Pacific Gas and Electric (PG&E) is inviting businesses and consumers to apply for $240 million in renewable and energy storage incentives through its self-generation incentive program (SGIP) for 2017.

California regulators have directed PG&E and other investor-owned utilities to distribute $566,692,308 designated to the SGIP program through 2019.

The bulk of the money – 79 percent will be used for energy storage incentives. The remaining 21 percent will go to projects that use generation, such as wind turbines, fuel cells and combined heat and power.

PG&E says it will prioritize applications that pair energy storage with renewables.

The SGIP was developed in 2001 by the state legislature and the California Public Utilities Commission (CPUC) to boost renewables and support California’s climate and clean air goals.

This year marks the first time most of the money is designated for energy storage. More than $390 million will go to energy storage projects bigger than 10 kW in size. For smaller, residential-size storage projects, the state allocated $57 million.

Energy storage incentives will vary based on the size of the project and other factors.

For example, the incentive will be 50 cents/watt-hour for projects that do not take the federal investment tax credit (ITC). Residential systems that are 10 kW and smaller will receive the same incentive. For larger energy storage projects that take the ITC, the incentive begins at 36 cents/watt-hour. As funds deplete, the incentive levels go down in 10 cents/watt-hour increments. The money is being alloted in five stages, with the first step opening up May 1.

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Three decades ago when the Energy Storage Association tried to galvanize support it drew 35 people to the room. Last week, at its annual conference in Denver, there were near 2,000.

Sure, they came because battery prices are dropping and energy storage pairs nicely with oh-so-popular solar. But something bigger is afoot here, something the size of the power grid, as Matt Roberts, ESA executive director, conveyed in his opening remarks at the Colorado Convention Center.

Brace yourself for an “intimidating array of new disruptors” on the grid as more of the economy becomes electrified, said Roberts. Running the grid as we do now will get us into trouble. The solution he sees is 35 GW of energy storage by 2025.

Roberts begins his argument for ‘why energy storage’ with robots –– tiny disc-like robots rushing about on a factory floor. Automated and directed by bar codes, they are sorting 200,000 packages a day with little human help. They operate entirely on electricity with an energy charge pegged precisely to the volume and timing of incoming packages. So they never run short on power. Nor is any wasted.

Now scale the factory floor up to a city of the future, Denver for example, and you get a glimpse of why energy storage may be bigger than you think

Denver’s a good setting for this futuristic city because it has a microgrid today, one tied to its transit system, which links to its airport, which of course links to the rest of the world.

So instead of robots on the canvas, imagine electric vehicles and trains. Departing from the microgrid at Denver’s Pena Station, a train ferries cargo and passengers to the airport, where they fly to Los Angeles. Meanwhile, signals are sent ahead so that 177 self-driving electric vehicles – exactly the number needed — are waiting at the LA airport when the passengers arrive. An equally calibrated fleet of trucks pick up the cargo. The vehicles run on batteries pre-charged with enough energy to reach their pre-arranged destinations.

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When Eli Harris co-founded EcoFlow Tech, his goal was to produce a green and mobile energy storage system that could serve as a mobile power station for consumers needing more than a phone charge.

“I wanted to take an industrial amount of power and put it in the consumer market,” said the co-founder and CEO of the company. “There were no portable batteries sized for consumers—only products like the fixed Tesla wall and the small batteries for phones.”

His idea was to put in the hands of consumers a portable battery system that could be paired with solar and used to power lights, camping equipment, small heaters, laptops, power tools, small refrigerators and many other consumer products for customers in the US and abroad.

Working with experienced battery engineers and with $10 million in backing from two of China’s leading supply chain and manufacturing companies, Harris and his associates developed River, a “personal grid” or mobile power station with a 412-watt capacity, the ability to charge 11 devices simultaneously, and a real-time power display. Ecoflow released the product earlier this week on Indiegogo and as of Thursday, had attracted more than $157,000 from 267 backers—523 percent more funding than its goal of $30,000 on Indiegogo.

“We broke $100K in six hours; less than 0.1% of campaigns in history have broken $100K in the first 24 hours and less than 1% of campaigns break $100K total,” said Harris. “It’s an exciting validation of the market demand for River and the new concept of personal energy storage.”

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A distributed energy storage network of 8,000 batteries located at 7,000 telecom facilities in France has reduced utility demand by 10 to 15 MW during two demand response events. And now the company that managed the program wants to bring it to the U.S.

Actility, which provides IoT-based grid balancing and demand response programs, wants to launch its program in the US by partnering with utilities and energy providers in the same way it does in Europe. In addition, it is seeking to work with companies, like France’s Orange Telecom, that have distributed battery networks, said Cedric De Jonghe, the energy business manager for Actility.

