Batteries for electric energy storage has become like the search for the holy grail of enabling more intermittent renewable energy, wind and solar, both for integration with the electric grid as well as for “stand-alone” installations. The applications for stationary batteries can range from local power back-up to grid frequency control to diurnal storage, e g 1 -4 hours of storage to balance peak of power generation to peak of load.

As already demonstrated in a wide range of pilot projects and early commercial projects batteries can be placed at all levels of the electric system. It can be at the residential level, e g in combination with rooftop solar. It can be at the distribution level, e g as community energy storage (CES) system. It can be at a generating site, e g wind farm or utility size solar, as well as the substation level, e g as a bulk energy storage system (BES). Typical capacities would be 5 kWh, 50 kWh and several MWh respectively.

The “pain”/need/demand for battery storage is there. So is the technology. What is needed for large scale adoption is the cost to come down. Presently the lithium battery systems are in the range of $800 – 1000 per kWh. In the parts of the country with high electricity prices things start to become quite interesting at $400 – 500 per kWh, but for most parts of the country $200 per kWh is likely, where it eventually needs to be.

Probably the best route to get the costs down is to leverage the volumes and progress of lithium batteries for vehicular applications. The technical requirements for the vehicular and stationary applications are close enough to make it possible.

An early idea launched by GM, later followed by Nissan, was to deploy the vehicular batteries in stationary applications after the battery had reached its limits in a car. At a first glance it may sound like an interesting concept, but at a closer look it is for several reasons most likely a dead-end route. A battery pack cannot just be taken out of the car and placed outdoors or inside a building. It will require a substantial modification. Further, stationary applications can be as demanding on the battery as a vehicular application. If a car battery has reached its useful life in a car, it is questionable if the battery will have enough life left to really serve in a stationary application. For the same reason very few, if any, old car engines find their way to become back-up generators! Eventually, the concept of having a battery in a stationary application after 10 years in a car misses the dynamics of the lithium technology development. With continued research and development as well as growing production volumes we can expect significant progress. Batteries 10 years from now will have better performance for a lower cost!

A more viable approach is to leverage the economy of scale of vehicular battery cells but to package them in dedicated systems for stationary applications.

A good example of this approach was recently announced by Solar City taking an innovative approach by combining rooftop solar with battery storage.The concept, marketed as Demand Logic™, is to use the battery to reduce the peak consumption of power and that way reduce the demand charge, the fixed cost of the electricity bill.

The battery system Solar City uses is a modular system supplied by Tesla/Panasonic. It has the same battery cells and system topology as used in the Tesla cars, but packaged for the stationary application. The battery pack is built like a vertical cabinet with a small foot print.

Solar City and Tesla/Panasonic may be the most visible constellation. Less visible but equally interesting is a new constellation between AES Energy Storage and LG Chem, the Korean company, which is the battery supplier to GM for Volt and other plug-in electric cars. With 200 MW of storage resources deployed AES is the leader in utility scale battery systems for grid regulation/frequency control. Historically A123 has been AES’ primary provider for these types of battery systems.

In March this year AES Energy Storage introduced Advancion™, a “fourth generation energy storage solution”. A targeted application is peak power substitution, i e using battery storage as an alternative to simple cycle gas turbines. AES is reportedly very aggressive on the price, which they target at $1000 per kW/$250 per kWh. No doubt LG is leveraging their economy of scale for vehicular batteries, but even so these prices are likely “forward prices”.

While Tesla got a lot of attention announcing the plans for a “giga factory” for batteries, Nissan has already a “giga factory” in Smyrna, Tennessee.  It is a 475 000 square-foot facility, which can be scaled up to 200 000 battery packs per year. Once it reaches full capacity, it will represent a $1.7 B investment. DOE (U.S. Department of Energy) helped make it happen by providing a $1.4 B loan. The plant started production in the latter part of 2012.

Nissan’s battery partner is NEC Corporation. In 2007 Nissan and NEC formed a joint venture, Automotive Energy Supply Corporation (AESC).  AESC started producing battery packs in 2009 in a dedicated factory located at Nissan’s Zama facility in Japan. To support the production of battery packs NEC also expanded its Sagamihara plant in Japan for production of the lithium-manganese cathodes. The Smyrna factory incorporates best practices from the factories in Japan and scales it up.

In addition NEC is expanding into the stationary market. In March this year NEC announced that they acquired the former A123 Energy Solutions from Wanxiang, who had bought A123 out from its bankruptcy. In the announcement NEC stated their intent to “drive the expansion of the energy storage system business by combining A123 Energy Solutions expertise in energy storage solutions with NEC’s battery technologies and international channels”.

Contrary to the above constellations between battery companies, automotive companies and energy storage system solutions providers BYD, the Chinese company, is more vertically integrated than any of the other companies. In fact BYD manufactures batteries for consumer electronics as well as battery cells and packs for both their own line of plug-in electric cars as well as a wide range of stationary energy storage systems.

In summary it seems fair to conclude that there is convergence between stationary and vehicular lithium ion batteries. As part of this process there are also signs of a consolidation of battery companies.