Solutions that take advantage of off-peak energy tariffs make sense, and companies are investing in the development of energy-storage options.
It is almost taken as read that the future of travel lies in electric, and probably driverless, cars. What is perhaps less widely known is that this has implications for the way in which we power our homes and businesses.
The potential of electric cars is clearly huge – research by Bloomberg New Energy Finance suggests that electric vehicles will represent 35pc of global new car sales by 2040.
At the beginning of November, the Government announced a £600 grant for businesses keen to install charge points on their premises.
Yet for all the appeal of electric vehicles, take-up will surely be influenced by how far the cars will go before their batteries run out.
To date, batteries have generally not had a good track record of keeping up with advances in modern technology – with power-hungry smartphones that run out of juice being the best example.
Research by Bloomberg New Energy Finance suggests that electric vehicles will represent 35pc of global new car sales by 2040
Fortunately that is changing as a result of the large sums of money being pumped into battery research, thanks in part to the increasing roster of electric vehicles in the market and their improving ranges and capabilities (the Renault Zoe for instance, has a 250-mile range on a full charge).
The link between battery development and electric cars, and the fact that people will want to charge their cars at home, explains why US luxury electric carmaker Tesla unveiled its own residential battery pack called Powerwall to much acclaim in 2015.
Describing energy storage as the missing piece in the energy equation, Tesla chief executive Elon Musk predicted that it could transform the global energy infrastructure.
Mr Musk’s claim is not as far-fetched as it might sound, says Dr Chris Horne, head of origination at E.ON UK B2B Solutions. “If every home had an electric vehicle, then every home would also have an energy store parked outside – the future is about integration of the different devices that generate energy, use it and store it.”
Tesla’s Powerwall is a rechargeable battery that is charged by electricity generated from solar panels on a property. It enables excess electricity generated during the day to be stored for use in the evening, meaning the owner does not have to buy energy back from the grid.
This flexibility is more important the higher your energy use, so businesses in particular could benefit from innovations in battery storage. Combined with continuing advances in on-site solutions and energy management systems, enormous savings are a tantalising prospect.
The companies betting on batteries
Tesla is investing billions of dollars into the manufacturing of batteries for their cars and other battery products.
The company isn’t alone in the market, of course. Other international manufacturers with similar products include LG, Nissan and SolaX.
Meanwhile, UK-based Oxis Energy, which sells a range of sulphur rechargeable batteries, is developing its own residential battery storage product, which is due for release in 2017. Panasonic is developing its own offering.
Despite the range of battery packs on offer, UK consumers have been slow to adopt them. “It’s down to price and lifetime,” says Dr Horne. “The initial investment in a battery is not insignificant, and the batteries have a finite life – perhaps 5,000 charge cycles. That’s about 10 to 15 years, if you charge and discharge the battery once a day.
E.ON notes that the global demand for large-scale batteries is expected to be around 14GW of new battery storage capacity by 2020 and 105GW by 2030, with major drivers behind that need being the growth in renewables and the need for flexibility at all levels in the power system (when the wind doesn’t blow or the sun doesn’t shine, for instance).
National Grid has kickstarted the creation of this new capacity already, by tendering 200MW of capacity to provide frequency response services to the grid, and E.ON won the tender to build a 10MW system at the Blackburn Meadows Biomass plant in Sheffield which can provide that power to the grid within 500ms, and fully deliver within one second.
A low-energy business could potentially save significantly through on-site generation and storage
However, in the UK, most of the currently installed commercial batteries are the result of innovation projects with funding from research councils or the Distribution Network Operators’ low-carbon network fund.
Dr Horne says that home battery packs make commercial sense in some homes and allow consumers to use more of the energy they generate.
In Germany for example there is demand for residential battery systems due to falling battery costs and a high penetration of solar panels among households.
Recognising this, in 2016 E.ON launched Aura – an all-in-one storage package including a PV system, storage device, energy app and green electricity tariff. In April this year E.ON also launched E.ON Solar and storage in the UK for residential homes.
With battery module costs expected to fall by more than 30 pc in[1] the next five years, thanks to the ramping up of battery production volumes due to increased demands from the EV and consumer markets, it will open up more profitable applications, particularly for industrial and commercial users such as back-up generation options, better management of on-site generated energy and lower peak loads and charges.
As most commercial buildings have a far bigger surface area than the average household, along with relatively lower energy demands during night-time, batteries stand to demonstrate more compelling economics here compared to the average home.
When combined with a solar PV-equipped roof, a low-energy business could potentially save significantly through on-site generation and storage.
Indeed, E.ON is already able to offer a range of storage solutions for businesses, and works with business customers to offer cost-effective end-to-end solutions that bring together multiple new technologies to reduce energy use and energy costs.