In its latest report on funding and mergers and acquisitions (M&A) activity for the Battery Storage, Smart Grid, and Energy Efficiency sectors, Mercom Capital Group, llc finds that battery storage continued to be an attractive proposition.

Indeed, VC funding in this category attracted US$539 million from 34 investors in H1 2018, up 12% on the same period a year earlier, where $480 million was raised. Deals here included $80 million by Stem and $71 million raised by sonnen.

Overall, 14 categories were targeted, including, Energy Storage Systems, Lithium-based Batteries, Solid State Battery, Flow Batteries, Energy Storage Downstream, Fuel Cells, Nickel-based Batteries, Energy Storage, and Management Software.

Representing an increase of 10%, debt and public market financing activity grew to $142 million across five deals, compared to $129 million raised across nine deals in H1 2017. In terms of project funding, H1 2018 saw $34 million was raised across four deals, up significantly from the $5 million in two deals in 2017.

Finally, the first half of this year saw eight Battery Storage M&A transactions, up from two in 2017.

Performing markedly worse were the Smart Gird and Efficiency categories, which chalked up declines across the board, and accounted for the overall decrease – 14% or $2.4 billion raised compared to $2.8 billion – in total corporate funding.

Of the two, smart grid companies saw the biggest declines, with VC funding in H1 2018 falling a massive 56%, from $304 million raised in 1H 2017, to $135 million via 19 VC investors.

Marking the only increase – and a significant one at that – in this category, $1.3 billion was raised via debt and public market financing, across two deals, compared to $9 million.

Regarding M&A activity, just five transactions were recorded, down from 13 a year previously.

Efficiency companies also fared badly, with VC funding in the period falling 32% to $165 million via 20 investors, compared to $242 million.

As power grids seek to adapt to the transition to renewable power generation, energy storage solutions, including battery storage, gas peaking plants and hydroelectricity, are touted as one solution to grid volatility.

As nations make the transition from coal-based power economies to renewable power economies there is anticipated to be a massive impact on power grids. In the UK, for instance, the government has committed to a programme that will phase coal out of all electricity generation by 2025.

Future energy needs will be met by renewables, nuclear power and power sharing via interconnectors with neighbouring countries (more on this in our feature on interconnectors). “Coal and gas-fired power stations have been the absolute main baseline capacity drivers of the UK’s grid for decades and decades, says Duncan Gordon, renewable energy broker at Alesco. “Now that’s changing, and the grid has needed to adapt”

“In terms of the overall contribution to the grid it’s definitely wind that’s been the major success,” he continues.”2017 was a headline year, with wind providing 15% of the UK’s annual electricity supply and the grid has come to rely on it. Combined cycle gas turbines and nuclear provide the baseload capacity requirements but the increasing contribution of solar and wind to the grid has raised the volatility profile and increased the need for new capacity to run and be available intermittently.”

2017 was a headline year, with wind providing 15% of the UK’s annual electricity supply and the grid has come to rely on it

Unlike traditional coal power, electricity production by weather-dependent renewables such as wind and solar can vary quite considerably depending on the time of day, time of year and whether or not the wind is blowing. This causes peaks and troughs in supply that older grids were not designed to cope with, leaving grids more susceptible to sudden variations in power generation or consumption.

Any shortfalls are most likely to be experienced during the November to January winter period when the days are shorter and colder. On top of this, there are variations in energy demand. Take the World Cup for instance. National grid operators know there will be a surge in demand at half time when England is playing and when up to 20 million viewers switch on their kettles at the same time.

As power grids seek to adapt to the transition to renewable power generation, energy storage solutions – including battery storage – are touted as one solution to grid volatility. “Whilst grid stability has largely been supported by interconnectors, demand-side response, gas plant upgrades and gas peaking plants the National Grid’s storage contracts have also provided entry for battery asset systems to be installed” says Gordon.

“Initially the utilities installed large battery systems, but in time private developments have completed with project finance taking advantage of short-response contracts, two to four years, followed by longer term capacity contracts.”

While Tesla is best known for making electric cars, it also has an interest in solar roofing thanks to Solar City and energy storage devices with Tesla Energy. It is these two brands that will likely be most affected by a new patent application that was published today by the U.S. Patent and Trademark Office that describes a new, safer storage battery.

The patent was originally filed January 20, 2017, and specifically mentions, “energy generated from photovoltaics” and is basically an “improved energy storage system” that is designed to release the hot gases that can be generated in the charging and discharging process if cells fail. The gases would be released thanks to two “interconnects” (one on the positive ends, the other on the negative ends) that have weak spots (made from a thin layer of mica, perhaps) that would rupture and vent the gases when necessary.