Orange Telecom has batteries in the 10- to 20-kW size range at 7,000 locations in France, and was one of Actility’s first partners, “lending” the batteries–and getting paid for it–during critical peak periods on the grid system. Actility aggregated the batteries to respond to the high peak periods.

“In 2017 we have experienced two activations thus far during moments when the electricity grid in France was facing a critical situation,” said De Jonghe.

Actility in 2010 began offering demand response services and started searching for ways to implement non-traditional demand response programs, De Jonghe said.

“We were looking for flexibility in highly distributed sources” in industries such as the telecom industry, he said. It launched its green demand response program in 2016.

In its first green demand-response project, Actility partnered with Orange, in addition to RTE, the largest Transmission System Operator (TSO) in Europe, and Enedis, the largest French Distribution System Operator, to create a “clean demand response” program that responds to spikes in energy demand.

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Lithium-ion batteries are best positioned to meet the demand for energy storage over the next five to 10 years, but in the long run, other battery storage technologies will be needed for long-term energy storage and larger- scale applications.

That’s the word from Lux Research, which recently outlined up-and-coming battery storage technologies in a teleconference.

Right now, the need for storage is prompted by the growing use of renewable energy on the grid, said Chris Robinson, an analyst for Lux.

The amount of wind and solar on the grid has doubled, he said. Half the electricity added last year was wind or solar, driven largely by cost reductions. “Even just in the last 15 years, we have seen a big drop in the cost of solar modules. We don’t expect this trend to change,” he said.

However, the large amount of renewable energy being added to the grid is causing grid instability, Robinson said. With solar, there’s instability in the morning when there’s often too much solar coming online. And in the evening, the grid becomes unstable when the amount of solar decreases.

“Energy storage can play an important role,” he said.

The use of Lithium-ion batteries is growing quickly because prices have dropped due to increased economies of scale and larger production capacities. But Lithium-ion batteries can’t solve all problems, and are often not appropriate for large-scale and long-duration applications, he said.

For example, a large solar project in China capable of powering 2,000 homes would need massive-scale storage, in the gigawatt-hour range, a task not suitable for Lithium-ion batteries, Robinson said.

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Microgrid revenue rose 29 percent from 2015 to 2016, reaching $6.8 billion globally, according to a report issued today by Advanced Energy Economy (AEE).

Prepared by Navigant Research, AEE’s 2017 Market Report also found that Asia Pacific led the microgrid market followed by North America.

In the United States, the microgrid market continued a five-year gallop upward. Microgrid revenue has more than doubled since 2011, reaching $2.2 billion in 2016, a 16 percent year-over-year increase from 2015 to 2016.

Energy storage, a smaller market than microgrids, made a bigger leap year-over-year. Revenue climbed 45 percent, making energy storage a $1.1 billion global market. In the U.S., the energy storage market reached $427 million, a 54 percent rise.

Charging infrastructure for plug-in electric vehicles proved to be another small, but fast growing market, rising 69 percent over 2015 to reach $864 million — a sevenfold increase compared to 2011. In the U.S. the charging market saw a 576 percent increase over five-years, reaching $182 million.

Microgrids and energy storage were the leaders for annual growth in their market segment, what AEE describes as electric delivery and management. The segment, which also includes smart grid, electric vehicle charging, and transmission and distribution, constitutes a $19 billion U.S. market and $99 billion global market.

Overall, however, electric delivery and management saw only anemic growth of three percent in the U.S., dragged down year-over-year by a fall in transmission investment (six percent) and distribution (13 percent.) Still, transmission produces the most revenue in the segment, $6.8 billion, down from $7.2 billion the previous year.

Advanced metering infrastructure also reduced the sector’s growth, with its four-year downward slope of 18 percent since 2012.

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Massachusetts released a much-awaited energy storage solicitation on Thursday offering up to $10 million for new projects.

Issued by the Massachusetts Clean Energy Center (MassCEC) and the Department of Energy Resources (DOER), the solicitation makes available $100,000 to $1.25 million in matching funds for each chosen project.

The solicitation springs from a state report issued last year that found Massachusetts could save electricity ratepayers $800 million by incorporating 600 MW of energy storage projects. The state plans to set a specific energy storage goal, now the subject of a separate proceeding before the DOER.

The state is offering money for projects that showcase examples of future storage deployment, help to grow the state’s energy storage economy, and contribute to the state’s clean energy innovation leadership.

MassCEC anticipates making about 10-15 awards. Applicants must supply at least 50 percent of total project cost.

The state plans to allot about half of the money from the energy storage solicitation to projects that include utility partners. Both distribution scale and behind-the-meter projects will be considered, but must be grid connected.

