The booming renewables industry in Texas should, in theory, create a role for energy storage plants to manage its variability.

Years into the Lone Star State’s wind and solar deployment, though, little grid storage has arrived, and future prospects look bleak.

Early projects have delivered some 89 megawatts of storage into ERCOT’s grid, said Cheryl Mele, chief operating officer of the Electric Reliability Council of Texas, the grid operator. Another 1,800 megawatts have entered the interconnection queue, which by no means guarantees they will ever be built.

Lack of a winning business model makes it unlikely mass deployments will begin anytime soon. That could leave significant value on the table for Texas ratepayers.

“When you look at the amount of renewables we do have, certainly storage would have some value in being able to respond quickly,” said Mele, speaking at Wood Mackenzie’s Power & Renewables Summit in Austin Wednesday.

“If we start to see a gap between our forecasted load and our forecasted intermittent renewables, the batteries can respond very quickly,” Mele added. “They can cover a bit of that gap while you’re waiting for other resources to ramp up.”

Here are the major obstacles facing the young energy storage market in Texas, with some provisional solutions to get this technology into play.

Utilities can’t own it

Texas power market deregulation separated competitive generation from regulated wires utilities.

That implicates storage because it qualifies as generation in this market; that means it has to compete with gas generators, and wires utilities are not allowed to own it, lest their ownership undermine the bedrock of competitive markets.

That said, batteries don’t actually generate; they store electricity generated elsewhere and release it at useful times. The discharge of power resembles generation, but batteries can readily function as transmission or distribution assets.

November 19 (Renewables Now) – Gresham House Energy Storage Fund plc (LON:GRID), launched recently by UK asset management firm Gresham House Plc (LON:GHE), announced on Friday that it has wrapped up the acquisition of its 70-MW seed portfolio.

The fund has paid a total of GBP 57.22 million (USD 73.6m/EUR 64.4m) for five operational energy storage systems, namely Staunch in Staffordshire, Lockleaze in Bristol, Littlebrook in Kent, Rufford in Nottinghamshire and Roundponds in Wiltshire. The particular assets were developed by Gresham House and Noriker Power Ltd.

Gresham House Energy Storage Fund has closed the transaction on November 13, using proceeds from its GBP-100-million initial public offering (IPO), conducted earlier this month. It noted that these assets support its targets for a dividend and total return.

The fund’s goal is to invest in an exclusive pipeline of utility-scale energy storage systems in Great Britain.

(GBP 1 = USD 1.29/EUR 1.13)

Stem Inc, is the market leader in behind-the-meter energy storage, delivering turnkey solutions to customers as a means of bringing meaningful reductions in demand charges to customers.

CleanTechnica connected with Stem’s SVP of global sales and marketing, Alan Russo, at Solar Power International this year to get the inside scoop on what makes Stem tick today and how that’s changing now that it is folding solar into its catalog of turnkey solutions.

Stem’s bread and butter is bringing its technical expertise to customers being hit with large demand charges, time of use rates, high electric bills, or just looking to save some money month to month on their utility bills. They work with customers to custom design a solution that Stem then brings to the customer to ultimately deliver on the value proposition identified.

Energy storage by itself isn’t that exciting. In fact, just bolting batteries onto an electrical system might not have any noticeable effect. The transformative aspect of any stationary energy storage installation is the intelligence that controls the energy storage system and uses the storage capacity to optimize the overall profile of energy consumption to meet the needs of the consumer.

The prospect of rolling its mastery of C&I energy storage solutions together with solar brought Stem to Solar Power International this year to broaden its reach into the solar industry. The solar industry is well aware of the symbiotic nature of solar and storage.

“They’ve largely determined that to preserve the value of solar, it’s very desirable to attach storage,” Alan said. “The customer saves more money because now they’re able to get more utilization from those free electrons that they produce during the day when it’s no longer valuable to produce cheap electricity during the day and everyone wins as a result.”

Stem Inc, which offers commercial and industrial (C&I) customers battery storage systems to lower their energy costs, has partnered with Canadian state-owned utility Ontario Power Generation to offer Ontario businesses ‘no-money-down’ energy storage solutions.

US-headquartered Stem, which describes itself as an ‘Artificial Intelligence for energy storage company’, has a track record in its home country, particularly in California, of delivering battery and software solutions to C&I customers that reduce the host business’ need to draw energy from the grid at peak times.

The batteries can also be used to provide other services that could accrue revenues or make savings, such as ancillary grid services, or integrating onsite solar self-consumption. Provider and customer effectively ‘share’ the net savings on energy bills that Stem guarantees, enabling the company to offer its solutions on a ‘no-money-down’, long-term contract basis. Essentially, Stem and rivals including Green Charge (now ENGIE Storage) and Advanced Microgrid Solutions (AMS) have made their name through creating a market for ‘energy storage as a service’.

As well as making limited expansion moves into other territories and markets, including a virtual power plant (VPP) project in Japan and a recent launch for a solar-plus-storage offering in Arizona, the company has been active in Ontario for some time. The company has a number of projects executed or in the pipeline in the province and in late July announced it had netted CA$200 million (US$151 million) in project finance from institutional investor group Ontario Teachers’ Pension Plan.

The Canadian province has been identified as a hot market in C&I energy storage, not least because of the Global Adjustment Charge (GAC) policy mechanism, which uses peak electricity pricing tariffs to pay for grid upkeep and clean energy policies, with commercial customers levied the highest rates. Recent developments include a 42MWh deal between developer NRStor – another big recipient of project finance from institutional investors – and solutions provider IHI Inc and a single 48MW / 144MWh energy storage system provided by Fluence to PUC Distribution, a designated electricity distribution provider in the Ontario city of Sault Ste. Marie. The largest single C&I project already up and running in the province is a 10MW / 20MWh battery system installed by Convergent Energy + Power and made by IHI Inc.

