Two reports released within days of one another have highlighted the increasing value of the energy storage market as a necessary tandem to a low-carbon society, with Bloomberg New Energy Finance predicting the market will grow to attract $1.2 trillion in investment and boast 942 gigawatts (GW) by 2040, while in the UK the current pipeline already sits at an impressive 6,874 megawatts (MW).

It is of little surprise that the energy storage market around the globe has expanded so quickly, given the explosive growth of intermittent renewable energy sources like solar and wind. Simply put, energy storage evens out what is otherwise intermittent electricity generation, meaning that solar can continue to provide electricity at night and wind can continue to provide electricity when the winds are still.

This is vitally apparent in the United Kingdom which, according to a report published by renewable energy trade body RenewableUK and the country’s Solar Trade Association, has all but exploded in size over the past seven years. Specifically, the report shows that planning applications in the UK have soared from 2 MW in 2012 to 6,874 MW in 2018.

The news of the UK’s 6.9 GW energy storage pipeline was part of an announcement which will see RenewableUK launch a new database of energy storage projects across the UK, with comprehensive information on nearly 400 UK projects. The database reveals that the average capacity of applications for new battery storage projects in the UK has increased from 10 MW in 2016 to 27 MW in 2018.

Currently, the UK boasts 3.3 GW of storage capacity and there is a further 5.4 GW that have already received planning consent — including 4.8 GW worth of battery storage.

“The energy sector is breaking new ground by making an unprecedented transition to a clean, flexible system which will power our country in the future,” said RenewableUK’s Executive Director Emma Pinchbeck. “Energy storage is already playing a key part in that, from small local projects to grid-scale schemes. We’re decentralising the way the power system works and, at our conference, we’ll hear how an increased share of wind, solar and storage on the grid could transform UK energy markets.”

A proposal by Pacific Gas & Electric (PG&E), one of California’s three main investor-owned utilities (IOUs) to deploy large-scale energy storage to replace peaking natural gas plants has been approved by the state’s regulator.

Last week, the California Public Utilities Commission (CPUC) issued its approval of three capacity contracts and one power purchase agreement (PPA) for 567.5MW of energy storage capacity to be built across four large-scale battery storage systems. Significantly, each will store energy for four hours, making them viable capacity resources to replace gas plants.

PG&E submitted its proposal to the commission in late June and said the selected projects had been awarded from more than 100 options from around 30 submitted proposals with the solicitation launched to address local voltage issues as well as capacity deficiencies in specific sub-areas of the utility’s service area.

As reported by Energy-Storage.news at that time, the winning projects will be delivered by Dynegy-Vistra Energy, Hummingbird Energy Storage LLC, Micronoc Inc and Tesla.

The two largest are the Dynegy-Vistra project (300MW / 1,200MWh) and the Tesla (182.5MW / 730MWh). PG&E will own and operate the Tesla system, while capacity from the other three will be purchased by the utility through the aforementioned capacity agreements.

CPUC had authorised PG&E to conduct its solicitation of projects in February this year through Resolution E-4909. CPUC said last week that the approved projects meet the aims of that resolution, addressing local voltage and capacity concerns which could arise as a result of three gas plants, Metcalf Energy Center, Yuba City Energy Center and Feather River Energy Center.

Two community energy suppliers in California followed up an agreement to buy power from a large-scale solar-plus-storage farm with another, project developer EDF Renewables has announced.

Energy-Storage.news reported at the end of October that Monterey Bay Community Energy (MBCE) and Silicon Valley Clean Energy (SCVE) had agreed 15-year power purchase agreements (PPAs) with Recurrent Energy, the US developer owned by Canadian Solar.

Through that deal, MBCE and SCVE will buy 45% and 55% respectively of output from Slate, a 150MW solar farm in Kern County, paired with 45MW / 150MWh of lithium battery storage which enables four hours of dispatchable solar energy, helping mitigate late afternoon and evening peaks in demand as solar production tails off.

At around the same time, but not announced by EDF Renewables until a few days ago, the pair also brokered a PPA deal with EDF Renewables, the international clean energy development arm of European utility company EDF, again for a Kern County solar project.

Big Beau Solar + Storage Project is 40MW / 160MWh of battery energy storage and 40MW of solar generation capacity, expected to reach commercial operation by the end of 2021. SVCE and MBCE will once again buy 55% and 45% of the power each in the same split as for the Slate project PPA.

“The inclusion of storage provides the agencies with a 100% clean and partially dispatchable product, allowing them to mitigate the ‘duck curve’ risk and monetise price spikes,” EDF Renewables product development director for renewables and energy storage Valeri Barros said.

