The U.S. energy storage market is expected to continue its exponential growth after increasing a record-breaking 232% from Q1 2018 to Q1 2019, Wood Mackenzie U.S. Energy Storage Monitor. But the storage market, along with renewables and EVs, precariously relies on critical minerals, and any disruption in the supply from China could potentially damage that progress.

To decrease this reliance, coupled with China’s threat to use those types of minerals as leverage in the ongoing trade dispute, the U.S. State Department created ERGI.

“Over 80 percent of the global supply chain of rare earth elements, important minerals for electric vehicles and wind turbine components, is controlled by one country,” the department said in its fact sheet.

Under the plan, the U.S. will share mining expertise with other countries to develop their mineral resources, as well as advise them on governance frameworks to help attracted foreign investors.

The hope is to ensure global supply for energy minerals meets increasing demand. “Global investment in mineral-intensive renewable power generation and battery storage technologies continues to outpace investment in fossil fuel power generation by over 100 percent annually,” according to the fact sheet.

Even though the United States possesses critical minerals, the growth of battery storage, as well as electric vehicles, will require more sources than the ones domestically available, George Crabtree, director at Argonne National Laboratory’s Joint Center for Energy Storage Research, told the Senate Energy and Natural Resources Committee June 4.

Canada and Australia, two large mining countries, have partnered with the U.S. in its efforts and others could join later, acccording to media reports said, citing a U.S. official.

The Energy Storage Association (ESA) and the American Council on Renewable Energy (ACORE) did not provide any comment on the new initiative.

As companies and states pursue aggressive decarbonization goals, the pressure to find a cost-effective storage solution is mounting.

A growing number of companies are deploying on-site energy storage, usually paired with solar. Commercial and industrial behind-the-meter storage just had its best quarter yet, reaching 44.9 megawatts of capacity in Q1.

But C&I buyers aren’t driving the growth in storage. Utilities are, with massive energy storage deployments and announcement becoming more common. In fact, the United States just became the world’s largest grid-connected energy storage market, and researcher Wood Mackenzie’s Energy Storage Monitor shows that Q1 2019 was the best quarter for deployments, with 148.8 megawatts coming onto the grid.

Projections show utility energy storage deployments are just getting started; they’re expected to double in 2019 and triple in 2020.

Utility energy storage is growing like gangbusters
Utilities have been announcing 100+ MW energy storage plans at an impressive clip over the last six months:

Southern California Edison selected a portfolio of energy storage projects in April, with a collective capacity of 195 MW, deciding against a 262-MW natural-gas peaker plant to fill the same function.
Reason: Falling prices for energy storage and the rise of policy that prioritizes low-carbon energy options.

Pacific Gas & Electric (PG&E) gained approval from the California Public Utilities Commission for four energy storage projects, totaling 567.5 MW, to replace a gas plant in South San Francisco late last year.
Reason: A policy priority from regulators to shift from natural gas to clean energy sources for flexible capacity.

Arizona Public Service (APS) disclosed in February that it plans to install 850 MW of energy storage by 2025 (the single largest storage procurement from a utility to date).
Reason: A policy that sought to grow capacity during the peak demand period, between 3 and 9 pm.

Eversource is considering a $7 million energy storage backup system for Westmoreland, a small town in western New Hampshire that suffers from frequent power outages.
Reason: Energy reliance, as the town relies on just one power line (and no backup source), which is susceptible to falling tree branches in storms.

The Trump Administration is in a strange position. Given its strong nationalism and specifically anti-Chinese sentiment, it wants to diversify sources of imports away from China and preferably bring back some manufacturing and other operations to the United States.

But this same administration also strongly backs the fossil fuel and nuclear industries and appears to be in denial of the unstoppable momentum of the energy transition. When one of the main promises of your campaign was to “bring back coal”, you are inherently not in a good position to even grasp the significance of China’s growing dominance of solar, wind, energy storage and electric vehicle supply chains.

