Episode 57: Energy Storage with Marek Kubik (Fluence)

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Episode Intro Notes

What We Will Cover

• What do we mean when we talk about energy storage?

• What types of Energy Storage Systems currently exist?

• Why is energy storage important?

• What are the downsides of energy storage?

• How is energy storage evolving?

• How does energy storage relate to listeners?

• About Marek Kubik, our expert guest

What do we mean by energy storage?

• So Scott, are we talking about like the energizer bunny triple A batteries here?

  • Not quite - energy storage is so much broader than just the TV remote batteries.

• Technically energy storage as a concept can be described as conversion of electrical energy from a power network into a form in which it can be stored until converted back to electrical energy.

  • Simply put, energy storage is exactly what it sounds like, storing energy.

• Instead of using the technical definition to describe energy storage, it is probably best to talk about the different types of energy storage systems that currently exist in the world.

what types of energy storage currently exist?

• If most of us are like Jay, when we think of energy storage we often think of batteries. This isn’t wrong, as batteries are one of many forms of energy storage and are becoming increasingly relevant in enabling vehicle electrification and behind the meter energy storage.

  • Hold on for a second Parker, what do you mean by behind the meter?

  • We will dive back into the benefits of energy storage, including behind-the meter energy storage a little later on but for now...behind-the-meter is a term that references where an energy system is in relation to the meter. Almost all businesses or homes likely have an energy meter that tells you how much energy you consume per month. Essentially, a behind the meter energy system is one that can provide power directly to the user without having to pass through the meter.

    • One example of a behind-the-meter type system would be a home battery or solar panels that provide direct energy to your home, versus back to the grid.

• Let’s get back to talking batteries. One of the most widely known types of energy storage systems to date is the rechargeable Lithium Ion (LI) battery, the type of battery that can be found in your iPhone and powers Tesla’s cars.

  • Lithium Ion has emerged as a leader in the battery storage space. Why? Well, for one, it has a high energy density, meaning lithium ions can store a lot of energy in their atomic bonds. They are lightweight. Also, they have a low dissipation, which means they can hold their charge. A lithium-ion battery pack loses only about 5 percent of its charge per month, compared to, for example, the 20 percent loss per month for nickel-metal hydride batteries.

    • On the downside, LI batteries require a flammable electrolyte which can cause small battery fires, like those exploding Samsung batteries we all heard about.

    • LI batteries are also already nearly 40% more expensive to produce than conventional alternatives we’re about to mention. 

  • So what other types of battery storage systems exist?

    • Focusing specifically on other forms of rechargeable batteries, rather than the single use alternatives we have the following:

      • One is Lead Acid batteries - the type found in conventional gas powered cars - and another is nickel cadmium - a low cost rechargeable option to replace single use alkaline batteries

        • Both of these options tend to be cheaper, but are often bulky, have higher environmental impacts, or are less efficient than lithium ion alternatives.

      • There’s also Nickle-Zinc batteries. One provider of Nickel-Zinc batteries, Zinc Five, says that these batteries have a comparable energy density to LI, both nickel and zinc recycle easily, and have a similar cycle life as LI.

• Hold up y’all, batteries are great but they are only one form of energy storage! According to the EPA other popular forms of energy storage include pumped hydroelectric, compressed air, flywheels,and thermal energy storage. 

  • Let’s first talk pumped-storage hydropower.

    • “Pumped-storage hydropower (PSH) is ... a configuration of two water reservoirs at different elevations that can generate power (called discharge) as water moves down through a turbine; this draws power as it pumps water (dubbed recharge) to the upper reservoir.”

      • According to the DOE, pumped-storage currently accounts for 95% of all utility-scale energy storage in the United States.

      • Most pumped-storage was built during 1960 and 1990 and no new ones are under development.

  • Compressed Air Energy Storage

    • Electricity is used to compress air at up to 1,000 pounds per square inch and store it, often in underground caverns. When electricity demand is high, the pressurized air is released to generate electricity through an expansion turbine generator.

  • Flywheels

    • According to the Energy Storage Association,”a flywheel is a rotating mechanical device that is used to store rotational energy.”

      • There’s only three of these in the United States. (collectible)

      • The main criticism of flywheels is that they can’t deliver sustained energy over long periods.

  • Thermal Energy Storage

    • Thermal systems use heating and cooling methods to store and release energy

      • Examples include (1) ice storage in buildings so that compressors do not need to be run and (2) solar-generated heat in molten salt that can be used when there is no sunlight. 

        • In all cases, excess energy charges the storage system (e.g., freezes the water, heats the molten salts, etc.) and is later released as needed.

Why is energy storage important?

• At a high level, energy storage systems can time-shift energy, storing at times of surplus and releasing at times of deficit.

  • Why do we need to time shift in the first place?

    • This fundamentally ties back into the infrastructure of the power grid. 

    • A power grid is a delicate balance between supply and demand. Essentially, power companies are constantly trying to balance the amount of power they are generating with the amount that is being consumed by end-users, like us!

      • One way to help balance fluctuations in electricity supply and demand is to store electricity during periods of relatively high production and low demand, then release it back to the electric power grid during periods of lower production or higher demand.

    • Grid operators have to respond to real-time demand. As a result, if energy unpredictably spikes, they can have difficulty responding quickly which could lead to loss of power.  We will talk more about energy resilience in a minute.

    • Also because demand spikes during certain times, this can impact the cost of electricity. A unit of energy (typically a kwH) may be more expensive when everybody wants it on a hot day to run their air conditioning versus a pleasant night where you can keep the AC off and simply open your windows.

    • This is a gross oversimplification. We could do a whole other episode on power grids alone so we will try to keep this high level.

