Lazard Ltd. (New York) has released its annual in-depth studies comparing the costs of energy from various generation technologies and of energy storage technologies for different applications.

The company’s latest annual Levelized Cost of Energy Analysis (LCOE 10.0) shows a continued decline in the cost of generating electricity from solar technology, with lesser cost declines in other forms of renewable energy.

Utility-scale PV cost declined by 11%; residential PV down about 26%

According to Lazard, the cost of generating energy from solar photovoltaic (PV) technology continues to decline: The median levelized cost of energy from utility-scale PV technologies is down approximately 11% from last year, and rooftop residential PV technology is down about 26%, although the latter is still not cost competitive without significant subsidies and other policy support.

In addition, Lazard’s latest annual Levelized Cost of Storage Analysis (LCOS 2.0) shows cost declines in most battery storage technologies, but with wide variations depending on the type of application and battery technology.

 “Our studies continue to demonstrate that there are no one-size-fits-all solutions in energy generation or storage,” said George Bilicic, Vice Chairman and Global Head of Lazard’s Power, Energy & Infrastructure Group.

“The demands of a developed economy will continue to require both traditional and alternative energy sources as the technologies driving renewable energy evolve.”

“The economic viability of commercial energy storage systems varies widely by application and on a regional basis,” said Jonathan Mir, Head of Lazard’s North American Power Group.

“As manufacturers and customers identify optimal technologies for different use cases, we expect further innovation and a continued drop in costs, which will help drive increased use of renewables.”

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Corporate investment in energy storage nearly hit $660 million in the third quarter, a five-fold increase from third quarter 2015, according to the latest U.S. Energy Storage Monitor from GTM Research and the Energy Storage Association.

The all-time high mark in investments is an indication that more and more companies are entering the energy storage space. “More players are coming into the sector, and there more are on the horizon,” Matt Roberts, executive director of the Energy Storage Association, said. 

In the first three quarter of the year, there was a total of $812 million of corporate investment in energy storage, according to the report. That far outstrips the $416 million for all of 2015. To date, the 2016 total includes $167 million of venture capital funding and $645 million in project financing.

The increase represents a 20% year-over-year rise and reflects a maturing of the industry as it evolves away from early stage venture capital funding, Roberts said. “It shows that there are more viable places to put projects.”

Storage companies such as Stem and Advanced Microgrid Solutions have been ramping up their project finance capabilities. In August, Stem secured $100 million in financing from Starwood Energy Group Global. CEO John Carrington said he plans to use the funds to support project finance deals. In a project finance structure, each project is set up as a special purpose entity that is solely responsible for repaying loans without recourse to the corporate parent, usually the development company.

In July, Advanced Microgrid Solutions signed a deal with Macquarie Capital for the capital to jointly develop and construct a $200 million fleet of the energy storage projects. CEO Susan Kennedy describes AMS as a development company that tailors solutions for customers more than a storage company that installs batteries.

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The Lancey electric space heater allows users to charge its battery during off-peak hours and use the electricity for heating during peak demand periods.

A French startup is approaching home energy storage from a bit different of an angle, and instead of merely functioning as a home battery, its product doubles as a radiator that is said to be able to help reduce heating costs by as much as 50%.

The radiator from Lancey Energy Storage is described as a plug-and-play space heater, which means that even though it integrates a lithium battery and can allow users to charge it during times of cheaper electricity, and then use that electricity when grid prices are higher, no additional wiring is necessary to install it, and it can cost up to 75% less than installing a gas heater. And since heating can account for a significant percentage of home energy use (according to Lancey CEO Raphaël Meyer, up to 67% in Europe, whereas the US puts it at about 42% in the United States, and the IEA says that almost 80% of energy demand in the buildings sector is from heating), this represents a great opportunity for both homeowners and rental property owners alike to reduce both their costs and their environmental impact.

