Markets and Products
I. The Need for Energy Storage
The world’s power needs are growing signficantly. The International Energy Agency estimates that an additional 250 Gigawatts of new generation will be required annually between now and 2050. Meeting these power needs with clean, sustainable technologies will be imperative if we are to avoid an environmental catastrophe. Technologies such as wind, solar, wave, tidal, biomass and nuclear generation can provide clean energy, but many of these technologies are variable, producing power when utilities don’t need it, or are not variable enough. Grid-scale energy storage will pave the way for clean technology to reach a dispatchable stage, usable by utilities and society when most needed – good for business, good for the environment.
In addition, Peaking Power needs will increase up to 10% per year, as worldwide grids will need reserved capacity to handle peak power usage periods. Combustion gas turbines, an inefficient, polluting and not the fastest technology, have the highest probability today of deployment for growing peaking power needs. At $1,000,000 per Megawatt, this represents a $25 billion annual market opportunity.
|3460 MW Didcot Power Station, UK|
II. Existing grid-scale storage
The only truly proven and the dominant player in grid-scale storage is pumped storage hydropower (PSH).
PSH is clean, cost effective over its life, and provides very fast response; much better than gas combustion turbines. The trouble with PSH are difficulties in siting, land use, permitting, construction time and the amount of capital required prior to a facility coming online. The key to providing successful grid-scale storage is flexibly siting, quickly built storage that captures the proven benefits of PSH. To date, noone has met this challenge.
Compressed Air Energy Storage (or CAES) has been successful to a small degree, with two facilities operating globally and several more in the study phase. Like PSH, people want to build more, but suitable sites, capital requirements, permits, and in the case of CAES, efficiency, all significantly limit the amount of additional grid-scale storage capacity these two technologies will bring.
Emerging technologies, such as batteries and flywheels will play a part in Ancillary Services and distributed storage, and they are fairly flexibly sited. However, their capital costs and life expectancies fail to compare well to PSH.
III. How will Gravity Power Modules compare to the competition?
For the ancillary services market, existing combustion turbines and emerging flywheel and battery companies are Gravity Power’s principal competitors. GPMs will ramp far faster than gas turbines, have no emissions and be competitive on a cost/kW basis. Compared to batteries and flywheels, GPMs are projected to be significantly lower – at around $1000/kW – with much longer lifetimes.
For the peaking power market, we view simple cycle combustion gas turbines as our primary competition. Being much more flexibly sited than PSH or Compressed Air, GPMs are more attractive than conventional gas combustion turbine peakers on a levelized cost of electricity (LCOE) basis. GPMs will have no stack and no noise problems, lower land use, burn no fuel and can be installed where most needed on the grid.
*Credit Suisse Model — Assumes $40/MWh off-peak power & $2.50 or $12.50/MMBtu Gas