Thanks to continuously declining costs, a hybrid renewable electricity generation system that combines wind, solar, and storage could become competitive with the cheapest fossil fuel electricity in the United States—combined-cycle natural gas generation, an MIT professor suggests.

John Deutch, an Institute Professor at MIT, has recently presented a study, ‘Demonstrating Near Carbon Free Electricity Generation from Renewables and Storage’, at an energy seminar at Stanford University.

According to Deutch, the best way to see if the hybrid electric systems (HES) of wind, solar, and storage could compete in costs with natural gas-fired electricity generation is to organize a large-scale demonstration to show if those HES could meet electricity demand of a relatively large service area “rather than rely on government sponsored large scale demonstration projects or regulatory mandates compelling deployment of storage.”

“Uncharacteristically I have been an optimist—I am an optimist—about this, and I believe we are very close to having an economically competitive triad—wind, solar and storage—to produce electricity at a cost as low as the cheapest fossil alternative, which is natural gas combined cycle,” Deutch said during his presentation. “We are close to having this be a commercial operation.”

The large-scale demonstration would show the private sector if those hybrid systems could be competitive, he said, noting that the base analysis was made for the ERCOT service area in Texas, and additional studies were made for Iowa and Massachusetts.

According to Deutch, Puerto Rico and Hawaii could be suitable places for energy developers to show HES viability. The MIT scientist proposes developers to bid for 20-year contracts with a utility and all the government has to do is to ensure a ‘regulatory wrap’ to allow the project.

A new poll has identified energy storage as the most promising technology for institutional investors keen on renewable assets, amid plans by many to ramp up allocations.

Nearly two-thirds of all asset owners and managers quizzed by the firm chose batteries and other energy storage technologies as the renewables subsector with the greatest potential.

The appeal of storage rests on the “growing role” it will play in the European energy mix as renewables become more prominent, Aquila said as it released the findings. “Cost reductions, technology development and improving regulations will continue to strengthen the investment case for storage moving forward,” the firm added.

The respondents – a 103-strong base featuring pension funds – dedicated on average 3.6% of their portfolio in 2018 to renewable infrastructure, a rise from the 2% recorded in 2016. For 12% of these investors, the exposure last year reached into the 10-15% region.

According to the survey, the institutional appetite for renewables looks set to build all the way to 2021, with 49% poised to ramp up exposure by that year. Despite their optimism around storage, the polled financiers planned their largest allocation increases in offshore wind, solar thermal and onshore wind.

Regardless of their investment target of choice, institutional players were drawn to renewables as a whole by long-term cash flows (the top reason for 55% of respondents). Geographic diversification, low correlation to other asset classes, inflation hedging and ethical considerations were, in descending order, the other key drivers.

Energy storage aside, electricity transmission was seen as the second most promising investment area, with interconnector projects close behind. Allocations in these two areas could be key for a solar industry faced with grid challenges in certain markets and question marks over interconnection projects, with the UK particularly exposed if no-deal Brexit comes to pass.

Energy markets across the world are changing rapidly with the increase of renewables and the change to a more distributed energy network. Energy storage is key. The capabilities of large-scale batteries have expanded, allowing users to capture more value and create a powerful tool to manage energy needs. At the same time, the price of energy storage dropped more than 50% from 2012 to 2017. And that trend is likely to continue. Energy storage systems are also being incentivized by many government programs to encourage utilization, further decreasing the cost of energy storage.

For manufacturers, energy storage systems can provide two major benefits: cost effective support to critical equipment onsite and mitigating utility risk.

Most advanced manufacturing facilities have equipment that is at risk of shutdown or damage due to poor quality incoming power or rapid voltage fluctuations. Other businesses have inventory at risk in the event of loss of climate control. Adverse impacts to businesses come in many forms: equipment repair or replacement cost, lost revenue, lost inventory and loss of customer confidence. Business interruption insurance coverage is often not effective in mitigating losses caused by external power supply issues.

By installing an energy storage system, manufacturers can ensure the best power, provide backup and monitor systems, potentially replacing various software or equipment on site. New battery systems can now replace a UPS (uninterruptible power supply) while also providing other services simultaneously. Control systems can ensure higher power quality and clean the electricity coming in from the grid, ensuring that sensitive equipment do not see voltage fluctuations. The storage system in the event of a grid outage also provides power for a safe shutdown procedure or power until backup gensets can be spun up. Storage systems can support and provide VAR (volt-ampere reactive) support for inductive or high demand loads, matching the needs of the business to ensure the business is run for optimal output instead of electricity costs. Previously, high-performance energy storage systems were cost prohibitive, but they are now cost effective.