The Lancey heater, which is said to cost about €1000 when available next year, is a ‘smart’ device controllable via smartphone, but it can also be considered as a part of a distributed energy storage system, which can help both residents and landlords save money, and potentially reduce the use of ‘peaker plants’ by utilities. The radiator is said to include a range of smart technologies, such as its infrared heating system and sensors for detecting open windows or occupants in the room, as well as a ‘learning algorithm’ and the ability for users to monitor their overall electric consumption.

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The Massachusetts Department of Energy Resources (DOER) recently announced it is prudent for the Commonwealth to adopt an energy storage target for electric companies to procure viable and cost-effective energy storage systems to be achieved by January 1, 2020. The next step in the process is for DOER to adopt energy storage systems targets by July 1, 2017. To assist DOER in determining “the appropriate target scale, structure and mechanisms for the energy storage systems targets,” DOER has requested stakeholder input by January 27, 2017.

As background, in August 2016, Massachusetts Governor Charlie Baker signed into law An Act Relative to Energy Diversity, Chapter 188 of the Acts of 2016. The Act directed DOER to use a two-step process in its evaluation of storage procurement targets. First, DOER was to determine whether to establish energy storage procurement targets that electric companies must adhere to by January 1, 2020. Further, if DOER deemed that it would it be prudent to establish energy storage procurement targets, then the legislation directed the DOER to adopt such targets by July 1, 2017.

Accordingly, the process to establish energy storage procurement targets has now commenced. The legal standards and policy considerations within which DOER must render its decision are complex, especially given other mandates for utilities within the Commonwealth.

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ISO New England and interconnecting transmission owner Central Maine Power on Dec. 19 filed with FERC an executed non-conforming Standard Small Generator Interconnection Agreement with FPL Energy Wyman for a 16 MW battery project at an existing power plant site in Maine.

The existing generating facilities where this project site is located make up the Wyman Station, which is a fossil generating facility comprised of Units 1, 2 and 3 in Yarmouth, Maine, and FPL Wyman IV’s William F. Wyman No. 4, a fossil generating facility also located there.

This new facility is a battery energy storage project comprised of eight bi-directional inverter-based generating units each rated at 2.39 MVA, totaling 16.7 MW gross and 16.2 MW net for Summer and Winter. While this new project is separate from and does not include the fossil units at the site, it will be interconnecting to CMP’s existing William F. Wyman Station 115-kV switchyard.

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Federal regulators today approved a billion dollar energy storage project in Meagher County. The 400-megawatt pumped storage project would supplement electricity from wind turbines and other sources.

The 50-year license issued today is a big step forward says, Carl Borgquist, President and CEO of Absaroka Energy:

“Now we will go out and start actively and aggressively marketing the capabilities and capacity of this facility to the utilities and that will be the last milestone before we can arrange financing and start building the thing.”

The Gordon Butte Pumped Storage Project would use excess power produced by wind farms or other sources to pump water uphill to a 3,000-foot long reservoir.

During times of peak consumer electricity demand or when the wind is not blowing, the water would be released to turn hydropower turbines and keep electricity flowing.

Construction is expected to begin no earlier than 2018.

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Panasonic Corp (6752.T) will invest more than 30 billion yen ($256 million) in a New York production facility of Elon Musk’s Tesla Motors (TSLA.O) to make photovoltaic (PV) cells and modules, deepening a partnership of the two companies.

Tesla’s shares were up 3.5 percent at $220.75 in early trading on Tuesday.

Japan’s Panasonic, which has been retreating from low-margin consumer electronics to focus more on automotive components and other businesses targeting corporate clients, will make the investment in Tesla’s factory in Buffalo, New York.

The U.S. electric car maker is making a long-term purchase commitment from Panasonic as part of the deal, besides providing factory buildings and infrastructure.

Bloomberg: Yamanashi Vies for Energy Storage Investment

A patch of land in the shadow of Mount Fuji is becoming a testing ground for energy storage, with some of Japan’s leading companies trying to develop technologies such as spinning flywheels and fuel cells.