The solicitation seeks innovative business models that showcase the commercial value of energy storage in light of the specific local energy challenges and opportunities in Massachusetts.

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Comments have poured into the Federal Energy Regulatory Commission (FERC) in recent weeks on proposed rules that industry players say would boost energy storage in wholesale markets and open new opportunity for microgrids.

Issued in November, the FERC Notice of Proposed Rulemaking (NOPR) attempts to smooth the way for energy storage to transact in six regional wholesale markets that span much of the U.S. The proposal (RM-16-23) also gives distributed energy aggregators wholesale market inroads.

As is customary, FERC has called on stakeholders to comment on the ideas before it puts them into effect. More than 100 companies, utilities, organizations and state agencies have weighed in.

The interest isn’t surprising. Ted Ko, policy director at Stem, says the proposal has monumental significance.

“It is probably the most significant thing at the federal level ever in terms of the rules changing for our business model,” said Ko. Stem aggregates energy storage so that it can participate in energy markets. The company’s mission is to build and operate a digitally connected energy storage network.

Under the FERC proposal, such aggregations could at last get the chance to compete against the power plants that now dominate the wholesale markets.

“It is finally going to make the different wholesale markets around the country adjust their rules to accommodate what energy storage is capable of doing,” Ko said in a recent interview.

Existing rules were designed long before the rise of energy storage and microgrids. Hence, they accommodate the sale of energy, capacity and ancillary services by large, centralized generators, but not small distributed energy resources (DERs) and energy storage in wholesale markets.

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A 200-kWh advanced energy storage facility at Texas Electric Cooperatives’ Master Distribution Center in Georgetown, Texas is designed to help its 75 member co-ops learn about the benefits of energy storage — and tap into a special pricing deal with a vendor.

“Our project here at our Georgetown facility will provide an up-close opportunity for our members to see this technology at work,” said Archie Lopez, director of strategic initiatives for Texas Electric Cooperatives (TEC). “They will be able to see the equipment and software in a real-world application and any lessons learned here will assist our members in finding the right application of this technology for their customers.”

TEC partnered with Advanced Microgrid Solutions — which installed and operates the system — to offer services to the co-ops at “preferred pricing,” according to AMS. Lopez said TEC doesn’t know how many co-ops will acquire storage systems, and that all the co-ops are very different from each other, with differing needs.

The storage system at the 160,000-square-foot Master Distribution Center will reduce TEC’s peak demand and provide support to the electric grid.

Energy storage helps meet the goals of the co-ops, said Lopez.

“Electric cooperatives exist to serve their members with safe, reliable electricity delivered in a cost-effective manner. Because battery storage has a variety of applications to help meet those goals, cooperatives are well-suited to explore the opportunities battery storage may have for their systems,” he said.

The Georgetown storage system will be financed and owned by AMS and AMS and TEC will share the savings generated by the storage system, said Manal Yamout, vice president of policy for AMS.

“The primary revenue stream to finance it will be demand charge savings on energy bills,” she explained. “We are sharing in the energy bill savings with the customer.”

She noted that the financing arrangements differ from host to host, and couldn’t reveal the details of the TEC contract. However, she provided details about another deal to illustrate the contracts AMS signs with clients.

The Inland Empire Utilities Agency in southern California has a contract with AMS for a 3-MW system plus 3.5 MW of solar, 1 MW of wind and 2.8 MW of biofuel cell generation. This system is expected to reduce peak energy demand up to 15 percent, according to materials provided by AMS.

In the Inland Empire case, expected savings are $68/kW/year.  The utility and AMS split the savings 50 -50 under the agreement.

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When a very big international company buys a very small company in an emerging area like energy storage and microgrids, you’ve got to ask, ‘What’s up?’

This week Italian energy giant Enel swooped in to take 100 percent ownership of Demand Energy, an entrepreneurial U.S. energy storage company based in Washington state.

Pay attention U.S. utilities, says Rob Thornton, president & CEO of the International District Energy Association, which includes the Microgrid Resources Coalition. It appears European utilities get it.

The acquisition, Thornton said, “underscores how our European utility counterparts are ahead of the curve on utility transformation from central station generation to more distributed, cleaner generation closer to the customer.”

These European companies are “assigning greater value to effective tools like Demand Energy for decarbonizing and delivering enhanced customer control and resiliency,” he said.

An $80 billion energy company operating in 30 countries, Enel is striving to be carbon neutral by 2050.

“In my opinion, US utilities that embrace this paradigm shift towards cleaner, more efficient decentralized solutions will likely prosper in the years ahead while those clinging to status quo, rate base monopolistic models may find themselves gone the way of Wang or Digital Equipment Corp.,” Thornton warned.

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