The degree to which energy storage can compete economically with natural gas peaking plants is still being determined, but better price signals are needed to incentivize the most cost-effective reliability solutions regardless of technology, experts and analysts said Monday.

As lithium-ion battery prices come down and battery energy storage systems become more prevalent, some are beginning to question whether energy storage could be a cheaper, more efficient option for managing power grids than building natural gas-fired peaking power plants.

Gas-fired peaking plants can be started up quickly when power demand spikes, but they usually do not run very often.

The US has 120 GW of operating gas peaker capacity and 20 GW of peaker capacity planned by 2017, Ravi Manghani, director of energy storage at GTM Research, said in a presentation at the GTM Forum: Energy Storage vs. Gas in New York City.

The median capacity factor of the US’ 120 GW of gas peaking capacity was 3% and the median hours of run time per start was 5.3 in 2017, he said.

For example, the 199-MW Elk Station GT2 gas-peaking plant in Texas operated for 309 hours in 2017 and was started 47 times. The plant ran for an average of 6.6 hours when started and was only started one time during which it ran for more than 10 hours, Manghani said.

Manghani’s research indicates that on a $/MWh levalized cost of energy basis, eight-hour lithium-ion battery storage becomes competitive with peaking gas combustion turbines around 2022 and energy storage economics continuously improve to 2027, while gas peaker economics worsen. As a result, 32% of new US gas peaker capacity is at risk from four-hour storage by 2027.

Manghani’s team has only looked at costs so far and the next step would be to consider the revenues each asset could earn in different US power markets, he said.

Indeed, “the revenue side of the equation is unfolding now,” Rob Morgan, CEO of energy storage at GE, said. “Right now trying to parse out the value of storage is the challenge.”

It is still unclear whether energy storage can provide more value replacing gas peaker plants or being used for power transmission and distribution infrastructure deferral, Morgan said. The reality will probably vary based on policy and market rules in specific locations, according to conversations with multiple meeting participants.

The use of electric car battery packs to create large energy storage projects is becoming increasingly popular.

Now, a new one made of BMW i3 battery packs is connecting to the UK National Grid and has become one of the largest to date.

The project is made of six shipping container sized units, five of which house 500 i3 BMW manufactured battery packs, which each have a 33 kWh capacity.

For a comparison, BMW delivered just over 500 i3 electric vehicles in the US last month. Therefore, it’s a significant portion of their battery pack manufacturing going to stationary energy storage.

The 22MW facility has been installed at Vattenfall’s Welsh onshore wind farm Pen y Cymoedd.

It shares the electrical infrastructure of the wind farm to create a hybrid renewable energy and storage asset.

Claus Wattendrup, Head of Business Unit Solar & Batteries, said:

This is Vattenfall’s largest battery installation to date, where we make use of synergies at our existing wind farms sites – such as at Pen y Cymoedd or the Princess Alexia Wind Farm in the Netherlands. Hybrid renewable parks will play a larger role in the future and we are leading this development.

It’s Vattenfall’s second large-scale energy storage project using BMW i3 battery packs.

After a 2.8 MWh energy storage facility built with batteries from over 100 BMW i3 electric cars in 2016, they used up to 1,000 BMW i3 battery packs for an energy storage project at another of their wind farms near Amsterdam.

We are seeing more automakers leveraging their electric car battery packs for energy storage systems.

For example, Renault is using old Zoe battery packs for a home energy storage product and energy storage systems to power off-the-grid charging stations.

Also, Nissan recently unveiled stunning new streetlights powered by used Leaf battery packs and solar.

BOULDER, Colo.–(BUSINESS WIRE)–May 22, 2018–A new report from Navigant Research analyzes the advantages of energy storage with fossil fuel (ESFF) solutions to maximize the efficiency, value, and useful life of fossil fuel power plants.

The development of energy storage has been tightly associated with the integration of renewable energy. However, energy storage is one of the most versatile technologies on the grid. Click to tweet: According to a new report from @NavigantRSRCH, a new generation of projects combining energy storage with fossil fuel (ESFF) generators is shifting the paradigm of how energy storage is utilized.

“At a time when market conditions are forcing power plants into premature retirement, energy storage can increase revenue and lower the costs to operate power plants,” says Alex Eller, senior research analyst with Navigant Research. “In the same way a hybrid car utilizes battery storage to improve efficiency and reduce fuel consumption, an energy storage system integrated with a conventional power plant can result in significant fuel savings while improving the grid’s overall resiliency.”

According to the report, market conditions and policies are driving acquisitions and new hybrid projects from incumbent generator providers. The pairing of storage with generators is also opening opportunities for new products and services both from companies serving large-scale utility markets and those focusing on distributed generation technologies for commercial and industrial customers.

