The market for energy storage in Texas is in limbo, in part because key issues regarding utility ownership of energy storage have yet to be resolved.

The issue arose a year ago when the PUCT dismissed a request by AEP Texas, a unit of American Electric Power, to install two battery storage projects because the regulators said they lacked sufficient information.

Instead, the PUCT in February opened a docket (#48023) on the issue to “develop facts necessary to establish a regulatory framework” that would allow energy storage and other technologies to operate within the confines of Texas’ Public Utility Regulatory Act (PURA).

The docket, or “project” as the PUCT calls it, exposed the deep divide between utility and non-utility stakeholders in Texas’ competitive wholesale market, which does not allow transmission and distribution utilities (TDUs) to own generation assets.

Texas law classifies energy storage as generation, but TDUs argue that they are within their rights owning energy storage facilities for use on their distribution systems because they do not intend to use them as generation.

Texas competitive generators, along with competitive service providers and other parties, however, argued that utility-owned storage devices would be generation and would inevitably affect wholesale power markets and wholesale power prices.

The TDUs counter that even though the storage device might affect the wholesale market, they would be indistinguishable from any of the actions a TDU might take that could affect the wholesale market, such as the construction of new transmission line.

In its report to the legislature, the PUCT shows that PURA provides conflicting definitions of “generator” with respect to the ownership of energy storage devices. One section makes intent to sell to the wholesale market key. Another section appears to make an exception for self-use of power from a storage device.

I started covering the solar energy industry seriously in 2009. It seemed like a hopping, exciting time in the industry — growth was exploding. I remember one early story in which readers admonished me a little because I put “Solar Power Exploding” in a headline, and they thought I was referring to genuine explosions. In 2019, 2009 and 2010 progress looks like anthills.

Scrolling back through our What Changed archives, below is a lengthy rundown of notable changes within the solar energy and energy storage industries in 2018. I’m sure I missed some of them — drop a note in the comments if you have a favorite I skipped. I’m also sure this post is far too long for the casual reader — do your best. Additionally, stay tuned for record-breaking progress in 2019.

Nevada raised its renewable electricity standard (requirement) from 15% by 2025 to 50% by 2030.

California approved new standards requiring that solar panels be installed on the roofs of nearly all new homes, condos, and apartment buildings by 2020.

California approved the “Million Solar Roofs of Energy Storage” bill.

California passed a law requiring 100% clean energy by 2045.

The California Public Utilities Commission (CPUC) kicked off a $1 billion Solar on Multifamily Affordable Housing (SOMAH) program — $100 million a year for solar power on multifamily housing buildings.

Illinois Governor Rauner signed two bills to support solar development conditions for Illinois farmers and rural areas, bills projected to generate $250–350 million in tax revenue.

New York started becoming much more of a solar power player in the United States, with 26 new large-scale solar power plants approved for development, a community solar push, and broader efforts to stimulate the industry.

Commercial solar battery cost fell significantly in 2018 and are set for further falls in 2019, according to S&P Global.

The financial analyst giant reported a drop of 40 per cent in the cost of installed battery storage between 2017 and 2018.

The world also doubled its energy storage capacity between 2017 and 2018 to 9 GWh. A further surge of close to 80 per cent is expected by the end of 2019.

Falling costs boost Australian battery storage industry

According to S&P Global, analysts are now predicting a “new era” of energy storage in 2019. This is due to the dramatic reduction in cost.

Energy prices from large-scale battery storage in southwest US are less than AUD$42 per MWh, based on Bloomberg New Energy Finance (BNEF) figures.

BNEF is predicting exponential growth in global energy storage. Current prices will subsequently be more than halved by 2030.

Solar battery cost far lower than gas backup

The cost of a solar storage power plant is up to half that a new gas peaker, according to US solar power developer 8minutenergy.

A gas peaker is a  gas-fired generator that supplies power to the national grid at times of peak demand.

8minutenergy CEO Tom Buttgenbach says a solar battery plant is “a factor of two cheaper” than a gas peaker.

Electric vehicles powering global battery boom

Electric vehicles (EVs) still make up most battery demand. Global EV sales passed four million in mid-2018 according to BNEF. They should reach five million during the first quarter of 2019.

Commercial and home energy storage has also made big strides. Large-scale batteries like Tesla Powerpack are now storing energy in wind and solar farms across Australia.

Australian states’ home battery rebate schemes

Meanwhile, several Australian states are running solar battery rebate schemes. The South Australian Marshall Government is offering rebates up to $6,000 for 40,000 home-owners.

In addition, the Queensland Government will help 1,500 households and small businesses access batteries like Tesla Powerwall 2.

The Andrews Government in Victoria is providing half-price solar batteries for 10,000 households.

Meanwhile, a 2018 report by Alternative Technology Australia found new homes with solar panels could save owners up to $18,000 over ten years compared to those powered by non-solar electricity and gas.

