The expected outcome of utility integrated resource planning (IRP) is the optimum combination of power generation resources that will produce the most cost-effective and reliable generation for the rate-payer. That process is relatively simple for a nuclear and fossil fuel-based system. However, the difficult process of integrating renewable generation has made asset optimization and operational flexibility paramount.

Reaching that goal is often further complicated by external influences. For example, states/nations with Renewable Portfolio Standards often require a set quantity renewable generation to be produced each year.

Others have market-driven rules or have enacted legislation that require placing renewable generation first place in the dispatch queue, thereby pushing conventional assets further down the list, often from baseload to cycling operation. The unpredictability of renewable assets that operate only when the wind blows and the sun shines require more frequent cycling, start/stops, and ramping of assets that accelerates equipment wear-and-tear. Planners have a difficult job optimizing grid efficiency with so many moving parts.

All grid operators want more flexible generation that is available on demand. As additional wind and solar generation come online, some grid operators have elected to rely on market mechanisms to entice developers to construct fast response assets to fill in the inevitable production gaps inherent with renewable generation. Others have installed decentralized “blocks” of gas-fired assets, usually simple cycle combustion turbines or reciprocating engine generators, to provide quick response power when needed. Many utilities are forced to keep assets operating a part-load to satisfy rising spinning reserve margins.

Many utilities have added flexible generation in the form of high-efficiency combined cycle power plants but they remain best suited for operation at or near baseload operation for maximum efficiency.

There is also a steep price to pay in O&M and lost efficiency when cycling or operating a combined cycle plant at part-load. The elegant solution is large-scale energy storage but that technology remains a future promise.

Often these solutions attempt to use fossil generation in ways it wasn’t designed to be used, cycling when renewable energy supplies spike up or down, for whatever reason.

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Tesla (NASDAQ:TSLA) was supposed to be the big name in solar and energy storage, leveraging the Powerwall for homes and Powerpack for businesses and using its SolarCity operations to push systems out into the wild. But Tesla is shrinking its solar ambitions and doesn’t seem to have much interest in being a leader in anything but utility-scale energy storage.

That presents an opportunity for the rest of the industry, and SunPower (NASDAQ:SPWR) is taking a surprisingly aggressive approach to its energy storage ambitions. Long-term, it could be a huge differentiator for the company. 

Rollout strategies matter in storage

It’s easy for a company to say it has an energy storage product, but rolling it out to customers is easier said than done. Tesla’s Powerwall was introduced in 2015, but there still haven’t been a meaningful number of the systems installed worldwide. 

What drives energy storage installations is economics, whic is a big reason the Powerwall has flopped. Outside of Hawaii, there hasn’t been an economic case for home energy storagebecause customers with solar panels can just send their excess electricity to the grid and be paid the retail price for it, a practice known as net metering. 

Where energy storage has been gaining traction for a few years is in commercial markets, where adoption is driven by economics. Commercial customers generally have bills split into usage and capacity components. The usage side of the bill is similar to residential bills, fluctuating based on how much electricity is used in a month. Capacity charges are based on the peak capacity used by a facility, even if it’s only for 10 or 15 minutes during a month. If energy storage can shave the peaks from this part of the bill, it can justify the storage system financially. Any other value adders, like shifting solar energy produced on-site from peak hours to evening hours, are gravy for the system. 

This is why SunPower is investing in energy storage for its commercial projects. Management says it currently has $60 million in storage pipeline, and in 2018 half of its commercial installations could include storage. That’s a big statement for a company with the No. 1 position in the commercial market today.

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The largest renewable energy acquisition in history — that big enough for you? Global Infrastructure Partners bought Asia-Pacific’s largest independent renewable energy power producer, Equis Energy, to set the record. The acquisition was for a record $5 billion.

French energy giant Engie (formerly called GDF Suez), which has been acquiring cleantech companies like it’s got nothing better to do, recently made an acquisition of an African off-grid solar company, Fenix.

