy storage offers:
• Improve operational efficiency
• Integrate intermittent renewables
• Support base load nuclear
• Join the dots between power & energy
• Decarbonisation

However:
• Many technologies are unproven
• Cost targets are difficult to define
• Engineering scale poses a technology risk

Sector Export:
• Ready to implement
• Addresses the needs of both the power and transport industries


Sector Export


Energy Management:

Customers are the most extreme peaks:
• Local peak management
• Energy storage
• Embedded generation


Hydrogen Refuelling | Green Hydrogen

What's the Solution?
Hydrogen made from renewable power
• Replaces a revenue cost with a capital item
• Reduces the need for fossil fuels
• Decarbonises transport
• Improves air quality
• A demand side managed load


System Cost Analysis

HFuel System Costs
Based on 50Kg/day target
• Strongly dependent on the electricity price
• Electricity prices may be negative, reflecting demand side services

HFuel


The Market for Hydrogen

Global Fuel Markets
Fuel demand curve is log/log
• $1000/gallon for diesel by helicopter
• 2.3 cents/gallon heavily subsidised fuel in Venezuela

1000
Fuel price (USD / lit petrol equiv.)

Military Fuel
100

Remote Industrial
10
Automotive

1

0.1
Islands
Subsidised Automotive
0.01
0.0001 0.001 0.01 0.1 1 10 100 1000 10000

Market size (TWh / yr)


The Market for Hydrogen

Global Fuel Markets
Fuel demand curve is log/log
• $1000/gallon for diesel by helicopter
• 2.3 cents/gallon heavily subsidised fuel in Venezuela

1000
Fuel price (USD / lit petrol equiv.)

Military Fuel
100

Remote Industrial
10 15 kg/day (Current)
Automotive

1
50 kg/day (Target)
0.1
Islands
Subsidised Automotive
0.01
0.0001 0.001 0.01 0.1 1 10 100 1000 10000

Market size (TWh / yr)


Global Petrol Prices (Nov 2010)

Global Fuel Markets
Four major country categories
• Cat 1: Highly Subsidised
• Cat 2: Subsidised
• Cat 3: Fuel Tax
• Cat 4: High Fuel Tax
• Access markets above $1.26/L

POWER Electrolyser Technology: From Source: German Technical Corporation

The Market for Hydrogen Fuel


Hydrogen Fuel Cell Electric Vehicles

Nov 2010
EV and Hydrogen Cars
Hydrogen vehicles are EV’s but with some significant advantages:
• Refuelling time (3mins)
• Range of over 400 miles
• Well to wheel efficiency
• Grid demand side management



Well to Wheel Emissions
DoE analysis agrees with the major car companies
• Hydrogen from centralised wind
• On site hydrogen even better
• “A triple zero fuel”


Hydrogen Refuelling | Market Developments

Japan, US & Germany Adopt Hydrogen
Toyota, Honda and Nissan join forces to promote hydrogen
• Total of 100 hydrogen refuelling stations planned in Japan
• 1000 refuelling stations in Germany in 4yrs ($2.6bn)
• 150 planned in California (30 already built)


Hydrogen Refuelling | Market Developments



Hydrogen Vehicles
Serious traction envisaged around 2015
• Air quality may drive early adoption 2010 2011 2012 2013 2014 2015 2018 2020

• Commercial fleet early adoption Daimler 200 1000/yr 10,000/yr 100,000/yr

• Return to base refuelling GM 100 10,000/yr 100,000/yr 250,000/yr

Honda 200 1000 Commercialisation
• Perfect for embedded electrolysis
Hyundai 1000/yr >100,000/yr

2010 2011 2012 2013 2014 2015 2018 2020

Ramp up
Purpose design FC
hybrid vehicles

Trials, conversion design cars and niche vehicles

10,000/yr per
Potential trickle to London manufacturer


HOST | Partners

Hydrogen on Site Trials
Trials to establish commercial benefits and environmental impact models


Energy Storage | Clean Fuel

Connect with ITM Power:
www.itm-power.com
Join the mailing list:
rlm@itm-power.com


Summary

• Renewable power needs energy storage
• Sector export a great solution
• Transport is a large enough sector
• Green hydrogen is a zero carbon footprint fuel
• Early adoption is from commercial fleet operators
• HOST trials to establish economics and business models


Thank you for listening


Energy Storage | Fuel Security , Presented at Energy Institute, London

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