California’s Self-Generation Incentive Program (SGIP), the scheme to incentivise the use of distributed energy, opens for applications at the beginning of next month, weighted to favour energy storage.

When it comes to solar, SGIP has previously been a success in the US state and is administered by the utilities Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and Southern California Gas Company (SoCal Gas) as well as the Center for Sustainable Energy.

The programme awards “financial incentives for the installation of new qualifying technologies that are installed to meet all or a portion of the electric energy needs of a facility”. Through to the end of 2019 a total of US$270,165,000 will be made available through SGIP to the programme administrators: just over US$117 million for PG&E, US$91 million for SCE, just under US$36 million for the Center for Sustainable Energy and US$26 million for SoCal Gas.

The biggest change to SGIP is that as of this year, 75% of funds will be allocated to energy storage technologies, and just 25% for generation technologies. Residential energy storage projects of less than 10kW will comprise 15% of the energy storage portion. When the intended budget allocation was announced last summer, GTM Research head of energy storage Ravi Manghani called it a “big win” for the energy storage industry.

The programme opens for formal applications on 1 May 2017. For residential systems smaller than 10kW and systems larger than 10kW that do not take the Investment Tax Credit (ITC), incentive levels are set at US$0.50 per watt-hour. Projects larger than 10kW that take the ITC will receive US$0.36 per watt-hour. These are just the initial figures – incentive levels will come down by US$0.10 per watt-hour once demand has exceeded available funding. If this lowered rate proves popular enough to have allocated all of its budgeted funding within 10 days, the rate drops by the same amount again.

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In the world of electricity, few topics are generating more headlines this year than energy storage. Market watcher Navigant Research figures more than 1,420 projects are under way across the power grid, with a new installation trumpeted almost every week.

“Overall, the global energy storage industry is poised to continue to grow quickly over the next several years,” Navigant analyst Ian McClenny noted in a recent update about the market. “With emerging infrastructure becoming increasingly integrated, dynamic and complex, flexible resources like storage will provide added value to existing and new power-generating assets.”

Although energy storage long has been a technology on the brink — drawing R&D dollars from the likes of Tesla founder Elon Musk, the U.S. military and a growing number of utility pilot projects — there is reason to believe that storage tech has entered a new phase in its evolution.

One statistic that should get you thinking: data from research firm Mercom Capital Group estimates that about $820 million was dedicated to energy storage project financing during 2016. That compares with just $30 million tracked by the company in 2015. 

Several initiatives have captured the attention of mainstream media, rather than just the trade press: “A Big Test for Big Batteries,” proclaimed The New York Times in a January article about three huge grid-scale projects in Southern California. The installations are part of broader investments by San Diego Gas & Electric and Southern California Edison meant to improve the stability of the local grid and make it easier to integrate renewable energy generating resources, including solar photovoltaic farms. One storage farm can offer up to 30 megawatts of capacity for up to four-hour stretches. Utilities in other regions are dabbling.

“It’s fair to say we don’t have long-range experience with this technology to say that it is perfect or a nirvana,” Alice Jackson, vice president for Midwest utility Xcel, told The Times. “It’s something we’ll observe as California goes through its experience.”

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A new pilot project from Illinois’ largest utility is bringing energy storage out from behind the substation and into the neighborhood.

Last month, ComEd deployed a 25-kilowatt-hour, lithium-ion battery in Beecher, Illinois, about 40 miles south of Chicago. In the event of a power outage, the battery can supply about an hour of backup power to three houses selected for the project.

It’s part of a broader experiment in Community Energy Storage (CES), or the deployment of medium-sized batteries in between those found in utility-scale applications and the kind of personal, home-battery systems offered by Tesla and others. Taken together, distributed CES units can start to match the scale of larger, more centralized energy-storage systems.

ComEd says the Beecher pilot will run for a year, and that similar pilot projects are in the works. The Beecher CES system is aimed primarily at mitigating reliability issues — the area experiences an unusually high amount of outages due to challenges with a nearby medium voltage line that serves it, according to Manuel Avendano, manager of emerging technology in ComEd’s distribution planning and smart grid group.

