Failing to create an investment tax credit as part of the ongoing tax extenders legislation, a coalition of clean energy trade bodies in the US have urged.

As it stands, this year’s tax extenders will add a further year to wind power’s Production Tax Credit, but calls for the bipartisan Energy Storage Tax Incentive and Deployment Act (H.R. 2096) to be rolled in have been ignored.

Writing to Representative Richard Neal (D-MA), chairman of the Committee on Ways & Means, the group said the storage ITC offered a short-term jobs boost and a contribution to addressing the climate crisis.

“While members of the Democratic caucus debate how to address the climate crisis, the Ways & Means Committee has an opportunity to take a significant step forward by incorporating clean energy tax credits into forthcoming legislation,” the letter dated June 18 reads.

“H.R. 2096 will ensure a level playing field for energy storage as a standalone asset alongside all other energy resources made eligible for Section 48 & 25D investment tax credits (“ITC”). Resolving the uncertainty facing companies who seek to utilize the ITC for energy storage will not only spur greater investment and create jobs among a diversity of industries, but also it will accelerate the U.S. transition to zero-carbon electric supply.

“We encourage you to not miss this opportunity. Fixing ITC eligibility for standalone energy storage is among the nearest-term opportunities to advance clean energy in this Congress.”

The letter was sent on behalf of American Council on Renewable Energy (ACORE), American Wind Energy Association (AWEA), Energy Storage Association (ESA), National Hydropower Association (NHA), Northeast Clean Energy Council (NECEC), RENEW Northeast and the Solar Energy Business Association of New England (SEBANE).

After fires were started at a reported 23 battery energy storage installations in South Korea during 2018, the government and a national standards committee have discovered the causes but have so far declined to engage with the international press on the matter.

Energy-Storage.news has been tracking progress since rumours and then more solid reports began flying around over the past few months that during 2018, lithium-ion battery energy storage systems, deployed rapidly over the past few years, have been catching fire.

South Korea’s Ministry of Trade, Industry and Energy, and the national Standards Committee were reported by local news outlets to have held a press briefing a week ago, revealing that in nearly every case the issue appears to have been poor management of batteries, rather than anything inherently unsafe in the batteries themselves. At one stage at the beginning of the year, a source passed on to Energy-Storage.news a note issued by manufacturer LG Chem to customers which requested customers to stop operating their systems until “a decision is made to restart the operation”, with other manufacturers similarly affected.

The ministry has issued a release in Korean, while Energy-Storage.news has requested further information from both the ministry and standards committee but is yet to receive a reply several days later. Similarly, when requested for comment back in May, the US office of battery maker LG Chem refused to handle the matter, deferring back to corporate HQ in Korea but claiming to be unable to contact or obtain comment from there. Direct requests to that HQ have yet to be acknowledged. Both Samsung SDI and LG Chem, among the country’s biggest players have taken a big financial hit based on one-off costs of dealing with the safety issue.

One of the most exciting innovations in energy over the past decade has been the development of energy storage technology. Batteries have become viable for almost every size project, from homes to the largest utilities.

In 2018, 311 megawatts (MW) and 777 megawatt-hours (MW-hr) of energy storage were installed in the U.S., according to Wood Mackenzie and the Energy Storage Association’s Energy Storage Monitor. The cumulative installations could power 75,000 homes for an entire year, and they’re just the start of the industry’s growth.

Energy storage plans are exploding
777 MW-hr of energy storage is a lot, but it’ll soon be dwarfed by a few projects. Earlier this month, the Gemini Solar Project in Nevada revealed plans to build a 531 MW/2,125 MW energy storage facility to accompany a 690 MW solar power plant. The project could then smooth out the electricity offered to the grid to include peak evening hours, when solar intensity falls but electricity demand jumps.

In Florida, NextEra Energy’s (NYSE:NEE) utility Florida Power & Light is planning a 409 MW/900 MW-hr facility that will be co-located with a solar power plant. In Hawaii, six projects were recently approved by regulators totaling 247 MW/998 MW-hr of energy storage. They will be paired with 247 MW of solar power plants, all of which will deliver electricity to the grid at $0.10 per kWh, or less, which is lower than the cost of fossil fuels on the island. Solar and energy storage have disrupted Hawaiian utility company Hawaiian Electric Industries (NYSE:HE) but Hawaiian Electric is (slowly) learning to use solar and energy storage assets to its advantage rather than fight renewable energy under its jurisdiction.

