July 18, 2019 | Podcast
Energy: The new space race
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Transcript:
NARRATOR 1 Welcome to the DNV Talks Energy podcast series. Electrification, rise of renewables and new technologies - supported by more data and IT systems, are transforming the power system. Join us each week as we discuss these changes with guests from around the industry.
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NARRATOR 2 Hello, you’re listening to ‘Face the Facts’, the new current affairs podcast from DNV Talks Energy, where the world’s leading energy experts share their insights on the most important global news stories about the energy transition.
Energy storage hit the headlines recently when the World Bank gave the green light to a loan worth 750 million US Dollars to pay for a new energy storage accelerator programme in China. Meanwhile, over in America the move away from fossil fuels continues at pace with some of the larger energy companies, like the Tennessee Valley Authority unveiling ambitious plans for 5 gigawatts of energy storage over the next 20 years.
In this episode Jason Goodhand, Global Business Lead for Energy Storage at DNV, assesses the energy race between the US and China and looks ahead to who the winner might be.
Transcript:
JASON GOODHAND We’re seeing two of the world’s great superpowers in a race to control the emerging global market for energy storage. It’s something akin to the Space Race in the 1950s between the United States and Russia. However, in this case it’s the United States and China.
The Space Race in the 1950s was a competition to see who could master space travel and the technological advances related to that, such as rocketry, satellites, putting a man on the moon. As the world’s two largest emitters of CO2, China and the United States have a different goal; trying to kerb their fossil fuel usage.
Some could say this undertaking is as important as the Space Race, in that climate change being avoided is an incredibly important goal. So, to understand why it’s energy storage, what’s happening is this technology is being combined with renewable energy to store electricity from intermittent devices. So, typically, traditional power is generated from a gas plant or a coal plant. When you flip to renewables, there’s no emissions, which is great, but the sun doesn’t shine and the wind doesn’t blow exactly when you’re using electricity, so we need to store this and harness it at a later time. Storage helps close that gap.
One of the things that’s kept storage out of the fray until now has been cost and reliance on the technology. One of things that China’s done specifically around the risks to the technology and finding investment is they’ve sought out a loan from the World Bank of China for 750 million dollars, specifically for energy storage and what they hope to do with this is pair it with renewables, which happen to get curtailed fairly frequently in China, just due to the way their system is designed. In the United States however, while there is a still policy driving energy storage, there are also a variety of economic reasons that would make energy storage a valuable investment.
Many private and public generators in the US are decarbonising. When I formerly worked at Engie, a large independent power producer, they started a process in 2016 to sell off most of their fossil fuel assets in the United States. To highlight this shift, the public service company of New Mexico recently abandoned plans to continue the San Juan coal facility and in its place will be gas, solar and storage. Company officials said that this new plan will actually save residential customers money. So, you can see here that by using storage, we’re actually able to shift away from fossil fuels and save money.
Another example is the Tennessee Valley Authority whose recent integrated resource plan includes 14 gigawatts of solar and 5 gigawatts storage. I think one of the things that’s been most exciting is the very recent story of the Los Angeles Board of Water and Power. They’ve negotiated a 25-year contract that sees prices of solar at less than 2 cents a kilowatt hour and the power from batteries in this contract, less than 1.3 cents. This is record breaking pricing.
So, while the race is heating up, it’s unlikely to have a loser. Both the US and China are moving forward to deploy as much storage as they can, but the benefits will be realised by the entire world in the form of lower emissions and cheaper battery technology.
So, I think the question that will remain is, despite how successful these markets are in deploying storage, will they be able to get to 100 per cent renewables and are there new forms of storage that will be required?
Transcript:
NARRATOR 2 Thank you Jason for sharing such valuable insights. Today we heard three new unforgettable facts;
The World Bank has approved a loan worth 750 million US Dollars to pay for a new energy storage programme in China.
In the US, the Tennessee Valley Authority has announced plans for 5 gigawatts of energy storage over the next 20 years.
And technological advances in battery storage are expected to lower energy bills for customers around the world, down by more than USD 80 a year by 2023, according to PNM in the US.
To hear more facts and opinions responding to the latest news from the global energy transition, listen again next week to DNV Talks Energy: 'Face the Facts'.
Transcript:
NARRATOR 1 Thank you for listening to this DNV Talks Energy podcast.
Transcript:
To hear more podcasts in the series, please visit dnvgl.com/talksenergy.
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