A Model 3 ramp-up that resulted in a quarterly profit was a sign that Tesla’s automobile business finally may be financially stable. If so, it is a good time for Tesla to turn its attention to the energy business — encompassing solar and energy storage — that has for long taken a backseat to getting the electric vehicle assembly line in order.

Elon Musk has been broadcasting this message since Tesla reported a surprise profit in the third quarter. On the call with Wall Street analysts after the earnings in November, the Tesla CEO said, “For almost two years we had to divert a tremendous amount of resources.”

Now Musk claims Tesla is poised for “the really crazy growth for as far into the future as I can imagine. … It would be difficult to overstate the degree to which Tesla Energy is going to be a major part of Tesla’s activity in the future,” he said.

Never one to shy away from bold claims or ambitions, Musk said Tesla Energy could grow to roughly the same size as Tesla’s automotive business, and solar would grow, on a percentage basis, the fastest of any, with storage second.

“I think both over time will grow faster than automotive,” Musk said. “They’re starting from a smaller base.” He added, “I think, especially, if you look at sort of — if you look at, like, year-over-year growth, it will be absolutely incredible … over the course of, say, a year, gigantic increase.”

In a recent internal email to Tesla employees, Musk outlined two critical year-end priorities: delivering all cars to their customers and boosting the rate of solar deployments by a significant degree.

Skeptics point to a variety of other reasons why Musk may be in solar- and energy-business salesman mode, beyond the Model 3 inflection point. The solar business has in recent years been associated with more negative than positive news. Tesla faces a lawsuit from shareholders over its controversial 2016 purchase of SolarCity; the solar roof that Musk has been touting for years is off to a slow start; its solar panel plant in Buffalo, New York, has been dogged by issues; and its solar business has faced unfavorable customer-service reviews.

Century-old electric technology company GE kicked off 2019 with yet another reorg.

The workhorse Power division was split up, to start. Though still a top supplier of the world’s natural-gas turbines, the division had turned into a money-loser as renewables adoption surged. Meanwhile, an expanded Renewable Energy division materialized with some 40,000 employees and billions of dollars in revenue. And GE’s up-and-coming energy storage business took up residence in that new division under the Renewable Energy Hybrids brand.

Previously, energy storage had nestled under Power, and before that it lived in the ill-fated Current unit, catering to commercial energy services. Years earlier GE tried and then abandoned a sodium-nickel-chloride battery manufacturing play called Durathon.

As the first year under the new arrangement draws to a close, GTM sat down with GE Renewable Energy Hybrid Solutions CEO Prakash Chandra to hear how the industrial giant is leveraging energy storage to grapple with a changing energy market.

“There’s never been a lack of commitment to storage,” Chandra said. “I think we’ve tried to muddle through what is the best way to play in the space so we can add the most value in the entire value chain of storage.”

The Durathon effort, which looks quixotic from today’s perspective, developed as an effort to turn GE locomotives into diesel electric hybrids. Since then, Chandra said, the company has come to appreciate the importance of being battery-agnostic and positioning itself to adapt as the battery supply chain evolves.

Now GE has taken up the mantle of system integrator, using its electrical equipment know-how to vet all the components in the containerized Reservoir product and backstop its system performance.

“This is where you provide the performance guarantees; this is where you wrap everything up,” he said. “This is what customers will come to you for and stay with you for over 20 years. You need companies that can stick around for another 20 years to be able to provide these wraps.”

GE’s longevity speaks for itself, even if its energy storage business has shifted every few years. But the company also hopes to differentiate itself based on its experience in developing power electronics and its historical leadership in gas turbines.

Remember hows gasmobiles were a luxury item until the Ford Model T came along? No? Well anyways, electric vehicles are closing in on a similar tipping point. The sticking point is the cost of an EV battery, which remains stubbornly high compared to, say, the cost of a gas tank. That’s about to change, and the US Energy Department has the lowdown on new energy storage technology that will help vault EVs into the affordable mainstream.

