\u201cSimply put, the reason for storing electrical energy is that you can decide when you use it,\u201d explains Claudio Seebach, Dean of the Science and Engineering Faculty at Adolfo Ib\u00e1\u00f1ez University in Santiago, Chile. \u201cEnergy can be stored for when demand is highest \u2013 it solves the natural imbalance between moments of supply and demand.\u201d<\/p>\n\n\n\n
This is of particular importance in the renewables sector, where solar and wind generation provide clean, but intermittent power: when the sun isn\u2019t shining or the wind drops, generation stops with it.<\/p>\n\n\n\n
Chile, whose energy mix has one of the region\u2019s highest shares of wind and solar power, offers a clear example of the challenges these dips can create.<\/p>\n\n\n\n
The country benefits from a unique geography and climate: in the north, the Atacama Desert boasts the highest levels<\/a> of solar irradiance on Earth and, in the far south in Patagonia, Chile is buffeted by some of the strongest winds<\/a> on the planet.<\/p>\n\n\n\n But at times, these features count against it, too. For half the year, the sun sets at a similar time all along the slender tract of land it occupies on South America\u2019s coastline, creating an immediate need for energy storage \u2013 a sector in which the country is already making progress, with the launch of ambitious targets, strategies to incentivise investment in technology, and multiple projects already online and in the pipeline.\u00a0<\/p>\n\n\n\n Today, energy can be stored in multiple ways, including using banks of large-scale batteries, which can store electricity before it is injected back into national grids. Though lithium-ion batteries are the most efficient on the market, the wider use of lead<\/a> or sodium<\/a> alternatives could be just around the corner.<\/p>\n\n\n\n \u201cBattery storage is efficient, but very short term,\u201d says Enzo Sauma, a professor in industrial and systems engineering at Chile\u2019s Pontifical Catholic University. \u201cIf you store energy in a battery one month and want to use it the next, then there will be nothing there because the energy dissipates. But you can use the energy very efficiently by storing it on a day where there is lots of sunlight and then releasing it overnight.\u201d<\/p>\n\n\n\n Longer-term options have proven to be more expensive. Pumped-storage hydropower, which involves pumping water up to a reservoir before releasing it back down through a turbine, is currently the most widely used<\/a> solution worldwide. It has been employed in the mining industry for decades, but projects have a large footprint and require altitude differences. Newer alternatives include molten salt storage<\/a> \u2013 which uses salt as a medium for thermal energy \u2013 and gases produced using renewable sources, such as green hydrogen<\/a> and green ammonium. These processes are less efficient, but allow for energy to be stored for months or years.<\/p>\n\n\n\n The sharp growth in renewable energy production, and the pursuit of ambitious global targets on new capacity<\/a>, bring with them a significant challenge, alongside huge potential for the storage market\u2019s expansion. The global energy storage market is currently valued<\/a> at around USD 246 billion, with an estimated 387GW of new energy storage capacity anticipated to be added globally by 2030, according to a report<\/a> from US-based law firm Morgan Lewis. This is a 15-fold increase compared to the end of 2021.<\/p>\n\n\n\n By 2030, Chile is seeking to supply 70% of its total energy<\/a> consumption with renewable energy sources, and aims to reach carbon neutrality by 2050. Though its nightly solar shortfalls are currently plugged by fossil fuel<\/a> generation, the country has pledged<\/a> to close its remaining coal-fired power plants by 2040. To achieve its ambitious renewable energy targets, developing energy storage is imperative. But the country has made strong progress, fast becoming Latin America\u2019s poster child for such technologies.<\/p>\n\n\n\n Having launched<\/a> a national storage strategy in 2023 that sets targets and aims to attract investment in the sector, and with a large pipeline of projects on the way, Chile\u2019s installed storage capacity could soon overtake<\/a> that of the US.<\/p>\n\n\n\n Chile\u2019s first battery energy storage projects were commissioned <\/a>in 2009, and all but two of its 16 administrative regions have facilities in operation, under construction or in the planning stage. The greatest installed capacity is found in the northern regions of Antofagasta and Tarapac\u00e1, the country\u2019s solar powerhouses.<\/p>\n\n\n\n \u201cWe\u2019re living through a true energy storage revolution in Chile,\u201d a spokesperson for Chile\u2019s energy ministry told Dialogue Earth. \u201cAt the moment, there are storage projects in operation with a total capacity of 387 megawatts, and others in different stages of development which will allow us to reach a total capacity of 2 gigawatts by 2026.\u201d<\/p>\n\n\n\n The government expects a total investment of USD 2 billion over the next two years, the spokesperson added. \u201cThis is key for our energy transition. It will afford us greater flexibility in our electricity system and reactivate the economy in the north of the country to improve the quality of life for the people who live there.