Already a prolific adopter of solar and other distributed energy resources and technologies including electric vehicles (EVs), California now has in place a target to meet 100% of retail electricity sales with renewable sources by 2045.

Amazon is turning to Tesla in order to deploy energy storage capacity at their distribution centers.

After a deal to add Tesla Powerpacks to a UK facility earlier this year, now Amazon is working with Tesla again at another distribution center.

The last project included both a 4 MW solar array and 3.77 MW battery system installed at a large fulfillment center in Tilbury – east of London.

Amazon has hundreds of locations like this one around the world and at the time, it looked like if this project turned out to be successful in reducing energy costs, Amazon could decide to deploy Tesla Powerpacks at more locations.

A few months later, we’ve now learned that the internet retail giant is planning a similar project at their Coalville facility in Leicestershire.

UK’s Solar Power Portal reported about the new project:

“The size of the Tesla battery system to be used was not clear from the planning documents, however proposed building elevations suggest a system comprised of 15 Powerpack units.”

Amazon reportedly plans more similar projects over the next 18 months.

Tesla Energy is aiming to ramp up its deployment of energy storage through several different channels. These deployments will range from Powerwalls at the residential level to large utility-scale projects, like the new giant project with PG&E in California, to the smaller scale commercial projects, like those ones with Amazon.

Electrek’s Take

I like to see Amazon dipping their toes in energy storage. They are a major energy user – not only through their distribution centers for their retail effort, but also because of their giant internet services and data centers.

After these new projects in the UK, I can see Amazon ramping up the deployment of solar and energy storage projects at locations around the world.

They have plenty of money and now is the best time to do it.

Bloomberg NEF says the tumbling cost of batteries is set to drive a boom in the installation of energy storage systems around the world in the years from now to 2040. This has led BNEF to significantly increase its forecast for global deployment of behind-the-meter and grid-scale batteries over coming decades. The group now predicts the global energy storage market will grow to a cumulative 942GW/2, 857GWh by 2040, attracting $1.2 trillion in investment over the next 22 years.

BNEF’s latest Long-Term Energy Storage Outlook sees the capital cost of a utility-scale lithium-ion battery storage system sliding another 52% between 2018 and 2030, on top of the steep declines seen earlier this decade. This will transform the economic case for batteries in both the vehicle and the electricity sector.

Yayoi Sekine, energy storage analyst for BloombergNEF and co-author of the report, said: “We have become much more bullish about storage deployments since our last forecast a year ago. This is partly due to faster-than-expected falls in storage system costs, and partly to a greater focus on two emerging applications for the technology – electric vehicle charging, and energy access in remote regions.”

Logan Goldie-Scot, head of energy storage at BNEF, added: “We see energy storage growing to a point where it is equivalent to 7% of the total installed power capacity globally in 2040. The majority of storage capacity will be utility-scale until the mid-2030s, when behind the meter applications overtake.”

Behind-the-meter, or BTM, installations will be sited at business and industrial premises, and at millions of residential properties. For their owners, they will perform a variety of tasks, including shifting grid demand in order to reduce electricity costs, storing excess rooftop solar output, improving power quality and reliability, and earning fees for helping to smooth voltage on the grid.

The global energy storage market is on the cusp of a long-running investment and deployment boom, according to one of the world’s most influential energy analysts.

Bloomberg New Energy Finance (BNEF) this week announced an upgrade to its forecasts for the behind-the-meter (BTM) and grid-scale energy storage sectors, confirming that in response to falling costs it had “significantly increased” its projections for the sector.

The latest annual report on the global energy storage market predicts global energy storage capacity, excluding pumped hydro storage, will soar over the next two decades from less than 20GW to nearly 1,000GW by 2040.

Specifically, BNEF said it now expects the market to grow to a cumulative 942GW/2, 857GWh by 2040, attracting $1.2tr in investment over the next 22 years.

It added that the emergence of “cheap batteries” will provide a knock on boost to the renewables market, as it will allow wind and solar projects to provide power when the wind is not blowing or the sun is not shining.

“We have become much more bullish about storage deployments since our last forecast a year ago,” explained Yayoi Sekine, energy storage analyst for BloombergNEF and co-author of the report, in a statement. “This is partly due to faster-than-expected falls in storage system costs, and partly to a greater focus on two emerging applications for the technology – electric vehicle charging, and energy access in remote regions.”

The tumbling cost of batteries is set to drive a boom in the installation of energy storage systems around the world from now to 2040, according to the latest annual forecast from research company Bloomberg New Energy Finance (BNEF).

