Renewable energy developer Invenergy has initiated commercial operations of a utility-scale battery storage system located in Knoxville, Iowa, for MidAmerican Energy.

The 4 MWh lithium-iron phosphate battery system is housed in two truck-sized steel containers at a MidAmerican Energy substation.

The utility can use the system in concert with wind and solar power generation, by storing energy produced when wind speeds and sun exposure are high and using it later. MidAmerican Energy owns an expansive portfolio of wind-powered generation capacity.

This is the fifth utility-scale advanced energy storage project Invenergy has developed, and the first where the company acted as the engineering, procurement and construction (EPC) provider.

“We are excited by the new opportunities for battery storage that we are seeing around the country,” said Kris Zadlo, senior vice president responsible for storage development at Invenergy.

El Paso Electric Company, a Texas electric utility, has revealed the winning bids for its 2017 request for proposals, including a total of 200MW of utility-scale solar and 100MW of battery storage.

Announced on Boxing Day, El Paso Electric revealed the winning bids for its competitive 2017 All Source Request for Proposals for Electric Power Supply and Load Management Resources.

The company announced that winning bids included a total of 200MW of utility-scale solar resources, another 100MW of battery storage, and the construction of a 226MW natural-gas unit at the Company’s Newman Power Station.

In addition, El Paso Electric also revealed that it would seek to purchase between 50MW to 150MW of wind and solar generated power.

“These technologies provide a mix of carbon-free renewable and clean burning natural gas generation that will enable us to meet the growing need for power in our region in a safe, clean, reliable, and cost-effective manner,” said Mary Kipp, El Paso Electric President and Chief Executive Officer.

“This balanced combination of resources will work with our existing energy portfolio as we move to retire aging, less efficient plants while continuing to meet our customers’ changing energy needs.”

No specifics were given regarding the solar and battery storage projects, while the natural gas combustion turbine generating unit intended for El Paso Electric’s Newman Power Station is expected to begin operation in 2023 and incur a cost of US$143 million.

California’s rising adoption of solar power has fundamentally altered traditional dynamics on its electric grid. In response, the state’s electricity providers are moving ahead with rate changes that will have a significant impact on electricity costs and the financial performance of behind-the-meter solar photovoltaics (PV) on commercial and industrial facilities in the state.

Since delivering electricity during periods of high demand is cost-intensive, utilities in California have long implemented time-of-use (TOU) rates that followed the grid’s traditional load curve — which ramped in the morning, peaked in the mid-day hours, and gradually decreased in the afternoon into the evening. Higher rates were applied during “on-peak” and “part peak” hours to accommodate the cost of the mid-day peak, while lower rates were applied during “off-peak” hours at night and in the early morning.

The rapid growth of solar in the state’s generation mix has upended the traditional load curve. On a day-to-day basis, solar power production rises through the morning hours and peaks around noon before tailing off in the late afternoon/early evening hours. At scale, this reduces the demand for natural gas in the mid-day hours. However, as solar power diminishes in the late afternoon, utilities experience a spike in demand for power from traditional sources from the late afternoon and into the early evening — a trend which has been referred to as the “duck curve” since a report by the California Independent System Operator (CAISO) publicized the graphic below:

The duck curve represents a challenge to the grid for multiple reasons:

• Lost revenue: The decline in mid-day demand has eaten into a strong source of revenue for natural gas generators, while an abundance of solar power has lowered electricity prices across the board — occasionally resulting in negative prices.
• Higher costs: Supplying the demand spike in the mid-afternoon/early evening hours requires the use of natural gas peaker plants, which are expensive to run.

Traditionally, TOU rates accounted for the costs to meet the daily peak in demand. The more electricity customers used during on-peak hours, the more money they spent on TOU rates. Now that the peak in demand has shifted to a later period in the day, California’s utilities are adapting their TOU rate schedules accordingly. San Diego Gas & Electric (SDG&E) shifted on-peak hours for its summer season to 4 p.m.-9 p.m., from its previous schedule of 11 a.m.-6 p.m. Pacific Gas & Electric (PG&E) and Southern California Edison (SCE) are expected to implement the same schedule for on-peak hours in 2019.

While a tranche of seven solar-plus-storage projects under proposal in Hawaii would see renewable energy make its biggest competitive play against fossil fuels in the US island state so far, a project just completed will deliver energy well into the evening at just US$0.11 per kWh.

Energy-Storage.news reported earlier this month that Hawaiian Electric Company-awarded contracts for 1,048MWh of energy storage to pair with 262MW of PV and has now put them up for approval before the regulator, the Hawaii Public Utilities’ Commission (PUC).