\u201d<\/p>\n\n\n\n Chile will add a further 1 GW of capacity by 2026, with public land set aside by the government for energy storage projects in a reportedly imminent tender<\/a>. The energy ministry spokesperson told Dialogue Earth that the country\u2019s environmental assessment body is currently assessing the viability of 300 more storage projects, with a total capacity of 16 GW. According to some projections<\/a>, between 2026 and 2032, Chile\u2019s total storage capacity could double to 4 GW.<\/p>\n\n\n\n At the moment, the country\u2019s four largest energy generation companies are leading the way<\/a> with investment in storage: Engie, Enel, Colb\u00fan and AES Andes.<\/p>\n\n\n\n Elsewhere, Chinese battery maker BYD has signed an agreement with Spanish firm Grenergy to provide its batteries for a USD 1.4 billion energy storage facility in the Atacama Desert, which they claim will be the largest<\/a> of its kind globally. The project is expected to be brought online within three years. BYD declined a request for comment when contacted.<\/p>\n\n\n\n Elsewhere, in 2023, Canadian-owned Innergex, the third-largest renewable energy generator in Chile, inaugurated<\/a> its first electricity plant in the country, featuring a 50 MW battery energy storage system (BESS). Engie Chile, meanwhile, has two lithium-ion battery storage systems in operation, with a total capacity of 141 MW. At the beginning of next year, the company will inaugurate a 264 megawatt-hour, 96-battery facility, taking its total BESS portfolio in Chile to 371 MW.<\/p>\n\n\n\n A spokesperson for Engie Group told Dialogue Earth that Chile is seen as one of its strategic countries for supporting the energy transition, which \u201centails the investment of USD 1.8 billion by 2027. Our plan in Chile considers incorporating 1.4 GW to reach 2 GW of installed capacity in clean energy, including 2 GWh in storage systems\u201d.<\/p>\n\n\n\n Alongside its geographical advantages, analysts have highlighted<\/a> how Chile\u2019s open attitude to foreign investment \u2013 it has free trade agreements with countries representing nearly 90%<\/a> of the global economy \u2013 and competitive business environment have led to new innovations being adopted quickly. Though it has made progress, experts still point to the need for regulation and to continue improving conditions for the uptake of capital-intensive energy storage technology.<\/p>\n\n\n\n \u201cIt\u2019s likely that, within five years, we will have 3 GW energy storage capacity in Chile,\u201d says Sauma. \u201cIf battery technology keeps coming down in price, this can keep growing. The potential for the sector in Chile is very, very high.\u201d Battery costs have fallen by 90% in the last 15 years, and the cost of utility-scale storage projects is projected to fall by 40% by 2030, according to a recent International Energy Agency report<\/a>.<\/p>\n\n\n\n Seebach notes that \u201cthis is an incredibly fast race, and you need regulation to generate confidence for investment. That\u2019s the first thing we\u2019ve learned from Chile\u2019s case\u201d.<\/p>\n\n\n\n In this respect, Chile\u2019s government has attempted to stimulate the sector.<\/p>\n\n\n\n In October 2022, congress passed<\/a> a bill to incentivise the development of energy storage and electric transport. The legislation allows energy companies<\/a> to opt for remuneration for the energy they store and then inject back into the system. However, detailed regulation on the function of the bill is still being discussed by Chile\u2019s national energy commission. In the absence of regulation governing real-life application of such remuneration, \u201cpeople are holding off investing in batteries,\u201d says Sauma.<\/p>\n\n\n\n Chinese companies are the world\u2019s leading producers of lithium batteries, and have shown increasing interest in Latin America\u2019s vast lithium reserves \u2013 including in Chile<\/a> \u2013 to supply its own juggernaut clean energy industries<\/a> that are key to transitions in China and abroad.<\/p>\n\n\n\n Back home, President Xi Jinping has actively pushed for the development of renewable energy generation as China races to meet its pledges to peak carbon dioxide emissions by 2030<\/a> and achieve carbon neutrality by 2060. It is already making strides: June 2023 marked China\u2019s total installed non-fossil fuel energy power generation capacity overtaking<\/a> fossil fuel generation for the first time.<\/p>\n\n\n\n The Chinese energy storage industry has experienced rapid growth in recent years, too, with accumulated installed capacity soaring from 32.3 GW in 2019 to 59.4 GW in 2022. By 2027, it is expected to reach<\/a> 97 GW.<\/p>\n\n\n\n China is also developing rapidly in storage technology at various levels, says Yulong Ding, a professor at the University of Birmingham\u2019s School of Chemical Engineering. \u201cNationally, they have a lot of policies to encourage storage, and there is technology being developed at all levels of the supply chain,\u201d he notes. Additionally, Ding reports that \u201cChinese universities have built specific energy storage programmes for training the next generation of energy storage engineers\u201d.<\/p>\n\n\n\nEnergy storage options<\/h2>\n\n\n\n
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<\/div>Chile is the region\u2019s poster child<\/h2>\n\n\n\n
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<\/div>This is an incredibly fast race, and you need regulation to generate confidence for investment<\/blockquote>Claudio Seebach, Dean of the Science and Engineering Faculty at Adolfo Ib\u00e1\u00f1ez University<\/cite><\/div><\/div>\n\n\n\n
China\u2019s role in battery storage<\/h2>\n\n\n\n
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