Energy Storage & Electric Vehicles
To be clear, comparing the cost of energy storage technology with the cost of an empty gas tank does not provide a full picture of the true cost of owning an electric vehicle.

Back in 2013, Edmunds took a look at the Chevy Volt and found that the true cost of ownership over five years — including fuel and maintenance as well as the price of the vehicle — shaved thousands off the retail price compared to a gasmobile.

That’s partly because EV fuel is less expensive, especially if you play your EV charging card right.

The other part of the cost-cutting equation is maintenance and repair, because electric drive requires less of that compared to gasmobiles (the Volt has a gas tank but runs on electric drive).

Depending on the manufacturer, adding resale value to the equation can also bring the five-year cost of EV ownership down to parity — or better — with a gasmobile. One recent study compared a Tesla model 3 to a Toyota Camry and guess who came out on top?

Three EV Energy Storage Technologies To Watch…
With the true cost of ownership in mind, let’s take a look at the four emerging battery technologies that the Energy Department is eyeballing.

Gerbrand Ceder, a battery researcher at Lawrence Berkeley National Laboratory, provided a rundown on them last week.

For starters, he favors replacing the cobalt and nickel currently used in lithium-ion batteries with iron or manganese.

Aside from the potential for reducing costs, eliminating cobalt would free the EV supply chain from human rights issues associated with cobalt mining in some parts of the world.

Ceder foresees that technology hitting the shelves in about five or six years.

Solid-state is another type of technology that could launch into the market in about five years. Rather than using a flammable liquid electrolyte, these batteries are based on a solid, inflammable material.

That safety advantage would help lower costs, by eliminating the need to engineer extra systems into the battery. Cutting out the extra systems will also help improve battery range, by reducing weight and leaving more space for the energy storage components (to be clear, modern lithium-ion batteries have proven to be safe when properly engineered).

Annual deployments of energy storage resources in the United States have increased nearly tenfold since 2014, from only 62 MW in 2014 to nearly 500 MW expected for 2019. The big question is whether the nascent energy storage industry will be able to continue its current trajectory of rapid growth. All signs indicate that it will do so, and utility-scale “in front of the meter” energy storage procurements are a key reason why.

Here’s what you need to know about energy storage procurement trends.

The scale of energy storage procurements has increased tremendously as utilities have acquired a better understanding of how the technology can be used and the price of the technology has dropped. Energy storage helps to make renewable generation more valuable by storing the energy until it is required, and it makes the grid more resilient.

State and federal policies continue to point toward further opportunities for large energy storage projects. At the federal level, FERC’s Order No. 841 will expand market opportunities for energy storage resources beyond regulation and ancillary service products. At the state level, more than 20 states and the District of Columbia have taken actions to promote energy storage growth, ranging from utility procurement targets to storage development incentives.

Utilities typically procure new resources through a two-stage request for proposal or request for offer (RFO) process. In the first stage of an RFO, a utility will solicit bids that meet certain defined parameters published by the utility. In the second stage, the utility will select the most competitive bids for its “short list.” Bidders on the short list are typically invited to negotiate definitive documentation and, assuming the parties can come to an agreement on price and terms, a bidder will be awarded a contract for a new project.

Utilities will typically contract for energy storage resources through power purchase agreements; engineering, procurement, and construction agreements; or build-own-transfer agreements. While the procurement process for energy storage resources is the same as the process for conventional and renewable generation resources, the delivery timeframes can be shorter and the auctions more heavily subscribed given the shorter construction timeframe and simpler permitting requirements for battery energy storage projects compared to conventional and renewable generation.

Utilities and developers will encounter many of the same issues in an energy storage solicitation that they would in any other competitive solicitation for generation resources, including the rules and drivers for the competitive process, the utility’s potential cost comparisons to alternative resources, and the policy and reliability considerations of state regulators. In addition, however, energy storage resources have unique characteristics that will impact the structure of a solicitation.

