The Arizona power grid has a unique set of challenges, which it turns out solar and energy storage are particularly well suited to address.

Arizona Public Service, the state’s largest investor-owned utility, announced Thursday morning that it will add 850 megawatts of battery storage and at least 100 megawatts of solar generation by 2025. That amounts to nearly 1 gigawatt of new clean energy technology, to be obtained through a combination of newly completed and upcoming procurements.

The plan includes outfitting existing utility-owned solar projects with 200 megawatts of batteries, deploying 500 megawatts of new battery resources, and contracting for 150 megawatts of third-party-owned storage — the last of which beat out new-build natural gas peakers in an request for proposals that just concluded.

This work builds on the dispatchable solar project APS is building with First Solar, which is scheduled for completion in 2021. Factoring in the 50-megawatt battery and 65-megawatt solar power plant included in that system, that brings APS’ recently announced contracts for new clean energy resources to more than 1 gigawatt.

“We were really excited last year when we were able to do a peaking solar plant with First Solar,” said Brad Albert, vice president of resource management for APS, in an interview. “So we were hopeful and had our fingers crossed that the pricing would continue to decline and the performance would improve — and that’s bearing out.”

“We feel very strongly that coupling up solar and battery storage technology, especially as it continues to decline in price and become more attractive as a resource for our customers, is a very powerful combination,” he said. “It helps to meet our critical customer needs with clean energy resources. That’s why we feel so good about being able to forge a path in this direction today.”

Due to their decreasing costs, lithium-ion batteries now dominate a range of applications including electric vehicles, computers and consumer electronics.

You might only think about energy storage when your laptop or cellphone are running out of juice, but utilities can plug bigger versions into the electric grid. And thanks to rapidly declining lithium-ion battery prices, using energy storage to stretch electricity generation capacity.

Based on our research on energy storage costs and performance in North Carolina, and our analysis of the potential role energy storage could play within the coming years, we believe that utilities should prepare for the advent of cheap grid-scale batteries and develop flexible, long-term plans that will save consumers money.

Peak demand is pricey
The amount of electricity consumers use varies according to the time of day and between weekdays and weekends, as well as seasonally and annually as everyone goes about their business.

Those variations can be huge.

For example, the times when consumers use the most electricity in many regions is nearly double the average amount of power they typically consume. Utilities often meet peak demand by building power plants that run on natural gas, due to their lower construction costs and ability to operate when they are needed.

However, it’s expensive and inefficient to build these power plants just to meet demand in those peak hours. It’s like purchasing a large van that you will only use for the three days a year when your brother and his three kids visit.

Globally, there is a rise in the uptake of electric vehicles (EVs) and battery storage systems, especially in regions where there is a lack of constant, reliable energy supply or more economically feasible solutions, Electric Vehicle Industry Association representative Carel Snyman said during a panel discussion on the second day of the Africa Energy Indaba, on Wednesday.

Spurred by the adoption of cleaner, but intermittent energy sources, declining prices and regulatory subsidies, battery energy storage systems are being increasingly used across the electric system.

The recent growth of the battery storage industry globally has prompted considerable investment, particularly in lithium-ion batteries, used in EVs, as well as in countries’ electricity grids.

The rapid development of the global EV market has seen a simultaneous rise in battery manufacturing capacity to support demand.

Sub-Saharan Africa, however, needs to revamp and modernise its transport systems to support a growing population, said Snyman.

Sector development agency GreenCape sustainable transport analyst Khanyiselo Kumalo pointed out that EV sales now contributed to about 5% of overall global vehicle sales, compared with 1% ten years ago.

While global uptake is happening at an exponential rate, the update of EVs in Africa is lagging behind, she added.

She said the biggest opportunity for South Africa, while policymakers catch up to incentivising EVs, is manufacturing in the value chain of EVs, such as batteries and charging infrastructure.

In the depths of the deep freeze late last month, nearly every power plant in the Eastern and Central U.S. that could run was running.

Energy analysts saw a useful experiment in that week of extreme cold: What would have happened, they asked, if the power grid had relied exclusively on renewable energy—just how much battery power would have been required to keep the lights on?

Using energy production and power demand data, they showed how a 100 percent renewable energy grid, powered half by wind and half by solar, would have had significant stretches without enough wind or sun to fully power the system, meaning a large volume of energy storage would have been necessary to meet the high demand.

“You would need a lot more batteries in a lot more places,” said Wade Schauer, a research director for Wood Mackenzie Power & Renewables, who co-wrote the report.

How much is “a lot”?

Schauer’s analysis shows storage would need to go from about 11 gigawatts today to 277.9 gigawatts in the grid regions that include New England, New York, the Mid-Atlantic, the Midwest and parts of the South. That’s roughly double Wood Mackenzie’s current forecast for energy storage nationwide in 2040.

Energy storage is a key piece of the power puzzle as cities, states and supporters of the Green New Deal talk about a transition to 100 percent carbon-free energy sources within a few decades. The country would need to transform its grid in a way that could meet demand on the hottest and coldest days, a task that would involve a huge build-out of wind, solar and energy storage, plus interstate power lines.