• Ultimately, because energy storage enables this time-shifting ability, it helps contribute to overall energy efficiency and a ton of benefits!

  • First energy storage systems enable the renewable energy transition.

    • Most renewable energy sources, like solar, are naturally intermittent. Eventually the sun goes down. Because of this, they cannot generate around the clock energy that we need to support society.

      • With effective energy storage systems, we would be able to store any excess energy generated during peak generation hours for use later.

  • Secondly, energy storage systems support energy resilience

    • We’ve noted that the balance between supply and demand on the power grid is fragile. 

    • When supply cannot meet demand, grid operators are forced to make a difficult decision including rolling blackouts such as those seen in California back in August.

      • Anyone that has experienced a blackout can tell you that these can cause serious disruption and discomfort to residents and businesses.

      • It isn’t quite as fun to experience no power now as it was when the power was out from snow storms as a kid and we didn’t have to go to school.

    • Where energy storage helps is by decreasing the likelihood of planned blackouts from occurring. 

    • More stored energy = more resources that grid operators have to rely on to satisfy peak demand

      • The behind the meter, smaller energy storage systems are particularly helpful for resilience. Big batteries with connections cut due to a natural disaster may not help much in resilience.

        • This reflects a larger point that the value add of energy storage differs based on type and end-user.

    • Now, energy storage systems can’t prevent all blackouts, like those caused by natural disasters, though this is where they provide their third main benefit.

  • Energy storage systems support diesel displacement

    • In the case of natural disasters or any other event where a backup form of energy is needed, many institutions and individuals currently resort to diesel generators.

      • Beyond fossil fuel consumption, which we know is bad for the environment, diesel generators can be problematic for other reasons including health concerns.

      • Acute health concerns include Carbon Monoxide poisoning

        • From 2005 to 2017, more than 900 people died of carbon monoxide poisoning, and many more were injured while using portable generators.

        • No jokes here folks: make sure to never run a generator in a confined space.

      • There are also longer term health risks associated with diesel. 

        • Diesel exhaust contains more than 40 toxic air contaminants, including many known or suspected cancer-causing substances, such as benzene, arsenic, and formaldehyde.

    • I think we can all agree that the less diesel generators we have to use, the better. Energy storage could displace these systems by providing portable, immediate sources of energy in times of crisis.

      • As battery energy storage becomes more affordable, this could also improve health and safety outcomes following disaster events because more individuals will have access to energy necessary for emergency communication, and powering critical devices.

    • Beyond just the context of a disaster, the idea of making energy more affordable is appealing in its own right.

  • That brings us to our fourth energy storage benefit: energy storage could make our everyday electricity cheaper, improving energy access for all, including the most vulnerable populations

    • As we mentioned earlier, energy can be more expensive during peak demand. 

      • When everyone wants electricity at the same time, additional, more expensive power plants must be brought online quickly, raising the cost per kWh of energy supplied.

    • Energy costs can also be disproportionately higher for minorities. One recent study found black renters pay $273 more than their white counterparts and black homeowners pay $408 more for energy than their white peers.

      • For more on energy poverty, we recommend checking out the January 2021 podcast episode of the Resources Radio podcast that features an interview with University of Michigan’s Tony Reames. Go Blue.

    • By being able to store energy, we lower the cost of energy for everyone by avoiding the need to build more expensive plants to meet peak demand.

      • Excess energy generated during the day could be sold at night or vice versa.

      • Think of what you could do with those extra savings from your monthly electricity bill.

    • As energy consumption is correlated with better economic and health outcomes, and electricity specifically is correlated with improved education outcomes, cheaper electricity provides pathways for people to upgrade their quality of life.

  • Beyond enabling renewable energy and diversion from fossil fuel systems, energy storage has other indirect environmental impacts, mainly by displacing and eliminating the need for more coal plants and other dirty energy sources that we currently rely on for peak demand.

    • Avoiding those dirty sources to meet peak demand will mean net savings of greenhouse gas emissions.

    • Note though that energy storage can be more inefficient than using energy directly since some energy is lost during the conversion process.

      • But in general, if it’s between using a dirty energy source and storage, storage is better.

what are the downsides of energy storage?

• By now you might be thinking, wow energy storage sounds complicated but also awesome. What could possibly be wrong with it?

  • Some of the functional downsides of each technology were mentioned above, though other negatives can include environmental and safety impact.

• Unfortunately there are some negatives associated with energy storage, most of which are system dependent. For example:

  • Pumped hydro storage can impact wildlife habitats and migratory pathways, cause upstream flooding damage, and release greenhouse gas emissions from organic material that breaks down while trapped in the reservoirs.

  • Additionally, batteries might contain potentially harmful materials like Lithium and Lead, which can be problematic if disposed of improperly.

    • Extracting lithium and other minerals like cobalt and nickel is resource intensive. It can entail high water use, soil disruption, air pollution, and the potential for toxic chemicals to leach into the water supply.

    • Consumers are also concerned about the lack of safety standards around batteries, though as we will discuss shortly, there is a renewed conversation around these safety standards.

  • Affordability is also an issue.

    • Home energy systems, namely batteries, are not the most affordable at the moment.

      • Solar battery installations, such as the Tesla’s Powerwall can reach up to $11,000 dollars with installation fees.

      • This means that while the cost is falling, it still isn’t accessible to most people. A report from McKinsey and Co states battery costs dropped more than 50% between 2012 to 2017. 

• So that may sound like quite the drop, but it also stated that a 70% drop would mean a $170 per kilowatt hour price by 2025. That’s still far away from one estimate we saw of $20 per kilowatt hour to have renewable energy storage that meets all demand.

How is energy storage evolving?