The report ,, explores the advantages of ESFF solutions to maximize the efficiency, value, and useful life of fossil fuel power plants. The study examines the various strategies that market players are using to capitalize on this emerging trend and provides background on the development of ESFF solutions. It also details some of the key opportunities presented by the growth of ESFF solutions and projects and provides recommendations for utilities, vendors, and project developers. An Executive Summary of the report is available for free download on the Navigant Research website.

Think the plummeting costs of solar and wind are transforming the energy landscape? Then you should be betting on ways to warehouse that power.

To understand why, consider: Unlike almost all their rivals in the energy-generation space, solar panels and wind turbines are mass-produced goods. That means they’re subject to the rules of continual improvement and falling costs that we see with semiconductors, household products and clothing as production volumes rise and factories undercut each other. Traditional power plants are essentially large-scale construction projects, which rarely achieve the same sorts of efficiency dividends.

As a result, the cost of new-build renewables has been sinking. The highest-cost solar and wind projects in the U.S. will now produce electricity at least as cheaply as as the lowest-cost coal plants, according to a report last year by Lazard Inc.

In Australia, that price differential means one of the world’s largest coal exporters is unlikely ever to build another generator powered by the stuff, Catherine Tanna, managing director of EnergyAustralia Pty, told a Bloomberg Invest conference in Sydney Wednesday. By the early 2020s, renewables will have gotten so cheap that it will be more cost effective to build them than to operate even an existing coal or nuclear plant, Jim Robo, CEO of Florida-based NextEra Energy Inc., said during an investor call in January.

Negative Charge

The price premium for new solar generation over coal in Asia has slumped, and gone negative in India.

Coal miners hope to see a final leg of demand over the coming decade as incomes in emerging Asia rise — but even there, the rapidly falling cost of renewables means solid fuel is close to being priced out of the market, data from Bloomberg New Energy Finance show.

The trouble with things that get extremely cheap, however, is that you often end up with too much of them. That situation is exacerbated by the no-off-switch nature of wind and solar power. Take California’s recent mandate to put solar panels on the roofs of all new buildings. As my colleague Liam Denning wrote last week, one likely effect will be to push more electrons into a mid-afternoon electricity market that’s already glutted with supply.

A “may day”’ call this year came from the U.S. Department of Energy. The DOE made a $30 million funding commitment to long-term energy solutions through its Advanced Research Projects Agency-Energy (ARPA-E) office. “Long-term,” as defined in the project scope, starts at 10 hours and extends up to 100 hours of stored energy.

Funding from the new program called DAYS (Duration Addition to electricitY Storage) is open to any technology able to meet siting, output, and cycle requirements. And the solution must deliver an average cost of 5¢/kWh cycle across the range of storage durations.

Why Fund Energy Storage

The shift to renewable energy continues, despite uncertainty about the direction of U.S. policy under the current administration.

¤ Non-hydro renewable energy generation increased +15% in 2017 with wind and solar capacity reaching 143 GW, a 431% increase in the last decade.

¤ And a recent survey of North American utility companies from Utility Dive shows sector leaders remain bullish about the growth of renewable sources. Results shown in the table below indicate the industry recognizes the transformation cannot be implemented without energy storage:

The anticipated growth reflects current commitments to cleaner energy by leading U.S. utility companies.

¤ Consumers Energy in Michigan: 40% renewable energy by 2040.

¤ National Grid in the Northeast: 80% reduction in carbon emissions by 2050 (vs. 1990).

¤ Xcel Energy in the Central U.S.: 40% renewables by 2021, 60% by 2030.

¤ Ameren Missouri: Increase wind power to 700 mw by 2020 and solar to 50 mw by 2025.

¤ Duke Energy in the Southeast and Midwest: 40% reduction in carbon emissions by 2030.

¤ Southern California Edison: 80% solar, wind, hydro power by 2030.

¤ American Electric Power in the Southeast and Midwest: 80% reduction in carbon emissions by 2050 (vs. 2000).

¤ MidAmerican Energy in Iowa: 95% renewable energy by 2021.

¤ WEC Energy Group in Wisconsin: 40% reduction in carbon emissions by 2030

¤ DTE Energy in Michigan: At least 80% reduction in carbon emissions by 2050.

¤ First Energy in the Mid Atlantic: At least 90% reduction in carbon emissions by 2045 (vs. 2005).

It’s great in the lab, but will it actually work? That’s the million-dollar question perpetually leveled at engineering researchers. For a family of layered nanomaterials, developed and studied at Drexel University — and heralded as the future of energy storage — that answer is now, yes.

For some time, researchers have been working on using two-dimensional materials, atomically thin nanomaterials, as components for faster-charging, longer-lasting batteries and supercapacitors. But the problem with the existing techniques for doing so are that when the thickness of the material layer is increased to about 100 microns — roughly the width of a human hair, which is the industry standard for energy storage devices — the materials lose their functionality.