It’s no coincidence that energy storage is booming in scale right now. There’s a need in the market to curb the volatility of wind and solar energy production, and battery costs have now come down far enough that energy storage with batteries is economical.

The small-scale market that’s starting to sprout
It’s not just large energy storage projects that are gaining traction. Storage is being attached to residential and commercial solar projects in growing numbers. SunPower (NASDAQ:SPWR) says that over one-third of its commercial solar projects now have energy storage included.

On the residential side, Sunrun (NASDAQ:RUN), Vivint Solar (NYSE:VSLR), and SunPower are all offering energy storage for homeowners. The numbers are small, with only 15,000 home storage systems installed in 2018, but they’re growing in market share and could be included in standard solar systems in the next few years.

One of the major issues faced by the companies in the C&I sector is the downtime caused due to power outages. Even a small disruption in the supply of electricity in hospitals and nursing facilities can put lives at risk. Instances of power outages are resulting in significant losses for manufacturing companies as they are missing the timelines in delivering products to their customers. Power outages have led several manufacturing plants to shut down across the world. In December 2017, Delta Air Lines Inc. incurred a significant loss due to a power outage. Such financial catastrophes and business downtimes are creating a pressing requirement for investment in energy storage to overcome problems associated with power outages. This growing need for backup power is expected to drive the growth of the global decentralized energy storage market over the forecast period at a CAGR of over 18%. However, the market’s momentum will decelerate in the coming years because of the decrease in year-over-year growth.

Market Overview

Growing economic benefits of ESS

End-users are adopting ESS to store energy rather than depending on the power grid during peak power demand. This results in huge monetary savings as they reduce the peak demand charges they pay. Owing to such benefits, the demand for ESS is expected to increase over the forecast period and subsequently drive the growth of the global decentralized energy storage market size.

Stringent laws against lead pollution

Lead-acid batteries, that is one of the electrochemical energy storage technologies, contains sulfuric acid which is dumped in landfills contaminate groundwater reserves and drinking water supplies. Such improper disposal of the used lead-acid batteries is driving many countries to introduce stringent laws on the production and disposal of lead-acid batteries to reduce the risk of lead poisoning. For instance, China recently shut down many lead-acid battery plants and enforced strict regulations for the production of lead-acid batteries. This is expected to have a negative impact on the growth of the global decentralized energy storage market.

For the detailed list of factors that will drive and challenge the growth of the decentralized energy storage market size during 2019-2023, view our report.

Competitive Landscape

The market appears to be fairly fragmented with several players occupying the market share. Companies such as CALMAC and Fluence Energy LLC have intensified the competition. Factors such as the rising need for backup power and the growing economic benefits of ESS will provide significant growth opportunities for decentralized energy storage companies. CALMAC, Fluence Energy LLC, LG Chem Ltd., NEC Corp., NGK Insulators Ltd., and SENER Ingeniería y Sistemas SA are some of the major companies covered in this report.

Every year, committees in the U.S. Congress get together to give an additional lease on life to tax breaks through special legislation, a process known as “tax extenders”. And for the past few weeks, rumors have been circulating that this year’s tax extenders bill could include an extension of the U.S. Investment Tax Credit (ITC) to energy storage, as has been proposed in separate legislation.

This now looks like wishful thinking, as no such provision is in the tax extenders mark put forth by the House Ways and Means Committee. The latest version includes a one-year extension of the Production Tax Credit (PTC) for wind and the renewal of credits for what American Council on Renewable Energy (ACORE) describes as “orphan” renewable energy technologies, but no mention of energy storage.

“The House Ways and Means Committee extenders mark is a modest start to a really important near-term opportunity,” states ACORE CEO Greg Wetstone. “While an extra year of the wind PTC and renewal of the orphan renewable technologies are to be welcomed, this year’s extenders process should not conclude without the inclusion of a tax credit for energy storage and other critical measures to help combat climate change and decarbonize the grid.”

Energy storage and the ITC

To be clear, energy storage projects can currently claim the ITC – but only if they can show that they are charged with solar, and not conventional sources. To make matters more complicated, there are different rules for residential and commercial systems. As explained in a fact sheet by Solar Energy Industries Association (SEIA):

Current IRS guidance regarding eligibility of storage to receive the federal solar ITC is unclear. The IRS has concluded that storage systems owned by homeowners must derive 100% of their power from an onsite solar array to qualify for the ITC. The IRS previously said storage systems owned by businesses apply a different rule, as those systems would be eligible for the ITC only if at least 75% of the charging of the storage unit is provided through solar generation.