The actual evolution of the electricity system is expected to happen in fits and starts, with fossil fuels gradually being retired and the pace of wind, solar and storage development tied to changing economic and technological factors. The Wood Mackenzie co-authors view their findings, part of a larger analysis of utility performance during the polar vortex event, as a way to show, in broad strokes, the ramifications of different options.

Thanks to continuously declining costs, a hybrid renewable electricity generation system that combines wind, solar, and storage could become competitive with the cheapest fossil fuel electricity in the United States—combined-cycle natural gas generation, an MIT professor suggests.

John Deutch, an Institute Professor at MIT, has recently presented a study, ‘Demonstrating Near Carbon Free Electricity Generation from Renewables and Storage’, at an energy seminar at Stanford University.

According to Deutch, the best way to see if the hybrid electric systems (HES) of wind, solar, and storage could compete in costs with natural gas-fired electricity generation is to organize a large-scale demonstration to show if those HES could meet electricity demand of a relatively large service area “rather than rely on government sponsored large scale demonstration projects or regulatory mandates compelling deployment of storage.”

“Uncharacteristically I have been an optimist—I am an optimist—about this, and I believe we are very close to having an economically competitive triad—wind, solar and storage—to produce electricity at a cost as low as the cheapest fossil alternative, which is natural gas combined cycle,” Deutch said during his presentation. “We are close to having this be a commercial operation.”

The large-scale demonstration would show the private sector if those hybrid systems could be competitive, he said, noting that the base analysis was made for the ERCOT service area in Texas, and additional studies were made for Iowa and Massachusetts.

According to Deutch, Puerto Rico and Hawaii could be suitable places for energy developers to show HES viability. The MIT scientist proposes developers to bid for 20-year contracts with a utility and all the government has to do is to ensure a ‘regulatory wrap’ to allow the project.

A new poll has identified energy storage as the most promising technology for institutional investors keen on renewable assets, amid plans by many to ramp up allocations.

Nearly two-thirds of all asset owners and managers quizzed by the firm chose batteries and other energy storage technologies as the renewables subsector with the greatest potential.

The appeal of storage rests on the “growing role” it will play in the European energy mix as renewables become more prominent, Aquila said as it released the findings. “Cost reductions, technology development and improving regulations will continue to strengthen the investment case for storage moving forward,” the firm added.

The respondents – a 103-strong base featuring pension funds – dedicated on average 3.6% of their portfolio in 2018 to renewable infrastructure, a rise from the 2% recorded in 2016. For 12% of these investors, the exposure last year reached into the 10-15% region.

According to the survey, the institutional appetite for renewables looks set to build all the way to 2021, with 49% poised to ramp up exposure by that year. Despite their optimism around storage, the polled financiers planned their largest allocation increases in offshore wind, solar thermal and onshore wind.

Regardless of their investment target of choice, institutional players were drawn to renewables as a whole by long-term cash flows (the top reason for 55% of respondents). Geographic diversification, low correlation to other asset classes, inflation hedging and ethical considerations were, in descending order, the other key drivers.

Energy storage aside, electricity transmission was seen as the second most promising investment area, with interconnector projects close behind. Allocations in these two areas could be key for a solar industry faced with grid challenges in certain markets and question marks over interconnection projects, with the UK particularly exposed if no-deal Brexit comes to pass.

Energy markets across the world are changing rapidly with the increase of renewables and the change to a more distributed energy network. Energy storage is key. The capabilities of large-scale batteries have expanded, allowing users to capture more value and create a powerful tool to manage energy needs. At the same time, the price of energy storage dropped more than 50% from 2012 to 2017. And that trend is likely to continue. Energy storage systems are also being incentivized by many government programs to encourage utilization, further decreasing the cost of energy storage.

For manufacturers, energy storage systems can provide two major benefits: cost effective support to critical equipment onsite and mitigating utility risk.

Most advanced manufacturing facilities have equipment that is at risk of shutdown or damage due to poor quality incoming power or rapid voltage fluctuations. Other businesses have inventory at risk in the event of loss of climate control. Adverse impacts to businesses come in many forms: equipment repair or replacement cost, lost revenue, lost inventory and loss of customer confidence. Business interruption insurance coverage is often not effective in mitigating losses caused by external power supply issues.

By installing an energy storage system, manufacturers can ensure the best power, provide backup and monitor systems, potentially replacing various software or equipment on site. New battery systems can now replace a UPS (uninterruptible power supply) while also providing other services simultaneously. Control systems can ensure higher power quality and clean the electricity coming in from the grid, ensuring that sensitive equipment do not see voltage fluctuations. The storage system in the event of a grid outage also provides power for a safe shutdown procedure or power until backup gensets can be spun up. Storage systems can support and provide VAR (volt-ampere reactive) support for inductive or high demand loads, matching the needs of the business to ensure the business is run for optimal output instead of electricity costs. Previously, high-performance energy storage systems were cost prohibitive, but they are now cost effective.

