Every year, the clean energy experts at Bloomberg New Energy Finance (BNEF) predict what will happen in the sector in the year ahead. This year’s predictions have landed.

BNEF chief editor Angus McCrone writes that the falling costs in lithium-ion batteries, solar and wind energy that 2017 saw will continue in 2018 thanks to economies of scale and technological improvements, while the global economic recovery and associated strengthening of oil and coal prices will make clean energy and electric vehicles more competitive against their fossil fuel counterparts.

However, tightening monetary policies and higher interest rates “could start to affect the cost of capital, and therefore the relative competitiveness, of high-capex, low-opex technologies such as wind and solar”.

The research group predicts that 2018 investment in clean energy will be about the same as 2017’s $333.5 billion, but more capacity will be installed because of “the remorseless reductions in solar (and to some extent, wind) project capital costs”. More than 100GW of solar capacity will be installed in 2018, BNEF head of solar Jenny Chase predicts and although China will still dominate with about half the market, new markets will also open up. “This is the year that Latin America, south-east Asia, the Middle East and Africa will make up a measurable slice of the total. For instance, Mexico is likely to be a 3GW-plus market in 2018, and Egypt, the UAE and Jordan between them at 1.7-2.1GW,” she writes.

The wind energy market will be steadier, with about 59GW of onshore and offshore capacity added in 2018 before a rush in 2019 as the US Production Tax Credit nears its sell-by date. Onshore, China and Latin America will continue to see growth and while the usual suspects – the UK, Germany, the Netherlands and China – will dominate offshore, there are signs that the US and Taiwan markets are set to take off. Costs continue to fall, with two bidders – Vattenfall and Statoil – already lined up for the Netherlands auction of some 700MW of offshore capacity with zero subsidy. “Competition between a strong selection of developers would be another sign of the much-improved cost-effectiveness of offshore wind,” says Tom Harries, senior wind analyst at BNEF.

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AES Energy Storage and Siemens have joined forces to create a new energy storage company called Fluence Energy, which we mentioned recently in a story about the breakthrough prices of renewable energy + storage projects. Fluence COO John Zahurancik has since answered some questions for CleanTechnica about the new company and one of its major new energy storage projects.

What is the purpose of the Long Beach 100 MW/400 MWh energy storage project?

The project has been in development as part of a $2 billion repowering project in Long Beach, CA to replace aging natural gas peakers with a combination of more modern/efficient combined-cycle gas capacity and the world’s largest battery energy storage facility. The 100 MW system will provide critical capacity to meet local reliability needs in the area, while helping California meet its environmental goals.

How long will it take to construct the huge energy storage installation?

Construction for the Alamitos energy storage project will start later this year and is targeted for completion by the end of 2020.

Can you reveal the cost?

The pricing for this system is confidential under the terms of our contract.

What is the expected life cycle or longevity of the batteries?

The Alamitos project is contracted under a 20-year power purchase agreement, and the Fluence array is designed to ensure the system meets the PPA requirements over the full life of the contract.

Do you anticipate that you will be installing other energy storage facilities with the same or similar capacity?

We’re in a scaling-up period for energy storage that’s gaining speed every year. The rise of battery energy storage is similar in scale to that experienced by the solar industry between 2000 and 2015. Utilities and other customers around the globe see that the technology is mature, and the Fluence team has delivered projects for all 8 core energy storage applications on the electric grid over a decade of experience designing, deploying, and operating complete energy storage solutions. However, as we’ve done so, we’ve seen just how many places on the grid storage can provide value where the technology has yet to be adopted.

With the widespread deployment of storage changing the fundamentals of the electric power sector, we anticipate installing other facilities in the future with not just the same, but with both more and less capacity. In many power systems, having multiple 50-megawatt systems at different parts of the grid may more provide flexibility and reliability benefits than having a single 200-megawatt system.

For us, it’s about deploying the right solution at the right scale to solve customers’ energy problems, and prioritizing lasting partnerships to provide the most value over simply delivering products.

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Developing a new generation of lighter and safer electric vehicle (EV) batteries is one of the first four projects be awarded funding from the government backed Faraday Institution.

The institution, which is supported from the government’s industrial strategy, has announced £42 million worth of funding to find solutions to fix some of the challenges surrounding battery technology, which limit the range of EVs.

The University of Oxford will lead a consortium to find ways to overcome the barriers which are preventing the more widespread uptake of solid state batteries in electric vehicles.

The theory is that by using a solid material as a conductor, rather than the liquid-based electrolyte used in conventional lithium-ion batteries, solid state batteries should be lighter and safer, hence less costly and easier to keep cool.

