Bending the grid – the risks of new electricity storage innovations

15 Mar 2017

What are the most promising technologies for the different services on the grid? And what is the role of insurance in enabling more flexibility? At a recent conference at the Swiss Re Institute, prominent experts from industry and science came together with Swiss Re to explore new perspectives on this topic.

It is vital for the insurance industry to understand how the organisation of the power grid has changed and will continue to change. The de-carbonisation of power production, prompted by the increased role of renewable energy, has had a positive environmental impact. However, the wind doesn't always blow and the sun doesn't always shine – power production must be increasingly agile. Grid operators have continued to look for adaptable providers at all supply chain levels (generation, transmission, and distribution). Energy storage provides innovative solutions by providing power quality, reliability and arbitrage services, as well as grid investment deferral (through optimisation of the existing assets). Prior to the conference, Swiss Re analysed 34 varieties of storage technology, and divided them into six groups.

In particular, the conference participants discussed lithium-ion batteries, all vanadium redox flow, and compressed air technologies for grid applications. They also provided an outlook on the technological risks involved. Professor Donald A. Sadoway highlighted the different forecasts concerning cost reductions in lithium ion batteries (at the battery pack level), as well as the technical and economic burden behind battery architecture, with several thousands of cells in various configurations. Sadoway is the inventor of liquid metal batteries, and participants' debate quickly turned around the competing technologies. Marcus Müller, who headed the so-called 'EEBatt project', highlighted lithium-ion battery safety concerns which require appropriate protection devices especially for fire and explosion risks, particularly for stationary applications. This was supported by Philipp Sager from Swiss Re Reinsurance, who applied Swiss Re's 4-box model to assess the risks of storage technologies, and also showed past incidences. For the re/insurance industry it is still crucially important to better understand the risks involved in these new technologies in order to provide suitable coverage solutions, especially as we have not yet seen the widespread penetration of stationary storage technology which would have allowed loss experiences.

From lab to application - the Swiss examples

Switzerland has been at the forefront of testing new storage technologies. While there have been a lot of research and application for example in regard to redox flow batteries by the Swiss poly-technical universities presented by Professor Girault, and Michael Koller from the Zurich EKZ and Dr. Chartouni from ABB presented their local experience with the 1 MW storage solution in Zurich. Of note here is the positive impact on primary frequency control, peak shaving, island operation, and voltage support. We can increase the profitability of a battery energy storage system by cumulating the applications, but without accelerating the degradation of the batteries nor losing performance. Another example where Switzerland is testing innovative grounds is the world-wide first pilot plant of advanced adiabatic compressed air energy storage technology. Dr. Zanganeh from ALACAES presented the plant, expected a market pull in 3-5 years. The technology could present interesting alternatives and has fewer issues with public acceptance, as the machinery is hidden in the mountain and not exposed to the risk of water pattern changes.

Grid alignment and the regulatory setting is crucial

Norela Constantinescu from ENTSO-E, the European Network of Transmission System Operators for Electricity, and Dr. Ulbig from Adaptricity, an ETH Zurich spin-off, both pointed out the different services and various needs that grids require. Grid actors would potentially be 'technology agnostic', as they require the most suitable technology at the correct level. Most future developments in storage technologies will happen at the distributed level, hence the Distribution System Operators will gain even more importance. Consequently, Professor Tobias Schmidt from the ETH Energy Politics Group highlighted regulatory limitations as one of the main issues for storage development on the grid. In particular, this refers to the question of storage ownership and the producer and consumer roles in an unbundled grid – which is also relevant for re/insurance with regard to liability.

Summary of the Swiss Re Institute's Grid Storage event in March 2017. Summary by Oliver Schelske and David Grivel.
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Critical Illness (CI) insurance is a living benefits product providing indemnity cover for major medical disorders including cancer. For each disease covered the triggers to pay a sum is defined according to clinical diagnostic criteria. With medical progress prompting evolving clinical guidelines, CI definitions become obsolete. The introduction of liquid biopsy might become a disruptor for the diagnosis of cancer with an urgent need to update the current CI cancer definitions and reconsider reserving for in force CI business.


Liquid biopsy is increasingly used in clinical practice and has the potential to alter the diagnostic cascade. This could affect our Critical Illness business. With more cancers diagnosed more claims will be paid. The aim of the Expert Forum on Cancer Diagnostics was to gather insights from experts to understand the potential impact from advances in cancer diagnostics, such as liquid biopsy, on Swiss Re's Critical Illness book of business.


The event was split into two; the first part focussed on cancer biomarker technologies and the second part on advances in imaging techniques and the regulatory environment for cancer diagnostics.


Kenneth Bloom, from Human Longevity Inc, kicked off the day with an overview of early molecular cancer diagnostics and targeted therapy in cancer care. He highlighted the role of molecular diagnostics in personalized medicine, disease monitoring and surveillance as well as the limitations of liquid biopsy for the early detection of cancer. Nicola Aceto, from the University of Basel, gave a snapshot on liquid biopsy, highlighting success stories and the need for further clinical validation of liquid biopsies before they can be used for the detection of early stage cancers. Vincent Mooser from the University Hospital in Lausanne discussed the use of germline genomics as a cancer risk indicator. Damian Page, from Roche, discussed the current limitations of diagnostics in personalized treatment from a pharmaceutical perspective.  


The take home message from the morning session was that the use of liquid biopsies for early detection of cancer is still in its infancy. More clinical validation is needed before liquid biopsy can be routinely used for cancer screening and diagnosis. Liquid biopsies' primary strengths lie in the molecular assessment of minimal residual disease and as a companion diagnostic for targeted therapy. Early warnings about possible recurrence improve disease management and adjuvant therapy, and clues for drug-resistance allow for personal tailoring of therapy. However, the present gold standard for diagnosing cancer remains microscopic and histochemical analysis of a tissue biopsy.


Luigi Catanzariti, was the first speaker in the afternoon session. He discussed the use of companion diagnostics and the future of preventive immunotherapy for early stage cancers. He emphasized the fact that diagnostics collaborating is now an integral part of pharma strategy, but regulators treat drugs for targeted therapy and companion diagnostics as two quite different categories. Pierre Hutter, from Sophia Genetics, emphasized the importance of genomic data collection and how the data can be used to learn and improve predictive and treatment algorithms. Hans Hofstraat, from Philips, discussed the role of imaging technologies in detection, staging, monitoring and for follow up of cancer patients. He emphasized applications for personalized therapies and its value for staging cancer precisely. Thomas Hany, from a private radiology practice, closed the afternoon sessions with an overview of the use of imaging technologies in clinical practice, sharing insight with their limitations. 


The take home message from the afternoon session was that imaging technologies play a vital role in localizing and staging cancer. This is needed for deciding on best treatment options, and for monitoring recurrences. The speakers highlighted the fact that imaging techniques play an important role for early detection for many cancers, mainly breast and lung cancer. However, even state of the art imaging is limited for early cancer diagnosis. Only when combined with other diagnostic tools such as liquid biopsy diagnostic sensitivity and specificity will be increased.


To conclude, modern cancer biomarkers and imaging technologies are extremely useful in the treatment and surveillance of cancer. However, no tumor marker or imaging technology identified to date is sufficiently sensitive or specific to be used on its own for earlier detection of cancer. Tissue biopsy will remain the gold standard for diagnosing cancer in the near future.<[if gte mso 9]> <[if gte mso 10]> <[endif] -->