As energy storage becomes an increasingly critical element of the modern grid, a wide range of business models are available on the market. Energy storage as a service (ESaaS), in particular, is gaining traction among service providers. Corporate commercial and industrial (C&I) energy and sustainability managers are increasingly seeking cost-effective, customized, and comprehensive energy solutions that guarantee energy use reduction and cost savings without CAPEX or an impact on day-to-day operations.

ESaaS refers to the deployment of an advanced energy storage and energy management system under a fee-for-service, shared savings, or management model other than a direct purchase of the asset by the end customer. The business model was initially developed by Constant Power. This model is being adopted elsewhere to generate steady returns for investors upon completion of a distributed energy storage system (DESS) project. Since energy storage deals were previously avoided by investors due to complexity surrounding cash flow, ESaaS is a promising model that has the potential to attract financing and further grow the industry.

Role of Financing

Project financing is critical for the health, direction, and momentum of the distributed energy storage industry. For many years, the industry has made great progress in developing the technology, standards, public policy, and market rules that form the basis of today’s market. While these factors have led to expanding opportunities for energy storage, the lack of available and cost-effective capital is still a hindrance.

One strategy that firms are employing to assuage the reservations of lenders contemplating the distributed energy storage market is to show the effective adaptation of contracts and financing structures that proved successful in other markets. Specifically, energy savings performance contracts (ESPCs) used widely throughout the energy efficiency market are also well-suited for the C&I energy storage market. C&I customers are exposed to higher and more volatile electricity rates as utilities shift more of the service charge from a commodity basis to a demand basis through rising demand charges.

How Does It Work?

DESSs allow for the targeted reduction of load without affecting the operational profile of a facility. By coupling the ESPC with a DESS to affect the guarantee, both customer and firm can enter into an agreement where greater cost savings from demand charge reductions can be guaranteed. Including the capital cost of the DESS within the contract allows the customer to enter into an operating lease agreement providing guaranteed cost reductions. Many DESS providers are calling this ESaaS, where customers get the benefit of a DESS without having to buy the equipment.

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The good news is that the world’s largest fund manager, BlackRock, just closed $1 billion of a record $2.5 billion fund dedicated to solar, wind, and energy storage projects.

BlackRock’s Global Renewable Power III fund has commitments from more than 35 institutional investors in North America, Europe and Asia and “reflects strong investor demand for renewable power assets,” according to a press release.

BlackRock already has one of the world’s largest renewable power portfolios, with $5.5 billion in assets under management, and investments in more than 250 wind and solar projects since 2011.

“As global power generation shifts from two-thirds fossil fuels to two-thirds renewables over the next few decades, renewables are increasingly becoming a standalone allocation for investors and one of the most active sectors in infrastructure;” said David Giordano, global head of BlackRock Renewable Power.

The bad news

The bad news is that the $2.5 billion fund is a tiny fraction of BlackRock’s $6.96 trillion balance sheet and small change compared to BlackRock’s $17.5 billion (and growing) investment in coal.

According to The Global Coal Exit List, “BlackRock is not only the largest investor in companies developing new coal plants, it is also the largest shareholder in oil, gas, and thermal coal reserves.”

The Financial Times quotes Christopher Hohn, founder of the TCI hedge fund, as saying that “major asset managers such as BlackRock have been shown to be full of greenwash.“ The newspaper added that BlackRock “continues to pour money into sectors such as fossil fuels through its mainstream investment products – dominated by passive funds that track indices.”

ImpactAlpha expanded on that: “As a manager of mostly ‘passive’ portfolios pegged to indexes, BlackRock has been loath to divest from fossil fuels and other environmentally destructive industries and only rarely bucks management on shareholder resolutions.”

But other large funds are changing their ways: Japan’s $1.6 trillion Government Pension Investment Fund is potentially shifting up to $50 billion of its fund to add more careful review of the “negative externalities” created by firms in its portfolio.

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The Public Utilities Commission of Nevada (PUCN) has approved NV Energy’s Integrated Resource Plan to bring an additional 1,190MW of new solar energy projects.

The new projects will provide energy enough to power 230,000 homes – and an additional 590MW of energy storage capacity.