Widely deployed energy storage is still a relatively new entrant onto the grid, and the rules with respect to energy storage remain in flux. As a result, long-term power purchase agreements may include provisions that address change-in-law risks.

Annual deployments of energy storage resources in the United States have increased nearly tenfold since 2014, from only 62 MW in 2014 to nearly 500 MW expected for 2019. The big question is whether the nascent energy storage industry will be able to continue its current trajectory of rapid growth. All signs indicate that it will do so, and utility-scale “in front of the meter” energy storage procurements are a key reason why.

Here’s what you need to know about energy storage procurement trends.

• The scale of energy storage procurements has increased tremendously as utilities have acquired a better understanding of how the technology can be used and the price of the technology has dropped. Energy storage helps to make renewable generation more valuable by storing the energy until it is required, and it makes the grid more resilient.
• State and federal policies continue to point toward further opportunities for large energy storage projects. At the federal level, FERC’s Order No. 841 will expand market opportunities for energy storage resources beyond regulation and ancillary service products. At the state level, more than 20 states and the District of Columbia have taken actions to promote energy storage growth, ranging from utility procurement targets to storage development incentives.
• Utilities typically procure new resources through a two-stage request for proposal or request for offer (RFO) process. In the first stage of an RFO, a utility will solicit bids that meet certain defined parameters published by the utility. In the second stage, the utility will select the most competitive bids for its “short list.” Bidders on the short list are typically invited to negotiate definitive documentation and, assuming the parties can come to an agreement on price and terms, a bidder will be awarded a contract for a new project.
• Utilities will typically contract for energy storage resources through power purchase agreements; engineering, procurement, and construction agreements; or build-own-transfer agreements. While the procurement process for energy storage resources is the same as the process for conventional and renewable generation resources, the delivery timeframes can be shorter and the auctions more heavily subscribed given the shorter construction timeframe and simpler permitting requirements for battery energy storage projects compared to conventional and renewable generation.
• Utilities and developers will encounter many of the same issues in an energy storage solicitation that they would in any other competitive solicitation for generation resources, including the rules and drivers for the competitive process, the utility’s potential cost comparisons to alternative resources, and the policy and reliability considerations of state regulators. In addition, however, energy storage resources have unique characteristics that will impact the structure of a solicitation.
• Widely deployed energy storage is still a relatively new entrant onto the grid, and the rules with respect to energy storage remain in flux. As a result, long-term power purchase agreements may include provisions that address change-in-law risks.

There’s a lot of energy storage work to keep up with in California. There are regulatory shifts allowing net metered DC coupled solar+storage and adjusting how large energy storage can stack revenue. As well of course, the California home mandate pushing grid connected and manageable energy storage. Throw in an aggressive push away from fossils as well fires, and we have thousands of small scale solar+storage project requests, a home energy storage battery boom, utilities seeking large installs of large volumes of storage real fast, and record priced deals. And at the end of this, the state does see solar+storage domination.

On Wednesday, a new proposal was submitted by the California Public Utility Commission (CPUC) to shift 63% of 2020 to 2024 ratepayer collections for energy storage within the Self Generation Incentive Program (SGIP), towards an Equity Resiliency program. The purpose of the program is to support energy storage deployment in locations with critical resilience needs and specified “High Fire Threat Districts” (HFTD) that will bear the brunt of Power Safety Power Shutoff (PSPS) events. The program is legislated to begin accepting applications no later than April 1, 2020.

A full set of high resolution maps, which the below image is cut from, can be found on this California Public Utility Commission (CPUC) website. Including among the links is an address searchable map.

The Equity Resiliency Decision defines (located on sections 6.2/6.2.2/6.2.3 starting on page 35 of the document) residential customers with critical resiliency needs as:

customers residing in a Tier 3 or Tier 2 HFTD and one of the following: (1) eligible for the equity budget; (2) eligible for the medical baseline program, as defined in D.86087, 80 CPUC 182: or, (3) a customer that has notified their utility of serious illness or condition that could become life-threatening if electricity is disconnected, as defined in D.12-03-054.18

The Equity Resiliency Decision defines non-residential customers with critical resiliency needs as those located in a Tier 3 or Tier 2 HFTD that that provide critical facilities to a community located in a Tier 3 or Tier 2 HFTD and eligible for the equity budget.

