On September 15, 2021, the U.S. House Ways & Means Committee finished a markup of the Build Back Better Act[1], specifically Subtitle G – Green Energy.[2] The markup for Subtitle G contains proposed amendments to the current Internal Revenue Code (IRC) Section 48[3] that would add Energy Storage Technologies (among others), as eligible energy property, and hence receive the Investment Tax Credit.

Original IRC Section 48 Language

The original Internal Revenue Code (IRC) Section 48 listed ITC eligible technologies:

• Qualified fuel cell property
• Energy property
• Qualified small wind energy property
• Waste energy recovery property

Proposed Subtitle G Language

Proposed amendments to IRC Section 48 were described in Subtitle G – Clean Energy, Part 1 – Renewable Electricity and Reducing Carbon Emissions, Section 136101, Extension and Modification of Credit for Electricity Produced from Certain Renewable Resources.

The following technologies were added as eligible energy property:

Energy Storage Technology. Energy Storage Technology means equipment (other than equipment primarily used in the transportation of goods or individuals and not for the production of electricity) which uses batteries, compressed air, pumped hydropower, hydrogen storage, thermal energy storage, regenerative fuel cells, flywheels, capacitors, superconducting magnets, or other technologies identified by the Secretary, after consultation with the Secretary of Energy, to store energy for conversion to electricity (or, in the case of hydrogen storage, to store energy), and has a capacity of not less than 5 kilowatt hours. Construction must begin by Jan 1, 2034.

Qualified Biogas Property. Qualified Biogas Property means property comprising a system which (i) converts biomass into a gas which (a) consists of not less than 52 percent methane, or (b) is concentrated by such system into a gas which consists of not less than 52 percent methane, and (ii) captures such gas for productive use. Construction must begin by Jan 1, 2034.

Microgrid Controllers. Microgrid Controller means equipment which is (i) part of a “Qualified Microgrid,” and (ii) designed and used to monitor and control the energy resources and loads on such microgrid to maintain acceptable frequency, voltage, or economic dispatch. Construction must begin by Jan 1, 2034.

Qualified Microgrid means an electrical system which (i) includes equipment which is capable of generating not less than 4 kilowatts and not greater than 20 megawatts of electricity, (ii) is capable of operating (a) in connection with the electrical grid and as a single controllable entity with respect to such grid, and ‘(b) independently (and disconnected) from such grid, and (iii) is not part of a bulk-power system.

Key Summary of Proposed Language[4]

• Energy storage technologies added as eligible property in the current ITC Section 48.
• ITC Section 48 extended for 10 years, at 30% 2022-2031 before phasing down 26% in 2032 and 22% in 2033
• Base ITC value is 6%, and rises to 30% if certain labor standards are met (with <1 MW projects exempted):
  • Prevailing wage for all workers in project construction & project alteration and repair up to 5 years after placed in service
  • Qualified apprentices required to complete a percent of all construction/alteration/repair labor hours, starting at 5% in 2022 and rising to 15% in 2024 and beyond, with 1 apprentice required for every 4 workers; exemptions allowed if labor supply is unavailable or good faith efforts can be demonstrated
• A bonus of 10% of ITC value (i.e., +3% added to 30% ITC) if certain domestic content standards are met:
  • 100% of steel & iron
  • 55% of manufactured products
  • Waivers allowed if domestic content raises project costs 25% or US production is determined to be insufficient in volume
• Direct payment election allowed for Section 48 ITCs, with a phase in of domestic content requirements:
  • Only 90% and 85% of ITC value is available for direct payment in 2024 and 2025 if domestic content standards are not met
  • Domestic content standards are required for any direct payment of ITC value starting in 2026

This legislation is expected to be included in a full budget reconciliation package for vote in the House of Representatives later this month.

[1] https://waysandmeans.house.gov/legislation/markups/markup-build-back-better-act. See bottom of webpage for all markup documents

[2]https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/SUBFGHJ_xml.pdf

[3] https://irc.bloombergtax.com/public/uscode/doc/irc/section_48

[4] Summary provided by the Energy Storage Association (ESA). ESA provides vital policy and market updates to members.