The Yamanashi Prefectural Government is hoping that by attracting companies such as Panasonic Corp. and Toray Industries Inc. it can become a kind of Silicon Valley for energy storage development.

As part of a project in the city of Kofu, the prefecture has built a 1-megawatt solar power station that is being made available to developers of storage devices who want to run tests under closed conditions, according to Masaki Sakamoto, an official in charge of the project.

“It’s not easy to find a large-scale solar power station available for pilot projects,” Sakamoto said. “The best scenario would be that advanced research being conducted here leads to more collaboration between major and local companies and the creation of supply chains.”

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Following on the heels of record breaking year, energy storage in 2016 is on track to break through last year’s record.

The year-over-year increase will likely not be as dramatic as 2015’s 243% increase over 2014, but several developments in 2016 show that the storage market is developing in ways that could clear a path for accelerated growth in future years.

In its third quarter, the U.S. Energy Storage Monitor, GTM Research and the Energy Storage Association said they expect the U.S. energy storage market to grow to 260 MW in 2016, up from 226 MW in 2015.

Analysts, however, say that it is not just the size and number of the installations in 2016 that is notable, but the quality and specific characteristics of those installations.

2016 has been a “transition year” for U.S. energy storage, said Brett Simon, energy storage analyst with GTM Research. And Alex Eller, energy storage analyst with Navigant Research, said “2016 has seen a much more diverse energy storage market, both in terms of the types of systems (market segments) being deployed and the business models.” While utility scale installations dominated the market in previous years, Eller said 2016 has seen more progress at all market levels. He pointed to contracts for demand response capacity and utility ownership programs as key drivers in that transition.

In June, for instance, Consolidated Edison, along with SunPower and Sunverge, announced a $15 million pilot program for a virtual power plant.

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NextEra had been on the verge of selling its Wyman plant, but after it proved its mettle during the Polar vortex, the company opted to keep the plant. But Wyman is oil-fired, and NextEra is better known for renewables and clean energy technology. The addition of a 16 MW battery system helps bring the plant in line with the company’s overall direction.

Greentech Media reported last year that NextEra plans to invest $100 million in battery storage for its solar and wind projects. Vijay Singh, NextEra’s executive director of business development for energy storage, told the news outlet that the company anticipates battery storage will play a much larger role on the grid within the next five years. NextEra already operates batteries in conjunction with renewables in the PJM territory.

Last year, NextEra Energy CEO Jim Robo said that by 2020 energy storage will begin to replace gas peaking plants.  Robo expects energy storage prices to fall in a similar fashion to solar costs, which would put the technology on par cost-wise with gas peaker plants.

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The holy grail for lowering electric rates in Maine is to increase winter supplies of natural gas, the fuel used to generate half the region’s power. For years, proponents sought to do it with new and expanded pipelines.

That effort isn’t dead, but most major pipeline proposals are stagnating or have been defeated by environmental and community opposition. Now there’s a alternative solution: Build a big tank in Maine, along existing pipelines in either Rumford or Brewer. Store natural gas in its liquid form during the summer, when prices are low. Draw it off on cold winter days, when prices are high.

This storage tank could cost $250 million, so the developer is asking the Maine Public Utilities Commission to make electric and gas customers help pay for it over 20 years. Industry officials say LNG storage has a good safety record, and the promise is that if Mainers chip in $25 million annually to contract for storage, a cap set by the Legislature, they’ll save even more on their electric bills. Maine homeowners typically pay between 20 and 24 percent more for electricity than the national average.

But this big tank isn’t the only idea for the PUC to consider.

One company is telling regulators that it’s cheaper to store gas in existing tanks in New Brunswick, Canada, and send it to New England when needed via a pipeline that runs through Maine.

Another company says it’s better to store gas in small, mobile tanks during the winter, close to factories and other big power users.

Other companies are weighing in with their proposals. Some have been so heavily redacted for confidentiality reasons that it’s impossible, so far, for the public to determine what they want to build and where.

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