An ITC for standalone energy storage systems could finally become reality with its inclusion in a US$1.5 trillion infrastructure investment Bill, tabled by House Democrats.

Our sister site PV Tech reported earlier this week that the ‘Moving Forward Act’ includes measures to support solar and other renewables, including an investment of more than US$70 billion to help modify the electric grid across America to accommodate for renewable energy.

It also included grant programmes for solar in low income communities and at schools, pledged to reduce the soft costs of project development such as streamlining permitting and to set targets for renewable energy deployment. The Act has been welcomed by the Solar Energy Industries Association (SEIA) and SEIA CEO Abigail Ross Hopper said it could “help put American solar workers in a position to lead economic recovery”.

US Energy Storage Association (ESA) CEO Kelly Speakes-Backman also said this week that the inclusion of energy storage in the act was “greatly appreciated” and that “these these common-sense, forward-looking policies with bipartisan and bicameral support are crucial”.

The eligibility for energy storage for the investment tax credit (ITC), which currently only applies a rebate to project developers and stakeholders if the energy storage is combined with solar and installed at the same time as the solar i.e. no retrofits, the promotion of electricity storage on the grid particularly to support electric vehicle (EV) infrastructure and the slightly more vague promise to promote innovation in energy storage were all welcomed by the ESA CEO.

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Adding well-optimised energy storage to solar PV projects in the US state of Massachusetts can increase project revenues by up to 50%, Stem Inc has claimed, as the energy storage provider announced the completion of a front-of-meter solar project with 8MWh of storage.

Energy-Storage.news reported last July as Stem Inc announced the formation of a partnership wth private equity firm Syncarpha Capital to develop 28.2MWh of energy storage projects colocated with solar PV in Massachusetts. This week Stem Inc, which touts the artificial intelligence (AI)-driven capabilities of its storage systems, said that the project is the first of five from the pair to be completed.

The just-completed project, in Blandford, near Springfield, MA, is one of four AC-coupled front-of-the-meter projects Syncarpha and Stem are collaborating on, with one DC-coupled project rounding off the portfolio. PV generation capacity of the Blandford site is just under 5MW, Stem said. It also marks Stem’s first project as an independent power producer (IPP). Syncarpha Capital meanwhile has also struck a deal with ENGIE Storage for a 19MW / 38MWh community solar-plus-storage portfolio in the state, for which ENGIE will supply storage and control systems.

Energy storage deployment in Massachusetts has been driven by a number of supportive policies. The state has a target in place to deploy 200MWh of storage by the end of this year and 1,000MWh by 2025. In a recent interview, Jason Burwen, policy director of the national Energy Storage Association told this site that the state’s leaders, including Governor Charlie Baker, have chosen to pursue that target “not through a single energy storage policy” but “through distributing energy storage into many different programmes and feeding it through those” in an interview on state-level targets for storage published this week.

One major programme is the Solar Massachusetts Renewable Target (SMART) scheme, which incentivises solar installations with rebates and sets a 3.2GW target for PV. SMART now also stipulates that solar PV systems over 500kW need to be combined with storage, with an increased incentive added to match.

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Last year Bloomberg reported that the price of energy produced from wind and solar had fallen below the cost of energy produced from coal.

This was found to be true in Britain, France and Germany. It means that renewable energy can now compete with fossil fuels on price, without requiring government subsidies.

However, renewable energy is only cheap when it is being produced. When the sun isn’t shining and the wind isn’t blowing, we remain dependent on fossil fuels and nuclear power. It is possible to store energy produced from renewable sources but the current options are limited. A huge increase in grid-level energy storage is likely to be required as electricity is fully transitioned to renewable sources such as wind and solar.

There are a few established technologies for grid-level energy storage. The oldest is pumped-storage hydroelectricity in which energy is stored by pumping water up to an elevated reservoir and then allowed to flow back down through a turbine to generate electricity when required. More recently, grid-scale battery banks are starting to be installed. In their current form, neither of these technologies can be deployed at the scale and rapidity needed to reduce greenhouse gas emissions to safe levels.

An innovative pumped-storage hydroelectricity technology uses a concrete sphere located on the seabed as the lower reservoir. No upper reservoir or transmission pipe is required since the surrounding seawater provides the necessary water pressure. This has significant potential to provide near-term highly scaleable grid-level energy storage, integrated with other offshore power facilities.