“There will not be an electrification revolution within mobility without some adaptation of how we generate, consume and transform energy because all of these cars will have to be charged somehow,” Lior Handelsman of SolarEdge says.

We are talking to discuss the company’s recently-announced acquisition of SMRE, an Italian integrated EV technology firm. SMRE has since 1999 been producing e-mobility solutions including powertrains and batter management systems (BMS), software and a range of other critical components.

SolarEdge agreed to purchase 51% of SMRE for an investment of around US$77 million, valuing the Italian company at US$150 million. Handelsman said that while there are no immediate plans to integrate the EV company’s technologies with SolarEdge’s own offerings, or indeed with the supply chain of Kokam – the battery and storage system manufacturer SolarEdge bought into earlier in 2018 – there are obvious synergies.

The acquisition feeds into the inverter and smart energy company’s overall ‘masterplan’ to involve itself in the full gamut of distributed and clean energy market segments, according to the SolarEdge co-founder, who is also VP of product strategy and marketing.

“We are at an interesting time when the world of energy and the world of mobility are changing and are changing together and that change is also related,” Handelsman says.

“These are related revolutions. We are already covering a big part of the energy revolution with PV, which we’ve spoken about in the past, pro-suming and the smart grid of the future. That is actually tied to mobility. It’s tied in with the supply chain, for the lithium cells involved, it’s tied in the consumption side, the demand side, so this is something that was done by design. It has a masterplan behind it.”

Stefan Schauss: The British energy storage industry should move forward strongly, independent from [exiting] the Brexit [process] or [a] no-deal Brexit. [The] fact is that Great Britain always has been an, electrically, [relatively] isolated terrain. However, we would expect a shift in the applications that would generate future deployment of energy storage. In case of [a disorderly] Brexit, there will be a currency impact that most likely leads to higher energy storage prices, and will shift supplies from countries with no bilateral agreements to countries of origin that do have trade agreements in place.

Another impact will surely come from import factors – customs, trade routes – to service battery deliveries in fast asset deployments. Delays and higher fees should, however, be short lived.

CellCube’s engagement in the UK is focused on long-duration, capacity-driven projects either in front or behind the meter. We take a more long-term oriented view and hence do not foresee a major impact on our strategy. Instead, it might accelerate our timeline. However, there will be some risk factors to be priced in, like currency fluctuations and, immediately following the event, most likely some delivery time adjustments.

In all, it will be a manageable risk for CellCube going forward, and project impacts for UK installations are scheduled into our plans.

How can British companies still participate and compete?

In a hard Brexit case, [the] U.K.’s many energy storage manufacturers are expanding globally. British companies should be able to participate in much the same fashion as any Asian company.

Europe has just launched its Battery Alliance, to become a world leader in battery manufacturing. Is Britain out of the equation from that project, if a chaotic Brexit were to come?

We do believe this will have a major impact for [production operations] which are to be set up in Britain and would be planned under an EBA [European Banking Authority] funding scheme. Most likely [it would] also impact British companies who are trying to establish [production] in the EU.

There are rumors Europe will achieve its battery ambitions by turning away from Li-ion solutions for better alternatives, performancewise and socio-ecologically.

Across Europe, there is a common consensus building that lithium might be limited, by its cost structure, to solve the transition to a fully renewable power grid on the stationary energy storage side.[That is] paired with some of the safety problems we are currently experiencing on global deployments of large-scale lithium cell-based installations, as well as the recycling question, which still remains unsolved to a large extent.

The utility will use Sunverge’s platform to integrate battery energy storage systems with consumer on-site distributed energy resources including solar photovoltaic, smart thermostats, electric vehicle chargers and other smart controllable loads.

The aim is to ensure grid reliability, as well as reduce consumer energy bills and carbon footprint by making the grid greener and smarter for the state’s largest utility.

The system will be used by both the utility and consumers to monitor onsite energy generation, storage and usage, as well as grid status and integrated energy.

Ben Farrow, manager of new products and services at PSE, said: “These batteries can help by giving our customers reliable backup power, while providing us with the ability to learn more about operational capabilities and efficiencies of energy storage on our distribution grid.

“By gaining experience with battery storage on our grid, we hope to expand this technology to benefit all customers in the future.”

Martin Milani, CEO of Sunverge, added: “DERs and Virtual Power Plant technologies are becoming a key component in many utilities’ future planning. Increasingly, it will be a required capability to achieving the optimal mix of traditional infrastructure, renewables integration, grid modernisation, resiliency and cost-effective demand-side management efforts and 

The UK Government has launched a consultation to determine how best it can alter planning policy frameworks to support developers and businesses seeking to build energy storage facilities in England.

Launched on Monday (14 January), the Department for Business, Energy and Industrial Strategy’s (BEIS) consultation asks developers, investors and other energy storage sector stakeholders how policy can help stimulate the construction of co-located renewable arrays and storage systems.