• According to the EPA, more innovative forms of energy storage under development include flow batteries, saltwater batteries, electrochemical capacitors, and superconducting magnetic energy storage 

  • Issues with these include using rare and expensive metals and having low energy density - amount of energy provided per volume).

• Finally, in-mid 2020 there was the announcement of Form Energy’s Pilot with Great River Power that sent ripples of excitement through the energy community.

  • It is the “first commercial deployment of Form Energy's proprietary long-duration energy storage system” which is rated for use up to 150 hours, nearly 38x the 4 hour time period commonly used by utility scale Lithium Ion batteries. 

    • This is huge Parker! We’re really on the brink of a total breakthrough of energy storage should this long-duration technology prove both functional and scalable.

• It’s not just duration but also the size of the batteries that is exciting.

  • In California, as of January 2021, there is a 300 MW lithium ion battery online with a 100 MW addition coming. The 300 MW lithium-ion battery storage system alone is the largest of its kind in the world. Together, they will be able to discharge enough electricity to power roughly 300,000 California homes for four hours during evenings, heatwaves, and other times when energy demand outstrips supply.

  • These examples are big ones but in general, a lot of energy storage was installed in 2020. Nationwide, a record 1.2 gigawatts of storage were installed through the first three quarters of 2020. The Energy Storage Association says installations doubled in 2020 and would have tripled if not for the pandemic.

• There’s also innovation in the recycling of utility-scale batteries, which will mean less of the harmful mineral extraction touched on earlier.

  • In 2019, the U.S. Department of Energy launched the ReCell Center, a lithium ion battery research and development recycling center. Its goal is to foster a battery recycling industry in the U.S.

  • There’s also the Global Battery Alliance, a public-private partnership of 70 organizations focused principally on how best to increase the repurposing or recycling of batteries.

• It also may be evolving when it comes to diversity. Energy Storage Association CEO Kelly Speakes-Backman said recently that the industry needs to balance economic, the environment, and justice.

1. We couldn’t find numbers on the energy storage workforce, but the renewables workforce is lacking in diversity. For example, a Solar Foundation report found that while the U.S. is 60 percent white, the nation’s solar workforce is 73 percent white and the solar industry’s senior executive level is 88 percent white.

how does energy storage relate to our listeners, aka our beloved definers?

• First of all, all of the benefits mentioned above will indirectly or directly benefit you, so yay.

• Secondly, there are residential energy storage systems, such as the home battery systems we mentioned earlier.

  • These home energy storage systems are great substitutes for your typical backup generator and can help to reduce your energy bills.

    • Two systems we found include GoalZero’s Yeti X Portable Power Solutions and Tesla’s Powerwall.

    • These are both behind the meter energy solutions which means they can supply power directly to you. They can be charged up during non-peak hours when electricity is cheaper and used during peak times or during outages to keep your life moving smoothly.

• Calling attention to all electric vehicle owners.

  • With the growing popularity of electric vehicles, there is an increasing interest in Vehicle-to-grid (V2G) technology which draws unused power from your EV’s battery storage system to the smart grid.

    • Our frequent sponsor, Enel-X, is a big player here. Their smart charging platform helps to support the managed charging necessary for V2G technology.

    • According to a November 2019 article in GreenBiz, “last year, Enel X said its products in California provided a 30MW "virtual battery" to the grid, roughly equivalent to the power needs of a small suburb. The company projects that by 2025 a JuiceNet virtual battery could provide the equivalent energy of 47 natural gas power plants, once 3 million EVs are on U.S. roads.”

      • This is also probably a good point for us to plug another one of our previously related episodes, episode 49 on e-mobility with Giovanni Bertolino from Enel X.

        • We also saw a company called Sparkcharge pitch on Shark Tank its portable EV charger Roadie that stores energy for when you need it. This helps solve the range anxiety issue we discussed in the e-mobility episode.

  • Using this technology, utilities could incentivize electric vehicle owners to charge during non peak hours with lower rates and provide excess supply during peak hours.

    • There are still a number of concerns with this V2G technology, namely around, two-way energy flow capability, changing driver behavior, and incorporation into legal agreements.

  • Even if you aren’t selling back to the grid directly, imagine the possibility of using your car like one of those home battery packs mentioned above.

    • One company, Fermata Energy, is working on readying a technology that allows people to power their homes with their car’s battery. They hope to launch in 2021.

• Finally, with President Biden now in office, Biden’s Clean Energy Plan could lead to exciting new developments in energy storage capabilities. Currently, his plan includes establishing a new Advanced Research Projects Agency on Climate (ARPA-C) which will support “grid-scale storage at one-tenth the cost of lithium-ion batteries.” Also, his Build Back Better plan calls for “historic procurement and investments” in storage to realise a goal of 100% clean energy by 2035 for grid operations across the country.

  • We always love a good Climate and Energy Advocate so make sure to write your state’s representatives indicating support for these policies as they develop in the legislature.

about our guest, marek kubik

• Marek has a PhD in engineering and is a man of many hats, all centered around energy storage.

• He is a founding member of a leading global energy storage technology and services company called Fluence.

• He is an Expert Advisor to the United Nations on Cleaner Electricity Systems.

• He is a freelance contributor to Forbes.

• You can learn more about Marek’s energy storage work and thoughts, as well as his many travels at mkubik.com.

our interview with marek

Scott (00:26):

All right, definers. We are now joined by Merrick. Kubik managing director for the UK, Ireland and Israel. Very interesting territory, uh, for fluence. And you're joining us from Amsterdam Merrick. So thanks for taking the time to do

Marek (00:39):

We're excited to talk with you. No problem. Likewise. Gee, thanks Scott.