First Solar’s stock price jumped 20% at the end of October on the back of some strongly positive quarterly finances. It’s been over a year since First Solar’s share price was so high … but it’s still far below 2007–2011 levels.

Indian giant Acme Solar Holdings is aiming to raise Rs 2,200 crore ($335 million) in its initial public offering (IPO). You buyin’?

Groupe Renault knows where the world is headed, and it initiated a new Renault Energy Services business entity in order to try to capitalize.

On the other side of the pond, a new consortium of battery tech firms named Imperium3 New York announced it is investing $130 million over the next 5 years to commercialize “an innovative technology for making more efficient and less expensive lithium ion batteries.”

Meanwhile, UK startup Brill Power won a €100,000 prize at EnergyFest in Amsterdamfor finding a way to significantly extend the life of lithium-ion batteries.

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National Grid, a US transmission company, and the Department of Energy’s Pacific Northwest National Laboratory have entered into an agreement to work together on research in the areas of transmission grid modernization and energy storage technologies.

The electricity industry is undergoing sweeping changes, including evolving customer expectations, proliferation of renewable and distributed energy resources, and state energy policies that are affecting what the transmission grid is being asked to do.

Both parties are focused on creating a robust, flexible, secure grid that will deliver the nation’s clean, reliable, and affordable energy future. They will collaborate on topics such as:

·      Grid-scale energy storage;

·      Advanced transmission network controls and monitoring;

·      Integration of distributed and renewable energy resources; and

·      Enhanced grid cyber protection.

“I’d like to congratulate National Grid and PNNL on today’s announcement,” said Secretary of Energy Rick Perry. “Innovation partnerships with the private sector are critical to the groundbreaking work our National Labs undertake. DOE is committed to the modernization, reliability and resiliency of our grid and expanding energy storage research and this partnership is a great example of that commitment.”

“This collaboration is a natural outcome of our organizations’ mutual goal to optimize the benefits and value the transmission network can deliver to our customers, communities and country,” said Rudy Wynter, president and COO of National Grid’s FERC-regulated Businesses. “We are delighted to work with the experts at PNNL to make this vision a reality.”

“A reliable and resilient electric grid is critical to our national and economic security,” said PNNL Director Steven Ashby. “This agreement with National Grid will explore how to best integrate new technologies, like energy storage, onto the grid to improve grid reliability and resiliency in the face of severe weather events, cyber threats, a changing mix and types of electric generation, and the aging of the electricity infrastructure.”

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Energy storage firm RedT has connected a 1MWh flow machine to the grid as part of its project with Centrica in North Cornwall. 

The company uses vanadium redox flow technology, which it claims can deliver longer duration energy storage as opposed to the shorter burst power storage provided by battery technologies and chemistries such as lithium and lead acid.

CEO Scott McGregor believes longer duration storage assets will be required by energy systems in the UK and around the world as the penetration of renewable generation increases.

The project with Centrica is at The Olde House, a 600 acre farm and holiday retreat. It is enabling the farm to store solar energy from its 250kW PV array to use later in the day, which is when guests are returning to the holiday cottages.

The set up means the farm can harness significantly more of its renewable solar onsite generation, with RedT suggesting that that the project’s rate of return is in the “mid teens”, or roughly seven to eight years.

Centrica’s Local Energy Market trial is a £19m innovation project that also involves Western Power Distribution, The University of Exeter and National Grid. It is designed to show the role flexibility and storage can play in driving down the cost of energy across local and national systems.

RedT believes timeshifting the solar for use at peak times could save The Olde House up to 50% on grid imports during peak times.

It will also create revenue by tracking and dynamically responding to changes in grid frequency (frequency response) and providing grid services such as; Short Term Operating Reserve (STOR), participation in the Capacity Market and Demand Turn Up.  