Energy is one of the most significant costs in any manufacturing facility; energy storage solutions can help plan for and manage current and upcoming risk of electricity cost increases. In many places, the level of utility service has been decreasing due to aging infrastructure while the cost of electricity has been increasing rapidly.

The U.S. energy storage market will reach $4.5 billion by 2023, according to Wood Mackenzie Power and Renewables. Behind-the-meter energy storage will account for more than half of the annual market in dollar terms by 2021.

To date, growth has been largely driven by storage initiatives and demonstration projects in state policy, rate-setting and incentives. Changes in federal rules for energy storage markets requiring equal treatment of energy storage with other power sources promise to drive even more adoption.

On February 27, MIT Enterprise Forum (MITEF) Cambridge’s CleanTech Industry Group will host Energy Storage: New Business Models Fuel Rapid Growth. This interactive session will highlight what startups need to know to participate in the rapidly growing clean power system. Set for the Bartos Theater at the MIT Weisner Building, Northbridge Energy Partners Principal and Forbes columnist Peter Kelly-Detwiler will moderate the discussion featuring experts including:

• Dan Berwick, general manager, Energy Storage, Borrego Solar
• Alicia Barton, president and CEO, New York State Energy Research and Development Authority (NYSERDA)
• Kelly Speakes-Backman, CEO, Energy Storage Association
• Charlotte Ancel, director, Strategic Development, Eversource
• Joe Crespo, CEO, Genbright

Panelists will explore what startups need to know to participate:

• What government incentives and policies (local, state, federal) are in place to encourage greater adoption of energy storage in the commercial, industrial and residential markets?
• What storage technologies and services produce revenue streams now? What markets will become valuable in the next five years?
• How have investors and utilities influenced the development of new business models for both established companies and startups? Which of these models are most likely to be successful?

The event, which will be from 5:30 p.m. to 8:30 p.m., is sponsored by IE-Club Boston, CHEN PR and Massachusetts Clean Energy Center. For more information and to register for the event, visit the Web site. The session will be live streamed, and attendees can buy a ticket for the live streamed option to watch it online. 

UK battery storage firm Zenobe Energy has secured a £25 million (US$32.27 million) investment from Japanese power giants Jera and Tokyo Electric Power Company (Tepco).

The equity injection is not only one of the largest direct investments in a UK energy storage company, but also constitutes yet another move from Japan’s energy utilities into the UK power scene.

Zenobe, originally started up as Battery Energy Storage Solutions Ltd and then rebranded last year, said the equity injection would allow the firm to accelerate its energy storage rollout while also allowing it to expand into new markets.

The £25 million comes atop £45.5 million of equity already invested into Zenobe over the course of the last 18 months and a further £30 million of senior debt facilities provided by Santander and Generation IM.

That finance has powered Zenobe towards the forefront of energy storage development in the UK. The firm, which has around 73MW of operational storage assets, claimed an industry first last summer when it delivered more than 50MW of reserve power using National Grid’s new Ancillary Services Dispatch Platform.

Strategic investments, service offerings
It is now developing various new service offerings, which the company said would counter controversial charging reforms proposed by Ofgem, and is also providing flexible power solutions for electric bus depots, with an eye on expanding this offering to commercial EV operators.

Nicholas Beatty, co-founder at Zenobe, said the firm considered Jera and Tepco to be among the two “most significant strategic investors in the power sector”.

“They bring unique commercial and technical capabilities to Zenobe as well as unrivalled access to a global supply chain. This investment reinforces Zenobe’s reputation as an innovator in the energy market. Together, we’ll help energy intensive businesses use power intelligently to reduce costs, improve resilience and minimise environmental impact,” he said.

WASHINGTON — Declining costs and new market rules are opening opportunities for energy storage, but the technology’s operating characteristics are proving challenging to system operators and market designers, speakers told the Energy Storage Association Policy Summit last week.

Jurisdictional questions also are creating uncertainty, speakers said.

David Kolata, executive director of the Citizens Utility Board in Illinois, captured the optimism at the daylong conference, declaring his consumer group as “bullish” on the technology.

“In our minds, the declining cost curve of batteries and other storage technologies is the single most encouraging trend in the electricity space today,” Kolata said. “We see storage as an essential component of a least-cost future, and we say this because if we get the policy right there are multiple sources of consumer value.”