Scott (00:43):

Sure. So Americ you, we bow down to your technical knowledge here, Jay. I don't know if you ever thought about doing engineering. I never, for me very, I gave it a passing thought, Scott, but whenever I see an engineer now, I think just like you, did you recognize the

Jay (00:58):

Amount of like technical training that goes into it and It is just completely bypass me. Yes. So, so Merrick, did you like know when you were pursuing this degree that you would focus on energy storage?

Marek (01:11):

Um, no, actually, I mean, when I was doing it, I, it wasn't specifically supposed to be on a energy story. So I did the first, like a master's in engineering and then, uh, like a PhD that was focused on renewable energy integration. And it just so happens that when you start looking at renewable energy integration more closely, uh, it doesn't take you too long before you realize that energy storage is going to be pretty key to achieving that. So it wasn't ever the objective at the outset. It was something that I discovered through the course of the doctorate.

Scott (01:42):

Yeah. I mean, do you remember like the time you were exposed to energy storage and you're like, Oh my God, this is so interesting and can have such a big impact.

Marek (01:50):

So the purpose of the thesis that the PhD that I did was to understand what the future would look like with respect to more renewable energy coming onto the grid. And I was working for, um, uh, essentially a, uh, uh, a global utility company called AEs, um, pretty large in the U S um, but they had power stations in Northern Ireland, uh, traditional fossil fuel ones. So coal, coal, gas, uh, oil, and they were looking at basically what more renewable energy at being under the grid would mean for, for their system. Um, so actually I started off looking at what can you do to make power plants more flexible in order to be able to help integrate more renewables, but it only gets you so far because, um, ultimately if you want to get to a completely sustainable energy system, you can't have any thermal plant on the system at all.

Marek (02:36):

And at the moment, um, you'd kind of need the power plants to be providing the kind of services like the stability that helps balance out the variability of renewables and sort of, sort of through working at a coal power station that, uh, that I came across energy storage because although AEs was working on it, you know, had had these fossil fuel power plants. It was also like the very first company and in the world, but on a utility scale battery to the grid. And it was around that sort of time, 2007, 2008. So just a couple of years before I'd started in the role. So it was really at its infancy. Um, but it was just starting to be, uh, deployed in the U S. And so then that got me thinking, well, couldn't, we, can we bring it over to Europe and do the same thing. Um, and that led essentially to, to one of the first commercial battery storage projects in Europe, which we built up exactly that same old power station.

Jay (03:32):

So, Marek, I think we're going to get into this a little bit more later, but definers can probably already tell that you've got already a very nuanced approach to the topic from different angles at the same time. So I know that Scott and I like to think that the two of us have a lot going on because we've got a day job and the podcast, we look at your resume and we're like, okay, we need to stop sharpen here because you are a managing director, you have a URL Forbes, contributor, you are a UN expert advisor and of course a futurist as well. So, so what does wearing all these hats do as far as informing your approach to this topic of energy storage? Yes.

Marek (04:15):

That's a great question. Um, aside from keeping the extremely busy, um, I mean, energy storage is an interdisciplinary topic to start with. I don't think you can approach it, looking at the topic with any one specific lens. The main thing I think that it lets me do is not stay in a bubble because it's very easy to focus just on the grid, connected storage piece, not look upstream or downstream of that. And I expect we're going to get into that somewhere in, uh, in this conversation, like, so, you know, lithium and cobalt, whatever the raw material supply chain is, um, you know, upwards of, of what we do and downstream of that recyclability, things like that. So seeing the whole spectrum, um, particularly through the, the articles I've written for Forbes, I go off and try and investigate and expand my own understanding of the full life cycle of, of energy storage systems.

Marek (05:04):

Are they, are they, you know, really, um, you know, sustainable and then the other is, I guess, in terms of breadth and that's maybe where more of the UN side of things comes in because, uh, yeah, I was pretty shocked and honored to be asked to be part of this, um, UN uh, group, uh, experts on clean out activity systems and w you know, showing up that I'm so used to, you know, setting and speaking about renewables and storage as is everyone agrees that that's the, you know, the pathway we should be taking, but you have all these different, you know, global interests and all these other different segments of the energy sector also at the table, right. You've got people advocating for carbon capture and storage for, for nuclear, for energy efficiency. So as opposed to just looking up and down, it's also looking left or right. Which I guess makes me a consultant sort of two by two matrix all over the place, but I find it helpful for informing what I do on a day-to-day basis.

Scott (06:00):

No, I mean, so much of sustainability is interdisciplinary and trying to come up with so many different threads and then applying them to your area. So kudos to you for keeping up with the left, the right, the up and the down, like you were saying. And you also mentioned though about that, that first commercial battery energy storage array that you put in, I guess, at that coal plant that you said you worked at quite a while ago. So that was in 2015, that that was put in. And we're wondering how that experience relates to what you're trying to do today. And do you put in the same sort of batteries, and that was just back in 2015 or have things really changed in terms of like the kind of batteries you're putting in the capacity of those batteries.

