Welcome to the first interview of Leyline's interview series, Climate Impact Profiles, where we'll talk with innovators in clean energy to learn more about the trends and innovations driving clean energy technologies and other timely topics within the broader renewable energy industry. We're excited to share these conversations with our readers.
Let's go ahead and start out with your firm. Describe what Roland Berger does broadly and more particularly in energy storage.
Our inaugural interview is with Benjamin Lowe, senior project manager at Roland Berger LP, where we discuss what's happening with energy storage and the future of the industry.
Roland Berger is a management consulting firm with 2,700 consultants in 30 countries. The headquarters of the company is based in Frankfurt, Germany, but we have locations all over the world. In the United States, we have about 110 consultants in three offices: Chicago, Detroit, and Boston. Industries we serve in the United States include industrials, auto, chemicals, and energy, so there is a lot of synergy among those right now. It's a simplification, but think about the same batteries used in electric vehicles that are also used for stationary grid storage, and you get a sense of the cross-cutting topics where we work.
We believe that new opportunities come with new models, new technologies, new supply chains, and new ways of doing business. That is how we work with our clients, and we bring that mindset to the issue we are working on.
I work as a senior project manager at Roland Berger, and prior to my current role, I worked at Duke Energy in strategic planning and as a policy director at an energy storage battery startup. So I bring that knowledge as well as my business background to my job. I work with clients on energy storage and also other topics related to our nation's energy transition. So I might work with an independent power producer on a market entry strategy for a particular state or advise an electric utility on its future based on policy, customer choice, and grid investment.
One of the things that Roland Berger is known for is the Lazard Levelized Cost of Storage (LCOS). Tell us a little bit about what it is and how it is used in the energy storage industry.
Lazard is a well-known New York investment bank, and we jointly collaborated to produce this report each and every year. Back in 2011, there was a lack of standardization in evaluating energy storage technologies on a standardized basis. Some industry experts wanted to compare energy storage technology using $/KWh, others $/KW, and others still $/cycle or charge/discharge of the battery. This confusion made comparing different energy storage technologies and different use cases exceedingly difficult.
We created the LCOS to set up an "apples to apples" comparison for energy storage each year. So for this year, we are doing it for 2021. We don't look at where the industry is headed, just what is happening right now. We usually talk with about 100 people across the energy storage value chain - battery manufacturers, software developers, integrators, engineering/procurement/construction managers, developers, utilities, asset owners, and end-of-life recyclers of the technology. We then segment based on location: front of the meter and behind the meter. Within front-of-the-meter-use cases, we look at wholesale/bulk power services, transmission, and distribution deferral use cases, or systems paired with storage. Behind the meter, we look at commercial and industrial standalone, paired with storage and residential paired with storage. When we are all done, we get an apples-to-apples cost for the inputs on a $/MWH basis.
So let's dive into some of the big things happening in energy storage right now. Grid-scale energy storage seems to have taken off. What is the reason behind this major shift in energy storage deployment, and what are some examples of these kinds of projects?
Several things are driving the growth of grid-scale energy storage. These include falling battery prices; energy storage procurement targets, such as the ones in California, Virginia, and New York; and tax incentives for energy storage (when they are paired with solar). Also, energy storage is an enabler for renewable energy, which is intermittent and unpredictable. So storage allows for more renewables on the grid, which aligns with several state decarbonization initiatives. Finally, in addition to energy storage policies in states across the country, there are some attractive energy storage markets, such as ERCOT in Texas.
Another major change we are seeing now in energy storage is long-duration storage. What sort of projects are we likely to see with long-duration storage, and how do you think it will show up on the landscape?
Corporate entities and utilities are looking for more solutions around the clock, particularly emissions-free power. So we are seeing energy storage technologies being developed at the eight-plus hour duration. We are likely to see mechanical storage fit this need and not lithium-ion batteries, unless there are much further price declines. We are still waiting to see if the market chooses flow batteries at scale. Another technology we may see is sodium sulphur, something we are seeing in Asian markets right now.
Thanks so much for giving us a deep dive into your energy storage world and the things you work on day in and day out. Let's end with a fun fact about yourself that you can share with our readership.
Well, COVID has meant changes for everyone and perhaps most of all me. My family decided to move to Kansas, so we could "hunker down" while the pandemic was going on, and I have used a camper as my office since November.