Another project, led by the University of Cambridge, will look at extending battery life. It will examine how environmental and internal battery stresses, such as high temperatures and charging and discharging rates, damage EV batteries over time. The aim of this project is to extend EV range by extending battery life.

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Chicago grid equipment company S&C Electric built its first large-scale battery storage system in 2006, before almost anyone else was doing it. Now, it’s winding down that line of business.

Storage will still feature in its microgrid offerings, but the employee-owned company will procure it rather than producing it in-house, said Senior Director for Business Development David Chiesa. Meanwhile, S&C is refocusing on what it sees as its core competency: medium-voltage switching and protection, with a special focus on microgrids.

The move reflects the maturation and consolidation of the market in the 12 years since S&C built its first utility-scale battery, a sodium-sulfur unit for AEP. Demand for batteries has boomed, and a crop of electric-vehicle producers has established gigafactories to mass-produce battery cells and packs.

“We have other people in the marketplace who are taking single-use-type energy storage systems and just throwing them at the market for some incredible prices,” Chiesa told GTM at DistribuTech in San Antonio. “That high-volume manufacturing game has never really been what S&C is great at. We’re a standard manufacturer that features lots of customization to our standard products.”

That competition forces battery makers to either match the scale, which isn’t feasible in this case, or carve out a niche.

“For years we survived in that specialty space, because we knew how to integrate the really hard jobs,” Chiesa said. 

In the current, not-yet-fully-formed energy storage market, market design and regulatory structures prevent storage from making money on the full range of technical services it can provide. Vendors are innovating in anticipation of the expected hockey-stick growth curve, but finding a present-day buyer is a different story.

“One of our systems came with 12 use cases pre-engineered into the system,” he said. “Do you know how much value we got for that in the marketplace? None. You can only use three or four at a time.”

The baked-in versatility meant a customer could easily change use cases years down the road without an expensive retrofit, but again, that’s not a monetizable value at this point.

It’s hard to make money by building out product values that aren’t yet monetizable. The dilemma facing many early entrants into the storage industry is how much to invest in storage expertise before there’s a large enough market to support a thriving ecosystem of vendors and installers.

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Massachusetts Institute of Technology researchers say they’ve improved a large-scale battery, opening the possibility of storing massive amounts of renewable energy for a rainy day — or a day without wind.

The researchers say their changes to liquid-sodium batteries will make them more durable and useful.

“I consider this a breakthrough,” MIT professor Donald Sadoway said in a prepared statement. He said the batteries, invented five decades ago, could finally become practical because of the new research.

A team led by Sadoway, which included postdoctoral researchers Huayi Yin and Brice Chung and four others, published its study this week in the journal Nature Energy.

Sadoway said the battery’s innards previously contained a fragile ceramic, but the team found a way to replace it with durable metal.

Currently, buildings powered by solar and wind energy have a problem: “The wind doesn’t blow all the time; the sun isn’t there after dark,” Sadoway said. And if there’s surplus energy, large amounts can’t be stored.

Because of that, the buildings still have to be connected to an electrical grid. But the improved liquid-sodium batteries could eliminate that need, Sadoway said.

“You’d effectively be in a position to go off-grid,” Sadoway said. “The idea is that the storage would be close to the demand center — whether it’s in a single-family home or a hospital,” he said.

He said the batteries could also be used by utilities, and that could eliminate their use of fossil fuels.

“The big thing that is holding back grid-scale storage is cost,” he said. “With the cost of natural gas being what it is, it’s a lot cheaper to hook up a gas-fired unit than it is to install batteries.”

The batteries can be made of cheap, abundant raw materials and are safe to operate, he said.

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Texas Waves are designed to provide ancillary services to the Electric Reliability Council of Texas market and can respond to shifts in power demand more quickly, improving system reliability and efficiency.

“We’re excited to be able to provide fast-responding, dispatchable generation to help meet the energy demands of one of the fastest growing populations and economies in the country,” said Mark Frigo, VP and Head of Energy Storage, North America at E.ON. “In addition, Texas Waves helps to solidify our position as a leader in the North American energy storage market.”

These projects are the second and third grid connected lithium-ion battery systems installed by E.ON in North America. E.ON’s first grid connected lithium battery system project, Iron Horse, contains a 10 MW energy storage facility with an adjacent 2.4 MW solar array southeast of Tucson, Arizona, and came online in 2017.

E.ON has developed, built, and operates more than 3,600 MW of solar and wind renewable energy generation across the U.S., with more on the way. 