Marek (06:44):

So I guess the, the size sizes of the systems are changing in the sense that we're, we're seeing bigger and bigger projects being built, um, either on an individual project level, like we're starting to see mega batteries, giga batteries being built, like really, really huge energy storage projects or larger fleets of them, but the underlying technology itself isn't, um, isn't well, I say it's not radically changing. It depends on which perspective you look at it from an electric chemical perspective. It's not really changing it's lithium-ion batteries, which is the same technology we've had really, since the, since the eighties what's, what's changing is the cost of performance, the efficiency of that same, uh, same technology, the same basic cell. So lithium-ion since, uh, since 2010. So in the past 10 years has fallen 90% in cost, and it's improved about three times in density. So we were to build a system 10 years ago. It would take three times as much space and cost you 10 times as much as it does now. And that's just a snapshot in time. That's not a trend that stopped, right? If you look at the next 10 years, the projection is well, even less than 10 years, that, uh, that the cost of batteries is going to have yet. Again, what basically that means is just these systems are getting cheaper, more efficient, higher performance, and more compact, which means that they can do more and more jobs and more and more places. Um, cost-effectively

Jay (08:08):

Okay. So Merrick with that excellent context today, you are the managing director for UK, Ireland and Israel at fluids, as we mentioned earlier. So of course, fluids is an energy storage technology company. And this is actually a really fun fact to read you guys recently reached what we call a unicorn status, which is essentially a more than $1 billion valuation in just under three years, which is an incredible feat to begin with. So, Hey, congratulations. And of course, you've been there since the start as a founding member, you're now responsible for establishing and scaling teams that oversee $250 million worth of energy storage, technology, and services sales with clients across Europe, middle East, and Africa. Okay. That is a that's huge order in itself within red is as Scott and I are doing our research on influence's website about the sixth generation tech stack energy storage systems. So looking back to the intro is definers are, are following us through this episode. We talked about many types of energy storage in the intro and not just batteries. So is this six generation tech stack? Is that just one system that you guys sell and, and how does it compare to other energy storage systems on the market?

Marek (09:25):

Yeah. Great, great question. We're a horizontally integrated company. So we're in a sense technology agnostic, probably more accurately. We describe ourselves as electrochemically agnostic, as, um, as, as you guys were the talks about, uh, covering, uh, you know, uh, the entire breadth of energy storage technologies. There are a lot out there, but essentially lithium-ion batteries are the ones that are experiencing these radical cost density, performance improvements. And so for the significant majority of jobs you need to do in the near term to help get renewable energy onto the grid and integrate as high a level as possible. It's, it's, it's all lithium-ion, but even within lithium-ion, there are many different, like form factors. You have like cells, you have pouches, you have prisons, you have different types of chemistry and MC a nickel manganese cobalt, which is the, the high energy density stuff that's typically used in cars.

Marek (10:15):

You have LFP, which has lithium-ion phosphate is less energy dense, um, but, uh, but tends to last longer. It high-performing safer. So that there's all sorts of different, um, you know, nuances to the kind of chemistry that spelt. And when I say where we're this horizontally integrated company, we're able to draw upon the best innovations that come out of all the different battery suppliers, the OEMs, and integrate that into the, into one modular and scalable form factor. So the building block of all of our technology, this, this, uh, tech stack that you're talking about is a cube. And that cube essentially comes preassembled in a factory form factor with the batteries installed with the cooling systems, the fire suppression, all of the stuff you need so that its effects will be a plug and play box that you deliver to, to sites, and then just connect up and configure in whatever way you need to, to do a whole different range of, of jobs.

Marek (11:08):

So the form factor is the same. The architect texture is the same, but what you put inside the box and how you configure it on a site specific basis does change. So you might use the same cubes to deliver two or three of them, uh, out a small commercial and industrial customer site. So a behind the meter type of, of use, or you might string together a massive amount of them, uh, to, to form one of these like utility scale giga batteries to replace the transmission line, the same building blocks, but like configuring Lego in lots of different ways.

Jay (11:41):

Yeah. And Scott, this makes me think of as, as we've charted the course of this episode and to what Merrick just referenced, there are so many sub-specializations here when it comes to energy storage, that it maybe was a tall task for us to try to knock it as best we could in one episode. But it's fascinating Merrick to hear about all the different, as you're describing your horizontal, uh, orientation, the ability to see all of these different elements and be able to combine them, combine these specialties into the one that fits different types of uses.

Scott (12:12):

We talked about so many different types of energy storage, Jay, and I feel like lithium ion, to be honest, we kind of treat it as a whole its own thing. When we could have probably spent a fair bit of the intro, just go into the various ways you can play with things within the lithium-ion battery. Like, it sounds like America that you go into a client and you talk about, well, yeah, your lithium ion battery, you have this, this, this, this different option. And for your needs, you should go with this and we'll modify our base tech stack to meet your needs in this way.

Marek (12:39):

Yeah, that's, that's exactly it. And like one of the key things I used to think about with energy storage, as well as duration, right? Like how long do you need to store energy for? Cause it's a time limited resource. You can only be charged for so long and only discharged for so long. But the reason that we're seeing that, um, that lithium-ion batteries are so versatile, so flexible is that actually the, they perform extremely well from anywhere from, from sort of, you know, minutes, this sort of shortest duration systems we're building these days about one hour, um, all the way up to somewhere around like six hours. And then as battery costs continue to fall seven hours, eight hours becomes, becomes cheaper. So lithium-ion batteries are extremely versatile because they can deal with, you know, both kind of short second to second balancing on the grid as well as like more serious time shifting of like renewables. So solar and storage in particular is becoming more common, like shifting the solar from the middle of the day, uh, to the evening peak where typically the sun is set. So solar at night becoming essentially a resource on tap seasonal storage or weekly storage is a different beast. And that's where other technologies will be needed as well. If you want to get from like 80% renewables to a hundred percent renewables as that last step, that requires a different sort of set of technological characteristics.

Scott (15:05):

Okay. And you talk about the stack that you all are selling, and it sounds like it's a pretty common thing that you sell, but we're wondering if you can tell us about your clients in different areas. And I know you focus on new care and Linda in Israel, but for Europe, middle East Africa, us. And I understand you go on over a hundred flights a year. So you're seeing a lot of different stuff all over the place. Probably not a hundred flights this past year, but can you just give us a sense of the energy storage landscape across these different regions?