Earlier this week the earlier tendencies of nationalism appear to have won out, at least in Director Mike Pompeo’s State Department, which has launched a new initiative to counter China’s dominance in clean energy.

The Energy Resources Governance Initiative starts by admitting what the Trump Department of Energy has been fighting for years:

Increasing demand for renewable energy, electric vehicles, and battery storage technologies will create unprecedented demand for energy resource minerals.

It then goes on to focus on three “strategic objectives”: 1) Engage resource-rich countries on responsible energy minerals governance 2) Support resilient supply chains, and 3) Meet the expected demand for clean energy technologies.

After approving investment for the acceleration of energy storage deployment in developing countries to the tune of US$1 billion a few months ago, the World Bank has now approved a US$300 million loan to do the same in China.

China is the world’s most prolific installer of renewable energy and by the end of 2018 had about 1,038MW of batteries performing power system applications and is in line to build some of the world’s biggest planned energy storage facilities.

Nonetheless, according to a World Bank document outlining the aims of its US$750 million China Renewable Energy and Battery Storage Promotion Project, several big gaps still exist between early pilot stage and private or sponsor-funded development and a sustainable commercial industry.

The country as a whole has large regional pockets of energy poverty and a dependence of almost 60% on coal in the national energy mix, while the renewable energy already installed often sees low asset utilisation rates due to oversupply or transmission and distribution network congestion, as well as low levels of interconnection between the various provinces due to regulatory reasons.

The World Bank Group International Bank for Reconstruction and Development (IBRD) will finance US$300 million of the total sum as stated above. The group’s 2018 document said the remaining US$450 million would be found from counterpart funding and in a release yesterday named Chinese commercial bank Hua Xia Bank as that counterpart.

Meanwhile, the Global Environmental Facility (GEF) and Energy Sector Management Assistance Program (ESMAP) will provide financing for technical assistance towards regulatory reforms, “shaping appropriate technology and safety standards, and developing institutional capabilities,” the World Bank said.

The World Bank, in creating the China programme, said there is an appetite to invest in energy storage from a number of sectors, but more needs to be done to bridge the gap to create sustainable investment plans to give them better assurances around entering the market.

“SMEs are very keen on investing in power system battery storage applications but face a series of obstacles,” the World Bank’s April 2018 document said.

Siemens Gamesa Renewable Energy (SGRE) has begun the operation of an electric thermal energy storage system (ETES) in Hamburg-Altenwerder, Germany.

The technology makes it possible to store large quantities of energy cost-effectively and thus decouple electricity generation and use, explains SGRE, which calls the system a “world first.”

The heat storage facility, which was ceremonially opened on Wednesday, contains around 1,000 metric tons of volcanic rock as an energy storage medium. It is fed with electrical energy converted into hot air by means of a resistance heater and a blower that heats the rock to 750 degrees C. When demand peaks, the ETES uses a steam turbine for the re-electrification of the stored energy.

The ETES pilot plant can store up to 130 MWh of thermal energy for a week. In addition, the storage capacity of the system remains constant throughout the charging cycles.

For the next step, Siemens Gamesa plans to use the technology in commercial projects and scale up the storage capacity and power. The goal is to store energy in the range of several gigawatt-hours in the near future.

“With the commissioning of our ETES pilot plant, we have reached an important milestone on the way to introducing high-performance energy storage systems,” says Markus Tacke, CEO of SGRE. “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.”

The Institute for Engineering Thermodynamics at Hamburg University of Technology and local utility company Hamburg Energie are partners in the innovative Future Energy Solutions project, which is funded by the German Federal Ministry of Economics and Energy within the “6. Energieforschungsprogramm” research program. TU Hamburg carries out research into the thermodynamic fundamentals of the solid bulk technology used.

One of India’s leading renewable energy project developers has achieved a major milestone in implementation of two ambitious energy storage projects in the states of Andhra Pradesh and Karnataka.