Fractal Energy Storage Consultants provides technical design, financial analysis, procurement, due diligence and OE services for energy storage and hybrid projects. Fractal EMS provides turn-key energy storage controls and integration. Contact us today for more information https://www.energystorageconsultants.com.

In response to the Coronavirus Disease 2019 (COVID-19) pandemic, the U.S. Treasury Department and Internal Revenue Service (IRS) issued Notice 2021-14 that further extends a safe harbor allowing taxpayers who are developing renewable energy projects to claim the production and investment tax credits

Previous Notice

The Treasury Department and the IRS previously released Notice 2020-41 back in May 2020. This notice informed taxpayers that for projects that began construction in either calendar year 2016 or 2017, the Continuity Safe Harbor is
satisfied if a taxpayer places the qualified facility or energy property in service by the end of a calendar year that is no more than five calendar years after the calendar year during which construction with respect to that qualified facility or energy property began.

More Breathing Room

In this latest notice, the Treasury Department and the IRS acknowledged continued COVID-related delays in the development of facilities eligible for tax credits. Accordingly, the notice provides relief for projects on which construction began in 2016 through 2020 by expanding the period that qualifies for the Continuity Safe Harbor.

Latest Provisions

• Any qualified facility or energy property that began construction under the Physical Work Test or the Five Percent Safe Harbor in calendar year 2016, 2017, 2018, or 2019, the Continuity Safe Harbor is satisfied if a taxpayer places the qualified facility or energy property in service by the end of a calendar year that is no more than six calendar years after the calendar year during which construction with respect to that qualified facility or energy property began.
• For for any qualified facility or energy property that began construction under the Physical Work Test or the Five Percent Safe Harbor in calendar year 2020, the Continuity Safe Harbor is satisfied if a taxpayer places the qualified facility or energy property in service by the end of a calendar year that is no more than five calendar years after the calendar year during which construction with respect to that qualified facility or energy property began.
• For any qualified facility or energy property to which the Continuity Safe Harbor does not apply, the Continuity Requirement is satisfied if the taxpayer demonstrates satisfaction of either the Continuous Construction Test or the Continuous Efforts Test, regardless of whether the Physical Work Test or the Five Percent Safe Harbor was used to establish the beginning of construction.

Fractal Energy Storage Consultants provides technical design, financial analysis, procurement, due diligence and OE services for energy storage and hybrid projects. Contact us today for more information https://www.energystorageconsultants.com.

Welcome to the energy storage team Maine. We’ve been waiting for you. On June 22, 2021, the state of Maine became the 9th state with an energy storage target. Governor Mills signed LD 528 into law, establishing a goal of 400 MW of energy storage by 2025, and 500 MW by 2030. Let’s update the team roster…

California

• Assembly Bill (A.B.) 2514 (2013) directed the state’s three investor-owned utilities (IOUs) to procure 1,325 MW of storage by 2020 with installations operational by 2024 (580 MW from SCE, 580 MW from PG&E, 165 MW from SDG&E).
• A.B. 2868 (2016) directed the same utilities to add an additional 500 MW of additional storage to be rate-based. No more than 25 percent of the capacity could be behind-the-meter (BTM).
• S.B. 801 (2018) required SCE to deploy 20 MW energy storage to meet energy reliability requirements in the greater Los Angeles area associated with the Aliso Canyon gas explosion.

Connecticut – Newly added May 20, 2021

• S.B. 952 (2021) set a target of 1 GW of energy storage to be achieved by 2030. Sets interim targets of 300 MW by 2024 and 650 MW by 2027.

Maine – NEW

• LD 528 (2021) set a 400 MW energy storage target to be achieved by 2025, and 500 MW by 2030.

Massachusetts

• House Bill (H.B.) 4857 (2018) established a 1,000 MWh energy storage deployment target to be achieved by 2026.

Nevada

• S.B. 204 (2017) directed the Public Utilities Commission of Nevada to establish biennial targets for NV Energy Inc.’s procurement of energy storage systems, starting at 100 MW by the end of 2020 and increasing to 1,000 MW by the end of 2030.

New Jersey

• A.B. 3723 (2018) set targets of 600 MW of energy storage capacity within three years and 2 GW of capacity by 2030.