Down the road, CES could provide other benefits, such as the integration of more solar energy and reductions in the peak demand periods that strain the grid, Avendano says.

“Through grid modernization and smart grid investments, our reliability performance has been best on record for five years running, and we’re committed to continuous improvement,” Michelle Blaise, ComEd’s senior vice president of technical Services, said in a statement. “We want all ComEd customers to experience great reliability and that’s why we’re innovating and piloting emerging technologies such as energy storage to bring new value to communities and help improve service for our customers.”

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The energy storage market will expand dramatically in the coming years from an annual installation size of 6 GW in 2017 to more than 40 GW by 2021. In addition, an IMS Research report predicts that the market for storing energy from solar panels will go from $200 million in 2012 to nearly $19 billion by the end of this year. This is especially impactful for residential solar, which has seen consistent growth in the past few years and will continue to grow for the foreseeable future.

According to McKinsey, energy storage could be the “missing link” that makes intermittent renewables such as solar and wind power totally accessible and reliable all the time. That’s because it allows energy that’s stored while the sun is shining and the wind is blowing to be used later when the wind isn’t blowing or when it’s dark outside. McKinsey also indicates that there’s significant near-term potential for energy storage, and that this is largely due to the fact that prices are dropping dramatically and could be as low as $160 per kilowatt-hour by 2025.

Clearly, there is a mutually beneficial relationship between solar and energy storage. Particularly, long tail (i.e., small regional) solar companies will see greater opportunities as the industry moves away from consolidation and being dominated to a handful of large companies. This remains to be true despite the recent U.S. government policy shifts that deemphasize climate change. In fact, several companies as well as state and local governments have responded that this new policy won’t impede their efforts to support the development and implementation of clean energy including renewables.

New Opportunities for Long Tail Solar Companies with Energy Storage

Now, with solar financing options becoming simpler and more democratized, smaller and more agile solar providers will experience growth right along with the burgeoning energy storage industry. In fact, data show that residential energy storage will grow to 660 MW by 2021, and that most of it will be paired with solar. Solar paired with energy storage will drive growth in both industries.

This implies that partnerships need to be formed between solar and energy storage companies. That’s because long tail installers will need energy storage solutions to meet residential customer demand. However, one of the caveats is that not all energy storage solutions are the same because energy storage isn’t commoditized.

An example is the difference between a simple energy storage system versus an intelligent energy storage system. A simple system will allow customers to store energy from the grid or renewables and that’s pretty much it. For many people, this will be enough to satisfy their energy storage needs. An intelligent system will do this as well, but it will also facilitate energy optimization, home automation, and integration with the Internet of Things (IoT). 

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An ambitious retrofit process

North America has well over 20 GW of utility-scale PV with hundreds of MWs coming on yearly. Energy storage can help maximize the production of both existing and new utility-scale PV installations. In this free guide, Dynapower — the leading manufacturer of utility-scale inverters with over 350 MWs installed worldwide — provides a comprehensive overview of the three systems for coupling solar with storage — AC-coupled, hybrid plus storage, and a new approach DC-coupled with a converter. In addition to a system overview of each solution, Dynapower provides an analysis of the value streams each system type can bring online for installation owners to boost production and revenues.

All told Dynapower provides an overview of six energy storage enabled value streams — Clipping Recapture, Curtailment & Outage Recapture, Low Voltage Harvesting, Capacity Firming, Energy Time Shifting, and Ramp Rate Control.

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Arguing that energy storage is “critical to ensuring a resilient, reliable, cost-effective and sustainable grid”, the Energy Storage Association joined with 52 other organisations to plead the place of storage in the Trump’s administration’s infrastructure priorities.

Penning a letter to Congress, the coalition of energy storage advocates asserted that any dialogue on enhancing and rebuilding infrastructure and modernising the grid must involve energy storage systems. Signing the letter alongside ESA’s leadership were companies and groups including Johnson Controls, Lockheed Martin, 24m Technologies, AES Energy Storage, LG Chem, Enel Green Power North America, Green Charge, Greensmith, National Electrical Contractors Association, Panasonic, Parker Hannifin, Siemens, Stem, Sunverge, UL and several others.