Media outlets recently reported that Greenko Energy Holdings managed to secure equity investment worth $495 million to fund two pumped hydro energy storage projects it is currently working on in the southern state of Andhra Pradesh.

The equity investments have been made by Singapore government-backed group GIC and the Abu Dhabi Investment Authority (ADIA). The funds will be used towards the implementation of pumped hydro energy storage projects at Pinnapuram and Saundatti. The total cost for both the projects is estimated at $2 billion.

The company is said to have achieved financial closure for the Pinnapuram Storage Project while it is in negotiations to achieve the same for the Saundatti Project.

The Pinnapuram Integrated Renewable Energy Storage Project (IRESP), located in Andhra Pradesh, will consist of 2 gigawatts of solar power and 2 gigawatts of wind energy capacity with pumped hydro storage capacity of 8,000 MWh. The project shall be designed for a discharge duration of eight hours. The project is estimated to generate 2.77 billion kilowatt-hours of energy every year at a cycle efficiency of 76.1%.

The Saundatti Integrated Renewable Energy Storage Project (IRESP), located in Karnataka, will consist of 2 gigawatts of solar power and 2 gigawatts of wind energy capacity with pumped hydro storage capacity of 9,600 MWh. The project shall be designed for a discharge duration of eight hours. The project is estimated to generate 3.32 billion kilowatt-hours of energy every year at a cycle efficiency of 76.7%.

The two projects will give Greenko a major headway in terms of access to dispatchable renewable energy, an asset whose value will increase significantly as renewable energy capacity in the country increases sharply over the next few years.

Greenko Energy Holdings is backed by GIC and ADIA and has made large acquisitions to become one of the largest independent renewable energy generators in India. The company acquired Orange Renewables, a wind energy developer and also bought assets of SunEdison India when its US parent filed for bankruptcy.

While sources such as solar and wind may be good for the planet, they do not promise a constant and predictable stream of power in the way that fossil fuels do. 

Given this fact, if renewables are to become a crucial part of the planet’s energy mix, they will need to rely on smart and intuitive energy storage systems. 

In the U.S., California-based Stem is using artificial intelligence to help businesses store energy on a large scale.

The idea is to pair artificial intelligence (AI) with energy storage so that businesses and organizations can, according to Stem, “automate energy cost savings and protect against changing rates.” Customers include major firms like Adobe Systems, Bed Bath & Beyond and Whole Foods Market. 

“We build and operate the largest digitally connected network of intelligent energy storage solutions,” Stem’s CEO, John Carrington, told CNBC’s “Sustainable Energy.”

“It’s all cloud-enabled and it’s driven by our AI software platform that we call Athena,” Carrington added, explaining that the company’s technology offered businesses both flexibility and control when it came to their energy spend.

“We lower cost by storing electricity when it’s affordable and using it later when costs are high, shifting energy away from the most expensive times of day,” Carrington said.

Explaining the firm’s model further, Stem’s CTO Larsh Johnson said that it used AI to predict both a client’s needs and the availability and cost of supply, including the sustainability of that supply.

This, Johnson added, enabled Stem to “match a customer’s requirements with the availability of energy both from the grid and from any onsite renewable generation.”

Iowa economic development officials are tentatively endorsing a tax credit for battery storage to complement the state’s wind and solar generation.

The tax credit is one of several recommendations made in a recent report on energy storage opportunities by the Iowa Economic Development Authority. Others include targeting grant money and conducting additional research, including a “value of storage” analysis.

“We are seeking to move the needle,” said Brian Selinger, who, as the agency’s energy team leader, was involved in developing the Energy Storage Action Plan.

Storage was highlighted in a 2016 state energy plan. State leaders think storage could offer a host of benefits, such as enhancing the productivity of wind and solar, reducing energy costs, enhancing grid reliability, and creating jobs.

