Electrochemical pipelines to enable energy trading

Our MSc in Sustainable Energy Futures attracts a wide range of students from across the world who are interested in the future of energy. In this week’s blog Alec Macklis, a Bostonian by birth, discusses his research project on the possibilities for new ways of transporting, and trading, energy to loosen fossil fuels’ hold on energy markets.

Growing concerns over the issues like climate change and energy poverty have thrust the energy sector into a period of upheaval and evolution. Emphasis on energy efficiency and the advent of renewable generation has revealed a new set of industry challenges. Energy storage systems (ESS) are seen as some of the most promising technological solutions for two of the big problems, intermittency and energy management. Development of Energy Storage Systems will allow for excess electricity to be stockpiled and used later, providing much-needed flexibility to the grid as it pertains to supply and demand.

The systemic coupling of renewable generation with ESS would result in a low-carbon, electricity-rich energy supply with a high degree of temporal flexibility. However it is still unclear how electricity supply we can move renewable energy generated in one place, quickly and easily, to another. Currently the most popular, best understood and probably easiest way is through electrochemical ESS or, as they are better known, batteries.

My project, Electrochemical Pipelines: A techno-economic evaluation of spatial electricity arbitrage via large-scale transport of electrochemical energy storage systems, aims to look at how this “energy trading via battery” could transform renewably-sourced electricity from an unreliable input that cannot be stockpiled, into an abundant and liquid commodity that can be traded throughout the globe.

Global trading brings the idea of spatial electricity arbitrage into play. If we can move stored energy around the world then a company in a country where solar energy is cheap can then sell it in Country 2, where electricity is more expensive, at a profit. It is this ideas of arbitrage, alongside electricity commoditisation, that will be my main focus.

The main objectives for my project include:

  1. Determining the potential revenues associated with spatial electricity arbitrage.
  2. Projecting the costs associated with an electricity arbitrage scheme.
  3. Evaluating the value and feasibility of various scenarios (storage technology, mode of transportation, arbitrage value, etc.).
  4. Assessing potential effects of spatial electricity arbitrage on the energy sector.
  5. Identifying promising areas for further topic research.

These objectives will be achieved through a combination of research, technoeconomic modeling, and comparative analysis. Research will consist of a literature review focused on the topics of conventional energy markets, commodity economics and arbitrage, Liquefied Natural Gas (LNG) markets, the freight and transportation industry, and energy storage technologies.

While the underlying structure and methodology of the comparative model is not yet finalised the model will be capable of evaluating various scenarios on the basis of $/kWhe delivered to the grid and the associated arbitrage profits from each scenario.

Electricity substation

My project could identify spatial electricity arbitrage as a promising business opportunity and an untapped market. Commodity economics, energy storage technology trends, regional differences in renewable energy resources, and current investment trends in renewable generation all indicate that spatial arbitrage of renewably-sourced energy is inevitable in the future. When it becomes viable is dependent on the pace of ESS technology development.

If results from my project show a justification for the development of interregional electricity trade, the project could have a momentous impact on the way we develop, finance, and trade renewable energy. A globalised energy economy, where renewably-sourced energy can be stockpiled and traded across international markets, would both enable and accelerate further development of renewable generation across the globe.

Biography

Alec MacklisI was born and raised in Boston and lived my whole life in the United States before I arrived in London for the SEF program. My undergraduate studies were completed at Vanderbilt University, where I graduated with a Bachelors in Civil Engineering and Economics and a minor in Engineering Management.

Over the course of my undergraduate experience, I’ve held summer internships in fields ranging from economic modeling and analysis to civil engineering and construction management. This diverse work experience, combined with my broad educational background, has instilled in me an interdisciplinary curiosity that fits perfectly with the complex nature of the today’s energy sector.

I have been passionate about the field of sustainable energy since high school and wanted to continue my education by pursuing a Master’s in Sustainable Energy Futures. Participation in this program has allowed me to further develop my knowledge base, technical skill set, and business acumen for application towards solving the world’s energy problems. Motivated by the duality of challenge and purpose, I am hoping to use the knowledge that I’ve accrued throughout my studies into an impactful career within the field of energy strategy.

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