A 3,000MW energy storage target, proposed in Arizona as part of a grid modernisation policy, recognises the role of the technology in reducing the need for fossil fuels to stabilise the grid, a consultant has said.

Yesterday, Andy Tobin of the state’s regulator, the Corporation Commission, presented a plan that includes a goal to generate 80% of Arizona’s power from renewable sources by 2050, a commitment to review the existing Renewable Energy Standard and Tariff (REST) policy, to use renewables to mitigate peaks establishing a ‘Clean Peak’ standard and to deploy 3,000MW of energy storage to “leverage low priced energy during the day”.

The Commission will vote on the proposal in the next couple of weeks. A final vote is expected which would make the regulatory proposal legally binding, within six months to a year, Lon Huber, vice president and head of consulting at Stratagen Consulting, told Energy-Storage.News.

The 3GW target would be the biggest established to date in the US – the first state to set a target, California, is calling for 1.35GW by 2024 and New York for 1.5GW by 2025. While the timeline for deployment is longer for Arizona than those two previous title-holders, Huber pointed out that relative to the state’s size, the figure pencils out at a far higher capacity deployed per capita than in the others.

Lon Huber said the establishment of the target is closely linked to known plans for development of new gas turbine facilities by Arizona’s major utilities, including Arizona Public Service, which is projecting that it will need 5GW of new gas plants by 2032. Huber said it was likely the 3,000MW figure was arrived at as “a fraction of the new combustion turbines in the IRP (Integrated Resource Plans) of the utilities”.

“I think the assessment of what could be cost-effective storage was probably based on the need for new peakers over the next 15 years, more than anything. I think the innovation here is that, depending on different states and how they do things, you could end up in a situation where you buy a lot of renewables but you still need a large fossil backup fleet.”

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The CEO of Orsted, the world’s largest offshore wind developer, has said that his company is working to establish “a scalable commercial model” for solar PV and energy storage, viewing both as potential drivers of long-term growth.  

Danish power company Orsted, formerly known as DONG Energy until a rebrand and restructuring last year that also included selling off its oil and gas businesses, has just reported its latest quarterly financial results, including reporting for the full 2017 year.

For 2017, the group saw DKK22.5 billion (US$3.77 billion) operating profit, an increase of 18% from the year before. This included a 74% rise in profits from its wind business. The company made an overall net profit of DKK13.3 billion (US$2.23 billion), an increase of more than DKK1 billion from 2016.

The report and accompanying statements from the company and CEO Henrik Poulsen reiterated Orsted’s commitment to a transition to a low carbon, green and sustainable energy system repeatedly. The company is aiming to go coal-free by 2023 and also to source 95% of its heat and power generation from renewables by that time.

“Our strategy is based on the vision of an integrated green energy system, where renewable energy technologies can be combined with each other and with energy storage solutions, more flexible and intelligent patterns of consumption and electrification of the transport sector, heating systems and industry,” Poulsen said.

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First Italy, then Germany, then the UK: Europe’s annual frontrunners

The start of construction on India’s largest energy storage project is not only of strategic importance to regulators, but could also drive another wave of utility-scale projects in India, the chief of the country’s storage alliance has said.

AES India, a subsidiary of AES Corporation, and Mitsubishi Corporation started work this week on the 10MW project that will support the network operated by Tata Power Delhi Distribution Limited (Tata Power-DDL), a distribution company (Discom) that serves the North and North-West parts of Delhi. Energy-Storage.News reported in January 2017 that what is claimed to be India’s first grid-scale energy battery storage project is designed to aid the integration of rooftop solar in particular.

Rahul Walawalkar, executive director of the India Energy Storage Alliance (IESA), told Energy-Storage.News this week: “The AES project is expected to demonstrate the multiple value proposition of energy storage for the distribution grid such as peak shaving, distribution upgrade deferral, reactive power support as well as ancillary services for improving distribution grid reliability.”

Walawalkar also said the project was of “strategic importance” for Indian regulators, given that the Central Electricity Regulatory Commission (CERC) had already released a staff paper on energy storage last year.

The project would act as a “great confidence booster” for policy makers, such as NITI Aayog, Ministry of New and Renewable Energy (MNRE) and Ministry of Power (MOP), who are working on a National Energy Storage Mission. In this way, the new project will go towards addressing questions about technology readiness, added Walawalkar.

India’s National Solar Mission (NSM) was particularly successful in driving the local PV market to become the third largest in the world last year, and the nation will be eyeing up similar success in energy storage.