Marek (15:37):

You're right. Well, used to travel a lot, not so much in, in the recent year for certain reasons

Scott (15:42):

You'll use your points and other time Merrick. Yes.

Marek (15:45):

So, uh, yeah, and the needs for energy storage is very different across different markets. So some of the biggest leading regions for energy storage around the world, like the U S is, is one of the largest. And the first is, is leading in the world at the moment. Uh, the UK and Ireland, uh, Chile, interestingly has, uh, um, a lot of storage, uh, Southeast Asia. So there were a bunch of different sort of areas where storage is growing, especially fast for different reasons and the kinds of systems that you would build again and say that the building block that we're using now is the same, but you would configure it differently depending on what it's going to do. So in the U S for instance, a lot of these energy storage systems are being put in as, um, what's called peaker replacement. So traditionally, uh, gas or oil fired peakers, and the electricity grid are being used to run for just like a couple of hours a day, a couple of times a year to fill in shortfall gaps where there's, uh, you know, not enough, um, supply from other resources, but it's a really inefficient and expensive way of building a power plant.

Marek (16:46):

It's only going to be used like, you know, for a few hours a year.

Scott (16:48):

Yeah. We hit on this in the intro. Oh,

Marek (16:50):

You did good. Good. Well, yeah, so basically batteries are far more effective at doing that job. Um, and then doing useful stuff, the rest of the, the around. So in the U S you see a lot of four hour duration systems that are basically there to replace peaking power plants. If you look at the UK or Ireland, both a sort of Island systems, like they have some electrical connections to continental Europe, but not much. Um, they have huge wind resources. They have aging power plants. So they have a lot of actual, renewable variability on the system that needs to be balanced. So most of the batteries being put in, in the UK and Ireland, uh, providing second-to-second stability and balancing of supply and demand because the wind is a proportion of, of generation here is much higher. Chile is really interesting because we're seeing two particularly novel uses for storage there.

Marek (17:41):

So one is solar and storage, which I talked a bit about earlier. So in Chile, affluence is building a 560 megawatt hour battery alongside a large solar farm to basically do time shifting of renewables data data evening. But the other one that I think is following interesting, uh, is actually, um, a virtual dam. So you talks about pump hydro, uh, in the, in the intro. Um, well, pumped hydro has its challenges from a geography perspective. Like, you've, obviously if you have mountains, you can, you can use it. But even if you do have mountains, um, communities don't are not necessarily happy with you, dumbing them and, and, and flooding them. So run of river instead of more sustainable, but with run of river, you don't have storage until now, because if you put in a battery next to a run of river, hydro power station, you've effectively can provide energy storage without having to build the dam and build the pump hydro. So that's very long duration, sort of like five or six hour duration storage, but it functions the same way as a, as a, like a pumped hydro reservoir would, but you don't need to, to, to build the dam and you don't need to go through the 10 years of environmental planning, assessment permitting, pouring all the concrete. So

Scott (18:51):

I had not heard of that. I just want to clarify before we move on, when you say a four hour duration, eight hour duration, like, are you saying that there's a certain amount of capacity in the battery, and then it can give off that capacity for up to 48 hours? Like, help me understand that because maybe, maybe I'm just missing something. I just wanna make sure I've got it.

Marek (19:08):

Yeah, that's exactly right. So, um, if you've got, uh, let's say a hundred megawatt system, right? That's the power element of it. And then, um, you'll have the power for a certain amount of time. So if the batteries are fully charged a hundred percent, and it's a four hour battery, you would have a hundred times for a 400 megawatt hours of energy storage capacity, um, in that battery. So when I say like, um, shorthand saying like the duration, that's sort of like the maximum capacity of the system. So if you, you know, had it all the way empty and charged it all the way up, it could do a hundred megawatts charging for four hours or vice versa. If it's full and you discharge it, you could do it for four hours at full power or eight hours at half that power, or, you know, 16 hours at a quarter, et cetera, et cetera. All right. Thanks.

Jay (19:54):

Excellent. Great to know. So mirror, that, that example is actually really interesting because there are all kinds of environmental issues with dams that this virtual storage that you're using, this example could, could rectify, but that's, again, it's got, as we're learning yet another sub topic to be explored under this, this larger topic of energy storage. I want to transition us though into another area of this discussion, which again, we touched on, on the intro, which is just issues and complications with this. And we're curious to get your perspective Merrick. So the first question is, do you worry about the impact involved with extracting the resources necessary to make energy storage systems, as well as the potential for improper disposal at the end of their lives?

Marek (20:38):

I would say that I think about it and I track it rather than to say that I'm worried about it. Like, it's, it's definitely a consideration. Um, but often those that bring it up as a topic or using it as a bit of a straw man argument against new technology, and then sort of ignoring it for the base case, because nothing within sort of human, uh, human progress or oriented ingenuity doesn't require some form of Robin's terror. Right? So these arguments are typically used by the, uh, ice industry, um, against electric vehicles are saying, Oh, well, you know, you have to mind, uh, you know, lithium or cobalt. So, but did you say ice industry what's that? Oh, internal combustion engine. So like traditional fossil fuel cars.

Jay (21:20):

Got it. And, and Merrick, you're actually touching on a really interesting topic here, which is kind of the, this outsized focus on what could be a relatively smaller counter-argument for this industry, which we actually heard in our emo ability episode, it's got a few member that with Giovanni [inaudible], who was with, you know, lax was their head of immobility in the U S and Canada. So it's interesting that we see that resurface again here, but, but Mark, please continue.