New York

• S.B. 5190 and A.B. 6571 directed the New York Public Service Commission (PSC) to develop an Energy Storage Deployment Program, including 3,000 MW by 2030 with an interim goal of 1,500 MW by 2025.

Oregon

• H.B. 2193 (2016) required Portland General Electric (PGE) and PacifiCorp to each have a minimum of 5 MWh of energy storage in service by January 2020.

Virginia

• H.B. 1526 and S.B. 85 (2020) had Virginia Governor Ralph Northam signed the Virginia Clean Economy Act (VCEA) mandating a 3.1 GW energy target and a goal to achieve 100% renewable and clean energy by 2050.

Fractal Energy Storage Consultants provides technical design, financial analysis, procurement, due diligence and OE services for energy storage and hybrid projects. Contact us today for more information https://www.energystorageconsultants.com.

The state of Connecticut looks to become the 8^th state with an energy storage target. On May, 20, 2021 the Connecticut Senate passed Senate Bill (S.B.) 952, which will set a target of 1 GW of energy storage to be achieved by 2030. Energy storage targets are on the rise across the country. Let’s look at state energy storage targets to date:

California

• Assembly Bill (A.B.) 2514 (2013) directed the state’s three investor-owned utilities (IOUs) to procure 1,325 MW of storage by 2020 with installations operational by 2024 (580 MW from SCE, 580 MW from PG&E, 165 MW from SDG&E).
• A.B. 2868 (2016) directed the same utilities to add an additional 500 MW of additional storage to be rate-based. No more than 25 percent of the capacity could be behind-the-meter (BTM).
• S.B. 801 (2018) required SCE to deploy 20 MW energy storage to meet energy reliability requirements in the greater Los Angeles area associated with the Aliso Canyon gas explosion.

Connecticut – NEW

• S.B. 952 (2021) set a target of 1 GW of energy storage to be achieved by 2030. Sets interim targets of 300 MW by 2024 and 650 MW by 2027.

Massachusetts

• House Bill (H.B.) 4857 (2018) established a 1,000 MWh energy storage deployment target to be achieved by 2026.

Nevada

• S.B. 204 (2017) directed the Public Utilities Commission of Nevada to establish biennial targets for NV Energy Inc.’s procurement of energy storage systems, starting at 100 MW by the end of 2020 and increasing to 1,000 MW by the end of 2030.

New Jersey

• A.B. 3723 (2018) set targets of 600 MW of energy storage capacity within three years and 2 GW of capacity by 2030.

New York

• S.B. 5190 and A.B. 6571 directed the New York Public Service Commission (PSC) to develop an Energy Storage Deployment Program, including 3,000 MW by 2030 with an interim goal of 1,500 MW by 2025.

Oregon

• H.B. 2193 (2016) required Portland General Electric (PGE) and PacifiCorp to each have a minimum of 5 MWh of energy storage in service by January 2020.

Virginia

• H.B. 1526 and S.B. 85 (2020) had Virginia Governor Ralph Northam signed the Virginia Clean Economy Act (VCEA) mandating a 3.1 GW energy target and a goal to achieve 100% renewable and clean energy by 2050.

Fractal Energy Storage Consultants provides technical design, financial analysis, procurement, due diligence and OE services for energy storage and hybrid projects. Contact us today for more information https://www.energystorageconsultants.com.

Battery storage, and lithium-ion batteries in general, remain a highly magnified technology in terms of safety. This past week, Fractal had the pleasure of testifying at the Nash County Board of Commissioners in North Carolina on the topic of battery safety and cited significant improvements in BESS safety:

• Standards have continued to evolve (1973, UL9540 and UL9540A) that limit the impacts of abuse and the ability of fire propagation should there be a thermal runaway event.
• BESS enclosures have continued to compartmentalize, enabling less battery capacity to be exposed to an event
• Detection equipment has really evolved (CO and H2 sensors, both container and rack level)
• Suppression equipment and agents has also evolved (dry chem agents, aerosols, automatic venting tied to sensors)
• Redundancy in fuses and protections enabling isolation of affected equipment
• Deflagration panels enable mitigation of gas pressure build up
• Sensor ports enable external monitoring of internal gas levels
• Drip dry pipe (dry stand pipe) enabling flooding via fire department connection without the need to open an enclosure