SEIA explains that this is not a good solution for energy storage, or the grid. “Requiring the owner of storage technologies to account for the source of their energy imposes an unreasonable burden and undermines certainty,” argues SEIA. “It also expressly prohibits most of the grid services a solar plus storage system can provide to grid operators to help with resiliency.”

Siemens Gamesa has launched an innovative volcanic rock energy storage site.

The firm’s new pilot facility in Hamburg-Altenwerder, Germany, can store 130MWh of energy for up to one week.

It works by using excess electricity to power a resistance heater and a blower, which are used to heat around 1,000 tonnes of volcanic rock to 750°C.

The heat storage facility then converts heat back into energy using a steam turbine, making it possible to store large quantities of energy cost-effectively.

Siemens Gamesa says the project has a storage capacity target in the GWh range, which would be equivalent to the daily electricity consumption of around 50,000 households.

It notes the storage capacity of the system remains constant throughout the charging cycles, improving the reliability and durability of the system.

Markus Tacke, CEO of Siemens Gamesa Renewable Energy, said: “Our technology makes it possible to store electricity for many thousands of households at low cost.

“We are thus presenting an elementary building block for the further expansion of renewable energy and the success of the energy transition.”

Solar Power World recently spoke with Zachary Cox, VP of operations at U.S. Battery Manufacturing, about the current state of the U.S. energy storage market. The deep-cycle, lead-acid battery manufacturer attributes the recent increase in energy storage system deployments to improved battery technology and utility flexibility, but Cox noted there’s still a long way to go to figure before cost-effective, long-duration storage is more commonplace.

Solar Power World recently spoke with Zachary Cox, VP of operations at U.S. Battery Manufacturing, about the current state of the U.S. energy storage market. The deep-cycle, lead-acid battery manufacturer attributes the recent increase in energy storage system deployments to improved battery technology and utility flexibility, but Cox noted there’s still a long way to go to figure before cost-effective, long-duration storage is more commonplace.

SPW: What do you think is the reasoning behind batteries finally finding some traction in the United States?

Cox: Improvements in battery technology have fueled the increased adoption of energy storage over the past decade or so. More recently, I think a major factor has been the curtailment or elimination of net metering with many utility providers. If net metering is eliminated or curtailed, the economic benefit of solar power is significantly diminished. Batteries provide a way to store the excess generation for use at night, reducing or eliminating the need for grid provided power.

In addition to net metering playing a role for residential and commercial users, utility companies themselves are implementing storage technology to give them flexibility on the grid. Energy storage provides utility companies the ability to distribute load during peak demand or ride through supply interruptions.

Another big factor for increased storage installations is the formal commitment to clean energy in states like California, Washington and New York. Last year, Governor Brown of California signed legislation committing to 100% renewable energy by 2045. In order to make this goal a reality, energy will need to be stored somewhere. The big question is where: front-of-the-meter, residential behind-the-meter, commercial behind-the-meter, or a combination of all three? If you take a look at where we are now, all three are seeing somewhat even deployment capacities.

SPW: How can we make storage adoption even greater in the United States?

Cox: One of the biggest challenges will be developing battery technology that is safe, has a low cost of ownership, provides high performance characteristics and is environmentally friendly. Lithium-based battery technologies can provide high performance, but their high cost, low recyclability and spotty safety record create huge challenges for further growth. Lead batteries provide safety, the lowest cost of ownership and the highest recycling rate of any product in the world (99%), but they currently lack the performance needed for large-scale systems. The key to the future of energy storage will be the improvement of both of these technologies and the development of new technologies to meet the growing demand.

US software and data company Autogrid has continued its roll-out of solutions into Japan’s evolving electricity market, joining a virtual power plant (VPP) project that could add more than 10,000 assets by the end of 2021.

Autogrid has been one of the prominent early movers in aggregating distributed energy resources (DERs) including solar, battery energy storage and demand response, into so-called VPPs that perform the role of conventional power plants on the grid, without dependency on large-scale centralised generation assets and associated transmission and distribution infrastructure. Energy-Storage.news covered the California company’s activities in this space as early as 2015, when it delivered solutions to what was described as “the world’s first software-defined power plant”, a VPP in Holland that incorporated 100MW of dispatchable resources including CHP and demand response.