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VANCOUVER (miningweekly.com) – The Chinese government has awarded a major contract to privately held clean technology innovator Pu Neng Energy for the construction of a 12 MWh vanadium-flow battery, as Phase 1 of a larger 40 MWh energy storage project, in Hubei province.

This first phase will be installed in Zaoyang, Hubei, to integrate a large solar photovoltaic system into the grid. Following this 10 MW, 40 MWh project, there will be a larger 100 MW, 500 MWh energy storage project that will be the cornerstone of a new smart energy grid in Hubei province.

This significant project will serve as a critical peak powerplant, delivering reliability and emissions reductions.

According to Pu Neng, this type of project is a tantalising glimpse of the future of the Chinese electricity grid as the country is halting construction of many coal-fired powerplants and pushing the integration of renewable energy with energy storage.

The China National Development and Reform Commission released Document 1701 in September, which outlined its strategy aimed at accelerating the deployment of grid-scale energy storage. The policy calls for the launch of pilot projects, including deployment of multiple 100-MW-scale vanadium-flow batteries, by the end of 2020, with the aim of large-scale deployment over the ensuing five years.

“China has the largest and highest-grade vanadium resourcesin the world and is poised to use this miracle metal to fundamentally transform its electricity grid. With massive amounts of renewable energy and storage coming on line, China will create the most modern, clean and efficient grid in the world,” commented billionaire mining celebrity and chairperson of Pu Neng, Robert Friedland.

The company has developed the most reliable, longest-lasting vanadium flow battery yet, with more than 800 000 hours of demonstrated performance. The combination of Pu Neng’s proprietary low-cost ion-exchange membrane, long-life electrolyte formulation and innovative flow cell design sets it apart from other providers.

Pu Neng’s vanadium redox battery systems store energy in liquid electrolyte in a patented process based on the reduction and oxidation of ionic forms of the element vanadium. This is a nearly infinitely repeatable process that is safe, reliable and non-toxic. Components can be nearly 100% recycled at end-of-life, dramatically improving lifecycle economics and environmental benefits compared with lead-acid, lithium-ion and other battery systems.

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With Tesla adding its Powerwalls and Powerpacks to houses, businesses, and the grid itself, one might think that Li-ion batteries are the ultimate in energy storage systems. That theory doesn’t hold water – but what does hold water is the world’s tallest wind turbine: a 3.4 megawatt GE 3.4-137, sitting atop a Max Bögl tower whose base includes a reservoir for a pumped hydro energy storage system, which the company calls a “water battery.”

Pumped hydropower is a well-established energy storage technique; it’s also one of the most efficient energy storage technologies, which is why pumped hydro represents 95% of the US grid’s energy storage capacity. The concept is simple: when electricity is abundant (production exceeds demand), a pump moves water uphill and stores it in a reservoir. During peak demand times, the water flows downhill, turning the pump into a generator. This is typically done in areas where the natural geography provides both an upper and a lower reservoir. In some cases, a man-made reservoir serves as either the upper or lower vessel.

When the town of Gaildorf, Germany, decided to put four wind turbines on some nearby mountains, officials wanted to incorporate an energy storage system. While the area has a natural body of water in the valley, an artificial reservoir was needed at a higher elevation. Engineers at Max Bögl, a German company that makes hybrid steel and concrete turbine towers, saw an opportunity to increase the wind turbines’ generating capacity and satisfy the need for an upper reservoir at the same time. They designed an innovative tower base that increases the turbine height by forty meters and holds 40 million liters (10.5 million US gallons) of water. The additional tower height allows each turbine to capture strong higher-altitude winds, while the “water battery” can store 70 MWh worth of electricity with a peak power output of 16 MW.

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The energy storage market is growing exponentially, however, as a percentage of total grid capacity it still only makes up a tiny fraction of the whole. Even among energy storage applications, pumped hydropower still retains a 95% market share. The major factor inhibiting further uptake — cost.