The AES, Mitsubishi project being deployed in Rohini, Delhi, at a substation operated by Tata Power-DDL will enhance grid reliability for more than 7 million customers across the Delhi region.

Storage technology and services company Fluence, a Siemens and AES joint venture, will supply AES’ grid-scale Advancion technology platform for the project. The Advancion solution is designed to provide long-term dependability. The project should also demonstrate storage’s ability to balance distributed energy resources, including rooftop solar, said Praveer Sinha, CEO and managing Director, Tata Power-DDL.

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France-headquartered multinational utility ENGIE has followed up acquisitions in smart energy by incorporating three companies, including commercial energy storage provider Green Charge, into its parent brand with the explicit aim of furthering its position in North American markets.

The three, all headquartered in the US, are: Green Charge (also sometimes known as Green Charge Networks), a Washington-based energy data analytics and optimisation company, Ecova, and Opterra Energy Services, which installs energy efficient solutions for customers, including solar panels and LED lighting.  

ENGIE said the rebranding of the three “is designed to amplify ENGIE’s voice in the North American market” and raise the visibility of the parent company in each of the acquired subsidiaries’ fields. It appears the utility is happy with its profile in the utility-scale and distributed generation sectors, but wants to “build an even more comprehensive portfolio of energy offerings in North America”. In a 2016 corporate blog, ENGIE said that all three acquisitions had been “strategic transactions aimed at delivering broader value to energy consumers”.

Green Charge will now be known as ENGIE Storage Services NA, continuing to be headquartered in Santa Clara, California. The company was recently identified by research firm IHS Markit as one of three leaders in commercial and industrial (C&I) energy storage in the US, with a value proposition based around lowering business clients’ energy costs through peak shaving – managing the expensive demand charges levied onto commercial electric ratepayers that can constitute as much as 50% of a company’s power bills. Green Charge also accrues further revenues through provision of grid services, particularly in helping reduce the network’s peak load. ENGIE took an 80% majority stake in the company two years ago.

As with the other two leaders in the US C&I space, Advanced Microgrid Solutions and Stem Inc, I.H.S Markit analyst Julian Jansen said that critical to their success so far has been the offering of energy storage “as-a-service” – in basic terms, creating long or medium-term agreements with customers to save them money through something akin to a subscription model, as opposed to selling equipment outright to customers to operate the assets themselves. Green Charge has executed dozens of projects on this basis, mainly in California, although the company is also the supplier of 13MWh of aggregated small-scale systems for a project in Brooklyn-Queens, used to mitigate peak demand in the New York neighbourhoods for utility ConEdison. 

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Trade associations NY BEST and the Energy Storage Association have been quick to applaud New York Governor Andrew Cuomo’s historic setting of a 1,500MW energy storage procurement target for his state.

Energy-Storage.News reported earlier this week that Cuomo, in his annual State of the State address, had set out plans for US$200 million to be invested via New York’s NY Green Bank and US$65 million via NYSERDA in the development and deployment of energy storage projects, while the 1,500MW target should be reached by 2025.

The announcement was made along with a raft of other environmental, energy and sustainability policy measures as Cuomo attempted to set out a “comprehensive agenda to combat climate change”.

These included establishments of energy efficiency targets, moves to cap greenhouse gas emissions and limit pollution from natural gas plants, establish a solar PV programme for 10,000 low-income households and to reconvene a scientific panel on climate change disbanded by the Trump presidential administration.

Energy Storage Association CEO Kelly Speakes-Backman said her group “heartily applauded” the establishment of the target. Meanwhile William Acker at NY BEST, pitched as a regional trade association as well as a technology development group – NY BEST has its own battery testing and research facilities available to its members – said the deployment of 1,500MW by 2025 and the US$265 million investment would help cement New York’s position as a leader in the energy storage industry while contributing strongly to the state’s climate change and sustainability goals.

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On islanded (or isolated) grids with growing renewable penetrations, grid operators often struggle to maintain system stability. Operators in places as diverse as Ireland, Puerto Rico and Australia frequently rely on inertial response from thermal power plants like coal or gas-fired generators to balance sudden mismatches between supply and demand. However, recent research from Northern Ireland’s Queens University Belfast (QUB) finds that battery-based energy storage can provide inertial response for system reliability much more efficiently, at a lower cost and with substantially reduced emissions than a much larger quantity of thermal generation.

