Lead-acid batteries in a competing market stationary batteries for grid services and PV home storage

Batteriealterung Batteriemodelle Batteriediagnostik Batteriepackdesign Elektromobilität Stationäre Energiespeicher Energiesystemanalyse Lead-acid batteries in a competing market stationary batteries for grid services and PV home storage 15 ELBC Valletta, 15.09.2016 Prof. Dr. Dirk Uwe Sauer, Monika Kwiecien, Julia Badeda, Dirk Magnor, Kai-Philipp Kairies, Tjark Thien Chair for Electrochemical Energy Conversion and Storage Systems

Overview PV Home Storage Systems MW battery systems Market development Lithium-Ion batteries Challenges for lead-acid batteries to stay competitive 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 2

PV-Home-Storage Systems 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 3

Home-owned PV systems get more and more combined with an individual storage systems ISEA / RWTH Aachen 2015 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 4

PV-home storage systems Unloading the grid by using forecast algorithms Self supply rate [%] with storage w/o storage 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 5

Monitoring program Trend in PV-home storage - installations Cumulated installations in Germany ~100MW @ 200MWh* ISEA / RWTH Aachen 2016 13.09.2016 *with each system having a 3kW power connection and 6kWh capacity Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 6

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Automotive manufacturers enter the market EV and PV-storage are lifestyle products 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 11

Automotive manufacturers enter the market not only Tesla Battery cells purchased in large quantity orders for the automotive market Using the same cells and battery pack production lines for stationary batteries (all sizes) 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 12

Typcial load on batteries in PV home storage systems Energy throughput [kwh] Charging Discharging power / nominal energy capacity [1/h] 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 13

Battery Storage System markets EV and PV-storage are lifestyle products Percentage Hedging against increasing electricity cost Discontinuation of guaranteed feed-in tariff Contribution to the German Energiewende Protection against power failures Safe investment General interest in storage technology 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 14

Monitoring program Trend in PV-home storage market share ISEA / RWTH Aachen 2015 2.5 years ~10% Lead-Acid ~70% Lithium-Ion 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 15

Sizing of batteries For the user only usable capacity counts Installed capacity Usable capacity Capacity in kwh Arithmetic average Standard deviation Lead-acid Lithium-Ion 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 16

Monitoring program Trend in PV-home storage price development Price per usable capacity [ /kwh] ~7%/a ~20%/a ISEA / RWTH Aachen 2016 Li:1.500 /kwh Pb:1.200 /kwh End of 2016: Li systems below 1000 /kwh are expected in the market 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 17

Large battery systems in the MW range for control power 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 18

Megawatt Battery Storage System market in Germany Battery Storage Systems >1MW in Germany Lead-acid From research and public funded projects to large scale private investments 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 19

Megawatt Battery Storage System market in Germany Battery Storage Systems >1MW in Germany Total market in Germany about 600 MW, in Europe about 3000 MW (Great Britain is an extra market) Currently an interesting business case for batteries, but this year decreasing price for primary reserve Weekly bidding process Dominated by lithium-ion batteries With increasing number of installations market price for frequency control will decrease Lead-acid From research and public funded projects to large scale private investments Primary control from batteries is the key to partially switch off conventional power plants during times of high renewable power generation 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 20

5 MW 5 MWh Multi-purpose battery storage system for the medium voltage grid Frequency control, primary control power, peak shaving, intra-day trading, virtual power plants & storage system, smoothing of power gradients, pool optimization

More than 25,000 cells in five different technologies LMO LFP LTO OPzS OPzV

Batteries Technical details Every battery string is connected to the grid connection point via its own converter (630 kva nominal power). SCADA 1 system, converter systems and battery management systems guarantee battery-specific operation thanks to trilateral communication. Battery type Output / capacity (AC side) Manufacturer Lead-acid (OCSM) 1.21 MW / 1.36 MWh GNB Industrial Power Partner VRLA gel (OPzV) 1 MW / 1 MWh GNB Industrial Power Partner Lithium-ion (Lithium- Manganese-Oxide - LMO) Lithium-ion (Lithium-Iron- Phosphate - LFP) Lithium-ion (Lithium-Titanate- Oxide - LTO) 2.35 MW / 2.35 MWh Quinous (Samsung) Supplier 0.6 MW / 0.66 MWh RES (ATL) Supplier 0.46 MW / 0.16 MWh Microvast Supplier The stated capacities relate to 1-hour discharge (C 1 ) Usable capacity of lead-acid batteries is higher for multi-hour discharge VRLA = Valve Regulated Lead Acid 1 ) SCADA: supervisory control and data acquisition 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 23

10 x 630 kva inverters 5 x 1260 kva transformers 2 x 300 kw cooling 10,000 V feed to public grid operated by

Container become state-of-the-art solution 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 25