Some of these critical facilities were defined as meters directly serving grocery stores, corner stores, markets and supermarkets, if the customer has average annual gross receipts of $15 million or less, over the last three tax years, as well independent living centers, food banks, and, households that rely on electric-pump wells for their water supply.

At the dual conference, practice-oriented approaches take centre stage. During the session “Linking Climate Protection and Business: The CEO’s View,“ Dr. Christian Fischer, managing director at Robert Bosch GmbH, will be talking about the company’s efforts to reach worldwide carbon neutrality by 2020. Matthias W. Send from the energy provider ENTEGA AG will likewise share his insights. In another keynote, Dr. Volker Hille, Head of Corporate Technology at Salzgitter AG, will explain how the company aims to reduce its CO2 emissions by employing hydrogen and wind power. In the “International Markets” session, Rory McCarthy from Wood Mackenzie, an international management consultancy, will present the results of a modelling of the Central European energy markets’ flexibility needs.

“The upcoming conference bridges the gap between the discourse on climate protection and corporate management, a highly fascinating and relevant thematic field, particularly for managers,” says Dr. Andreas Moerke, who took over as head of Energy Storage Europe this year. “Participants can also expect a comprehensive scientific programme within the framework of IRES in Düsseldorf, and representatives of storage manufacturers will furthermore meet at the German Energy Storage Association’s workshops.”

Professor Peter Droege, EUROSOLAR President and Chairman of the IRES Organising Committee, states: “We are delighted that in 2020 almost 150 selected top-level German as well as international experts from almost 20 countries will present their latest findings and innovations in over 22 different thematic sessions. The ESE and the IRES have a great social and economic impact: Without a rapid switch to renewable energies, climate stabilisation is inconceivable. Investors and companies around the world are on the right track for purely economic reasons. Storage systems are the prerequisite for the regenerative world.”

All storage solutions under one roof

The conference sessions will again cover a wide range of electrical and thermal storage technologies as well as numerous effective storage and decarbonisation projects. Thermal storage, sector coupling, the topic hydrogen and successful concepts as well as business models incorporating storage use will also be main points.

In cooperation with IRES, the Energy Agency NRW is also organising a lecture series in German on the topic of “Structural change – What will the energy regions of the future look like and what role will storage play?”

Commercial energy storage ‘pioneer’ Stem Inc and NEC have announced a master supply agreement and wide-ranging partnership that will see the latter’s equipment and solutions used in solar-plus-storage projects in Stem’s pipeline.

NEC’s Roger Lin and Stem Alan Russo talked to Andy Colthorpe about the dynamics of that deal and why the two entities: one in the behind-the-meter, storage-as-a-service industry delivering projects on a business model of sharing revenues and electricity costs avoided with the customer and the other, known for its work on larger projects connected to the utility side of the meter, came together to pool their capabilities and ambitions.

Energy-Storage.news: NEC has done solar-plus-storage projects already and so has Stem Inc, but both companies are perhaps better known for their standalone energy storage projects. Presumably you have both observed a broadening of the business case for adding energy storage to solar that makes this new partnership a timely one?

Alan Russo, Stem: We’ve seen increasingly that the market was moving towards solar that had storage. That really comes from behind-the-meter customer-sited stuff and the front-of-the-meter, sort of, ‘virtual net-metered’ projects which are owned by independent power producers (IPPs). We recognised that developers were struggling with that question: ‘what do I do with a battery?’

That is the area that the industry is trying to figure out as fast as possible because of regulatory incentive structures that are incentivising the deployment of storage for grid-scale applications.

