As governments around the world focus on addressing climate change and stimulating the post-COVID economy, batteries have become an increasingly important part of the public conversation. It is now abundantly clear that the world’s ability to transition to clean energy and electric vehicles depends on the amount and quality of batteries that are available. Lithium-ion batteries are the only technology that can meet the performance requirements for electric vehicles and renewable energy storage. However, the demand for lithium-ion batteries is rising far quicker than investments in the raw materials required to produce them. Industry analysts expect demand for batteries to exceed material supplies by mid-decade. Alternatives to lithium-ion batteries are urgently needed to ensure that the transition to clean energy continues unabated.

Zinc-Ion Batteries: A New Li-ion Alternative

Lithium-ion batteries were initially developed because of their ability to store a large amount of energy in a small amount of mass and volume. This high energy density is of critical importance for portable applications like electronics and electric vehicles. However, stationary applications like renewable energy storage do not benefit from this energy density. In fact, the safety issues inherent in lithium-ion batteries pose significant challenges for this market. This application, therefore, offers the most opportunity for a lithium-ion alternative.

To replace lithium-ion in stationary energy storage, new battery chemistries need to be able to match lithium-ion’s power capabilities while offering improved safety and lifetime cost. Despite many attempts, few technologies have been able to achieve this. Flow batteries, for example, offer improved safety and lifetime cost, but offer too low power to be broadly useful in the electrical grid. The same is true for zinc-air batteries. Zinc-halide batteries appear to be the best candidate for replacing lithium-ion, but they are over 10x the size of comparable lithium-ion systems which makes them poorly suited for residential applications and has serious cost implications.

A tourism development in Saudi Arabia which will have its own international airport and hopes to attract over a million visitors each year will be 100% powered by renewable energy, with the help of a 1,000MWh battery storage facility.

The Red Sea Project will include more than 50 hotels on the west coast of Saudi Arabia and the company behind it, The Red Sea Development Company (TRSDC), has pledged that it will be fully powered by wind and solar. The project’s masterplan was approved in late 2018 by Saudia Arabia’s King Salman. The resort is scheduled to open in phases, with the first phase including the airport and four hotels to open by the end of 2022.

TRSDC awarded a contract this month for utilities infrastructure provision for the resort, with a consortium led by ACWA Power, the Saudi energy project investor and developer company behind some of the region’s largest – and the world’s lowest-cost – solar power projects. The site is expected to have an initial demand of 210MW and the consortium was awarded a 25-year contract.

ACWA Power’s consortium is a public-private partnership which includes financing from Saudi and international banks, including Standard Chartered Bank from the UK and the Silk Road Fund from China. Silk Road purchased a minority stake in ACWA Power’s renewables arm earlier this year. The partnership will ensure the design, construction and operation of utilities systems and associated infrastructure, including water treatment and desalination.

TRSDC representatives emailed Energy-Storage.news this week to say that the Red Sea Project will be powered 24/7 with the use of the battery storage system. The batteries will support energy resilience across the entire 28,000km2 site, including powering facilities at night-time and ensuring power if outages or other problems occur across its networks. TRSDC said that the combination of wind and solar will guarantee reliable supplies of energy.

US policymakers should explore the possibility of scrapping the investment tax credit (ITC) for solar PV and instead offer fiscal support for battery storage systems, an energy finance executive has said.

Andrew Redringer, managing director and group head of utility and alternative energy at KeyBanc Capital Markets, said the current ITC for both solar and wind “needs to go away” as the policy is “artificially lowering the price of the power”.

Speaking at the Solar & Storage Finance USA (SSFUSA) event, organised by PV Tech publisher Solar Media, Redringer said that projects can now stand alone without the ITC, given where costs have come.

“I’m all for ITC for battery, but I think the ITC has served its purpose for wind and solar, and it’s causing an unlevel playing field for some developers… the ones who have tax capacity are getting an unfair advantage.”

The current ITC permits solar system owners to recoup 26% of a project’s total cost from their taxes, having dropped from the previous 30% rate on 1 January. The credit is set to decrease to 22% next year, and as of 2022 the residential level drops to zero and the commercial credit falls to a permanent 10% level.

But there have been growing calls for the ITC to be extended, either back at the 30% rate or frozen at the existing 26% for a further period of time. A long-term extension of the ITC was among the key policies put forward by the Solar Energy Industries Alliance (SEIA) in a new document aimed at providing guidance for the incoming Biden administration and new members of Congress. The trade body describes the ITC as the “single most effective current policy available to encourage clean energy deployment”.

Despite hopes that a standalone ITC for energy storage would come into place this year, current laws mean storage units are only eligible for the credit if installed at the same time as a solar energy project, meaning retrofits miss out.

The importance of software for the bankability of a project is growing, as the opportunities for energy storage around the United States continues to expand.

Within the Assessing the Battery Market: Opportunities and Challenges in 2021 panel at the Solar & Storage Finance USA event, organised by Energy-Storage.news’ publisher Solar Media and taking place online this week, industry experts explained the security software can provide when funding storage projects.

Both front-of-the-meter and behind-the-meter models are bankable, explained Alain Halimi, director of Project & Specialized Finance Americas for the Commonwealth Bank of Australia, and it comes down more to the specifics.