Marek (21:46):

Yeah, no, no problem. So yeah, it's traditionally used either by the fossil fuel industry, uh, on the power grid or by say the internal combustion engine in industry in arguing against EVs or arguing against renewables and, uh, against, against storage of saying, Oh, well, you know, to build wind turbines, you need steel. So you, you know, that requires a resource or for, to build batteries, you need, you need lithium or cobalt or, or Abbey. So the, these things exist no matter what you're going to build. Um, and so yes, they're considerations. Um, but at the same time that the energy storage industry has pretty good answers to most of these questions. So the first one maybe to tackle is actually resource abundancy. Um, so one of the arguments is, well, there's not enough, um, you know, lithium in the world to, you know, to power the electric grid, to, to great this transformation.

Marek (22:33):

And that's just fundamentally wrong. There is, um, it's just a case of how you extract it. And the real challenge is how quickly you can scale up the extraction because to build a traditional lithium mine, for instance, it takes about seven years to, to scale up. Whereas the growth of the industry is far, far faster. So I'm more worried about actually the peace of bringing online more materials than them actually existing. Now the sustainability aspect is another one that is definitely relevant and important, but again, there's technologies that are coming in and helping it create step changes in that process. So one of the things that I wrote in my Forbes contributor role was on, um, essentially the lithium ion industry upstream of, of what we do and how you extract lithium to actually be used in, in batteries, which are used for everything, right.

Marek (23:21):

It's not just stationary storage, it's in electric cars, it's in consumer electronics. So on basically the way you do it at the moment is, uh, you create these massive, massive brain pools. So, um, places like Bolivia, you, you basically have these big salt flats and you just evaporate off the water and you're, you're left with different, you know, minerals and so on. Um, one of which is lithium. And so actually it's environmentally friendly from a, an extraction point of view because there's no like deep mining or, um, you know, drilling under the earth. It's, it's literally just, you know, scooping. Um, it's basically like you would with salt water, right. To get salt out of, out of the water. Um, but on the other hand, it does use water. So, so nothing's, nothing's perfect, but there are new extraction technologies that are coming along that rather than having to do that and, and, you know, spend months and months filtering out all these different minerals, you basically pour, um, like a sea line, Brian of, of this lithium through a, um, like a special filter and the lithium comes out and the extraction potential then is much, much higher and it's much, much faster.

Marek (24:26):

So there are these technologies that are coming through to solve each of the, like the sort of upstream supply chain challenges, um, from a speed efficiency, land footprint perspective, um, to make things better.

Scott (24:39):

But would you say Merrick, it's fair to say that there's no, uh, upstream issue, let's say at least where you're like, well, shoot, we don't really have a good answer. Even we're not on our way to figure that out yet. It sounds like you feel like there's some issues, but we're addressing them.

Marek (24:55):

I think that's a great summarization. So yeah, each of the, each of the points that are raised there are answers. Like the fundamental thing is there are sustainable ways of extracting the minerals. The minerals themselves are all the raw materials you need to, to create this transition or that the main thing that we don't have a perfect answer to is like, how do you scale it up quickly enough to meet the growing demand for EBS and stationary storage, just for how long it takes to, to increase production of, um, of, of these raw materials.

Scott (25:27):

Okay. And before we get to the future stuff, cause we want to talk about affordability going into the future future technology. One of the things I know we wanted to bring up with you is that we actually, to be honest, we're looking for someone to interview who had a background that was black indigenous people of color. We've made this racial justice commitment to try to make the people we're interviewing more diverse. We're thrilled to be interviewing you. And you obviously have so much information to share with our listeners. We're so we're glad to have you, but we did want to ask because we had trouble finding someone that was diverse and had the kind of knowledge and experience that we were looking for. Is that something you've noticed, maybe a lack of diversity in the energy storage field and how do you think that the industry can advance diversity and inclusion?

Marek (26:12):

So it's a good question. I'm reflecting on fluence and, um, you know, how we've grown and scaled. I, I would say that we, um, I don't have stats to be able to throw out. We have a very diverse team in terms of, you know, nationalities backgrounds, uh, as we've grown, it's something we specifically considerSo we think it's important because you know, when you're working in a space, collective blindness is a thing. Like if everyone thinks the same as you, it looks the same as you, you just create these echo chambers and, uh, you know, aren't really thinking about the issues and topics fully. So we try to be a diverse employer. And so if this is you please, uh, please supply we're hiring like crazy at the moment. So

Speaker 4 (27:41):

How about that?

Jay (27:42):

Excellent. That's a great plug Merrigan. And as we are discussing diversity and inclusion here, there's another topic that we want to touch on that gets into a little bit of the future of energy storage. And that is this affordability question. So we know that energy storage can make our energy system more resilient and create cheaper energy for all, but there are of course real affordability issues that we're having in the present. So the question is, do you think we'll get to a point where the affordability problem goes away and energy storage is widely available, which would then have all these significant beneficial, environmental, social, and economic effects. Like we all have our own

Marek (28:23):

Computers. Are we going to have our own personal energy storage systems one day? It's, it's a good question. I'm going to, uh, butcher this quote, but, uh, you may have heard the Nietzsche quote, God is dead, but I think the affordability question of energy storage is largely dead.

Speaker 4 (28:38):

I mean, again,

Marek (28:38):

You can't really look at it in isolation. It's really sort of renewables plus plus storage together as a, as a picture. I don't know if you've discussed before the concept of a energy trilemma that you have to balance affordability, sustainability and reliability, and that it used to be this like three legged stool that was impossible to stand straight on. Because for instance, if you rewind five or 10 years, renewables were more expensive than fossil fuels and you needed the fossil fuels for reliability. So you could go down the sustainability route and have your, your renewables, but it would be more expensive and less reliable after back everything up. But ultimately the trilemma is no more, right, because if you look at, um, the cost of now renewable energy in most markets, I Bloomberg new energy finance have identified now that the cheapest form of electricity generation in two thirds of the world.