This is how the patent application describes the process in detail:

The energy storage system includes a module housing having multiple battery cells positioned inside the module housing. Each of the battery cells has a first end and a second end. Further, each of the battery cells has a positive terminal and a negative terminal. A first interconnect is positioned over the multiple battery cells. A second interconnect is positioned over the multiple battery cells. Multiple first cell connectors connect the positive terminal of the battery cells to the first interconnect. Similarly, multiple second cell connectors connect the negative terminal of the battery cells to the second interconnect. A top plate having an interior side and an exterior side is positioned over the first interconnect and the second interconnect. The top plate includes one or more weak areas above the one or more battery cell. The weak areas are regions that have less integrity and thus, where mechanical failure is more likely to occur if a battery cell releases gas. These regions may be physically weaker areas compared to the surrounding areas and may rupture when pressure builds up due to a failed cell. Alternatively, the weak areas may be chemically weaker and preferentially rupture when exposed to the caustic gases released by a failed battery cell. The weak areas may also fail due to a combination of physical and chemical weakening.”

In other words, a patent for better, safer energy storage, brought to you by a car company.

Energy storage is picking up pace as renewables did a decade ago. It is perhaps the crucial missing piece of the puzzle to bring about greater penetration of renewable energy and accelerate the smooth global transition to clean energy.

With developed nations already striving to be big storage players in the industry, new energy storage projects are now seen to be sprouting in emerging markets, primarily driven by the rapidly falling energy storage costs. Indeed, it has been estimated that approximately 80GW of energy storage capacity is expected to come from developing countries from the existing 2GW today.

A common trend amongst the reports on energy storage is that the rate at which storage is being deployed poses a challenge to the traditional grid system within the next five years. In other words, we may be looking at a hybrid between a decentralised power system and the existing central design and dispatch system.

As the demand for electricity goes up and with increasing renewable sources in the energy mix, what is clear now is that utilities must now be alive to the impending integration of energy storage for it is the trending solution to increase the flexibility of the grid to meet with the daily cyclical demands.

A 48MW grid-scale battery project looks to be under development at an unnamed location in the Philippines, local news outlets have reported.

The chief operating officer of Aboitiz Power, described recently by PV Tech as one of the country’s largest power producers, told reporters last week about the forthcoming project. Emmanuel Rubio was speaking at a forum event on electricity policy, hosted by the University of the Philippines’ Energy Policy and Development Program-hosted event (EPDP).

The Manilla Times and other local news outlets reported the COO’s remarks. According to Rubio, the 48MW project would be located at an existing fossil fuel plant on Mindanao, the Philippine’s second largest island.

According to The Times, Rubio said the project would be used to “enhance” Aboitiz’ “ability to provide ancillary services,” while also mentioning that the storage system could provide “contingency reserves” to the grid. However, the COO was reported as saying that the project was at a “preliminary” stage, including carrying out technical studies.

Rubio said the company would have to work closely with the national grid operator, the National Grid Corporation of the Philippines, but that the project could be completed by the end of 2019. So far the US Department of Energy’s Global Energy Storage Database lists only one large-scale, grid-connected battery storage system in the Philippines, a 10MW project executed by AES at a coal power station and connected in 2016.

Energy-Storage.news also reported in 2017 that developer Solar Philippines was developing a utility-scale solar-plus-storage project, pairing lithium batteries with a 150MW PV plant. Meanwhile, on a smaller scale, a 2MW PV microgrid, with 2MWh of Tesla battery storage and 2MW of diesel backup was completed by Solar Philippines in March this year, with villagers proudly proclaiming that due to the improvement of power reliability there would be ‘NO MORE BROWNOUTS!’

There have also been a handful of commercial or community systems developed in the country, while German residential and small-scale commercial battery storage company Sonnen struck a distribution deal to get into the Philippines and Malaysian markets in late 2017.

The Evolve system allows new or existing residential solar customers to store excess solar power generation. In the event of a power outage, the system will keep the solar system operating, ensuring that power is available to support essential loads.

“The Evolve system allows us to offer a fully-integrated, LG Chem battery-based, AC-coupled solution to our customers. With an attractive price point we expect the Evolve to pick up immediate traction in the Southeast,” said Russell Seifert, CEO of Creative Solar.

“Creative Solar is an established solar firm who was recently awarded the contract to install Solarize Atlanta and Solarize Carrolton customers, a validation of their leadership position in their regional market,” said Justin Holland, CEO of Eguana. “We are excited about our new partnership and look forward to bringing our solutions to additional US and Caribbean markets in the near future.”

Creative Solar is scheduled to become an Eguana certified installer in July, initial product orders have been placed and initial installations will commence immediately. Evolve energy storage systems will continue to be deployed throughout the balance of this year. One in four Creative Solar’s customers are already requesting storage as part of their solar installations due to low solar export rates in Georgia and a desire for solar-driven backup power.

Evolve is a fully integrated residential energy storage system that includes the company’s proprietary power electronics system, LG Chem low-voltage battery modules and a comprehensive user interface. The system is rated at 5-kWac output with a modular battery design based on a 6.5-kWh battery, which is scalable from 13 to 39 kWh in storage capacity. The NEMA 3R wall-mounted package is suitable for indoor and outdoor installations. The package is backed by a 10-year standard warranty.