Conventional hydro
The most economical way of storing really large amounts of energy is pumped-storage hydroelectricity (PSH). This stores surplus electricity as potential energy, typically by pumping water from a low-lying reservoir up to another reservoir located much higher up in a mountainous region. When electricity is needed, the water is allowed to flow back down to the lower reservoir, passing through a turbine that generates electricity. Round-trip energy efficiency is typically 70 to 80%. Total global installations of PSH amount to 127GW, over 99% of the world’s bulk-storage capacity.

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Construction is beginning on the world’s largest liquid air battery, which will store renewable electricity and reduce carbon emissions from fossil-fuel power plants.

The project near Manchester, U.K., will use spare green energy to compress air into a liquid and store it. When demand is higher, the liquid air is released back into a gas, powering a turbine that puts the green energy back into the grid.

A big expansion of wind and solar energy is vital to tackle the climate emergency, but they are not always available. Storage is therefore key, and the new project will be the largest in the world outside of pumped hydro schemes, which require a mountain reservoir to store water.

The new liquid air battery, being developed by Highview Power, is due to be operational in 2022 and will be able to power up to 200,000 homes for five hours, and store power for many weeks. Chemical batteries are also needed for the transition to a zero-carbon world and are plummeting in price, but can only store relatively small amounts of electricity for short periods.

Liquid air batteries can be constructed anywhere, said Highview’s chief executive, Javier Cavada: “Air is everywhere in the world. The main competitor is really not other storage technologies but fossil fuels, as people still want to continue building gas and coal-fired plants today, strangely enough,” he said.

The U.K. government has supported the project with a $12.5 million grant. The energy and clean growth minister, Kwasi Kwarteng, said: “This revolutionary new facility will form a key part of our push towards net zero, bringing greater flexibility to Britain’s electricity grid and creating green-collar jobs in Greater Manchester.

“Projects like these will help us realize the full value of our world-class renewables, ensuring homes and businesses can still be powered by green energy, even when the sun is not shining and the wind not blowing,” he said.

The U.K. government is being urged to make the economic recovery from the coronavirus pandemic a green one. “We owe it to future generations to build back better,” said the prime minister, Boris Johnson, recently, while the chancellor, Rishi Sunak, is reported to be planning a “green industrial revolution.”

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The most efficient energy storage technology may be as close as the nearest hill, according to former Energy Secretary Steven Chu, and almost as old.

“It turns out the most efficient energy storage is you take that electricity and you pump water up a hill,” Chu said Tuesday at the Stanford University Global Energy Forum.

When electricity is needed, you let the water flow down, spinning generators along the way. Pumped hydro can meet demand for seasonal storage instead of the four hours typical of lithium-ion batteries.

“There’s been a resurgence and a new look at pumped storage because it is the one thing we do have, and we know it works and lasts a long time,” Chu said, highlighting it first in a review of energy-storage technologies.

Pumped hydro takes advantage of the efficiency of converting electricity to mechanical motion using an electric motor, and converting it back again using generator.

“Round-trip efficiencies can reach as high as 85 percent,” he said. “In terms of energy storage it’s really one of the best.”

Chu has been touting pumped hydro as a backup for renewable energy at least since he served as President Obama’s first energy secretary in 2009. It can help renewables dominate the grid, he said, at least to 80 percent.

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Quidnet Energy, a startup developing a long-duration energy storage technology, just closed on a $10 million series B financing round. Additionally, the firm announced a contract with the New York State Energy Development Authority (NYSERDA) for a 2 MW/20 MWh demonstration project of its geomechanical pumped storage (GPS) technology.

That’s ten hours of storage versus the four hours typical of the predominant lithium ion battery technology.

Existing investors Breakthrough Energy Ventures (founded by Bill Gates in 2015) and Evok Innovations participated in the round, along with new investors Trafigura and The Jeremy and Hannelore Grantham Environmental Trust.

Quidnet aims to develop an efficient cost-effective alternative to traditional pumped hydro.

The missing piece

True low-cost, long-duration energy storage has always been the missing piece in making intermittent wind and solar act like baseload thermal generation year-round.