Specifically, the consultation aims to garner opinions on whether BEIS should alter current regulation surrounding large-scale storage projects with a capacity of 50MW or more. Currently, these projects are required to pass through the Nationally Significant Infrastructure Projects (NSIP) regime, while smaller developments are processed through local planning frameworks.

The consultation proposes that the 50MW “cap” is removed, allowing all storage projects, regardless of capacity or output, to be sent to local authorities for planning committee approval.

It additionally recommends that storage projects co-located with other forms of generation should only need to pass through the national planning system if the capacity of each aspect exceeds 50MW.

According to BEIS, such moves would spur the uptake of renewables and storage without distorting investment decisions.

“Our findings so far indicate that the 50MW capacity threshold, which triggers the need for a proposal to be brought into the NSIP regime, does not in itself distort storage developers’ sizing and investment decisions to a significant degree,” the consultation document states.

The consultation closes on March 25, with respondents encouraged to submit their evidence online, by email or by post. Any policy changes resulting from the consultation will apply to England only. 

Industry reaction

The launch of the consultation has been welcomed by the Renewable Energy Association’s head of policy Frank Gordon, who said: “A future UK electricity system with high energy storage deployment will reduce the need to produce ‘peak’ demand from fossil fuels, accelerate decarbonisation by improving the efficiency of wind and solar generation and reduce the need for costly grid reinforcement.

The debate over energy storage replacing gas-fired peakers has raged for years, but a new approach that shifts the terms of the argument could lead to an acceleration of storage deployments.

Rather than looking at peak demand as a single mountainous peak, some analysts now advocate a layered approach that allows energy storage to better match peak needs. The idea is beginning to gain traction with some states and utilities.

“You don’t have to have batteries that run to infinity.”

Ray Hohenstein

Market applications director, Fluence

Some developers of solar-plus-storage projects say they can already compete head-to-head with gas-fired peakers. “I can beat a gas peaker anywhere in the country today with a solar-plus-storage power plant,” Tom Buttgenbach, president and CEO of developer 8minutenergy Renewables, recently told S&P Global.

Others disagree. Storage is not disruptive for generation, but will be disruptive for transmission and distribution, Kris Zadlo, executive vice president and chief development officer at Invenergy, told the audience at a Bloomberg New Energy Finance conference last spring. Invenergy develops generation, energy storage and transmission projects.

But there is another path that avoids the pitfalls of positions on either end of the all-or-none approach. “Do the analysis of the need itself,” Ray Hohenstein, market applications director at Fluence, told Utility Dive. If the need is only two hours in duration, it may be best served by a two-hour battery. “You don’t have to have batteries that run to infinity.”

Storage vs. fossil fuel peakers

Energy storage has several benefits over traditional fossil fuel peaking plants, Hohenstein said. It is instantaneous, it has no emissions and requires no fuel, and has limited infrastructure needs. It can also help the grid absorb higher levels of renewable generation by soaking up excess output, such as solar power at noon. But the one thing energy storage cannot do, he said, is provide limitless energy.

So, instead of looking at replacing an individual peaker, Hohenstein advocated a “duration portfolio” approach that uses energy storage to shave peak load.

Last summer, my family and I visited London.

I’m not much of an Ikea customer in the States, but there are a handful of the iconic retailer’s giant stores in the London area too.

In the name of research, I wandered into one. The way I figure, if you want to know what “mainstream” looks like, Ikea — with more than 300 stores on both sides of the Atlantic — is a good place to start.

What caught my eye?

Ikea’s “energy storage system.”

Basically, it’s a big ol’ battery that, when hooked up to a handful of solar panels (which Ikea also sells), allows a homeowner to store electrical power for use at night and on cloudy days.

As I’ve written before, energy storage — for utilities and homeowners — is a gigantic opportunity for investors. We ignore it at our wallet’s peril.

Energy Storage = Profits

It’s the missing link in our “electrified” digital economy.

Fossil fuels are easily stored, of course, but provide an increasingly smaller mix of America’s energy needs.

Wind and solar provide an ever larger share — but what does a utility (or homeowner) do when there’s no wind, or no sun?

Energy storage is the answer.

In the Total Wealth Insider model portfolio, I already have one stock in this sector that’s up more than 40%, with more on the way.

Investors like ValueAct’s Jeffrey Ubben describe a 21st-century electrical grid — with energy storage at its center — as “an Amazon-like opportunity. You haven’t had electricity as a growth business in a long, long time.”

It’s worth noting that the world’s largest solar energy storage plant was just switched on in Hawaii.

With the ability to store 100 megawatt-hours’ worth of power for up to five hours straight, utility executives say the plant provides as much as 40% of the island’s evening peak power via stored solar energy.

According to researchers at Wood Mackenzie, the amount of energy-storage deployments tripled on a year-over-year basis for two quarters in a row.

In Q3 last year (Q4 numbers aren’t out yet), utilities and homeowners together deployed roughly 150 megawatt-hours’ worth of energy storage.