Online management Each battery calculates marginal costs at any point in time Load profile Lastgang Actual state of batteries Aktueller Systemzustand Battery model (efficiency, ageing) Inverter model Air conditioning SMA.de 0-400 0 400 power Strangleistung per string [kw] [kw] Distribution among strings follows a stock exchange model Update every second 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 26 Marginal costs Kosten per in minute /Min [ /min] 0,06 0,05 0,04 0,03 0,02 0,01 Zusammensetzung Kostenkurve Energieverluste energy losses Batterie battery Energieverluste energy losses Wechselrichter inverter Energieverluste energy losses Klimaanlage climatization Alterungskosten ageing costs battery Batterie Gesamtkosten total marginal costs

Operational data to come in 2017! Inauguration September, 8 th 2016 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 27

Market development of lithium-ion batteries 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 28

Growing market for lithium-ion batteries Market w/o lead-acid batteries 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 29

Market share of manufacturers of lithium-ion battery cells 2014 5250 Mio. cells sum 13.6 billion $ 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 30

Lern- und Skaleneffekte 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 31

Economic challenge for lead-acid batteries 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 32

Installed and usable capacity Lead-acid vs. Lithium-ion batteries Installed capacity Usable capacity Capacity in kwh Arithmetic average 56% 81% Standard deviation To achieve same cost per usable capacity, lead-acid batteries may cost only 69% per installed kwh compared to lithium-ion batteries Lead-acid Lithium-Ion Oversizing factor for lead-acid batteries: 1.44 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 33

Efficiency in operation Lead-acid vs. Lithium-ion batteries Technology Efficiency Lithium-Ion (NMC 1) 94,8% ± 1,0% Lithium-Ion (NMC 2) 94,6% ± 0,8% Lithium-Ion (LFP) 90,8% ± 1,5% Lead-acid 82,6% ± 3,5% Differenz 12.1 % abs Loss in earnings 200 capacity turnovers (usable capacity) 20 ct/kwh value of electricity (end-user, Germany) 10 years batteries lifetime 48 /kwh usable loss in earning with lead-acid vs. lithium-ion batteries per kwh usable capacity in 10 years 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 34

Capacity depending on current rates Lead-acid vs. Lithium-ion batteries OPzS Battery (different manufacturers and products) Lithium-Ion (different manufacturers and products) C 3 to C nom C 3 to C 10 C 1 to C nom C 1 to C 10 84% 76% 58% 53% > 95% > 95% > 95% > 95% Oversizing factor necessary for lead-acid batteries > 1.13 > 1.64 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 35

Lifetimes Lead-acid vs. Lithium-ion batteries Cycle lifetime Lead-acid battery (OPzS): ~ 2,000 full equivalent cycles @ 50% DOD Lithium-ion battery (automotive grade): ~ 4,000 full equivalent cycles @ 50% DOD Calendar lifetime Lead-acid battery (OPzS): 7 10 years Lithium-ion battery (automotive grade): 8 15 years Lifetime factor: 200 full equivalent cycles/year lead-acid batteries lithium-ion batteries ~ 1.35 (conservative) 7 10 years 8 15 years 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 36

Total comparison Lead-acid vs. Lithium-ion batteries To achieve similar performance lead-acid batteries must be oversized by a factor of 1.44 because a lower DOD is needed show 48 /kwh less investment costs for compensating lower efficiency Must be oversized for 1C operation by a factor of 1.64 to compensate low capacity utilization at high current rates show only 74% of investment costs to compensate for lifetime disadvantages compared to lithium-ion batteries. 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 37

Wholesale price Lead-acid vs. Lithium-ion batteries Automotive industry has costs of about 250 /kwh for a lithium-ion battery system (including packaging and battery management (BMS)) Necessary wholesale price for lead-acid batteries: (250 /kwh 48 /kwh) / 1.64 capacity utilization x 0.74 compensating lifetime = 91 /kwh To be competitive in a 1C market lead-acid batteries must be < 91 /kwh @ > 2,000 full equivalent cycles (@ 50% DOD) and > 9 years calendar lifetime 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 38

Further challenges Lead-acid vs. Lithium-ion batteries In fact, lead-acid batteries must be even significantly cheaper, because costs for housing, cabling, rent for area, service, etc. are higher due to lower energy density costs for lithium-ion batteries will decrease to below 150 /kwh for battery systems latest in 2025 (1C market) results in a 46 /kwh cost goal for lead-acid batteries For a C/3 market the numbers are slightly better: wholesale prices significantly lower than 104 /kwh today and lower than 52 /kwh latest in 2025 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 39

Drawback of lead-acid technology ~ 200 Mill./year economy of scale from automotive for stationary sector limited market, numerous product variations no economy of scale 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 40

Summary Additional stationary markets for batteries coming up Pressure on prices is very high due to strong decrease in prices for lithium-ion batteries Pressure on earnings for large scale systems is high due to high number of flexibility options Lead-acid batteries in the new markets currently almost marginalized Whole sale price for high quality stationary lead-acid batteries must be well below 100 /kwh C 10 and must fall below 50 /kwh until 2025 to stay competitive 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC 41

Chair Electrochemical Energy Conversion and Storage Systems ayutaroupapa Fotolia.com Storage System Technology and Vehicle Integration Modelling, Analytics and Lifetime Prediction Grid Integration and Storage System Analysis 13.09.2016 Dirk Uwe Sauer, Monika Kwiecien - 15 ELBC Prof. Sauer 43