Chris Pritchett is a contract lawyer working in Britain for law firm Foot Anstey, as a partner heading up the energy and environment practice. Pritchett recently served as moderator for the “Developers and financiers debate” at the Energy Storage Conference at the Solar & Storage Live 2017 show in England. In attendance were fund managers and project developers and a robust discussion followed. Afterwards, Andy Colthorpe caught up with Chris for an in-depth interview on camera.   

One main topic that comes up often is the relative complexity of modelling returns for energy storage projects, compared to the simplicity enjoyed by solar developers and financiers.

“[With the feed-in tariff (FiT), renewables obligation (RO) and PPAs]… you got used to a quite straightforward and really quite easily modellable return. You knew what it was going to be – it was government-backed for 20-25 years. There has been a journey whereby the investment community has had to detach themselves from that way of thinking.

“Some of the most sophisticated guys haven’t come from that background, they’ve come from tech investment. Actually, they’re far more used to the way this is working. There’s still a willingness to say, ‘what’s the aggregation agreement, or the FFR (fast frequency response) agreement? That’s the financeable proposition’.

“And you say ‘no, actually, here… is an asset – we’ve got grid, all the connections, we’ve got the battery modules and control system. And we’ve got a world of opportunity, where somebody, at some point, will pay you to do lots of stuff with it’.

“People who are well placed to take advantage of that market will be people with assets deployed and ready to go.”   

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The race is on for storage solutions that can help provide secure, reliable electricity supply as more renewables enter Australia’s electricity grid.

With the support of the Australian Renewable Energy Agency (ARENA), we have identified 22,000 potential pumped hydro energy storage (PHES) sites across all states and territories of Australia. PHES can readily be developed to balance the grid with any amount of solar and wind power, all the way up to 100%, as ageing coal-fired power stations close.

Solar photovoltaics (PV) and wind are now the leading two generation technologies in terms of new capacity installed worldwide each year, with coal in third spot (see below). PV and wind are likely to accelerate away from other generation technologies because of their lower cost, large economies of scale, low greenhouse emissions, and the vast availability of sunshine and wind.

Although PV and wind are variable energy resources, the approaches to support them to achieve a reliable 100% renewable electricity grid are straightforward:

• Energy storage in the form of pumped hydro energy storage (PHES) and batteries, coupled with demand management; and
• Strong interconnection of the electricity grid between states using high-voltage power lines spanning long distances (in the case of the National Electricity Market, from North Queensland to South Australia). This allows wind and PV generation to access a wide range of weather, climate and demand patterns, greatly reducing the amount of storage needed.

PHES accounts for 97% of energy storage worldwide because it is the cheapest form of large-scale energy storage, with an operational lifetime of 50 years or more. Most existing PHES systems require dams located in river valleys. However, off-river PHES has vast potential.

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After CEO Elon Musk extended an offer to help Puerto Rico earlier this month, Tesla is following through on a pledge to contribute to rebuilding the power grid devastated by Hurricane Maria, leaving thousands of people without electricity.

In a tweet Tuesday, Tesla posted photos of Hospital del Niño and the solar and power storage project that’s beginning there using the company’s Powerwall batteries. Musk has also donated $250,000 to relief efforts in Puerto Rico.

Musk first hinted at helping to rebuild Puerto Rico’s power grid in a tweet on October 5th; Governor Ricardo Rosselló promptly replied with, “Let’s talk.” Since then, numerous other companies have offered to help find power solutions for the territory that sustained upwards of $90 million in damage in late September from Hurricane Maria.

Last week, however, Whitefish Energy, a small firm from Interior Secretary Ryan Zinke’s Montana hometown, said it would be awarded the $300 million contract to fix Puerto Rico’s electricity problem.

Rosselló has said the goal is to get 95 percent of Puerto Rico’s power back online by Christmas.

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The Caribbean Development Bank (CDB) has approved funds of USD$350,000 for energy storage and grid modernisation in the Caribbean.

The grant was approved to assist utilities and stakeholders with design and planning of storage and grid solutions, in an effort towards clean energy across the region.

Tessa Williams-Robertson, head at Renewable Energy at CBD said, “Through this project, utilities and energy stakeholders will receive the support and technical advisory services needed to identify suitable investments in energy storage and grid modernisation technologies and properly plan for implementation and operational management”.

The Canadian Support to the Energy Sector in the Caribbean (CSES-S) fund will provide technical assistance supporting up to six energy storage and/or grid modernisation proposals, from the Bank’s Borrowing Member countries (BMCs).

The CSES-S Fund provides technical assistance over a four-year period; it was launched in 2016 and has since supported 15 technical assistance projects. The projects include 10 capacity-building projects, four development support projects and one regulatory support project, with the capacity-building projects reaching over 500 people.

