Listen to this article

00:00
00:00

On May 10, the UK reached a fresh high for the amount of electricity generated by solar. Early on that Wednesday afternoon, solar output hit 8.5 gigawatts, according to Electric Insights, a website that tracks Britain’s power. At its peak, the green energy source was supplying more than 22 per cent of the 38GW being handled by the national grid, as solar for some hours exceeded the steady output from the UK’s fleet of nuclear power stations.

It is a record that is likely to be broken quickly as the UK, like other countries, generates a growing proportion of its electricity from renewables to meet climate change goals. In 2015, renewables leapfrogged coal to become the world’s biggest source of installed power generation.

But the growing contribution of green energy to grids — particularly wind and solar — brings with it the problem of managing the unpredictability and intermittency of these supplies.

Storage is still a very small part of the energy industry but it is developing quickly both at the domestic level — where homeowners can use batteries in tandem with solar panels on their roofs — and on a much larger scale, with the development of battery parks aimed at smoothing supplies to the grid.

In 2005, there were six megawatt-hours of large utility-scale energy storage globally, according to Bloomberg New Energy Finance. Today there is more than 4,000 MWh. Even so, that is only enough to guarantee temporary supply around 130,000 homes for an day.

“In 2016 there was almost 1,100 megawatt hours of utility-scale energy storage commissioned. There has been a huge ramp-up in the past two years,” says Julia Attwood of Bloomberg New Energy Finance (BNEF). BNEF’s figures cover all storage technologies but lithium-ion batteries are now the storage technology “to beat”, according to analysts.

“One of the most basic problems with renewables is that they supply electricity intermittently whereas much of the demand for it is very consistent,” says Ms Attwood. “Our grids, our industries and appliances, they are all set up to use a very steady power supply that doesn’t vary very much. Energy storage can be a solution to this by effectively acting as a bridge between how we generate renewable energy and how we want to consume it.”

In the US, concern over security of supply is driving interest in large-scale deployment of batteries. In California in 2015, when a large natural gas leak near Los Angeles threatened conventional energy suppliers, regulators ordered battery storage to be built to prevent power shortages.

In Japan, the technology gained pace after the Fukushima nuclear disaster in 2011, as batteries were considered a useful tool to deal with grid outages.

In Germany, the falling cost of solar panels combined with higher prices charged for supplies from the grid have generated more interest in domestic battery storage.

“It is now cheaper to generate electricity from solar on your roof than it is to buy electricity from a utility in most cases and in most countries,” says Sam Wilkinson of IHS Markit, the data provider.

The popularity of storage systems to capture the electricity generated by domestic solar panels is helped by a generous subsidy in Germany that helps homeowners meet the initial costs of buying a battery, which is also true of other countries.

While costs of batteries are coming down, Mr Wilkinson acknowledges that in most cases “incentives are required” to expand the market for battery storage to help balance the grid.

“Costs have come down dramatically but there is still a long way to go before they are going to be truly embedded everywhere in the grid and we’ll see huge volumes of them,” Mr Wilkinson says.

Meanwhile, growth in the electric vehicle market has helped lower costs and improve the design of lithium-ion batteries. A battery pack that can be used in an electric vehicle has fallen from $1,000 per kilowatt hour in 2010 to $273 per kWh last year, according to BNEF, which is forecasting a further 73 per cent fall in costs by 2030.

Analysts point out the industry is still young. But across the grid, in the home and on the road, further improvements in battery technology are expected to allow cleaner sources of intermittent power to extend their role as part of the overall energy mix.

Copyright The Financial Times Limited 2017. All rights reserved.