Recently published research from Drexel and the University of Pennsylvania, shows a new technique for manipulating two-dimensional materials that allows them to be shaped into films of a practically usable thickness, while maintaining the properties that make them exceptional candidates for use in supercapacitor electrodes.

The study, published in the journal Nature, focuses on using soft materials — similar to those in the liquid crystal displays of phones and televisions — as a guide for self-assembly of MXene sheets. MXenes, are a class of nanomaterials discovered at Drexel in 2011, that are particularly well-suited for energy storage.

“Our method relies on a marriage between soft material assembly and functional 2-D nanomaterials,” said Yury Gogotsi, PhD, Distinguished University and Bach professor in Drexel’s College of Engineering, who was a co-author of the research. “The resulting electrode films show rapid ion transport, outstanding rate handling, and charge storage equal to or exceeding commercial carbon electrodes.”

WASHINGTON (May 16, 2018)—Today, the U.S. House Committee on Appropriations passed legislation that would cut Energy Department funding. Renewable energy and energy efficiency programs would sustain a $243 million dollar cut, while ARPA-E, a program key to advancing clean energy technology creation and development, would be slashed by about $28 million. The White House had proposed eliminating ARPA-E in their budget proposal for fiscal year 2019. The legislation would, however, also increase funding for federal energy storage programs.

Below is a statement by Rob Cowin, director of climate and energy government affairs at the Union of Concerned Scientists.

“This committee continues to miss opportunities to speed up the country’s transition to clean energy. The bill cuts the nation’s flagship clean energy research and development program, ARPA-E, which helps develop game-changing energy technologies and fills a critical gap in private sector investments.

“By reducing support for these kinds of programs, the U.S. is ceding leadership on clean energy and technological innovation to countries like China, which is investing in these technologies. You would think U.S. lawmakers would want to promote economic growth by capitalizing on the expanding global market for clean energy technologies.

“This legislation also exposes tensions in ideologies between Congress and the White House. The appropriators increased support for federal energy storage research, approving nearly $10 million in additional funding over the level set in the fiscal year 2018 omnibus bill. Energy storage systems can enable excess wind and solar energy to be stored for later use at times when the sun is not shining, and the wind is not blowing—making them more competitive with fossil fuel-based energy sources.

Vivint Solar (NYSE:VSLR) has spent the past year cleaning up its house in residential solar after the company’s sale to SunEdison fell through. Now, operations are steadily improving. Vivint has also been one of the beneficiaries of Tesla‘s (NASDAQ:TSLA) decision to shrink its solar business, and it has made a relatively quick transition to selling solar systems rather than financing them and then leasing to customers. That’s the good news.

What hasn’t been going so well for the company is its launch of energy-storage products. A partnership with Mercedes-Benz recently went up in smoke after the automaker decided to focus its efforts on large-scale installations, and its effort to go head to head against Tesla’s Powerwall apparently hasn’t been as successful as the company had expected. This leaves Vivint Solar without its key energy storage partner, and with no obvious path to becoming a leader in the rapidly growing energy-storage market. 

Mercedes-Benz abandons Vivint Solar

In May 2017, Vivint Solar and Mercedes-Benz forged an alliance to bring energy storage to the residential solar market. Mercedes-Benz’ supplied the battery units; each one had a 2.5 kW-hr capacity, and up to eight could be strung together in a storage system, enough to power the average U.S. home for about 16 hours. 

Now, the two companies are going their separate ways. Vivint Solar has already replaced Mercedes-Benz’ batteries with LG Chem batteries on its website, but Greentech Media is reporting that LG batteries are only available in Utah, and won’t be rolled out to larger markets like California until later this year. 

It’s likely that more than one fatal flaw contributed to the partnership’s collapse. The requirements an automaker has for an electric vehicle battery don’t entirely translate to what’s needed for one being installed in the home, so there could have been some issues with fit. Also, its batteries individually had far less capacity than Tesla’s 14 kW-hr Powerwall 2. Finally, Vivint Solar was relatively opaque on pricing, but Electrek has reported that the cost of a Mercedes-Benz energy storage system was between $5,000 and $13,000, which may not have been a compelling deal compared to the Powerwall, priced at $5,900 plus installation.

Replacing Mercedes-Benz batteries with LG Chem should help lower costs and bring a company more focused on what the home market needs in energy storage, so there are some positives to bringing LG Chem onboard and it’s probably the right move short-term. But it doesn’t help at all with differentiating Vivint Solar’s product in the marketplace. LG Chem is also partnering with the biggest residential solar installer in the U.S., Sunrun (NASDAQ:RUN), meaning Vivint Solar is only catching up to, not surpassing, the competition.