Quidnet looks to use “excess” renewable energy to store pressurized-water under ground at dry oil and gas wells. The startup is aiming to work with electric utilities and deliver commercial-scale projects across the North American electric grid.

“Quidnet’s GPS technology is a novel form of hydroelectric energy storage. It uses time-tested well-drilling and construction technologies to pump water under pressure into subsurface geological reservoirs to store energy. When variable renewable energy is not available, this water is released to drive hydroelectric turbines to power the electric grid,” said Quidnet CEO Joe Zhou.

Zhou noted, in an interview with pv magazine that the company was “building off of known supply chains: pumping, wells, drilling, piping, etc.”

He added, “Today, the duration is ten hours but we can get to tens of hours, maybe hundreds of hours, dependent on the volume of the cavern.”

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Seven states in the US have now put some kind of public policy in place that recognises the role that energy storage will play in their future, lower carbon energy system.

On the one hand, it is to be applauded that this is clearly a mark of an ambition that New York, New Jersey, California, Nevada, Massachusetts, Oregon and Virginia share, that the importance of the energy transition and a green economy has not been lost on state leadership. On the other hand, why is it that some of these states have set mandated energy storage procurement plans for their utilities and others see their targets as more ‘aspirational’, vague goals?

The US national Energy Storage Association’s policy director, Jason Burwen, spoke with Andy Colthorpe about the seven early adopter states and whether this is likely to be a spreading pattern across the country.

Why should it really matter whether these goals are met, or not? In a state like California, for example, as the renewables penetration on the grid rapidly grows, is it just perhaps more obvious that energy storage would be desirable or needed there than in other states?

Let me also add a second rephrasing of this question – which we’ve heard a little bit recently: “If we’re going to 100% renewable or clean energy, why do we need storage targets? Storage will just happen, right?”

That’s not how these things work. A really key thing to bear in mind here is that, when you’re procuring resources for resource adequacy, or for system capacity, we’re talking about multi-decadal investment decisions.

Just because you see a future where we’re going to have a tonne of renewables, and the business case for storage will be self-evident in the future, well, the investment decisions that are largely going to determine supply mixes in the future are being made today.

Every year you wait, there’s a certain degree to which there’s a path dependency that you’re putting a lot of jurisdictions on and maybe there’s a plan at the end of the day, to retire assets early – but I don’t know that that’s necessarily going to be a politically savvy strategy. And frankly, it’s not in the interest of ratepayers either.

So energy storage targets are really important because they are in some respects saying, “listen, you know you’re going to need this, so instead of sitting on your hands and kind of doing nothing about it right now because it’s a new resource, it looks different and you might not have experience with it, you have to go figure it out”.

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Eos Energy Storage, the leading manufacturer of safe, low-cost and long-duration zinc battery storage systems, is proud to announce plans to deploy its latest technology battery energy storage system (BESS) in partnership with the California Energy Commission(CEC). The BESS will be used to evaluate performance across multiple utility energy storage use cases.

In light of the wildfires impacting much of California in recent years, non-flammable, non-combustible batteries like the one made by Eos provide a way for the state to continue to install more grid-connected battery storage capacity without exacerbating the risk or severity of fires. The energy storage industry has been under increased scrutiny around fire safety after a lithium-ion battery facility in Arizona exploded in 2019 and the ensuing fire reportedly left four first responders injured.

“This project is an important milestone as it marks the first deployment of our latest made-in-the-USA battery system,” said Joe Mastrangelo, Eos’ Chief Executive Officer. “When deployed at scale, our proven and safe, non-flammable technology will help California reach its clean energy goals for various applications like pairing with utility solar, microgrids, non-wire alternatives, and indoor urban storage.”

The project is supported by grant funding from the CEC, which, through its BRIDGE (Bringing Rapid Innovation Development to Green Energy) program, supports the development of emerging clean energy technologies in support of the state’s long-term energy and climate policy. This will be the third Eos deployment to receive a CEC grant, with the previous two having been undertaken in partnership with the University of California, San Diego and other California utilities.

The project will be installed at San Diego Gas & Electric’s Pala Energy Storage Yard and will showcase and benchmark the ability of the Eos BESS to perform grid support, peak shaving, within the California Independent System Operator (CAISO) market.