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One of the reasons natural gas has grown to become the largest energy source for electricity in the U.S. is that it’s a very flexible energy source. It can provide baseload power for the grid, and peaker plants can provide short-duration energy that fills gaps when renewables aren’t producing energy or demand is unusually high. 

A lot of times the value of the peaker plants is generated in only a few hours per year. In Southern California, peak summer hours require gas power plants to provide supply when the rest of the grid is overloaded, which leads to higher power prices and makes the economics of these power points work. But energy storage systems can provide similar value to the grid at peak hours while providing additional services 365 days per year. As the cost of storage comes down, it could make natural gas peaker plants obsolete, causing another major shift in energy as we know it. 

Energy storage shows its worth 

When Tesla (NASDAQ:TSLA) built a 20 megawatt/80 megawatt-hour (MWh) energy storage system in Southern California early last year, it was a critical turning point for the industry. Not only was energy storage going to be the supplier power at peak times for the grid, replacing off-line natural gas facilities, but the project was deployed in a matter of months. 

Tesla’s highly publicized 129 MWh project in South Australia was built in less than 100 days and has already proven it can add value to the grid. A day before it was scheduled to be turned on, the energy storage system was called upon to provide 59 MW of power on an extremely hot day. Over time, it’ll help stabilize the grid at times of peak demand, reducing the need for peaker plants. 

Tesla isn’t the only one in the energy storage game, either. AES (NYSE:AES) and Siemens(NASDAQOTH:SIEGY) are betting big on energy storage as well with a joint venture called Fluence. The company already has a contract for the world’s largest battery energy storage system at 100 MW/400 MWh and has a total of 500 MW of projects in the pipeline. 

Energy storage is already starting to take some of the value formerly reserved for natural gas peaker plants, and GTM Research senior advisor Shayle Kann said recently that as energy storage systems become even more economical, he “can’t see why we should build a gas peaker after 2025.” 

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First Italy, then Germany, then the UK: Europe’s annual frontrunners

The start of construction on India’s largest energy storage project is not only of strategic importance to regulators, but could also drive another wave of utility-scale projects in India, the chief of the country’s storage alliance has said.

AES India, a subsidiary of AES Corporation, and Mitsubishi Corporation started work this week on the 10MW project that will support the network operated by Tata Power Delhi Distribution Limited (Tata Power-DDL), a distribution company (Discom) that serves the North and North-West parts of Delhi. Energy-Storage.News reported in January 2017 that what is claimed to be India’s first grid-scale energy battery storage project is designed to aid the integration of rooftop solar in particular.

Rahul Walawalkar, executive director of the India Energy Storage Alliance (IESA), told Energy-Storage.News this week: “The AES project is expected to demonstrate the multiple value proposition of energy storage for the distribution grid such as peak shaving, distribution upgrade deferral, reactive power support as well as ancillary services for improving distribution grid reliability.”

Walawalkar also said the project was of “strategic importance” for Indian regulators, given that the Central Electricity Regulatory Commission (CERC) had already released a staff paper on energy storage last year.

The project would act as a “great confidence booster” for policy makers, such as NITI Aayog, Ministry of New and Renewable Energy (MNRE) and Ministry of Power (MOP), who are working on a National Energy Storage Mission. In this way, the new project will go towards addressing questions about technology readiness, added Walawalkar.

India’s National Solar Mission (NSM) was particularly successful in driving the local PV market to become the third largest in the world last year, and the nation will be eyeing up similar success in energy storage.

The AES, Mitsubishi project being deployed in Rohini, Delhi, at a substation operated by Tata Power-DDL will enhance grid reliability for more than 7 million customers across the Delhi region.

Storage technology and services company Fluence, a Siemens and AES joint venture, will supply AES’ grid-scale Advancion technology platform for the project. The Advancion solution is designed to provide long-term dependability. The project should also demonstrate storage’s ability to balance distributed energy resources, including rooftop solar, said Praveer Sinha, CEO and managing Director, Tata Power-DDL.

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In mid-December 2017, Greentech Media’s Energy Storage Summit kicked off with a live panel discussion. Moderated by Senior Energy Storage Analyst Dan Finn-Foley moderated a panel at Greentech Media’s Energy Storage Summit, the panel featured experts on stage who were asked to interpret and weigh in as 500 senior-level energy professional attendees answered live polling questions on the top themes in the market.

One of the questions asked that could be of interest to EC&M readers involved whether lithium-ion will remain the undisputed king, and if not, who will emerge as its challenger? When asked what technology has the best chance of supplanting lithium-ion as the dominant utility-scale advanced storage technology, flow batteries drew the most optimism (see Figure 1). In fact, nearly half of attendees cited them as the most exciting technology for utility-scale applications (Figure 2).

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