“It’s more around the battery front, how it’s going to work and what kind of management team are backing the project, because battery projects are really complex when you when you think about it, because they are put in an electrical grid system which is not necessarily designed for them.”

As batteries can play into a number of markets, including arbitrage and frequency regulation, the management of them is very important to their bankability.

“Don’t be intimidated by software,” continued Halimi, “humans cannot necessarily manage all of these values, contract and requirement to charge discharge at the right time, and basically, also fulfil your requirements across device contracts.”

Therefore, the use of software is an increasingly important, and something Halimi said as a lender they have spent a lot of time working to understand.

“If the developer doesn’t have the right system, basically, the project is not bankable, you won’t be able to get into a bank debt, or even sometimes even equity.”

The California Solar and Storage Association (CALSSA) released a new report “Shovel Ready for Recovery: A Blueprint for Jobs and Economic Recovery Through Local Solar and Storage Investments,” highlighting the job creation, clean energy and energy resiliency benefits from local solar and storage investments as outlined in CALSSA’s ten-point plan of action.

California’s local solar and storage industry is helping the state move to clean, renewable energy while also helping keep the lights on for everyday consumers and businesses. Today one million solar systems located at schools, farms, businesses, homes, and low-income apartment buildings throughout California produce nearly 13 billion kWh of clean energy each year, avoiding 5 million metric tons of CO2 annually. Attached to a growing number of these solar systems are more than 30,000 energy storage systems connected to the grid and providing 1 million kWh of storage capacity. Local solar and energy storage projects are job intensive.

The industry sustains tens of thousands of local jobs and billions of dollars in economic activity within the state. Sixty full-time jobs are supported by every megawatt of local solar energy built, and California built 1,200 MW of local solar in 2019.

“As California looks for ways to bounce back economically from the COVID-19 pandemic, solar energy can boost jobs, lower customers’ utility bills, and help make the grid more resilient to wildfires and other extreme weather events,” said Ethan Elkind, director of the climate program at the Center for Law, Energy & the Environment at University of California, Berkeley. “The fuel from the sun is free and clean, so the upfront costs means more jobs and less pollution.”

COVID-19 and the resulting economy-wide shutdowns across the state brought a burgeoning distributed solar and storage industry to a temporary halt. The small and medium-sized businesses that make up the majority of the industry as well as the large manufacturers and national aggregators are regaining their footing as customer activity returns. With the right policies and investments California can bring a resilient solar and storage industry back stronger than ever to advance California’s clean energy goals, create local jobs, build a more reliable energy grid, and give consumers choice and control over their energy decisions.

Tesla has a new publicly traded competitor for its battery-based electricity-storage business.

Eos Energy Enterprises completed its merger with a special-purpose acquisition company, or SPAC, on Monday, and began trading on Tuesday under the ticker EOSE. Both companies offer the ability to store power produced by renewable but unpredictable assets such as solar power so that it can be used when demand is the highest.

Tesla (ticker: TSLA), of course, is best known as an electric-vehicle giant and the most valuable car company on the planet. But CEO Elon Musk believes battery storage will be a big business, too.

“I can’t emphasize enough, I think long term, Tesla Energy will be of roughly the same size as Tesla Automotive,” said Musk on the company’s second-quarter earnings conference call in July. “In order to achieve a sustainable energy future, we have to have sustainable energy generation…So you need to have a lot of batteries to store [renewable] energy because the wind doesn’t always blow and the sun doesn’t always shine.”

Tesla’s battery-storage technology is based on lithium-ion batteries. Eos uses zinc-based batteries, which don’t have enough power density for EVs, but work fine for storage. Lithium-ion batteries can squeeze in, very roughly, two times as much energy as aqueous zinc.

But zinc has other advantages, according to Eos CEO Joe Mastrangelo, including better thermal-management and power-discharge properties. Perhaps most important, zinc-based batteries are cheaper than lithium-ion ones, and don’t raise concerns over conflict minerals or uncertain supplies of lithium.

As President-elect Joe Biden readies his transition team and sets the agenda for his first 100 days in office, startups can expect to see some movement on long-stalled infrastructure initiatives that could mean big boosts to their business.

Infrastructure is high on the list of priorities of the incoming Biden Administration as the former vice president hopes to make good on his campaign promise to “build back better.”

American infrastructure has been crumbling for decades without significant investment from the federal government, and much of what will be replaced will also be upgraded with new technology, according to people familiar with the Biden plan.

That means tech companies focused on next-generation telecommunications and utility infrastructure, transportation, housing and construction tech around energy efficiency could see new dollars pour in over the next four years.

“Infrastructure and build out of the clean energy economy … doesn’t necessarily mean large wind or large solar projects. It could mean advanced metering … it can be new engine technologies,” said Dan Goldman, a managing partner at Clean Energy Ventures. “We think that that can be a huge opportunity for job creation … not only putting people back to work but putting people back to work in high quality jobs.”

And there’s a willingness to encourage these infrastructure projects in less partisan ways in states like Massachusetts, Virginia and Florida, which are actively building out electric vehicle infrastructure and renewable energy projects, Goldman said.