Batteries

Published on October 1st, 2014 | by Zachary Shahan

Is This Company Set To Monopolize A Critical Energy Storage Sub-Sector?

October 1st, 2014 by Zachary Shahan

When you think about innovative energy storage leaders that might see explosive growth in the years to come, you might think of Tesla Motors, Panasonic, BYD, Samsung, LG, Ambri, Eos Energy Storage, Aquion, and ViZn. But as exciting and noteworthy as each of those companies is, there’s another energy storage leader that isn’t touched by any of them.

More precisely, all of those companies are leaders or aim to be leaders in battery manufacturing, while the company to which I am alluding is standing alone in another critical sub-sector of the energy storage market.

The company to which I am referring is Younicos. Younicos combines different types of batteries and sophisticated software in order to bring to market an unprecedented energy storage solution. Below is a video introduction of the Younicos technology center we toured*. It doesn’t really discuss any of the exciting matters below, so don’t take it as a summary of the article. Other videos are sprinkled in to highlight certain points directly from the mouth of a Younicos spokesperson who showed us around.

Entering the Younicos Technology Center. Credit: Zachary Shahan | CleanTechnica (CC BY-SA 4.0 license)

Getting the Grid to 60% Renewables

One of the biggest challenges with making a large percentage of the electricity supply (not electricity demand) come from renewables is that, without quickly responsive storage, fossil fuel spinning reserves must be in place to deal with very short-term drops in electricity production from renewables (for example, drops in the range of a few minutes or even just a few seconds)**. Here’s a short discussion of that standing next to a diesel generator:

The typical situation now, as Philip Alexander Hiersemenzel of Younicos points out, is that coal or natural gas must fill in, and it must continuously be running in order to do so when needed, so Germany must essentially “import grid stability” and export excess coal power.

That’s where Younicos steps in.

One Younicos battery system with 100 MW** of capacity can replace 1 coal-fired power plant used for spinning reserve. 2 GW of Younicos batteries, providing ~1 hour of backup capacity, could replace all thermal power plants in Germany that are used for frequency regulation, resulting in 60% renewables and taking out about 25 conventional power plants.

Samsung lithium-ion batteries at the Younicos Technology Center. Credit: Zachary Shahan | CleanTechnica (CC BY-SA 4.0 license)

Sodium-sulfur battery enclosure at the Younicos Technology Center. Credit: Zachary Shahan | CleanTechnica (CC BY-SA 4.0 license)

These setups at the Younicos Technology Center simulate grids with different mixtures of renewables. Credit: Zachary Shahan | CleanTechnica (CC BY-SA 4.0 license)

Above 60%

Once you get up to 60-70% renewable energy, however, you need daily storage. And above 70-75%, you won’t use batteries as they would be too expensive for such needs. Power-to-gas will likely be used after that, but it is still decades before this is needed.

Younicos Gets Rolling

As Jake and Roy reported in recent articles, Younicos has now installed the first megawatt-scale grid backup system competing in the grid in Europe.

The Younicos system uses Samsung lithium-ion batteries, sodium-sulfur batteries, and vanadium redox flow batteries. But the special sauce that Younicos brings to this hybrid battery system is the software. Developed over the course of 8 years, this is no simple software. Philip noted that Younicos has tested dozens of different lithium-ion batteries to choose the best for its needs (we saw a case full of maybe two dozen different lithium-ion batteries they had tested) but that each of them is complicated and getting them to function very well and last long as frequency regulators is a very challenging matter. Philip noted that as different as the various lithium-ion batteries looked, they were that different on the inside. They looked very different.

Younicos has ~50 software engineers on staff as well as numerous chemical engineers and mechanical engineers. In total, it currently employs ~120 people full time.

The Younicos system is actually much faster and much more precise than a fossil fuel plant used for frequency regulation. Conventional power plants can block the grid. Batteries match it perfectly. Take a look at these graphs for a good visualization of that:

Prequalification_ENG_Frequency_Control_Must_Run

Image Credit: Younicos

Image Credit: Younicos

Younicos in the US

Younicos is starting out in the German market, but it is also primed to enter US markets. Earlier this year, it acquired Xtreme Power, a company which had been working on this a bit but also manufactured “advanced lead-acid batteries” and went bankrupt. About ⅓ of Younicos employees are now based in the US thanks to this acquisition.

Philip did not mention work on any particular storage projects in the US, but he said that PJM already rewards frequency regulation. Also, Xtreme Power already had ~90 MW of installed capacity when Younicos acquired it.

