The energy transition is well under way and the capacity of wind and solar generation is increasing. Still, to reach the targets agreed upon in the Paris Agreement these are not happening fast enough, especially as decarbonisation becomes increasingly more difficult. One of the challenges yet to be tackled is developing scalable solutions to cope with the variations in electricity generation and demand.By Marcel Eijgelaar, Researcher, DNV GL
These variations occur on the demand side and with the switch to variable renewable electricity sources, such as wind and solar, also on the generation side. These variations depend on living patterns as well as weather. Basically, there are three major cycles in electricity consumption and generation: a daily cycle (day/night), a weekly cycle (work week / weekend), and a yearly cycle (seasons).
General solutions to the mismatch in electricity generation and demand that occurs in day and week cycles include shifting demand to match generation (demand response), battery storage, pumped hydro, and charging (and discharging) electric vehicles at the appropriate time. However, these solutions are not very suitable to solve the yearly mismatch between generation and supply.
To transfer energy from one season to the other requires a storage solution with a huge energy content, which is only charged and discharged once a year – seasonal storage. The idea of seasonal storage appears to solve two problems: using surplus electricity that might be curtailed otherwise (typically in summer) and decarbonising electricity generation when demand is high and variable renewable energy production is low (typically winter). Unfortunately, the needed volumes can change quite significantly from year to year.
The business case for seasonal storage requires extremely low cost for the volume of energy stored to justify one annual cycle. Most suitable technologies involve molecules, of which hydrogen from electrolysis compressed and stored subsurface on a large scale has the lowest levelised cost of electricity.
However, the value of seasonal storage needs to be assessed in context, and it is competing with other developments such as daily storage. This absorbs part of the renewables excess that is also input for seasonal storage, and discharges during periods when prices are highest, thus reducing prices that drive the business case for seasonal storage. While short-term storage does not have the stamina to discharge for a long time, it can determine and select the most profitable time to charge and discharge.
Another competitor for seasonal storage is sector coupling. Electricity prices, dropping during periods when there is excess renewable generation, will create opportunities to use this energy that previously were not feasible. These opportunities need to have limited investments, as they will only be used sporadically. The most obvious is temporarily replacing natural gas for (industrial) heating, switching back to natural gas when electricity prices rise again. The same principle will apply to hydrogen production for industrial purposes, switching between natural gas and cheap electricity as feedstock.
Seasonal storage seems to be the missing component in the energy transition. Our calculations show that it will be profitable in 2050. However, the business case is strongly connected to other developments and is very susceptible to variations in renewable power generation and demand between years. A feasible option to mitigate these risks might be seasonal storage emerging from a prior development of a green hydrogen value chain for industrial and possibly heavy transportation purposes.