“If you want to talk about grid resiliency, energy storage is part of that conversation. If you want to talk about load modulation, demand response, storage is a part of that conversation,” Matt Roberts, executive director of ESA, told Energy-Storage.News back in February, noting the significant opportunity for storage in the federal government’s expressed priorities.

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“Energy storage systems are critical to ensuring a resilient, reliable, cost-effective, and sustainable grid,” a letter sent on April 3 by the Energy Storage Association and 52 industry organizations admonished the leaders of the U.S. Congress – asking the lawmakers to see energy storage as a policy priority when they discuss infrastructure projects in the coming months.

Addressed to Senate Majority Leader Mitch McConnell (R-Kentucky). Senate Minority Leader Chuck Schumer (D-New York), House Speaker Paul Ryan (R-Wisconsin-1^st District), and House Minority Leader Nancy Pelosi (D-California-12^th District) , the correspondence emphasized that energy storage systems are “fuel neutral” – and therefore, would support any generation resource connected to the grid, whether fossil fuel or renewable.

What’s more, the signatories said, the U.S. has a leading global industry position to protect. Indeed, in the fourth quarter of 2016, alone, the nation deployed 141 MW of energy storage – and experts expect the market to grow by tenfold over the next several years.

As costs of the technology decline and adoption rates climb, the global industry is expected to surge to more than $240 billion annually by 2040, “and if the U.S. competes to stay at the forefront, it can employ and support hundreds of thousands of Americans,” the letter said.

But it is not just about dollars and cents, the association and the industry principals stated. Energy storage deployment enjoys bipartisan support because of the direct and tangible benefits that it delivers on the grid. They pointed out that both Republican and Democratic governors have implemented programs supporting early storage deployments.

“For example, utilities in Texas, Utah, and New York have proposed energy storage as a smart, cost-effective complement to their wires and substations,” the letter detailed, providing the following other examples:

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Since the invention of electricity there is always a challenge to store it for future use. With the technological advancement, battery storage has offered a way to store energy chemically-especially renewable energy, so that it can be used at the point of demand or to balance grid. Amid surge in solar and wind power generation and their intermittent nature, the battery storage demand has increased manifold, and now batteries are big enough to give power backup to mega cities.

As the renewable energy share rises in the energy mix, there is an increased focus on energy storage projects in recent years. They are expected to play a key in the global transition to renewable energy.

In a report by GlobalData estimated the installed capacity of global battery energy storage system (BESS) from 1.5 Gigawatts (GW) in 2015 to over 14 GW by 2020, as many projects are scheduled to be commissioned over the period.

The report projected the US to continue to lead the BESS market over the next five years, reaching a market value of approximately $1.7bn by 2020.

BESS prices are also forecast to decline by about 50% over the 2015 to 2020 period, due to technological innovations, improvement in manufacturing processes, and increase in competitiveness.

Here are the biggest battery storage projects across the globe:

1. The Alamitos Battery Energy Storage System

AES is planning to build the Alamitos Battery Energy Storage System in Long Beach, California. It will have 300 MW of interconnected and 600 MW of flexible, zero-emission battery energy storage.

The company claims it as the world’s biggest storage resource, which is expected to enable efficient use of renewable energy resources, lowers costs and emissions, and offer increased reliability to the electrical grid.

The company is already developing a 100MW battery storage facility at the Alamitos Power Center. In November 2014, AES Southland was awarded a 20-year power purchase agreement (PPA) by Southern California Edison (SCE) for the storage plant.

2. EDF Energy Renewables West Burton 49MW Battery Storage Project

In August last year, EDF Energy Renewables has secured a contract from the UK’s National Grid to build 49 MW of battery storage project at its West Burton Combined Cycle Gas power station in Nottinghamshire.

The contract was part of a new 200 MW frequency response system to improve the reliability of the UK grid. EDF Group has applied for planning permission for the battery storage units at EDF Energy’s West Burton.

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