In the end, the competitive advantage on which Younicos is basing its business model is that it can connect batteries to the grid and offer primary frequency regulation much more cost effectively than anyone else. People are just starting to realize how important the software is and often don’t realize how challenging developing such software is. A few engineers can connect a battery to the grid, but it’s very difficult to do it well.

I don’t assume any other company has spent 8 years developing a system comparable to the one Younicos now has, and I doubt anyone else has anywhere close to 50 software engineers working to do so. If you know of a company that may compete here, let me know so that I can look into it! For now, Younicos has quickly risen to the top of the list of energy storage companies to keep an eye on.

Addendum: I ran this article by Philip for accuracy, and I also checked with him about a €3 billion figure he had discussed but I didn’t take enough notes on. Nothing came back as inaccurate, but he did want to clarify that storage needs and costs that were discussed covered battery storage generally. Here were his exact words, only with typos or such corrected for clarification:

It’s important to note that the numbers I gave in terms of batteries needed for critical system services as well as the ROUGH cost estimate hold for (almost) all electrochemical storage types, not just Younicos batteries (or, rather, battery systems laid out by us and running our software): batteries of almost any make all react within milliseconds. True, our software is also particularly fast, but the most important part of this whole suite of solutions is that it really lets you tailor the battery system (of whichever make) to each customer’s individual need. Some may want a battery that lasts twenty years, some may want to use one system for a maximum of business cases (some of which at the same time, say voltage control AND frequency regulation).

So: At today’s prices (and prices are falling) it would surely cost no more than €3 billion to provide ALL required system services from batteries, meaning that ALL fossil and nuclear plants could be switched off when their ENERGY is not needed (because there is enough renewable energy — this also means further expansion of renewables which is NOT included in the €3 billion). Not all batteries would be ours of course! They also wouldn’t all be doing what the Schwerin unit is doing initially (i.e. “just” frequency regulation). In fact it would probably be more like our UKPN project: some batteries doing this, others that, some all of it…. This isn’t a complete road map, the point is that this is entirely doable, and EASILY so!

**Also:

100 MW will probably be too much for one battery park. You’d want it more decentral — so maybe five 20 MW installations would replace one coal plant, or even 10 x 10….
Too much power in the system is just as bad as too little — so coal plants need to be able to produce LESS power in case demand falls, not just “step in” if there’s not enough wind an solar. (This is the old “baseload” fairy tale. There is no baseload/generation — there is just generation and load — and they have to match!)

Thanks to Philip for sending these excellent additional comments in while on vacation!

*My cleantech tour of Germany was hosted by Germany Trade & Invest, with transportation, accommodation, and some meals covered by the organization. No content requirements have been put on me.

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Tags: baseload, baseload energy, baseload power, Germany, samsung, vanadium redox flow batteries, xtreme power, Younicos

About the Author

Zachary Shahan spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.

kamal

we are a Importer/Exporter company in India, except this we are in BPO sector also so we are searching some new innovative business opportunities to our company so if someone have such a business offer then please contact me at my company mail : hr@forthinternational.com
GCO

While I trust Younicos’ solution is designed to scale better than Tesla’s, and use battery tech much more adapted to the task, simply taking the number of man-hours that went into developing each as an indication of quality or superiority is a bit naïve.

I don’t think we can judge without knowing more about their actual capabilities, and I’d personally reserve judgement until those are supported by some evidence like a successful large demo project, a significant contract, etc.
Billion003

Where’s the Axion batteries?
- http://zacharyshahan.com/ Zachary Shahan
  
  Haven’t been following them.
  - Billion003
    
    Zachary,
    The Axion technology is worth looking into. The company is not located west of the Mississippi and is not Li-ion based so it misses so much in-a-bubble press that focuses only on products in fashion – even though so much of this ‘fashion’ technology is often not worth its salt, so to speak. Unfortunately, this ‘fashionable’ technology ends up getting the lions share of development funds even when the technology doesn’t work – ie., billions flushed down the toilet, while so many know ahead of time it won’t work. (Thus is the nature of our corrupt, politically correct, research dollar flow…but I digress.)
    But…that said…Axion is an advanced lead acid based technology that, in tests, is showing its mettle (pun) in heavy duty applications like tractor trailer rigs (ePower engines) and in train locomotives (Norfolk Southern). If my information is correct locomotives alone weigh around 260,000 lbs. Add to this the rest of the train and its ends up maybe being thousands of tons.
    As an aside, take a look at the battery technologies and related data being used in the upcoming automobile start/stop technology. Keep in mind the question of how long the batteries will last.
    There’s so much BS hyper hype press and unworkable technology being foisted onto the public – at the cost of “billions.” Once again…money down the toilet.
    - GCO
      
      “Advanced lead-acid”, just like “clean coal”?
      