The three projects will be located in southern Nevada and are expected to be completed and serving customers by 1 January 2024. With the addition of these new projects, NV Energy will also meet the commitment made to customers last year to double its renewable energy.

The three new projects are:

• Arrow Canyon Solar Project – 200MW solar photovoltaic project with a 75MW – 5-hour battery storage system. The project will be located in Clark County, NV, 20 miles northeast of Las Vegas on the Moapa Band of Paiutes Indian Reservation. It is being developed by EDF Renewables North America, a market-leading independent power producer and service provider with over 30 years of expertise in renewable energy. EDF Renewables’ North American portfolio consists of 16 gigawatts of developed projects and 10 gigawatts under service contracts.
• Southern Bighorn Solar & Storage Center – 300MW solar array that includes a 135MW-4 hour Li-on battery energy storage system. The project will be built in Clark County, NV on the Moapa River Indian Reservation about 30 miles north of Las Vegas. It is being developed by 8minute Solar Energy, the largest independent developer of solar PV and storage projects in the United States, with over 15GW of solar and storage under development in California, the Southwest, Texas, and the Southeast, with more than 2GW of solar power plants now in operation.
• Gemini Solar + Battery Storage Project – 690MW solar photovoltaic array coupled with a 380MW AC battery storage system. The project will be located in Clark County, NV 25 miles northeast of Las Vegas on approximately 7,100 acres of federally-owned land under the management of the Bureau of Land Management. It is being developed by Quinbrook Infrastructure Partners in collaboration with Arevia Power, who are managing the development phases of the project. Quinbrook is a specialist investment manager focused exclusively on lower carbon and renewable energy infrastructure investment and operational asset management.
• The projects will create more than 3,000 construction period jobs using union labour. This will ensure the highest quality construction is used in delivering these projects so they can serve Nevada’s energy needs for the long term.

NV Energy signed its first renewable power purchase agreement in the 1980s and has since prided itself on making renewable energy development a priority. The company exceeded Nevada’s current renewable energy requirement for the ninth straight year in 2018.

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For a brief period a few days ago, Bordesholm in Germany became a showcase for how entire communities could switch over to renewable energy, with the backing of energy storage capacity.

Solar inverter maker SMA’s devices, including its Sunny Central Storage battery inverter and SMA Hybrid Controller XL, were used in a trial whereby the town’s energy supply was disconnected from the grid, proving for a one-hour window that local energy networks could be powered stably and reliably using renewable energy.

The name of the town may ring a few bells of recognition for regular readers of Energy-Storage.news. In January 2018, this site documented RES Group’s win of a competitive tender to build a 10MW energy storage system in the town, in Schleswig-Holstein, northern Germany, from local energy supplier Versorgungsbetriebe Bordesholm (VBB). Supported by the local state and funded through the European Union (EU), VBB and RES officially broke ground on the project in June 2018.

According to a RES Group case study, it has 10MW peak power output and 15MWh storage capacity, utilising lithium nickel manganese cobalt (Li-NMC) batteries. RES carried out EPC duties and remains in charge of maintenance, while the utility owns and operates it. Bordesholm is already 75% renewable, but the small town’s 8,000 inhabitants hope to see it reach 100% during 2020.

The battery system’s ‘full-time job’ is providing frequency containment reserves to the local network operated by grid company TenneT. In helping to stabilise power supply and integrate renewable energy, it also provides much-needed reductions in carbon emissions. However, it was also designed as part of a complete system that can be used as an ‘independent local grid’ using its islanding capability, notably in the case of power outages or other emergencies, and can also fire the local grid back up into operation (black start capability).

The latter has already successfully proven to be possible with energy storage over the past couple of years by various system integrators, notably by Younicos (now Aggreko Microgrid and Storage Solutions), also in Germany, in 2017. National Grid in the UK has said previously that it wants to see energy storage systems provide black start to the grid in the near future, to give a further example.

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While energy storage technologies like lithium-ion batteries have seen substantially reduced costs, “revenue streams for storage resources have not developed to the same extent,” according to the report.

“Energy Storage – Perspectives from California and Europe” is published by CAISO and the Renewables Grid Initiative, a Germany-based coalition with membership from environmental groups such as the World Wildlife Fund and European transmission operators including Amprion, 50Hertz and Swissgrid.