The new report suggests tethering a state storage tax credit to a proposed federal tax credit. The Energy Storage Tax Incentive and Deployment Act, introduced in the U.S. House in April, would offer electric storage systems the same 30% investment tax credit now available for solar photovoltaic systems. There is a federal tax credit for storage that meets some specific requirements.

“It’s helpful if we can see that support coming federally first,” Selinger said. “That would send a nice signal. As with solar, then Iowa can say, ‘The federal government has done something; maybe we can layer something on that.’”

Maryland is the only state with a storage tax credit. Several others including New Mexico and Hawaii have discussed it or extended other incentives such as grants, rebates, feed-in tariffs and exemptions from personal property tax, according to James Burwen, vice president of the Energy Storage Association.

Selinger said Iowa officials still need a much better understanding of how storage would work in the state before they would recommend legislation to create the tax credit.

The Ministry of New and Renewable Energy in India is looking beyond batteries to push energy storage in the renewable energy and grid balancing and support sector.

The Ministry recently issued a document calling upon companies to submit proposals for gravity storage projects. Gravity storage is seen as an energy storage solution with very short response time and high flexibility. India may be looking at multiple applications by utilizing gravity storage systems — grid balancing, stabilization of renewable energy discharge, etc..

Gravity storage works on the same principle as a pumped hydro project, with storage of potential energy at times of surplus, converting that stored potential energy into kinetic energy and, finally, into electricity. Usually a large mass (rock or concrete) is lifted using hydraulic pressure to store potential energy. To generate energy, the large mass is dropped, which pushes a large volume of water through a turbine, similar to the operation in a pumped hydro or a normal hydro power project.

At present, India has no major battery-based energy storage projects despite having floated a few large tenders for the same. The country, however, has 2.6 gigawatts of operational and another 3.1 gigawatts of under-construction pumped hydro storage projects.

Gravity-based storage systems based on solid mass are certainly a technology that can be implemented in India, as it is comparable to pumped hydro in several operational aspects. According to Heindl Energy, the efficiency of gravity storage is around 80%, nearly same as that of pumped hydro storage. A study by the Imperial College of London estimates the levelized cost of Heindl’s technology at $106 per megawatt-hour compared to $206 per megawatt-hour for pumped hydro.

University of Nottingham and the World Society of Sustainable Energy Technologies are working on gravity storage systems integrated into abandoned mines. The technology, submitted for patent, is called EarthPumpStore. The University ‘estimates that 150,000 abandoned mines in China could deliver an estimated storage capacity of 250 terawatt-hours’.

An innovative gravity storage system is reportedly in works by the Advanced Rail Energy Storage (ARES) in the United States. The company received approval for its first commercial project in 2016. The project is expected to be implemented in Nevada. Following is a summary of its operational aspect.

Australia is poised for a transformation of its electricity system – but not in the ways you’ve heard before.

In recent months, transmission companies around the world have been increasingly considering energy storage as the means to supplement a fundamental part of our electric power infrastructure: the poles and wires that carry high-voltage current from power plant to end-users.

Battery-based energy storage offers a solution for adding needed capacity – “virtual transmission” – on Australia’s transmission corridors, increasing system reliability and the NEM’s ability to move power between states, on far faster timelines and at less cost than traditional infrastructure.

Congestion on Australia’s transmission network is not an issue on most people’s minds but has significant impacts across the economy. Network congestion continues to make headlines in Sydney and Melbourne during the heat of summer, when temperatures often hit 50 degrees C.

Transmission lines are running at full capacity but still are not able to serve all the load during the hottest day.

A single transmission line outage across the state boundary can create power price surges of $14,000/MWh or brownouts – as happened in New South Wales during August 2018, when the QLD-NSW interconnector tripped due to a lightning strike.

While several initiatives being pursued at the state and national levels aim to increase critical transmission capacity and reduce network congestion, energy storage can play – and should be considered – in helping address this specific issue.