The UK’s Capacity Market has been initially suspended after the European Court of Justice annulled the European Commission’s decision not to object to the scheme.

However, the Department for Business, Energy and Industrial Strategy has said it intends to work closely with the European Commission to reinstate the scheme as soon as possible.

The ruling essentially prevents the government from holding future auctions and making payments under existing agreements.

Clean energy technology provider Tempus Energy challenged the decision to grant the UK’s Capacity Market with state aid approval, claiming that its very design unfairly discriminated against clean energy projects, paving the way for the market to be “dominated” by coal, gas and diesel generators.

Tempus claimed that the scheme privileges generation technologies over demand-side response in a “discriminatory and disproportionate manner”, adding that the European Commission could not have concluded that there were no doubts surrounding the scheme on the basis of a preliminary examination.

And today the General Court of the European Union ruled in Tempus’ favour, annulling the European Commission’s decision not to raise objections to the scheme.

The ruling said that the EC should have had doubts over certain aspects of the scheme and initiated a formal investigation to properly assess its compatibility with state aid rules.

The UK now has two months to appeal the ruling before the Court of Justice.

In a statement issued this morning, Tempus Energy chief Sara Bell said that the ruling meant that a “customer revolution is on the cards”.

SALT Energy, a Maryland based developer of renewable energy and microgrid projects, has teamed up with Baker Energy Team of Roseville, Calif., to explore the development of microgrids to serve new businesses in California City, especially cannabis growing operations.

A microgrid project could be in operation as soon as next summer, according to Robert Babcock, president and owner of SALT Energy. Although they are still preliminary, Babcock said he has had discussions with businesses that are either already in California City or are looking to locate there, particularly cannabis grow operations.

California City has a sunny, arid climate well suited for growing cannabis, and the city has a lot of open space.

The city was designed as a model to rival Los Angeles in size. Streets and services were laid out, and the city was incorporated in 1965. But although the lots were sold, the city never reached its planned size. Today there are about 14,000 residents of California City.

At this point, however, an influx of businesses with high electrical demand could strain California City’s grid, which is run by Southern California Edison. A cannabis grow operation can require service of up to 6,000 amps.

Linked microgrids for California City?

Since recreational marijuana became legal in California on January 1, utilities throughout the state have been swamped with service requests from cannabis growers looking to connect or upgrade their electrical service. That has resulted in service fulfillment waits of up to a year or more.

“California City is at the end of the line and the time lines are even longer,” Babcock said. “Cannabis growers want their service requests done yesterday.”

Over the last decade, the renewable energy industry has boomed due to the proliferation of new technology that is reducing the cost of construction and long-term operability. However, one critical problem still remains: storing renewable energy during lulls in wind speed or sun exposure is often prohibitively expensive. In response to this issue, Energy Vault, a subsidiary of California’s IdeaLab, has recently announced a straightforward mechanism for the conservation of renewable sources using kinetic forces.

The mechanism proposed by Energy Vault is a nearly 400-foot tall, six-armed steel crane. Using proprietary software, the towering structure orchestrates the placement of 35-ton blocks of concrete in response to drop-offs in demand and fluctuations in environmental conditions.

How does it work? As power demand decreases, the cranes surround themselves with concentric rings of the concrete bricks lifted by the leftover power from surrounding wind and solar farms. Once demand increases, the cranes begin lowering the bricks, which powers turbines that transform the kinetic energy into electricity that gets pumped back into the grid.

Energy Vault’s team looked toward preexisting renewable energy sources that rely on gravitational forces. According to Energy Vault, the technology was influenced by energy retention strategies of hydroelectric power dams that pump water into a series of cisterns on higher ground that ultimately flow downwards into energy turbines once demand rises.

Unlike conventional resources used for the retention of renewable energy, such as Tesla’s Powerwall and Powerpack lithium-ion stationary batteries, the system developed by Energy Vault does not rely on chemical storage solutions or high-cost materials. Recycled debris from preexisting construction sites can be used for the fabrication of the bricks, which are viable for up to four decades without a decrease in storage capacity.

Currently, Energy Vault is partnering with India’s Tata Power Company Limited to construct an initial 35 MWh system with an expected date of completion in 2019.

Venture capital funding for energy storage, efficiency and smart grid projects rose for the first three quarters of this year, even if overall corporate funding fell by 11 percent, according to Mercom Capital Group’s nine-month market report.

The overall funding—which includes venture capital, public market and debt financing—raised $3.3 billion for battery, smart grid and efficiency deals for the period January through September. This is an 11 percent drop from the $3.7 billion raised in the same period of 2017.

Global venture capital alone, however, topped $1.3 billion. This is close to $100 million higher than for the first nine months last year.

Some publicly announced storage-sector mergers became known just after the fourth quarter began. NantEnergy is buying the energy storage and management solutions business of Sharp Electronics Corp.

In October, energy storage startup Volta announced it was investing in battery developer Solid Power. Duke Energy also revealed plans to invest about $500 million in energy storage projects in the Carolinas.

Energy Storage will be the subject both of sessions upstairs and the Knowledge Hubs on the exhibit floor at POWER-GEN International happening December 4-6 in Orlando. Integrating large-scale battery technology into the electric grid is the subject of at least 12 sessions at POWER-GEN.