      More seriously, I didn’t manage to find any specs on Axion’s website, only vague claims about the superiority of their technology over regular lead-acid (which frankly wouldn’t exactly be Earth-shattering), with some FUD about Li-ion safety for good measure.
      Do you have some numbers?
      
      Unless some independent 3rd party had a chance to test their products, I’d think this one should go to your “bs & hype” bin as well.
eveee

Charging will happen in daylight. The most likely discharge time will be early evening. There is a solar surplus during the day that will increase in the future. It’s possible early morning may also need a boost. Other storage load support will be much less frequent, including grid stability for unplanned outages. Here’s the kicker. Large central thermal power must have large reserves regardless. All of the capacity must be replaced instantly. It’s less problem with smaller, distributed power, particularly if sited near loads. A more distributed grid is also more resilient.
http://www.meetup.com/RawLasVegas/pages/Free_Online_Health_Education_Videos/ RawLasVegan

Zach, if the battery/storage side is solved “it would surely cost no more than €3 billion” for “ALL fossil and nuclear plants could be switched off,” has anyone done the calculations to build out enough renewables to meet all energy needs?
- Bob_Wallace
  
  Bunches of studies have been done.
  
  Try a search using “cost of 100% renewables”. You might start with the Jacobson and Delucchi (2009) paper as it was pretty much the breakthrough. It’s a bit dated now since the cost of renewables is greatly lower, but if you read it as a ‘worst case’.
  
  http://www.scientificamerican.com/article/a-path-to-sustainable-energy-by-2030/
  
  And another good read is Budischak, et al. But it’s also a bit high since it was based on pre 2010 renewable prices.
  
  https://docs.google.com/file/d/1NrBZJejkUTRYJv5YE__kBFuecdDL2pDTvKLyBjfCPr_8yR7eCTDhLGm8oEPo/edit
  
  Take a look at what has happened to the cost of PV solar. No one (almost no one) saw it coming…
  - http://www.meetup.com/RawLasVegas/pages/Free_Online_Health_Education_Videos/ RawLasVegan
    
    Thanks Bob.
- jeffhre
  
  At first I was thinking 3 billion USD. That is so minuscule relative to the cost of generating assets, that it seems more than a bit incredible. Then I remembered it was denominated in Euros.
  
  $3.8 billion, still quite incredulously small for replacing spinning reserves – I would have to see these capacities and how they were related to price to believe it.
  - http://www.meetup.com/RawLasVegas/pages/Free_Online_Health_Education_Videos/ RawLasVegan
    
    Sounds inexpensive to me, especially considering the unseen costs such as health and global warming.
  - JamesWimberley
    
    Spinning and quick-ramp reserves may be particularly expensive in Germany. Many of the NG plants built were mothballed as uneconomic, so aren’t available. It must be very expensive to keep a coal plant spinning without load, and they have little hydro. There is adequate pumped storage, and always imports.
    - Calamity_Jean
      
      There’s also the political problem that Germany’s NG comes mostly from Russia. Germany doesn’t want to get so much of a vital supply from a nation of uncertain friendliness.
    - Jenny Sommer
      
      Isn’t most of the excess coal power exported anyway? Now that Belgium has lost 25% of its capacity they will be dependent on German coal export this winter. Also France is importing coal power during cool winters when they need lots of electricity for heating.
Richard

There is a battery system, See Raytheon’s ESS system using Redflow’s ZBM zinc bromine batteries. Redflow itself has developed controls to manage a .6MW system.
Matt

Expect a lot of motion in this sector now that Germany and Calf are pushing to make a market for it. Of course another answer to going about 75% is over building PV/solar. Same thing we did with FF plants.
Offgridman

As for competitors to Younicos isn’t what Tesla is doing at their car manufacturing plant along the same lines? It isn’t on quite as big of a scale yet, but the banks of batteries they’ve installed for load management and peak reduction are supposed to involve the use of some complicated software that they are developing. The same thing at some of the superchargers where they use batteries to reduce peaks in usage from grid supply not just storage for the ones that have solar panels. And with the rollout of storage for some of their customers with the affiliated solar leasing company, power management software is being further developed and data collected for future improvements.
So even if the compilation of all of these smaller projects isn’t quite on the scale of what Younicos is doing, being part of the grid storage and stabilization market is a part of their future plans.
JamesWimberley