Key observations and recommendations included:

• Not all systems are built alike. During procurement you must understand which of these options comes standard and which is an additional cost. It is best practice to present equipment bidders with specific technical requirements in the beginning.
• Always consult with your Authority Having Jurisdiction (AHJ) to understand local requirements related to safety and design standards.
• Insurance companies may require spacing and safety systems above and beyond general codes and standards.
• UL9540A testing and certification should be done by a domestic, reputable testing provider.
• Real-time monitoring (people) is a must and should be performed by an experienced provider. Unfortunately, some Energy Management Systems (EMS) suppliers offer “monitoring” but they are only monitoring the software, or they subcontract it out to another company. You need experienced eyes on your asset at all times, that have the ability to take action, and to perform anomaly detection. Most events could be circumvented with a good EMS, proper monitoring and data analysis.
• A safety plan and training outline should be given to first responders early during the design phase. Then formal training and materials should be provided during the commissioning process (2-step approach).
• You get what you pay for. A least-cost procurement methodology is not recommended when it comes to battery storage. Tier-1 stationary storage battery manufacturers with a domestic proof-of-concept should be mandatory.
• The experience and safety history of contractors should be well-vetted. This is what separates the U.S. safety track record compared to other countries.

Fractal Energy Storage Consultants is a consulting and OE firm that specializes in energy storage and hybrid systems. More information at https://www.energystorageconsultants.com

The Biden-Harris administration announced on January 21, 2021 that Energy Storage Association (ESA) Chief Executive Officer (CEO) Kelly Speakes-Backman has been appointed as Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy at the U.S. Department of Energy. Speakes-Backman and the ESA has played a integral role in shaping U.S. federal and market policy for energy storage. Congratulations!

ESA Chairman of the Board, John Hewa reported that the ESA Board voted unanimously to appoint ESA Vice President of Policy Jason Burwen to serve as interim ESA CEO, effective immediately.

Presently the ESA consists of 31 Leadership Circle companies, over 210 members and a Storage PAC to fund storage-related education in Washington, DC. Under Speakes-Backman’s watch, the ESA aggressively shaped policy across the ISO/RTO landscape by ensuring accountability and representation during FERC order implementation as it related to energy storage. The BEST Act, shaped by ESA, was passed at the end of last year, authorizing $1 billion for federal innovation investments in energy storage technology.

An increase of 20GWh of battery storage could reduce the amount of wasted wind power in Great Britain by 50%, according to new analysis from consultancy LCP.

Wind curtailments between Scotland and England are expected to cost consumers £1 billion (US$1.36 billion) per year by 2025, a figure that will continue to grow as the nation works towards the UK government’s 40MW by 2030 target. This figure highlights how “rapidly scaling up battery storage capacity is key” LCP said.

GB curtailed wind power on 75% of days in 2020, according to the consultancy, with over 3.6TWh of wind power being turned off in total, a figure mainly resulting from network constraints.

This analysis comes as LCP releases a new report into the investment opportunities of battery storage, which looked at a variety of different battery trading strategies and markets.

To read the full version of this story visit Current±. 

Energy-Storage.news’ publisher Solar Media will be hosting the Energy Storage Summit 2021 in an exciting new format on 23-24 February and again on 3-4 March. See the website for more details. 

Virginia’s clean energy policies introduced during 2020 included the US’ biggest state-level target for deployment of energy storage – and the state’s regulator has now introduced the rules intended to enable achievement of that target.

The Virginia Clean Economy Act (VCEA) passed with the approval of both sides of the state’s political divide in April last year, albeit after lengthy debate and pushback from utilities. The act puts the state on the path to 100% renewable and clean energy by 2050, brought Virginia into the New England and Mid-Atlantic US Regional Greenhouse Gas Initiative (RGGI) alongside 11 other states and introduced a 3.1GW target for energy storage deployment by 2035.

With Virginia now one of seven US states with a form of energy storage target in place, Virginia’s goal slightly outdoes the next largest, New York’s, which was set at 3GW by 2040. With that in mind, the Virginia State Corporation Commission – which has the authority to regulate numerous sectors including everything from utilities to insurance – issued its framework for the state’s two main utilities to adopt in pursuing that goal.

