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Energy Storage: If power is almost free, don’t sweat RTE

Last year in California CAISO reported oversupply and curtailment of 1.3 terawatt hours of renewable power. This means that there were no buyers for the extra power at any price; there was nowhere to move it; nowhere to store it. In 2020, California solar and wind operators either took their assets offline or shot the excess electricity into the ground. A total waste.

Periodic oversupply from renewables— with intermittent energy prices at or below zero—will likely be a fixture of our grid for the foreseeable future. 

Variance in the price of energy impacts the economics of energy storage. Surplus energy is currently banked mostly as pumped hydro and, increasingly, in grid-connected lithium batteries. But when energy costs dip to zero, battery economics change and viable competitors to lithium emerge. When energy costs are very low, Round Trip Efficiency— a measure of the ratio of how much energy you put into a battery versus how much you can get out of it—becomes a less important factor when calculating the Levelized Cost of Energy Storage. 

RTE has always been a strength of lithium batteries and a perceived weakness for zinc batteries. Lithium achieves RTE of 90% or better. Zinc RTE runs in the 50-80% range. When analysts pencil out the Levelized Cost of Storage for lithium versus zinc, the cost of energy losses related to RTE are a major factor—but only if the energy cost to charge the batteries is high. When energy costs are low, the cost of efficiency losses diminish and zinc becomes far more competitive. Zinc batteries—which are just starting to come online for grid storage–are made with ultra-cheap materials. Compared with lithium, zinc batteries require lower capex and opex, can reach payback faster, and are easier to manufacture and recycle.  If you aim to make money by arbitraging periods of ultra-low cost generation and expensive spikes in demand, zinc batteries are ideal. 

Investors are starting to see renewable oversupply as a feature not a bug—and are taking a closer look at zinc and other storage options that don’t necessarily optimize for RTE. As the supply chain for lithium (which is controlled by China) comes under more pressure and lithium battery production is gobbled up for transport applications, the world will need alternatives for grid storage. Zinc batteries—if they can deliver on their technical promise—are well positioned to fill the gap.

AZA Battery has developed a zinc air battery that’s cheaper, safer, and greener than lithium or lead acid. For more information contact Justin Szlasa at js@azabattery.com