The global energy storage market will grow to a cumulative 942GW/2,857GWh by 2040, attracting $1.2 trillion in investment over the next 22 years. Cheap batteries mean that wind and solar will increasingly be able to run when the wind isn’t blowing and the sun isn’t shining.

BNEF’s latest “Long-Term Energy Storage Outlook” sees the capital cost of a utility-scale lithium-ion battery storage system sliding another 52% between 2018 and 2030, on top of the steep declines seen earlier this decade. This will transform the economic case for batteries in both the vehicle and the electricity sector.

Yayoi Sekine, energy storage analyst for BloombergNEF and co-author of the report, said: “We have become much more bullish about storage deployments since our last forecast a year ago. This is partly due to faster-than-expected falls in storage system costs, and partly to a greater focus on two emerging applications for the technology — electric vehicle charging, and energy access in remote regions.”

Logan Goldie-Scot, head of energy storage at BNEF, added: “We see energy storage growing to a point where it is equivalent to 7% of the total installed power capacity globally in 2040. The majority of storage capacity will be utility-scale until the mid-2030s, when behind the meter applications overtake.”

Behind-the-meter, or BTM, installations will be sited at business and industrial premises, and at millions of residential properties. For their owners, they will perform a variety of tasks, including shifting grid demand in order to reduce electricity costs, storing excess rooftop solar output, improving power quality and reliability, and earning fees for helping to smooth voltage on the grid.

A year after Massachusetts awarded $20 million in energy storage grants, the first project is online and showing promise to help shave peak demand, save customers money, and pave the way for more solar power.

Municipal utility Braintree Electric Light Department (BELD) paid for most of the $2.6 million battery installation using its reserve funds and some of its business customers invested additional money in exchange for lower demand charges.

But it was a grant from Massachusetts’ Advancing Commonwealth Energy Storage (ACES) program that helped make the numbers add up for the pilot project. The program is part of the state’s Energy Storage Initiative, which has a goal of deploying 200 megawatt-hours of energy storage in the state by 2020, up from the current level of seven megawatt-hours.

In 2016, the state commissioned a report on the use of energy storage in the state and strategies to expand its deployment. Among the recommendations was a grant program to provide at least $10 million to demonstration projects that would identify and resolve obstacles to storage deployment, explore business models, and help developers gain experience working through the kinks of the process.

This proposal became the ACES program. In December 2017, the state announced $20 million in grants — twice the original target sum — to 26 projects planned for commercial sites, utilities, hospitals and education institutions.

The battery storage industry is at a pivotal moment, said Eric Hittinger, an assistant professor of public policy at the University of Rochester with a focus on electricity production. Like solar a decade ago, storage technology is getting better and cheaper, and is widely perceived as having strong potential, but there is still some uncertainty about it, he said.

“People see it as a tech that can provide a lot of value,” he said. “But it’s perceived as a little bit risky — people are not sure how to use it, where to put it, what the business model is.”

The PJM Interconnection has made a temporary change in the rules for its frequency regulation market that could mean lower revenue and market participation for energy storage.

The proposed rule — which still requires approval by federal regulators — addresses price spikes, or “price excursions,” observed by PJM staff.

Reinstates floor value

PJM stakeholders endorsed a rule change that would reinstate a floor value of 0.1 for the “benefits factor” the regional transmission organization uses to compensate for different types of frequency regulation resources.

Two types of resources can participate in PJM’s frequency regulation market: Reg D for fast responding resources, such as batteries, and Reg A for conventional resources, such as gas turbines or hydropower. PJM has only one market for frequency regulation, however, so the benefits factor is designed to create equivalence between offers from the two types of resources.

PJM set the benefits factor floor value at 1 in December 2015, but modified it in January 2017 and then effectively removed it in August 2018.

When the benefits factor fell to values approaching zero it would skew the results of the equations that PJM uses to score offers in the frequency regulation market. The benefits factor is always present as a denominator in those equations, which also include values for a performance score and a lost opportunity cost.

In cases where the benefits factor fell to less than 0.1 and the lost opportunity cost was above zero, PJM observed regulation market clearing prices as high as $7,000/MWh. Between May 1, 2018 and Aug. 31, 2018, PJM observed 80 intervals where the regulation market clearing price was above $500/MWh and 16 of these hours had marginal benefits factors less than 0.1. By way of comparision, the weighted average clearing price for regulation was $32.99/MW in the first six months of 2018.

Solar, UPS and the Kokam acquisition