Kolata cited lower cost for frequency regulation, reduced costs for integrating renewables, increased grid flexibility and reliability and the deferment of transmission and distribution system investments.

“And perhaps most importantly, storage can lower peak demand. From the consumer point of view, nothing is more important than reducing the peak. As you know, a large percentage of overall system costs are driven by 30, 40, 50 hours a year, so if you can reduce that peak, there are benefits for all consumers.”

Kolata said storage — along with time-based rates — will be crucial to ensuring transportation electrification brings benefits.

“At CUB, we see the potential benefits from electrification, but … only if vehicles charge when they should and don’t charge when they shouldn’t,” he said. “If transportation electrification increases peak demand, it’s going to be bad for the environment and bad for consumers.”

California Governor Gavin Newsom will need to hit the ground running if he wants his state to reach its historically ambitious goal of zero net carbon emissions by 2045. New York has its work cut out, too, as it aims to hit the same mark by 2040. Motivated by these newly minted climate policies, many other states are ramping up their emissions targets as well.

But no state will be able to reach its goal without addressing one crucial tool: energy storage.

Across the United States, thousands of people have installed batteries like the Tesla Powerwall in their homes, while a few states, such as California, New York, and Massachusetts, have pioneered grid-scale battery projects. These batteries store energy to be used later, at peak demand times or during other shortages.

The push for energy storage promises big environmental benefits. With enough capacity, generators of electricity can tap into their sources of renewable electricity, hold onto it, and use it when the sun is not shining and the wind is not blowing. It is a way to use carbon-free energy instead of fossil fuels, and reduce electricity generators’ emissions of destructive, climate-changing greenhouse gases.

But the reality is more complicated than this rosy picture would suggest. Energy storage projects, regardless of upgrades to technology and infrastructure, must be paired with the right policies. Without such policies, society risks increasing greenhouse gas emissions, rather than decreasing them. As climate threats mount and the window to act is beginning to close, states need to adopt desirable energy storage policies as quickly as possible.

India’s first grid-scale battery storage system was brought online earlier this week in Rohini, Delhi, by a triumvirate of heavy hitters including Indian electric utility Tata Power, global power company the AES Corporation, and global business enterprise Mitsubishi Corporation.

The 10MW/10MWh grid-connected energy storage system is owned by AES and Mitsubishi Corporation and it is hoped it will pave the way for wider energy storage adoption in India.

The battery energy storage system is located at a substation in Rohini, Delhi, operated by Tata Power Delhi Distribution Limited (Tata Power-DDL), and consists of an Advancion Energy Storage Platform supplied by Fluence, a Siemens and AES joint venture.

The Advancion platform is designed around small module nodes that serve as the building blocks for the larger energy storage system, providing a high degree of redundancy.

According to Fluence, the platform’ “independent, modular nodes incorporate pre-certified batteries and inverters with our patented controls and are architected in a massively parallel design – offering customers the highest level of reliability and availability, similar to the world’s best data center systems.”

“Fluence is proud to support Tata Power-DDL in their efforts to continuously improve their network by adopting new technologies such as Fluence’s Advancion energy storage platform,” said Stephen Coughlin, CEO of Fluence. “This historic project is a major step forward and will showcase the valuable role energy storage will play in enabling India to achieve its sustainable energy goals.”

The Tesla big battery at Hornsdale in South Australia continues to make its mark on the Australian energy market, pocketing another $4m in the fourth quarter from the provision of frequency and ancillary services.

The number was revealed in the Australian Energy Market Operator’s latest Quarterly Dynamics report, which also reveals a growing focus on energy storage, and time shifting and energy arbitrage in particular.

The fourth quarter was notable because it saw the number of big batteries on the main grid multiply, with the addition of the Dalrymple North battery in South Australia, and the Gannawarra and Ballarat big batteries in Victoria.

It also saw a record amount of pumped hydro used since 2008, a sure sign of the greater role for energy storage that is to come as the share of wind and solar continues to soar and more battery and pumped hydro systems, along with other forms of storage such as hydrogen and solar thermal, come into the system.

The performance and business model of the Tesla big battery has been a source of fascination for the industry since its opening more than 14 months ago. Tesla founder and CEO Elon Musk recently confirmed that the $95m facility was likely to pay itself back within a few years.

The battery, actually owned and operated by Neoen Australia, receives a $4m a year payment for providing grid services to the South Australia government – a payment worth significantly more given its recent performance keeping the lights on in the state after a lightning strike in northern NSW led to load shedding and generator trips in all other states.