QUB’s research found that just 360 megawatts (MW) of battery-based energy storage could provide the equivalent stabilisation to Ireland’s All-Island electricity system as would normally be provided by 3,000MW of conventional thermal generation. That shift to batteries could save up to €19 million (US$22.5 million) annually and could achieve approximately 1.4 million tonnes of annual CO2 savings.

Inertia: A blink-of-the-eye grid balancing service

The first ‘smart neighbourhood’ in the US state of Georgia is being created by utility Georgia Power and homebuilder PulteGroup, with each home equipped with solar PV, battery energy storage and other smart, clean and distributed energy resources.

PulteGroup said the planned new development builds on learnings from a prototype Zero Net Home, a residential building which offsets total energy consumption, either through efficiency measures or by producing more clean energy than the amount drawn from conventional grid sources. That prototype was built in northern California for local investor-owned utility Pacific Gas & Electric’s (PG&E) Zero Net Energy Production Builder Demonstration scheme, in a state which has already mandated new residential dwellings to be net zero energy by 2020.

Georgia Power, a subsidiary of Southern Company, will use Georgia Power Smart Neighbourhood as a real-world R&D and test facility for the future of such homes, much in the same way as Panasonic’s Fujisawa Sustainable Smart Town project in Japan has been doing since opening in 2014.

An initial 46 homes are planned at the Georgia development, each with 3 or 4 bedrooms, equipped with modern insulation, advanced heating and cooling, LED lighting and home automation including smart thermostats and voice-activated controls.

Through this partnership with Georgia Power, we continue to be at the forefront of energy efficiency that can shrink our homes’ carbon footprint, but also make our homes less expensive to own, translating into lasting savings for homeowners,” Ryan Marshall, president and CEO of PulteGroup said.

The development is planned for a grand opening later this year.

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Autarsys GmbH is planning to develop an energy storage system and PV project in Mam Rashan, a refugee camp in the Dohuk district of northern Iraq near the Syrian and Turkish borders.

Autarsys’ energy storage system will be integrated with a 300kW PV project that will secure a more stable supply of power. The system’s energy management software will give camp administrators the ability to prioritise and schedule the delivery of power based on residents’ most critical needs.

While refugee camps are traditionally powered by diesel generators, diesel is more expensive than renewable energy and is dangerous to transport in a volatile region. The first phase of the project will have the capacity to power one portion of the camp at a time during the day.

Autarsys expects that the renewable energy system will be operable by spring 2018. Additional funding in the future may enable expansion of the system. The German company has developed and delivered a number of off-grid microgrid or ‘edge of grid’ projects pairing solar, energy storage and other resources including two in the Philippines, one at a resort, the other for a remote village, one for a remote village in Cameroon and another in Australia with Conergy Australia combining 13MWp of PV with 1.4MW / 5.3MWh of energy storage which is currently underway in Lakeland, Queensland.

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One of the best new markets for energy storage might not be in a state with a deregulated market and policies that favor renewable energy, but in Florida, a bastion of traditional, regulated utilities.

States like California, Texas, New York, Hawaii and Massachusetts have either competitive wholesale power markets or policies that support and encourage energy storage, or both, and are among the leaders in energy storage projects. Florida, in contrast, has virtually no energy storage projects. But that could change quickly.

Florida could see $230 million of investment in utility-owned battery systems by 2021, according to a report by researchers from the University of California San Diego (UCSD).

Projects approved or proposed for Florida Power & Light and Duke Energy Florida could make the state a prominent location for energy storage. But electricity rates that track the national average — providing less incentive for storage as a means to reduce demand charges — and a lack of regulatory mandates pose challenges for storage developers, the report said.

Dramatic market change

Florida’s market for energy storage has already changed dramatically, Rick Ferrera, one of the authors of the report, told Utility Dive. “The market is a lot different today than it was a year ago when we started the report.”

That shift is being driven by the falling costs of battery storage and a heightened awareness of the need to bolster grid resilience in the aftermath of last year’s hurricane season that brought the devastation of Irma and Maria, Ferrera said.

The report, Battery Energy Storage in Florida, was released by The School of Global Policy and Strategy at the UCSD.

It finds an existing positive investment case for behind-the-meter storage in Florida. The main driver, the authors say, is the ability of battery storage to offset demand charges for utility customers. The scenarios modeled in the report found several battery systems are already “in the money” under a variety of scenarios at the low end of current cost estimates. And, as lithium-ion battery prices fall, even more potential projects could become viable, according to the report.

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