Europe is well behind the U.S., and California in particular, in battery storage deployments. Pumped hydro makes up almost all of the storage capacity in Europe. “Other forms of storage technologies such as batteries, electric cars, flywheels, hydrogen and chemical storage are either minimal, or at a very early stage of development,” the report said.

California, meanwhile, has many operational battery storage projects, and the most ambitious targets for storage procurement of any state. It also has market mechanisms to reward storage not yet available in some European countries. For example, frequency stabilization and other ancillary services storage can provide for the grid are “not presently being remunerated” in Germany, the report said. CAISO allows storage projects to compete for ancillary market revenue through its “Non-Generator Resources” model.

Despite this progress, CAISO notes that more should be done to encourage storage applications that better complement the grid during periods where demand is ramping up but renewable production is low. “Within the CAISO’s footprint, daily ramps are becoming a reliability concern and storage could help in addressing this,” the report said.

There is a seven-hour window starting around sunset when it could be most economic for batteries to discharge their energy, according to CAISO. Lithium-ion batteries most commonly used in battery storage projects have a duration of around four hours, so there is commercial interest in storage that can discharge for longer durations.

The report also calls for intensifying R&D investments into new storage applications, particularly “in countries where fossil-fuel and nuclear sources have been phased out” in order to “overcome periods with low infeed from renewables.”

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Nevada regulators have given a green light to utility NV Energy’s plan to add nearly 1.2 gigawatts of solar and 590 megawatts of batteries, underscoring a broader push toward renewable energy and storage by other Western utilities also owned by Warren Buffett’s Berkshire Hathaway.

The new projects are part of NV Energy’s integrated resource plan approved Wednesday by the Public Utilities Commission of Nevada. NV Energy announced the projects in June with developers 8minute Solar Energy, EDF Renewables, Quinbrook Infrastructure Partners and Arevia Power, and it expects them to be online in 2023.

This massive solar procurement includes Quinbrook and Arevia’s newly approved Gemini project, at 690 megawatts, which is tied with the Misae 2 project in Texas as the country’s largest single solar PV array. 8Minute’s 300-megawatt Southern Bighorn project and EDF’s 200-megawatt Arrow Canyon project complete the solar portion of the procurement.

All three projects will also come with at least four hours of energy storage capacity to shift hundreds of megawatts of solar power from peak midday output into later in the afternoon or evening. Gemini’s 690 megawatts of solar will be matched by a 380-megawatt battery array with about 1.5 gigawatt-hours of storage capacity. That could make it the biggest solar-paired utility storage projects in the country, as compared to the previous record holder, the 409-megawatt/900-megawatt-hour Manatee Energy Storage Center being built by NextEra Energy’s Florida Power & Light.

8Minute Energy CEO Tom Buttgenbach noted in June that the Southern Bighorn project, which will match 300 megawatts of solar with a 135-megawatt/540-megawatt-hour battery system, could run 65 percent of the time during peak summer hours, as opposed to the roughly 30 percent availability of the average solar plant in Nevada. The Arrow Canyon project offers an even more extended 5-hour storage duration, pairing 200 megawatts of solar with a 75-megawatt/375-megawatt-hour battery array.

These lengthening megawatt-hour figures for NV Energy’s latest solar-storage power-purchase agreements reflect a trend for longer-duration storage across the country, as falling battery prices allow for more cost-effective shifting of solar production. They’re also important for states like Nevada and Arizona that are starting to see the same “duck curve” effects as nearby California, where solar generation is pushing cheap energy onto the grid at midday that fades away in the evening hours when electricity demand spikes.

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December 5 (Renewables Now) – Nevada utility NV Energy on Wednesday said it had secured approval from the Public Utilities Commission of Nevada (PUCN) for 1.19 GW of new solar power projects and 590 MW of energy storage capacity in Nevada.

The additional solar capacity will come from three projects located in Clark County, southern Nevada, which are scheduled to be operational by January 2024.

The latest projects, whose potential inclusion in NV Energy’s portfolio was first announced in June, will help the company reach its goal of doubling its renewable energy capacity. Since April, energy providers in Nevada are required by law to comply with a 50% renewable energy portfolio standard by 2030.

