Hitachi and the future of energy storage

We hear from Ram Ramachander, Chief Digital Officer & Chief Commercial Officer for Social Innovation Business, at Hitachi Europe Ltd about how it is aiming to deliver future-focused battery storage solutions.

Maintaining a stable supply of high-quality electricity is becoming a greater global challenge as larger amounts of renewable energy are introduced to the power grid. High-quality electricity, both stable in voltage and frequency, is essential as a power source and the demand for new energy storage systems to overcome this challenge is rising. Ram Ramachander, Chief Digital Officer & Chief Commercial Officer for Social Innovation Business at Hitachi Europe Ltd, highlights the efforts of the Japanese tech giant to develop new battery storage solutions, the expansion of smart metering and electric mobility initiatives, and considers what the future for energy holds…

“Connectivity, and access to unprecedented amounts of data, is revolutionising many industries, and energy is no exception. Digitalisation is transforming the way we generate, distribute and manage energy. Artificial intelligence and machine learning enable predictive maintenance across entire energy networks, whilst battery storage technology is allowing renewable energy to be integrated. In our homes, smart meters are being installed and electric vehicles are being purchased. Together, these advancements are democratising energy, empowering consumers to become ‘prosumers’ - people who both produce and consume energy. With such constant change, where will the next development happen? These issues, and many more, are explored in a recent white paper created by Hitachi in partnership with Frost and Sullivan. The research highlighted three areas where innovation is happening at a rapid rate: the boom in battery storage, the expansion of smart metering and the age of electric mobility.”

The boom in battery storage

“Battery energy storage holds the key to the successful integration of renewable energy to the grid. The ability to store energy provides smoothing, congestion management and frequency regulation, all vital for effective integration. These advancements are predicated on the development of battery technology. New lithium-ion chemistries extend product lives, storage capacities and slim form factors, and advanced battery management systems are maximising cost savings through tariff price point tracking and arbitrage services.

“In the future, once up-front cost is reduced, prosumers who install their own energy storage systems will see significant cost saving, and the ability to generate income by selling back to grid via cloud-based communities. These communities will be accessed not only from homes, but also from electric vehicles (EVs), allowing cheap and green charging from charge points along the grid. Blockchain technology is currently being used in pilot projects to provide the trust layers needed for peer-to-peer energy transactions over the internet for consumers with installed and connected solar panels, energy storage and EVs.

“Why is battery storage so important to the future energy roadmap? It serves a dual purpose. Firstly, it facilitates the integration of intermittent renewable energy sources, whilst simultaneously opening the door to generating income for prosumers. The dual purpose of battery storage is driving mass-market adoption of residential storage beyond 2020. By 2025, we can expect residential storage to be an integrated and essential component of all renewable energy projects.”

The expansion of smart metering

“Smart meters are one of the building blocks of the smart grid and digital energy due to the huge amount of data they generate. As growing numbers of users connect via smart meters, the volume of data available to the system increases. The importance of smart meters lies in their simplicity. Compared to battery storage and EVs they have a low barrier to entry (up-front cost is often covered by the energy provider), meaning they have the potential to have the fastest impact on the average consumer. In Europe, where there is strong regulation from the EU on smart meter installation, countries such as Sweden, Italy and Finland have already reached close to 100% penetration of smart electricity meters and are seeing the benefits in terms of customer engagement and active energy management initiatives.

“With so many more smart meters installed, the door is opened to digital retail services such as tariff optimisation, customer engagement and IoT (Internet of Things) technology. Of these benefits, IoT technology is potentially the most exciting: smart meters provide the gateway into services at a consumption level, such as demand response, remote building control, home energy management and energy optimisation for commercial and industrial customers. The opportunity for creating efficiencies is vast.”

The age of electric mobility

“The electrification of mobility is a transformational trend in the energy industry. Growth in EV adoption is accelerating rapidly and 2017 will be the first year to see sales of more than a million vehicles globally. The automotive industry, which is inherently customer-centric and fast paced, is embracing the change by investing in R&D and aggressively marketing EVs. This, coupled with government targets to ban combustion engines, is driving market momentum.

“The merging of e-mobility and energy is clear. There will be opportunities to address charging infrastructure and grid balancing, as well as the deployment of millions of EVs creating a network of distributed energy storage points. The integration of EVs, solar PV generation and home energy storage is driving the emergence of vehicle-to-home (V2H) concepts. V2H solutions maximise energy efficiency and cost savings for an EV owner, as energy will be drained from grid at low price times, stored in the vehicle, and released back to the grid at peak times, creating income. Beyond 2020, aggregation and trade of excess storage capacity from EVs for grid services will extend beyond the home and into commercial facilities and public charging infrastructure. Once the ability to utilise your EV as a means of income generation is realised on a mass scale – mitigating the challenge of high upfront costs – demand is predicted to rise to almost 20mn new vehicles per year by 2025.”

What does the future for energy look like?

“These three areas represent just some of the hottest innovation opportunities in digital energy. It is predicted that the value of smart energy infrastructure could be an incredible $1.5trn annually by 2025 in terms of the market opportunity and benefits to businesses, customers and society. Acting to make the way we live more sustainable is no longer a choice – there is a real impetus to use developments in smart technology to maximise the opportunities of renewable energy. The momentum and opportunities behind the digital transformation of energy is huge, and governments, businesses and consumers must join the tide (and work together) or risk being left behind.”

The research on innovations in digital energy comes from a new whitepaper from Frost & Sullivan and Hitachi on Digital Energy: The Future of Energy and the Roadmap to Business Transformation.