Energy is one of the most significant costs in any manufacturing facility; energy storage solutions can help plan for and manage current and upcoming risk of electricity cost increases. In many places, the level of utility service has been decreasing due to aging infrastructure while the cost of electricity has been increasing rapidly.

The U.S. energy storage market will reach $4.5 billion by 2023, according to Wood Mackenzie Power and Renewables. Behind-the-meter energy storage will account for more than half of the annual market in dollar terms by 2021.

To date, growth has been largely driven by storage initiatives and demonstration projects in state policy, rate-setting and incentives. Changes in federal rules for energy storage markets requiring equal treatment of energy storage with other power sources promise to drive even more adoption.

On February 27, MIT Enterprise Forum (MITEF) Cambridge’s CleanTech Industry Group will host Energy Storage: New Business Models Fuel Rapid Growth. This interactive session will highlight what startups need to know to participate in the rapidly growing clean power system. Set for the Bartos Theater at the MIT Weisner Building, Northbridge Energy Partners Principal and Forbes columnist Peter Kelly-Detwiler will moderate the discussion featuring experts including:

• Dan Berwick, general manager, Energy Storage, Borrego Solar
• Alicia Barton, president and CEO, New York State Energy Research and Development Authority (NYSERDA)
• Kelly Speakes-Backman, CEO, Energy Storage Association
• Charlotte Ancel, director, Strategic Development, Eversource
• Joe Crespo, CEO, Genbright

Panelists will explore what startups need to know to participate:

• What government incentives and policies (local, state, federal) are in place to encourage greater adoption of energy storage in the commercial, industrial and residential markets?
• What storage technologies and services produce revenue streams now? What markets will become valuable in the next five years?
• How have investors and utilities influenced the development of new business models for both established companies and startups? Which of these models are most likely to be successful?

The event, which will be from 5:30 p.m. to 8:30 p.m., is sponsored by IE-Club Boston, CHEN PR and Massachusetts Clean Energy Center. For more information and to register for the event, visit the Web site. The session will be live streamed, and attendees can buy a ticket for the live streamed option to watch it online. 

UK battery storage firm Zenobe Energy has secured a £25 million (US$32.27 million) investment from Japanese power giants Jera and Tokyo Electric Power Company (Tepco).

The equity injection is not only one of the largest direct investments in a UK energy storage company, but also constitutes yet another move from Japan’s energy utilities into the UK power scene.

Zenobe, originally started up as Battery Energy Storage Solutions Ltd and then rebranded last year, said the equity injection would allow the firm to accelerate its energy storage rollout while also allowing it to expand into new markets.

The £25 million comes atop £45.5 million of equity already invested into Zenobe over the course of the last 18 months and a further £30 million of senior debt facilities provided by Santander and Generation IM.

That finance has powered Zenobe towards the forefront of energy storage development in the UK. The firm, which has around 73MW of operational storage assets, claimed an industry first last summer when it delivered more than 50MW of reserve power using National Grid’s new Ancillary Services Dispatch Platform.

Strategic investments, service offerings
It is now developing various new service offerings, which the company said would counter controversial charging reforms proposed by Ofgem, and is also providing flexible power solutions for electric bus depots, with an eye on expanding this offering to commercial EV operators.

Nicholas Beatty, co-founder at Zenobe, said the firm considered Jera and Tepco to be among the two “most significant strategic investors in the power sector”.

“They bring unique commercial and technical capabilities to Zenobe as well as unrivalled access to a global supply chain. This investment reinforces Zenobe’s reputation as an innovator in the energy market. Together, we’ll help energy intensive businesses use power intelligently to reduce costs, improve resilience and minimise environmental impact,” he said.

WASHINGTON — Declining costs and new market rules are opening opportunities for energy storage, but the technology’s operating characteristics are proving challenging to system operators and market designers, speakers told the Energy Storage Association Policy Summit last week.

Jurisdictional questions also are creating uncertainty, speakers said.

David Kolata, executive director of the Citizens Utility Board in Illinois, captured the optimism at the daylong conference, declaring his consumer group as “bullish” on the technology.

“In our minds, the declining cost curve of batteries and other storage technologies is the single most encouraging trend in the electricity space today,” Kolata said. “We see storage as an essential component of a least-cost future, and we say this because if we get the policy right there are multiple sources of consumer value.”

Kolata cited lower cost for frequency regulation, reduced costs for integrating renewables, increased grid flexibility and reliability and the deferment of transmission and distribution system investments.

“And perhaps most importantly, storage can lower peak demand. From the consumer point of view, nothing is more important than reducing the peak. As you know, a large percentage of overall system costs are driven by 30, 40, 50 hours a year, so if you can reduce that peak, there are benefits for all consumers.”

Kolata said storage — along with time-based rates — will be crucial to ensuring transportation electrification brings benefits.

“At CUB, we see the potential benefits from electrification, but … only if vehicles charge when they should and don’t charge when they shouldn’t,” he said. “If transportation electrification increases peak demand, it’s going to be bad for the environment and bad for consumers.”