The answer to the question in the headline is no, on this evidence. There are other storage integrators like ABB, and potential entrants like GE and Siemens. Younicos is clearly a capable operation and may have an early mover lead, but there is no basis for a monopoly like crucial and unique patents. They claim a lead – a “competitive advantage” – in software, which can’t be patented.
- http://zacharyshahan.com/ Zachary Shahan
  
  But if their system is way better than anything ABB, GE, Siemens, etc have developed, don’t you think they will dominate the market?
Michael G

Batteries are critical to get renewables out of the boutique stage so articles like this are really interesting. Regrettably, I don’t understand some of the issues here. For example:

“And above 70-75%, you won’t use batteries as they would be too expensive for such needs. Power-to-gas will likely be used after that”

Why would batteries be too expensive above 70%? What happens in taht range? And what is “power-to-gas”?

Thanks, and keep up the good work.
- andereandre
  
  The way I understand it, is that the low hanging fruit is getting rid of the spinning reserve. The next step is to keep your standby NG plants from running too often. That would mean lots of batteries.
  http://en.wikipedia.org/wiki/Power_to_gas . Use excess renewable electricity to create methane, store it, feed it to NG plants when renewables are low.
  - Mint
    
    Well said, but I’d add that the standby NG use is a continuum. Some plants are needed only a few hours at a time, e.g. peak hours of the day in the summer or winter (or if the worst wind droughts are only a few hours long). If these peaks are short enough in duration, batteries will work as peak shavers and be cheaper than a NG plant ($/kW being the operative metric, not $/kWh).
    
    But there’s only so much load you can shave this way until you run out of capacity at night to recharge them. The next stage of standby NG plants run for days at a time during peak seasons. This would need hundreds of hours of storage cycled only a few times a year, and at that point batteries cannot compete, even at $50/kWh.
    
    Renewable methane is one solution, but I suspect renewable hydrogen will be more competitive. Automakers are targeting $50/kW for fuel cells (yeah right) but even at $300/kW it’s less than a third the price of NG plants. Fuel cost and efficiency is probably similar for both.
    - andereandre
      
      Hydrogen never got a change because it was always behind competing technologies. And it will stay that way because the competing technologies are on a roll and no sensible investor will invest in it.
      
      Let me say something horrible. If you are not aiming for 100% renewables but think as I do that going for 90% is doing the planet a big favor, then firing up a coal plant for a week or so in an unlucky winter period with no sun and no wind and high demand is no problem. As long as the thing stays off for the rest of the time.
      - Mint
        
        I totally agree about the effectiveness of a 90% renewable grid as opposed to 100%. I similarly believe PHEV/EREV is very worthwhile, as it gets you 70-90% of the benefit of pure EV with maybe 1/2 to 1/5 the battery and no issues with range, infrastructure, or charging time.
        
        But I think hydrogen still has potential for stationary generation. Batteries cannot compete with them for $/kWh, and FF won’t be able to compete for $/kW (assuming the car companies achieve 20% of their cost target). There is at least a niche of the power market where H2 will thrive.
- http://zacharyshahan.com/ Zachary Shahan
  
  i think andereandre has summarized well, and i have an article or two on a power-to-gas pilot project coming as well…
  - Abhishek Gupta
    
    Dear Zach, I have an article that readers on CT will find very interesting. May I send it across for your review? Regards Abhishek Gupta (tracabhi@gmail.com)
    - Bob_Wallace
      
      Top left of the page – “About” – there’s a drop down that contains “Contact Us”.
  - Mint
    
    If I may make a request, can you do a comparison to H2 fuel cells?
    
    While I share Musk’s opinion that they don’t stand a chance for widespread transportation use, I think H2 fuel cells could be very promising for long term stationary storage.
    - http://zacharyshahan.com/ Zachary Shahan
      
      My understanding from everyone I’ve talked with is that batteries are much cheaper for primary regulation. For secondary regulation, I imagine it will depend on the region a lot, but Germany seems to be set on going toward hydrogen to gas (not using fuel cells).
- JamesWimberley
  
  Power-to-gas is the conversion of surplus electricity to hydrogen by electrolysis. There are pilot plants in Germany, which is looking at P2G as a way of meeting winter gaps in renewables (still cloudy days and nights in November, say). The hydrogen may be further refined into methane, which is a close substitute for natural gas. Or you can boost biomass fermenters directly with hydrogen, allowing all the carbon to be converted to methane – cellulose has twice the ratio of carbon to hydrogen, so even perfect fermentation leaves half the carbon.

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