Marek (29:31):

So two thirds of the world's population, um, the cheapest form of electricity that you can form is renewable and storage solves the reliability issue with that. So, no are you having to sacrifice, um, you know, affordability or reliability, if you go down the sustainable route, the cheapest form of electricity generation is also the sustainable one. So problem solved. There's maybe a few markets still where it's not the cheapest form of electric degeneration, but each year renewables are getting cheaper and cheaper batteries are getting cheaper and cheaper. So like two-thirds of the world is not bad going to start with and we'll get the rest.

Scott (35:18):

Wow. So many different uses for batteries. I love it. Uh, okay. And so policy-wise Merrick. I mean, you talked about the different countries that are seeing growth in energy storage, including Chile, which I didn't know about is that being driven by policy and what should regions or countries that want to drive more energy storage in their area, what is smart policy to you?

Marek (35:41):

So it comes in many different flavors because every market is different for how it's structured. Um, and

Scott (35:48):

You don't just have one answer America. It's always complicated. Smart Scott, come on. We should've known this by now.

Marek (35:55):

Yeah. It helps to go back and like, uh, one of those dinged countless for every time I say, well, it depends. Yeah,

Scott (36:00):

Yeah, yeah, no, I do it too. Go ahead, please.

Marek (36:03):

Uh, let's put it this way as a few different things. So one of the things that you at the U S has done particularly well, um, was FERC order eight 41, which is basically a regulatory rule, which said create open and equal market access for energy storage, for batteries and other technologies to provide the same services that power plants and other technologies provide. Um, the reason that that's really useful is if you come back to, you know, the wild West of 2015, where we talked earlier about working on that, that first battery in Europe is when you bring a new technology to the market and the rules say a built around power plants. It's very difficult to, to tick the boxes, um, from a regulatory standpoint, uh, for, uh, for that, for a new technology, because you're not a power plant. So if you're trying to be treated like a power plant, you won't necessarily fit all the, all the rules.

Marek (36:53):

So there are basically like catch 22 scenarios like that, that stop batteries competing to provide exactly the same services that power stations provide, like spinning reserve or whatever it is. And if you remove the barriers to them doing those jobs, then they do them much, much better than traditional technologies because batteries are far more flexible. They respond much quicker. They're, you know, they're more accurate because they're digital technologies and how they follow these things. But if the rules say that, technically you're not allowed to compete because you're not a fossil fuel power plant. That's what creates a market barrier that slows the adoption of storage. So that's one really big area. The second I would say is, is something as simple as pay for performance. All right. So once you've opened the market up and you let different technologies compete to provide the same service to help the grid, a stable differentiate based on how well they do it, right?

Marek (37:47):

So batteries, again, you go back to it, they respond in like hundreds of milliseconds, power stations respond in minutes, and there's an important difference for balancing the grid. Second to second, that means that one of those is more valuable to, to you. And therefore you should pay it more because if you do that, then the business case for, for the energy storage and for the flexibility provides a stronger, um, then the third one that's probably very effective is setting targets. So in the UK, for instance, there's net zero legislation, which basically means by 2050, um, the entire, um, uh, energy sector has to reach net zero emissions. And that sends a very, very strong signal that that renewables and storage is, is needed. So there's sort of those macro level, um, market signals that you can send. And then some countries and States have become much more targeted. So California is like leading in the U S because it's set a specific state target for having, um, you know, uh, you know, a number of megawatts of batteries online by a certain time. So those are probably like the three key levers access to markets, um, uh, differentiated to pay for performance or pay for actually what you need and, uh, set targets for, uh, for the adoption of the technologies.

Scott (39:01):

Jay, you can get America meeting with Joe Biden, right?

Jay (39:06):

Are you going to serve in public office over here? Because I would get really use resources like that, although it is nice to hear Scott, you don't really hear this. And over the, especially the last four years where the U S is doing something well, you know, respectively like relatively speaking in, in certain fields when it comes to this to sustainability. So America, we thank you for that at the very least, but we do now want to transition American to our famous, our typical last question for you. So this is what we call our party fact question. So let's say we're at a party, perhaps this is a gathering outside in a COVID friendly way, perhaps on the side of a river that previously would have had to get damned to produce power. But now with electricity and energy storage capabilities does not have to. So we're here, we're in this beautiful setting and we're talking to folks and we want to provide one party fact when it comes to energy storage that they will hold onto and stick with for who knows how long. So Merrick, if we are going to present our definers with one party fact that they can share that conveys the importance of energy storage, what would that be?

Marek (40:19):

So I guess one short thing you could think about saying is that the grid is moving from this old analog system of, you know, spinning thermal power plants to a digital one where you've got technologies that are solid state like solar and batteries. And the reason that that's happening so quickly is because of how solar and battery costs are falling, that digital technology. So they're very rapidly, um, uh, reducing and costs year by year. In the last 10 years, we've seen a 90% reduction in cost of batteries. And in the next 10 years, it's expected to fall another 50%. So a steep learning rate is meaning that the use uses for batteries are increasing and this transition is happening faster and faster,

Scott (41:05):

The money for parties, we can share these facts.

Jay (41:10):

Fantastic. Well, Mark, this topic has been so fascinating. You are so versed in so many of these aspects. We've loved our conversation with you. So thank you again so much for joining us. And we are excited to share this with all of our definers. Yeah,

Marek (41:24):

No problem. Um, delayed to the joint has been a good chat. Thanks so much.

Scott (41:27):

And I hope when we can travel again, our paths will cross in person. I can see the Instagram post now. All right. Thanks Mark. Thanks again, Eric.