Note: This post originally appeared in The Toronto Star. It has been reposted here with permission from the author.
Ontario Premier Kathleen Wynne’s announcement this week that the province is joining with Quebec in a cap-and-trade system to address climate change is a small step forward on a long journey.
It should be taken in perspective, neither dismissed as too little or anticipated as the next great thing. It’s a start. Though it sometimes seems to be moving at snail’s pace, it means that action is actually coming to Canada.
At the same time, much of the activity to address climate change focuses on policy tools such as cap-and-trade or carbon emission fees (which some consider taxes). After all, policy is what politicians do.
But while better policies help, climate change has advanced too much already to be addressed by policy alone. The real key is a technology breakthrough: the ability to store clean energy such as wind and solar power.
Storage has the potential to change the way we produce and use energy in the same way as mobile phones changed the way we use telecommunications. Finding a way to store the power that’s produced when the wind blows and the sun shines so it can be used on calm days and dry nights brings the possibility that environmentalists dream of — a post-fossil fuel future.
Clean energy storage exists, but it needs to become more efficient and less costly. Storage is really another term for a battery — any energy storage system from a reservoir above a hydro dam to the lithium-ion cell in your smartphone is a type of battery.
Clean energy storage is improving. In a recent report called Crossing the Chasm, Deutsche Bank predicts that combining solar power with better storage “is the next killer app that could significantly accelerate solar penetration.”
Earlier this month, key market players involved in energy storage arranged held the largest energy storage meeting to date in Canada at the MaRS Discovery District, in partnership with the National Research Council.
The conference topics were geeky but important — raw materials and components; controls, equipment and system integrators; storage installation and operation (including end-users). These market players are doing what so many experts and observers say Canadians should do to move the economy forward — identify gaps and opportunities in a promising field (in this case, the Canadian energy storage supply chain) to become competitive globally.
It has potential. The Deutsche Bank report says that a “20-30 per cent yearly cost reduction [in storage] is likely, which could bring conventional lithium ion batteries at commercial/utility scale to the point of mass adoption potential before 2020.” The bank thinks that the incremental cost of storage will decrease dramatically within the next five years, making solar power ever more competitive with more conventional, dirtier energy.
Battery costs have been falling in large part due to electric vehicles — the more of them on the road, the more batteries are mass produced. The luxury car manufacturer Tesla is a key market influencer here. Its “gigawatt” factory is set to be fully functioning by 2020 and will produce 500,000 battery packs a year. Tesla is also aiming for the residential storage market with plans to announce a battery for homes and businesses soon. (It tweeted a mysterious teaser announcement at the beginning of the month.)
Combine this with a fall in the cost of solar, as well as smart grid advances and it looks like there is at long last a serious alternative to the old-fashioned carbon belching electric utility. The Rocky Mountain Institute’s Economics of Grid Defection has reported on this topic.
According to Navigant Research, worldwide revenue from energy storage enabling technologies (ESET) is expected to grow from $605 million in 2015 to more than $21 billion a year by 2024. “These technologies are undergoing intensive scrutiny, as vendors face pressure to deliver more consistent pricing,” says Anissa Dehemna of Navigant. They form “a critical component of the energy storage value chain.”
This component is bound to increase. Ontario should do whatever it takes to be in the energy storage game.
Photo by Ng Han Guan / AP.