The regulations issued on 18 December 2020 went into force on the first day of this year. They concern the ways in which utilities Appalachian Power Company (APCo) and Dominion should petition the Corporation Commission for approval to “construct or acquire 400MW and 2,700MW, respectively of new utility-owned energy storage resources by 2035”.

The SCC received commentary and input from industry and non-industry stakeholders including the two utilities and groups as it formulated the regulations including the US national Energy Storage Association (ESA) and Solar Energy Industries Association (SEIA), developer GlidePath, Mitsubishi Power Americas and the Virginia Department of Mines, Minerals and Energy as well as environmental groups and others.

A project which will combine and then assess four different types of non-lithium technologies for long-durations of energy storage has been awarded a grant by the California Energy Commission (CEC).

A grant of “more than US$5 million” to help develop a workable long-duration storage system with 10 hours of storage has been accepted by Indian Energy, a grid-scale battery storage and microgrid development and systems integration company which is 100% owned and operated by Native Americans.

Indian Energy and construction partner Webcor will begin the creation of a handful of what have been dubbed ‘Hybrid Modular Storage Systems’ that include flow batteries, supercapacitors, fast-responding mechanical energy storage and zinc hybrid cathode battery storage. The project will be sited at a United States Marine Corps base, Camp Pendleton, where other microgrid and emerging energy resiliency solutions have previously been trialled.

The idea is that the different long-duration energy technologies will all be put into operation in modules that are optimised using a hybrid controller system, tested individually and then operated as one unit, helping to prove how they would come into action in the event of a grid power outage, for example.

In total, six modules of Hybrid Modular Storage Systems will be created; three using the above technologies and funded by the latest grant, while a further three modules using as-yet unspecified technology types will be funded by other government agencies and private industry partners, Indian Energy said. The overall project will find the ‘sweet spot’ – the best combination or selection of technologies – which will then be used for the building of a 400kW / 4MWh energy storage system.

When most people imagine the internet, the last thing that comes to mind is huge, on-the-ground facilities and thousands of miles of wires across the ocean floor, but even the digital age depends entirely on material things. Even the cloud, whose very name suggests an ethereal, floating datasphere free from servers, towers, and wires, is housed in data centers around the world.  And those data centers require energy–a LOT of energy. As more and more people get connected to the internet around the world and spend increasingly lengthy amounts of time online, that means that the internet’s energy and ecological footprints are massive and growing. Especially now, when so many people around the world are working online all day before retiring to a relaxing evening online before sleeping next to a phone that is still awake and connected to the internet to receive all those emails and notifications while you dream, the energy usage of the data warehouses that run the internet has become astronomical.

“Google estimates that each search emits roughly 0.2 grams of CO2 into the atmosphere, due to the energy it takes to power the cables, routers, and servers that make Google work,” Wired reported back in 2018. “Watching or uploading a video to YouTube is worse for the environment: 1 gram of carbon for every 10 minutes of viewing.” All of those clicks really add up: internet companies emit as much carbon dioxide as the airline industry–and that was before COVID-19 grounded most planes.

Related: India Oil Demand Falls For First Time In 20 Years Due To COVID

Google, a company that has long taken an interest in curbing climate change and supporting green energy tech, is now hard at work trying to reverse the public perception of its massive data centers’ insatiable hunger for energy. You may have noticed that Google proudly boasts on their homepage that they’ve been carbon neutral since 2007–a major accomplishment considering the amount of carbon emissions they need to offset. So far, they’ve been achieving that by purchasing renewable energy credits and investing in solar and wind energies.

But carbon neutral is a far cry from carbon-free. Currently, Google relies on diesel-powered backup generators to keep their data centers running, a decidedly emissions-intensive model. For as loud as Google has been about their green energy innovations and carbon neutrality, however, the company has been mum about exactly how often their diesel-powered generators run and how much carbon dioxide they are emitting. But climate news outlet Grist reports that, according to Google’s own estimates, “worldwide, there are more than 20 gigawatts of diesel generating capacity in service across the data center industry, which is the equivalent of nearly 63 million solar photovoltaic panels — enough to power more than 833,000 homes for a month.”