One factor emerging as a clear driver of cost reductions is economy of scale. As demand for energy storageincreases, mass production becomes feasible. Take Tesla’s Gigafactories: with a planned annual battery production capacity of 35 GWh — close to the current level of battery production of the entire world.

Tesla’s ambitious factory plans may be getting the most press, but they’re far from the only game in town. Accumotive (Germany), Energy Absolute (Thailand) and a consortium including Boston Energy and Innovation (BEI), Charge CCCV, C&D Assembly, Primet Precision Materials and Magnis Resources (USA) all have large-scale manufacturing plants in the pipeline.

These new large factories will allow energy storage to benefit from spreading the hefty upfront costs over the number of units produced. Tesla also expects that implementing innovative manufacturing processes will further drive cost reduction.

Lithium-ion based technologies account for close to 95% of new deployments of energy storage. They will undoubtedly see the most reductions in cost in the near future, however, production growth will still have to contend with the scarce quantities and precarious supply chains of the required raw materials.

The supply chain concerns for lithium-ion batteries is a main driver of research into new battery technologies — cost reduction is another. While redox flow batteries are not a new technology, this area of energy storage is seeing continuous development of new battery chemistries.

Some of these chemistries are already being tested and manufactured commercially, while others are only just being proven in university laboratories. In almost every case, the focus is on making effective batteries with common, cost-effective and safe raw materials.

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Toshiba and NRG Energy have completed a new battery energy storage system that will benefit the Electric Reliability Council of Texas (ERCOT) grid.

The Elbow Creek Energy Storage project is a lithium-ion based Toshiba battery system that is able to store and provide up to 2MW of electrical power. The project located near major generator and utility NRG’s and NRG Yield’s Elbow Creek Wind Farm in Howard County, Texas, was designed to enhance the stability of the local electric grid. Transmission system operator ERCOT is repsonsible for the provision and maintenance around 90% of Texas residents’ electricity network, run as a non-profit corporation and overseen by the state’s Public Utilities’ Commission (PUC).  

The battery system is expected to help solve short-term grid issues by offering high-speed frequency regulation services. The project was manufactured at Toshiba’s 1 million sq. ft. manufacturing facility in Houston, Texas and features Toshiba’s SCiBTM Rechargeable Battery.

It has been part funded by Texas’ environment agency, Texas Commission on Environmental Quality (TCEQ) and it is hoped that the project can contribute to the state’s efforts to meet decarbonisation targets. TCEQ introduced the Texas Emissions Reduction Plan (TERP) in August 2016, which gives out grants for individuals and businesses seeking to implement technologies that reduce diesel, nitrogen oxide and carbon dioxide, aimed primarily for air quality purposes, rather than explicity for decarbonisation. 

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Having been subject to discussion for years within the academic sphere, energy storage projects have become a topic of high interest to energy sector focused investors in recent years.

Decreasing cost curves, changing regulatory environments within the energy markets such as deregulation and shifts away from subsidised renewables to market pricing modes, and evolving software capabilities, are increasing investor confidence in energy storage investments and result in increased demand for investment opportunities.

While this seems to be true especially for more mature renewable energy markets like Europe, the United States and several others, investors are facing the problem that energy storage projects as investments are – in most cases – discussed on a very abstract basis. Only considering the “big picture” and seeing the project as a future pillar of the energy market leaves out details such as the complexity coming with energy storage investments in practice.

In my opinion, the propensity to drastically reduce complexity by discussing energy storage as high-level topic has developed based on two major factors:

Firstly, energy storage is still a new topic in the market compared to the long history of energy generation and transmission. Hence, while accumulators and especially batteries seem to be part of consumers’ lives ever since, the discussion about energy storage as a viable part of the electricity market structure is relatively trendy and new. In addition, due to the high diversity of technology types and their evolution, economies of scale and market consolidation (as seen currently in the photovoltaic market) are not yet reached. This leads to different potentials, resulting in an ultimate mess of investment cases. Supported by the fact that storage investments are often declared as a “venture capital topic”.

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