Japan’s electricity market is opening up to competition while the country remains largely dependent on imported fossil fuels and solar feed-in tariffs start coming to an end. Analyst Izumi Kaizuka of Tokyo-based RTS PV told this site recently that owing to these and other converging factors, including a zero energy buildings policy for new homes coming in place next year, Japan’s ‘solar boom’ is far from over. This changing market landscape is also opening up opportunities for new technologies, and the application of data, with major utility TEPCO’s recently reported blockchain project a case in point. Meanwhile, Autogrid and others including the UK’s Moixa Technology have struck deals to allow them to partner with energy solutions providers on aggregated VPP projects. Meanwhile, domestic providers including Softbank and Kyocera have also joined in partnership with utilities, grid operators and other stakeholders to execute virtual power plant (VPP) projects backed by the government.

Japanese energy management services company ENERES has contracted Autogrid to supply its virtual power plant and customer engagement software, which will “aggregate, market and dispatch energy from demand response and DERs”, Autogrid said yesterday.

“Japan is in the midst of a massive market transformation that requires much greater supplies of flexible energy,” Autogrid CEO Dr Amit Narayan said, adding that the VPP with ENERES is a “scalable platform to meet this challenge”.

Spanish renewable energy giant and offshore wind energy leader Siemens Gamesa Renewable Energy last week inaugurated operations of its electrothermal energy storage system which can store up to 130 megawatt-hours of electricity for a week in volcanic rock.

Siemens Gamesa, a company known more famously for its offshore wind turbines, is nevertheless a large-scale renewable energy technology manufacturer, with its hands in various renewable technology pots. One of these pots is energy storage, and last week the company announced the beginning of operations of its electric thermal energy storage system (ETES), claimed by the company as a world first. The opening ceremony for the pilot plant in Hamburg-Altenwerder was held last week to celebrate the beginning of operations.

The newly-opened electric thermal energy storage system is billed by Siemens Gamesa as “The Future Energy Solution” and as costing “significantly” less than classic energy storage solutions. Specifically, according to the company, even at the gigawatt-hour (GWh) pilot scale, ETES “would be highly competitive compared to other available storage technologies.”

The heat storage facility consists of around 1,000 tonnes of volcanic rock which is used as the storage medium. The rock is fed with electrical energy which is then converted into hot air by means of a resistance heater and a blower that, in turn, heats the rock to 750°C/1382 °F. When demand requires the stored energy, ETES uses a steam turbine to re-electrify the stored energy and feeds it back into the grid.

The new ETES facility in Hamburg-Altenwerder can store up to 130 MWh of thermal energy for a week, and storage capacity remains constant throughout the charging cycles.

“With the commissioning of our ETES pilot plant, we have reached an important milestone on the way to introducing high-performance energy storage systems,” said Markus Tacke, CEO of Siemens Gamesa Renewable Energy. “Our technology makes it possible to store electricity for many thousands of households at low cost. We are thus presenting an elementary building block for the further expansion of renewable energy and the success of the energy transition.”

Australia’s largest solar-plus-storage project has come online in Victoria with Tesla batteries, proving that existing PV projects can be successfully retrofitted with battery storage.

The 25MW/50MWh battery is co-located and integrated with the 60MW Gannawarra Solar Farm, near Kerang, in the Northwest of Victoria. The battery is now owned by Edify Energy and its partner Wirsol, who developed the project.

Minister for Energy, Environment and Climate Change Lily D’Ambrosio, who visited the project, said: “Big batteries help to stabilise our power grid and provide much-needed backup power – which is vital to maintaining a reliable and affordable energy supply for Victoria.”

“By investing in renewable energy and storage technology, we are continuing to modernise our electricity grid, strengthen our energy security and deliver real action on climate change,” D’Ambrosio added.

The Andrews Labor Government has invested AU$25 million (US$17.25 million) into two big batteries in North Western Victoria – the Gannawarra Energy Storage System and the Ballarat Energy Storage System – to help integrate new renewable energy into the Victorian grid and alleviate stress points in the electricity network.

The Australian Renewable Energy Agency also provided AU$25 million to co-fund these projects, with close to AU$20 million investment from private equity.

This is Tesla’s second biggest battery in Australia and among the largest of its kind in the world. It can power 16,000 households for two hours during peak demand.