Closing the Innovation Gap in Grid-Scale Energy Storage

EDT
Thursday, April 26, 2018 - 1:30 PM to 3:00 PM
Information Technology and Innovation Foundation
1101 K Street NW 610A
Washington, DC 20005
04/26/2018 13:3004/26/2018 15:00America/New_YorkClosing the Innovation Gap in Grid-Scale Energy StorageMM/DD/YYYY

Grid-scale energy storage has the potential to make the transition to a low-carbon energy system easier, quicker, and cheaper than it would be otherwise. Progress has been made to bring a wide array of storage technologies to the market, thanks in part to federal and state policies. However, these options are still not cheap enough or powerful enough to provide all the storage services required to operate a clean, 21st century grid optimally. Moreover, the industry now faces the risk of “lock-in” as lithium-ion batteries control more than 90 percent of this emerging market, making further innovation in potentially superior technologies more difficult.

On April 26, 2018, the Information Technology and Innovation Foundation (ITIF) held an event for the release of an MIT Energy Initiative working paper. The report’s authors, ITIF senior fellow David M. Hart and MIT professor Bill Bonvillian, presented their findings and discussed policy options to spur grid-scale storage innovation with an expert panel.

The discussion was moderated by Dorothy Robyn, senior fellow at the Boston University Institute for Sustainable Energy. To begin, she underlined the importance of finding innovative energy storage options.

Bonvillian began by sharing key findings from the paper. First, he emphasized the importance of transforming the electric power sector in order to meet climate goals. According to him, grid-scale storage has the potential to make this transition easier, quicker, and cheaper. However, he worries that lithium-ion batteries have a “first mover advantage,” which could ultimately lead to technology lock-in. Technology lock-in is when a dominant design emerges, accelerating further incremental innovation, price efficiency, and adoption. In other words, it can speed up the adoption of a new innovation. However, technology lock-in has its disadvantages. First, it risks excessive market concentration and can block the entry of more optimal alternative technologies that may have a longer life cycle. Put together, this could inhibit innovation.

Hart spoke next about the policy implications of a technology lock-in. In particular, he shared the report’s recommendations for the federal, state, and regional levels. On the federal level, the government should expand funding for storage research and development (R&D), create tax incentives for energy storage that focus on emerging technologies, support national and international processes that will lead to open standards, and work with international allies to counter unfair trade practices. Together, the federal and state governments can expand support for storage demonstration projects and early deployment and provide financial assistance to help storage innovators overcome barriers to scaling up.

Moreover, according to the working paper, state governments should set smart and ambitious targets for storage deployment, in addition to establishing sub-targets that are reserved for alternative storage technologies. Lastly, state and regional governments should revise rules so storage assets can participate fully in markets, implement regulations to enable access to multiple value streams, explore new products, establish regional innovation and purchasing consortia, and form an expert advisory system.

Following the opening remarks by Bonvillian and Hart, the other panelists shared their thoughts. First David Bradwell, chief technology officer, co-founder, and senior vice president of commercialization at Ambri Inc., spoke. His company is working to commercialize liquid metal battery tech, and as such, could provide the new innovation that replaces lithium-ion. Overall, he shared that new technologies will always replace incumbents—even in cases of lock-in. For example, he views lithium-ion batteries as a recent development, noting that sodium sulfur batteries were arguably locked in prior to its hegemony.

Frank O’Sullivan, director of research and analysis at the MIT Energy Initiative, spoke next about energy storage. According to him, energy storage is a necessity, noting that having deployable, scalable storage options would have a “profound broadening of the toolbox.” However, he believes that lithium-ion batteries will remain the dominant storage tool for the medium-term. In order to help accelerate innovation, he thinks the U.S. federal government should focus on advanced storage through the current R&D support mechanisms. Additionally, he would like to see investments in technology that aren’t yet to the market, so that they could fully realize their potential. Lastly, he mentioned that states play an important role in energy innovation.

Follow the discussion on Twitter using the hashtag #ITIFenergystorage.

Speakers: 
Dorothy Robyn
Senior Fellow
Boston University Institute for Sustainable Energy
Moderator
William B. Bonvillian
Former Director
MIT Washington Office
Presenter
David Bradwell
Chief Technology Officer, Co-founder, and SVP Commercialization
Ambri Inc.
Panelist
David M. Hart
Senior Fellow
Information Technology and Innovation Foundation
Presenter
Frank O'Sullivan
Director of Research and Analysis
MIT Energy Initiative
Panelist