“Eos batteries have demonstrated great strength on the field for various customer use cases including solar peak shaving. This important work positions Eos as a storage provider of choice for the growing non-wires alternatives (NWA) market which avoids congestion in states like California,” said Balki G. Iyer, Chief Commercial Officer of Eos.

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A path forward for ongoing energy storage in Maryland is not yet clear.

“We don’t want to speculate about future operations until we gain a better understanding of how the pilot program benefits our customers,” Durbin said. “We plan to work with the [Public Service Commission (PSC)] staff and Commissioners to accurately identify and quantify the potential benefits that battery energy storage can provide for our customers during the pilot program.”

The Maryland PSC accepted proposals from the state’s four investor-owned utilities — Exelon Corporation’s Baltimore Gas & Electric (BGE) and Potomac Electric Power Company (Pepco), Delmarva Power and Light (DPL) and FirstEnergy Corp.’s Potomac Edison.

Eight projects were proposed by the April 15 deadline, two from each of the four utilities. The Exelon subsidiaries submitted a joint proposal.

Pilot projects could include:

• BGE’s proposed 2.5 MW lithium-ion battery system sited at the Fairhaven substation in Southern Anne Arundel County and a third-party owned lithium-ion battery energy storage system at Chesapeake Beach, possibly a Tesla MegaPack;
• Pepco’s proposal for a utility-owned, third-party operated 1 MW lithium iron phosphate battery system at National Harbor and a third-party owned and operated 1 MW nickel metal chloride lithium-ion battery storage system at the Montgomery County bus depot in Silver Spring;
• DPL’s proposal for a third-party owned and operated virtual power plant with a plan to recruit 110 residential customers in the Elk Neck area who would each receive free installation of an LG Electronics 5kW/19.6 kWh lithium-ion battery; and a 1 MW nickel manganese cobalt lithium-ion battery system in Ocean City; and
• Potomac Edison’s proposed 1.75 MW lithium nickel manganese cobalt oxide battery energy storage system on its Town Hill circuit and a 0.75 MW lithium nickel manganese cobalt oxide battery energy storage system on its Little Orleans circuit, which has suffered tree-related outages.

Comments were submitted by the Commission staff; Energy Storage Association; Maryland Department of Natural Resources; the state’s ratepayer advocate, the Office of People’s Counsel (OPC); Maryland-DC-Virginia Solar Energy Industries Association (MDV-SEIA); state legislators; and Eric D. Wachsman, Director of the Maryland Energy Innovation Institute at the University of Maryland.

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The negotiation of an engineering, procurement and construction (EPC) agreement for a battery energy storage systems (BESS) project typically surfaces many of the same contractual risk allocation issues that one encounters in the negotiation of an EPC agreement for a solar or wind project. However, there are several issues that merit special attention in the context of an EPC agreement for BESS projects.

Equipment procurement and warranties

Full-wrap, turnkey EPC agreements – where the EPC contractor takes full responsibility for the engineering, equipment procurement, construction, commissioning, testing and turnover of a completed project to the owner – have historically been favored by energy project owners and their project finance lenders, due largely to the benefits of having a single, creditworthy counterparty responsible for all delivery aspects of a fully completed and properly performing project.

That said, as the project finance market for BESS projects is still developing and equity remains the more typical source of financing, alternatives to the full-wrap, turnkey EPC agreement have been utilized on BESS projects, largely to reduce equipment procurement costs to the owner.

EPC agreements providing for owner-supplied equipment will need to address the allocation of responsibilities as between owner and EPC contractor that would typically be borne by the EPC contractor in a typical full-wrap EPC, with respect to all such owner-supplied equipment (most typically the batteries themselves for BESS projects) – including delivery, risk of loss, title transfer, installation in conformance with supplier guidelines/recommendations and equipment warranties. In addition, issues of creditworthiness and/or credit support with respect to the equipment supplier will need to be addressed in a similar manner as the credit of the EPC contractor is resolved in the EPC agreement.

To the extent equipment warranties are provided directly to the owner by the equipment supplier and not wrapped by the EPC contractor in its project-related warranties, care needs to be taken to properly structure the EPC contractor’s warranty obligations such that, together with the equipment supplier’s warranty obligations, they provide full warranty coverage to the owner.

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