Those projects have garnered attention already for their low cost – ranging from US$0.08 per kWh to US$0.12 per kWh under long-term power purchase agreements (PPAs) – and the relative long duration of storage – four hours – that each will be equipped with.

Meanwhile, toward the end of last week, AES Distributed Energy announced the completion of Lāwa’i Solar and Energy Storage Project on the island of Kaua’i for local provider Kaua’i Island Utility Cooperative (KIUC). The facility, which AES has dubbed a “PV peaker plant”, is a 28MW PV power plant and 100MWh of lithium battery energy storage, allowing for five hours of storage.

An AES spokeswoman confirmed to Energy-Storage.news that energy from the plant will be sold to KIUC for the price agreed two years ago when the project began development: US$0.11 per kWh. Recent reports have put a figure on fossil fuel-generated electricity, usually from diesel, on Hawaii’s islands at around US$0.16 per kWh. Over 3.5 million fewer gallons of diesel would be imported onto Kaua’i as a result of the project’s contribution, AES has said. Energy-Storage.news reported in June that the low price had been secured on a 25-year term PPA. 

S&P Global reports the cost of solar with battery backup dropped precipitously in 2018. In a few cases in the sunny Southwest region of the United States, several tenders for solar plus storage came in at under $30 per megawatt-hour last year. Stand alone prices for installed battery storage — based on a 20 megawatt-hour system with 4 hours of storage — dropped 40% from the previous year to $357 per kilowatt-hour and are expected to keep falling. Bloomberg New Energy Finance projects a further 52% reduction by 2030.

Such tumbling prices have led Wood Mackenzie to forecast that as the market for solar plus storage matures, it could put more than 6,400 MW of new natural gas-fired peaking capacity in the US at risk by 2027. “I can beat a gas peaker anywhere in the country today with a solar-plus-storage power plant,” says Tom Buttgenbach, CEO of developer 8minutenergy Renewables. “Who in their right mind today would build a new gas peaker? We are a factor of two cheaper.”

Progress in battery storage was uneven around the world last year. South Korea has put significant incentives in place, which have led to a boom in that country. So much so, in fact, that Korean battery manufacturers have dedicated much of their production to meeting that demand at the expense of automakers hungry for EV batteries and residential storage products.

“When you see projects now being planned at over 1 GWh in scale, when only 18 months ago a 300 MWh installation was something to behold, you know you have entered a new era,” says Simon Moores, managing director of Benchmark Mineral Intelligence.. “It has been quite interesting to watch the battery makers’ dilemma of where to send the lithium ion cells. Of course they have contracts to honor with automotive producers, but the order inquiries from [energy storage] producers have been incredible.”

Some CleanTechnica readers have been wondering why Kia  and Hyundai have such low production targets for their newest EV offerings. The clamor for battery cells to meet the energy storage demand may be part of the reason for those low numbers.

“Even though progress was uneven, there was a much greater consensus in 2018 over the importance of energy storage, even in the near term, in major markets,” says Logan Goldie-Scot, head of energy storage at Bloomberg NEF. “In 2017, there were still a lot of people talking about how energy storage was not necessarily a competitive solution and was going to be limited. I hear those conversations much less now. Energy storage is now becoming more integrated into resource plans.”

New York — As liquid air energy storage company Highview Power prepares to launch two US projects this year, an official said Thursday, the company has teamed up with engineering firm Citec to help scale its storage facilities from 50 MW/500 MWh to multiple GWh.

“We will be starting two projects between 50 MW and 100 MW in the US this year,” Javier Cavada, Highview CEO, said in a phone call.

Though Cavada could not discuss specific locations or customers, he said Highview is looking at the wind corridor that runs through the Midcontinent Independent System Operator’s territory, as well as California, Texas and New York.

“It’s ideal to mix the technology with renewable generation, but it can be located anywhere,” Cavada said.

UK-based Highview Power has chosen Finland-based Citec as its engineering partner to help Highview modularize its GW-scale cryogenic energy storage system, according to a Wednesday statement. Highview said Citec will help it “easily and cost-effectively” scale the capacity of its plants up or down.

The economy of scale “is steep” so the larger the system the cheaper it gets, Cavada said.

The technology uses liquid air as the storage medium and can currently deliver 20 MW/80 MWh to more than 200 MW/1.2 GWh of energy. Air is cooled and stored as a liquid, then converted back to a gas to generate energy that powers turbines producing electricity.