The Canadian Government provided CAD$5 million (USD$3.9 million) in grant resources to the CDB to support public and private actors in the energy sector.

The Canadian government invests through the fund in legislative and regulatory Support, investment project support and capacity building, to supply energy projects and increase knowledge and expertise, in order to achieve sustainable energy targets.

In May 2017 CBD approved projects including: the Building Capacity for Disaster Risk Management and Climate Project in Haiti as well as an Energy Efficiency Measures and Solar Photovoltaic Plant undertaking in St Vincent and the Grenadines.

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A number of years ago, one of the smartest entrepreneurs in the electric industry (as evidenced by the timing of his sale of generating assets to a big energy producer) bought a hybrid car. He said it was a mobile electric battery and that he’d sell electricity back to the grid from it, sooner or later. That was a while ago. Now every major automotive manufacturer around the world is making a big commitment to electric vehicles (EVs). And yes they are basically mobile batteries. 

Renault, which has cross ownership arrangements with Nissan and Mitsubishi, just announced the creation of Renault Energy Services. This new corporate unit is dedicated to a broad array of challenges: the smart grid, charging systems and electric storage.

Because these are automotive companies, the electric vehicle as the center of the operation. But if we learned that an electric utility was exploring these three areas in some integrated way we would certainly not be surprised either.

Nissan officials in the United Kingdom (where incidentally there is little reserve electric generation capacity in the conventional network) claim to have an “intelligent charging strategy”. This facilitates recharging car batteries at off peak periods. The added benefit here is the potential for better utilization of renewable energy sources like wind power, which are often under-utilized during off peak periods.

If large numbers of vehicles eventually do recharge batteries during off peak hours, it implies several changes for the utility industry. First, all those extra vehicles drawing power off peak would boost asset utilization rates substantially–a pretty big positive. However, the same so called intelligent software that directs the battery to recharge during off peak hours, can also be programmed to resell power back to the utility when power prices are high, assuming the vehicle won’t be used.

In a sense, all of our driveways and streets could be lined with thousands of what amounts to very small power plants. All with the potential eventually to sell electricity back into the grid. Planning for future electric power generation needs just got a lot more complicated.

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Renewable energy is, undeniably, on the rise: solar and wind farms are popping up in the U.S., Europe, China, and Australia, while many companies are planning to source 100 percent of their energy from renewables. Side-by-side with this growing interest in clean energy are equally increasing energy storage needs. According to Spencer Hanes, a business development managing director at the North Carolina-based utility provider Duke Energy, batteries—like Tesla’s Powerwall and Powerpack—are going to take over the U.S. electric grid in five years.

“There’s going to be a lot of excitement around batteries in the next five years. And I would say that the country will get blanketed with projects,” Hanes said on Thursday, speaking as part of a panel at Solar Power Midwest in Chicago, according to Forbes.

Solar and wind farms generate energy at peak periods, when the sun is out and the winds are strong, but these don’t always match the needs of the grid. To remedy this, solar and wind farms, and even utilities, are turning to energy storage batteries. Tesla has a number of projects like this in Australia, while Google parent company Alphabet is working on a similar project in Malta.

CLEANER AND CHEAPER

Aside from batteries in larger energy farms, batteries are also becoming more popular domestically. Soon, more houses are going to be equipped with home batteries, like the Powerwall and Ikea’s home battery packs, as a reaction to the shift to renewables—and because they bring down energy costs. In the U.S., home developers in a number of state, which include New York and California, are making batteries part of their houses. “With the way that the cost curves are coming down it’s a big opportunity for all of us to deliver what customers want,” Hanes added.

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Almost every automaker working on electric cars is also currently looking at ways to leverage their battery technology development into other products. It started with Tesla’s launch of ‘Tesla Energy’ in 2015 and now BMW, Renault, Nissan, and several others have also launched similar products or even new energy divisions.

Daimler has its ‘Mercedes-Benz Energy’ subsidiary and the company unveils today an impressive new project using its vehicle battery packs for stationary energy storage.

The German automaker is putting aside 3,000 battery modules from its production for the third-generation smart electric car toward a new energy storage facility managed by enercity, a German electric utility, in Herrenhausen.

They have already installed 1,800 battery modules out of the total 3,000 and they announced today that they brought the system online.

It is being used to balance out the important amount of solar and wind energy on the German grid:

“In the event of increasing fluctuations in electricity feed-in from renewable energies such as wind and solar energy, such storage units help to ensure optimum balancing of the grid frequency, which must be constantly stabilised. With their storage capacity, they balance the energy fluctuations with virtually no losses – a task which is currently predominantly performed by fast-rotating turbines, rotating masses in large power stations. Around half of the planned system strands is already coupled with the network with an output of 5 MW.”