Roger Lin, NEC: Solar-and-storage is obviously a big story nowadays. The fundamentals have always been the same: that the sun comes up and goes down, you have clouds, you can’t always consume that electricity being generated at exactly those times. Putting storage with solar just makes sense, it’s very simple.

What’s changed is the policy and business models that have been driving that. There have been localised pockets of advances in solar-storage, so there’s the advent of the solar-storage PPA that has been out there for at least a year and a half now, with maybe half a dozen different variants on that, all valuing the addition of storage to solar, not just for the sake of storage but for the sake of control, for the sake of dispatchability, to deliver the power when you need the power. Those things didn’t exist before.

Century-old electric technology company GE kicked off 2019 with yet another reorg.

The workhorse Power division was split up, to start. Though still a top supplier of the world’s natural-gas turbines, the division had turned into a money-loser as renewables adoption surged. Meanwhile, an expanded Renewable Energy division materialized with some 40,000 employees and billions of dollars in revenue. And GE’s up-and-coming energy storage business took up residence in that new division under the Renewable Energy Hybrids brand.

Previously, energy storage had nestled under Power, and before that it lived in the ill-fated Current unit, catering to commercial energy services. Years earlier GE tried and then abandoned a sodium-nickel-chloride battery manufacturing play called Durathon.

As the first year under the new arrangement draws to a close, GTM sat down with GE Renewable Energy Hybrid Solutions CEO Prakash Chandra to hear how the industrial giant is leveraging energy storage to grapple with a changing energy market.

“There’s never been a lack of commitment to storage,” Chandra said. “I think we’ve tried to muddle through what is the best way to play in the space so we can add the most value in the entire value chain of storage.”

The Durathon effort, which looks quixotic from today’s perspective, developed as an effort to turn GE locomotives into diesel electric hybrids. Since then, Chandra said, the company has come to appreciate the importance of being battery-agnostic and positioning itself to adapt as the battery supply chain evolves.

Now GE has taken up the mantle of system integrator, using its electrical equipment know-how to vet all the components in the containerized Reservoir product and backstop its system performance.

“This is where you provide the performance guarantees; this is where you wrap everything up,” he said. “This is what customers will come to you for and stay with you for over 20 years. You need companies that can stick around for another 20 years to be able to provide these wraps.”

European authorities have waved through a multi-billion-euro scheme to turn the continent into a global hub for green battery making, amid hints that barriers could be set for foreign imports.

This week, the European Commission gave the nod to a €3.2 billion (US$3.5 billion) plan by major EU states to create a “pan-European” battery ecosystem via a coordinated research push alongside industry operators.

The so-called IPCEI – Important Project of Common European Interest, a status conferred to research schemes seen as key in the EU – will see Belgium, Finland, France, Germany, Italy, Poland and Sweden support their respective national battery industries with the Commission’s blessing.

The €3.2 billion will bankroll projects by 17 sector players across the seven countries, from BASF to Eneris, BMW, Enel X and Fortum. At a respective €1.25 billion (US$1.38 billion) and €960 million (US$1.06 billion), German and French battery schemes will reap a sizeable slice of the funding.

The multi-country project will be structured along the four core steps of the battery chain, from the more efficient sourcing of ores to the development of cells and modules, the roll-out of software- and algorithm-powered battery systems and sounder recycling and dismantling practices.

The €3.2 billion pot will focus on lithium-ion batteries, both liquid electrolytes and solid-state systems, and seek to unlock a further €5 billion in private money. If backed projects exceed their revenue expectations, they will return the extra gains to their respective member states.

The IPCEI – to be overseen by a body integrated by all seven states – stems from months of talks between the Economy ministers of Germany (Peter Altmaier), France (Bruno Le Maire) and others. On social media this week, the Commission’s Maroš Šefčovič thanked all for their “coordination”.

In separate statements to the media, also this week, Šefčovič’s hinted that EU authorities may not stop at fostering an EU battery landscape; they could also act to set up hurdles to battery imports from outside the EU bloc.