In April 2018, Highview launched a grid-scale demonstrator plant that converts waste heat from landfill gas engines at the Pilsworth Landfill in Bury in the UK into power.

In December, the six major Independent Systems Operators (ISO’s) across the country filed their plans for creating new market rules and opportunities for energy storage. While the rules will take at least a year to go into effect and the plans are just an initial step, a recent study suggests that this effort may add up to 50,000 megawatts (MW) of storage nationwide in the next decade.

At the same time, many states – like California, Massachusetts, New Jersey and New York – are recognizing the potential value of energy storage and are starting to integrate it as a key component of their plans to meet climate and renewable energy goals.

Combined with falling capital costs, these trends suggest a lot of new energy storage in the pipeline. This presents both opportunities and challenges for states looking to reduce their greenhouse gas emissions.

Not all energy storage is “clean”

When designed and incentivized properly, energy storage can be charged using clean power, and that power can then be discharged to displace dirtier power later in the day. While this is the optimal outcome, a growing body of research suggests that energy storage could actually increase emissions if it’s not done carefully.

The environmental benefits of storage depend critically on how, and when, it is operated. Electricity rates, wholesale energy markets and the physical constraints of the electricity grid all combine to incentivize when storage owners charge and discharge their devices, and for what purpose – the “how” and “when” of storage utilization. Essentially, the effect that energy storage has on emissions depends on which power plants are used to charge the storage, which plants are offset when the storage discharges, and how efficiently the storage itself operates.

North America, western Europe and Asia Pacific are expected to account for nearly 90 percent of the new long-duration energy storage capacity installed globally over the next eight years.

A new report from Navigant Research found that most new projects being installed fall into the four-hour to eight-hour duration categories, with most of those served by lithium-ion batteries. 

“This type of storage provides the necessary flexibility to manage dynamic resources effectively,” says Alex Eller, senior research analyst with Navigant Research. “Demand for long duration storage will continue to increase around the world as prices continue to decline and more ambitious targets for greenhouse gas reduction are implemented.”

Earlier this month, AES Corp. and Hawaiian utility Kaua’I Island Utility Cooperative completed their joint solar and storage project at Lāwa’I, calling it a record-breaking effort for photovoltaic peaker capacity. The Lāwa’I Solar and Energy Storage Project combines a 28-MW solar PV and 100-MWh five-hour duration energy storage system. The system can deliver approximately 11 percent of the Kaua’i island’s power needs.

This would make Kaua’i more than 50 percent powered by renewables, according to AES. Hawaii has a mandated goal of reaching 100 percent renewable energy by 2045.

Another recent report by Global Market Insights forecast that China’s energy storage investment could grow some $700 million to more than $6 billion by 2024.

Fluence, Nidec ASI, Tesla and RES are the leading players in the increasingly competitive utility-scale energy storage market, according to a new report from Navigant Research. These leaders are “actively pushing the boundaries” of how energy storage is viewed in the industry and are working to open new markets.

But companies that are currently trailing the leaders are also well-positioned to capitalize on new markets and project opportunities, Navigant says. Dramatic growth is expected in the market, and all players covered in the report are positioned to be successful as the market grows, according to the research. However, some are more likely to thrive as they build on the strong foundation and capitalize on complementary offerings, including ESS hardware and renewable energy project development.

The report, Navigant Research Leaderboard: Utility-Scale Energy Storage Systems Integrators, compares the strategy and execution of 12 leading ESSIs focused on the utility-scale market. These companies are rated on 12 criteria, including vision, go-to-market strategy, partners, production strategy, technology, geographic reach, sales/marketing/distribution, product performance, product quality and reliability, product portfolio, pricing, and staying power. 

Moving Past Project Development to Integrated Solutions

The utility-scale energy storage market has grown increasingly competitive since 2016 as projects become economically viable for a range of new applications in new geographies. As the market matures and expands, the role of energy storage systems integrators (ESSIs) such as Fluence and others has become the most important element in the value chain when it comes to ensuring successfully built and profitable energy storage systems. 

Companies in the ESSI space are moving beyond simply providing project development services to offering integrated hardware and software solutions for a range of ESS customers. These companies are responsible for both the design and management of an energy storage project, typically using robust software and controls platforms to maximize the value of a project both to the grid and to the system owners.

While there are several competing utility-scale energy storage technologies with differing characteristics matched for certain applications, battery ESSs are emerging as the leading technology globally for new projects.

In addition to the leading players in the market, the Navigant Report looks at “contenders” – including Powin Energy, Greensmith, LG CNS, NEC Energy Solutions, and NextEra Energy Resources – “challengers,” and “followers.”