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As an increasingly high proportion of energy grids are fed by renewable energy, developing storage solutions that can deal with intermittency in sustainably, safely and cost-effectively is key.

Lithium-ion batteries are still the frontrunner technology for large-scale energy storage, and their benefits are clear — high energy densities, relatively low maintenance and a rapidly dropping cost per kWh. But their drawbacks of limited lifespans, explosive failure modes and potentially precarious chains of component supply are equally well publicized.

What battery technologies and chemistries are making waves for stationary storage applications?

All-Iron Flow Batteries (RFB)
Redox Flow Batteries (RFBs) are hardly a new technology, but have received renewed interest in the past few years as grid energy storage solutions. Benefits include long lifespans, theoretically limitless scalability and long discharge times, however, they have been held back by their drawbacks including low energy densities, expensive component costs and in some cases toxic or dangerous electrolyte materials.

Energy Storage Solutions (ESS) have been working on developing and proving the commercial case for their all-iron flow battery which aims to solve several of these issues. In contrast to Vanadium flow batteries, the electrolyte materials are selected for their abundance, safety and low-cost — salt, iron and water. The battery can be transported “dry” and hydrated on site, also lowering logistics costs and improving mobility.

The non-corrosive electrolyte also allows for cheaper materials to be used for the power stack and other battery components. With a mild electrolyte pH (1 to 4) electrode reaction potential lower than the 0.8V carbon corrosion potential, all-iron flow batteries experience little electrode degradation — ESS’s modules experience minimal performance loss over 20 000+ cycles with approximately 70% peak round trip efficiency.

ESS are testing the business case under a contract with the U.S Army Corps of Engineers, with initial cost estimates at have set an estimated cost for their battery at $500/kWh. At this relatively early stage of development, the cost is certainly not attractive enough to compete with Li-on or even Vanadium flow on a wide scale but could be an ideal solution for smaller and/or remote grids.

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After successfully landing a contract to build what would be the world’s largest energy storage system, and to install batteries in New South Wales, Tesla has landed another deal to supply Powerpacks to the first solar and wind energy storage project in the world.

Windlabs, an Australian renewable energy development company, announced on Thursday that they’re moving forward with plans to build a solar and wind energy farm at the Kennedy Energy Park in North Queensland. The project, which costs some $160 million, will be a joint construction under Vesta and Quanta. The former will be providing the wind turbine, and Tesla will be supplying Powerpacks for energy storage.

“Kennedy will consist of 43.2MW Wind, 15MW AC, single axis tracking Solar and 4MWh of Li Ion battery storage. The project will use twelve Vestas V136, 3.6MW turbines at a hub height of 132 meters; the largest wind turbines yet to be deployed in Australia. The Li-Ion storage will be provided by Tesla,” according to the press announcement from Windlabs.

SUSTAINABLE ENERGY ECOSYSTEM

Solar and wind energy, while effective at providing power, require specific circumstances in order to generate energy. It’s necessary, then, to store whatever energy is generated at peak hours so they’ll be available to supply the grid at non-peak times. This is where battery storage comes in; something Tesla has advocated for with the Powerwall and Powerpack.

The Kennedy project’s 4MWh requirement is measly compared to Tesla’s construction of a 100 MW/129 MWh Powerpack energy storage system. Though, as Electrek points out, there is the potential for scaling. “We believe Kennedy Energy Park will demonstrate how effectively wind, solar, and storage can be combined to provide low-cost, reliable and clean energy for Australia’s future,” Roger Price, executive chairman and CEO at Windlabs, said in the press release.

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CHICAGO, October 18, 2017 (Newswire.com) – IHI, Inc. announced today a new 500kW, 2.5MWh energy storage project collocated with a larger facility developed by IHI Corporation, the parent organization of IHI, Inc. The energy storage system is expected to be operational by April 2018.

The facility is intended to alleviate continued grid challenges in order to accelerate the implementation of renewable energy resources, such as photovoltaic (PV) generation systems. The overall project is designed to create an independently sustainable power system by utilizing a variety of installed technologies including on-site hydrogen generation, PV systems, and battery storage to reduce CO² emissions while providing reliable power.

“This energy storage system will change the landscape of generation and consumption in the region, creating an independent and resilient local grid. The success of this effort relies on innovative software capabilities for immediate reaction to various energy needs, such as grid failure, renewable utilization, and other emergency situations,” commented Toshiaki Nishio, Managing Director of the energy storage division of IHI Inc. (hereafter IHI Energy Storage). “IHI Energy Storage is proud to be a key partner in the development of this facility.”

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