The selected projects include the 200-MW Arrow Canyon solar scheme, which is being developed by EDF Renewables North America and has 75 MW of battery storage. A project being developed by 8minute Solar Energy will add 300 MW of solar power with 135 MW of battery storage within the Southern Bighorn Solar & Storage Centre, while the largest plan includes a 690-MW solar farm with 380 MW of energy storage capacity. Known as the Gemini solar + battery storage project, it is being developed by Quinbrook Infrastructure Partners and Arevia Power.

At present, NV Energy has 57 geothermal, solar, hydro, wind, biomass and supported rooftop solar projects, both operational and under development, in its portfolio.

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DENVER — It’s become a cliche to compare today’s energy storage market to where the solar industry was a certain number of years ago. But storage’s trajectory differs from the early growth dynamics of solar power in a crucial respect: It transcends the geographic boundaries, dictated by sunshine and policy, that constrained solar’s rise.

Fast-acting battery technology performs many roles: frequency regulation, capacity, deferral of wires upgrades, resilience, firming renewable generation and more. It does not rely on a geographically specific weather pattern or any one set of state policies to become valuable, and it’s already asserting itself across the U.S., said Daniel Finn-Foley, energy storage director at Wood Mackenzie, speaking Tuesday at GTM’s Energy Storage Summit in Denver.

Solar reached the big time early in California, thanks to abundant sunshine and supportive state incentives. Pockets of development later formed in Hawaii and the Desert Southwest, and in the less sunny but politically supportive New England states. But it did not spread evenly, and whole regions such as the Southeast and Midwest trailed behind for years.

“Energy storage’s value lends itself to a much more diverse range of geographies,” Finn-Foley said in an interview after the talk. “It’s finding value in wholesale markets; it’s finding value in vertically integrated utility markets; it’s finding value for residential deployments — really, just about everywhere.”

Storage is still considered new and experimental in many states, but a map of where development has taken place reveals its border-crossing appeal. Here are the states that already operate more than 50 megawatts of grid storage, according to Finn-Foley’s presentation.

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Energy storage deployed more capacity than any third quarter in U.S. history, according to a new report from the Energy Storage Association.

The U.S. sector deployed 100.7 MW (totaling 264.6 MWh of duration) of storage in the quarter ending Sept. 30, according to the ESA and research partner Wood Mackenzie. Massachusetts led the way with front-of-meter (FTM) deployment totaling 58 MWh, while Vermont and Arkansas tied for second place with 24 MWh.

“We are encouraged to see the continued strong growth of the energy storage industry,” said Kelly Speakes-Backman, CEO of the U.S. Energy Storage Association. “Three of the last four quarters have recorded more than 100 MW in deployments, experiencing a healthy diversity of customer-sited and grid-side projects, and a growing pipeline of projects in development. We can expect deployments to accelerate even further if Congress acts to pass legislation making stand-alone energy storage eligible for the 30% investment tax credit by the end of this year.”

Residential storage grew by nearly 40 MW in the third quarter of the year. California, Hawaii and Arizona were the largest US markets for residential storage in during the timeframe.

“The power shutoffs over the past few months in California will act as significant drivers of growth in residential storage into 2020 and beyond as more customers explore solar-plus-storage for backup power,” Speakes-Backman added.

FTM storage growth will accelerate significantly starting in 2020 as the segment adds 825 MW next year and 2,635 MW the following year, according to forecasts.

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Britain needs to increase energy storage tenfold to hit its target of net-zero greenhouse-gas emissions by 2050.

That’s the estimation of utility Drax Group Plc, which says 30 gigawatts of pumped hydroelectricity storage and batteries are necessary to help the U.K. transition to a net-zero energy system. Drax operates 400 megawatts of pumped hydro.

Installing vast

quantities of storage will help mitigate against the indeterminacy of renewable power. The U.K. currently has about 3 gigawatts of storage available with 1.1 gigawatts either commissioned, under construction or announced since the start of 2018, according to BloombergNEF data.

“This summer’s blackout in Britain highlights the value of having a range of fast-acting technologies and that demand will only grow as older thermal power plants retire and are replaced by intermittent renewables,” said Oliver Schmidt, co-author of Drax’s Electric Insight report and senior consultant at clean energy consultants Apricum GmbH.

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