Earlier this year, Secretary Brouillette of the U.S. Department of Energy launched the Trump Administration’s Energy Storage Grand Challenge Program. The initiative is designed to be a comprehensive effort to accelerate the development of next-generation energy storage technology that will position the United States as a global market leader. This program represents a continuation of the administration’s efforts to improve U.S. infrastructure, energy independence, and reliability.

The Grand Challenge builds on the $158 million Advanced Energy Storage Initiative announced in President Trump’s Fiscal Year 2020 budget request. According to a statement from the Department of Energy, the vision for the Energy Storage Grand Challenge is to create and sustain global leadership in energy storage utilization and exports, with a secure domestic manufacturing supply chain that is independent of foreign sources of critical materials, by 2030. While research and development (R&D) is the foundation of advancing energy storage technologies, the Department recognizes that global leadership also requires addressing associated challenges.

Using a coordinated suite of R&D funding opportunities, prizes, partnerships, and other programs, the Energy Storage Grand Challenge sets the following goals for the U.S. to reach by 2030:

Technology Development: Establish ambitious, achievable performance goals, and a comprehensive R&D portfolio to achieve them;

Technology Transfer: Accelerate the technology pipeline from research to system design to private sector adoption through rigorous system evaluation, performance validation, siting tools, and targeted collaborations;

Policy and Valuation: Develop best-in-class models, data, and analysis to inform the most effective value proposition and use cases for storage technologies;

Manufacturing and Supply Chain: Design new technologies to strengthen U.S. manufacturing and recyclability, and to reduce dependence on foreign sources of critical materials; and

Workforce: Train the next generation of American workers to meet the needs of the 21st century electric grid and energy storage value chain.

Energy storage has become more common among infrastructure projects, given recent government efforts like the Energy Storage Grand Challenge Program, continued volatility on the grid, challenges in meeting demand, aging transmission infrastructure, grid instability, price fluctuations, as well as increasing activity in the market for power purchase agreements. To address these issues, some business owners are looking to lower their costs through generation and storage of energy.

In light of these developments, innovative financing will likely evolve as a more prominent part of battery storage projects, as new technologies develop and lenders become more comfortable with the risk/return analysis for such projects. As the energy storage market grows, financial institutions will continue to become more involved wherever they can offer a lower cost of funding as understanding of the complexities and risks of such projects continues to grow. Project financing, public-private partnerships, private equity investment, and specialized funds that invest in energy storage, will become more common among such projects.

Italian multinational Nidec has started work on the first energy storage system in mainland France as part of an €80m ($89m) pilot project for French transmission system operator RTE.

The project called ‘RINGO’ is to build a storage system to optimize management of energy flows on the transmission grid in Vingeanne in the Côte-d’Or department of eastern France. RINGO is RTE’s name for its “virtual power lines” research.

RTE hopes the pilot will prevent grid congestion at times of peak demand by experimenting with the storage of all surplus wind and solar energy and its subsequent return to the grid.

The company says that “a project that sees battery storage systems become an integral part of modern electricity grids and key elements for realizing the vision of an electric and sustainable future”.

The Vingeanne site is in a region of high wind and the lithium-ion battery chosen for the pilot has a storage capacity of 12 MW/24MWh, which Nidec says is equal to the amount of energy produced by five wind turbines.

Work started in January and commissioning and testing are hoped to begin in March 2021.

Milan-headquartered Nidec said today that the development of large-scale energy storage is “a great industrial challenge to meet the fundamental energy transition from polluting to sustainable and renewable sources, necessary to reduce greenhouse gas emissions and mitigate global warming.”

Last week’s Energy Storage Summit, held at the Victoria Park Plaza in London, brought together some of the biggest and best the industry has to offer.

The Energy-Storage.News team was on hand to document the event, picking out some key themes that emerged as the Summit entered its fifth year.

1. Interest in non lithium-ion storage is there, but there are challenges ahead.

Whilst lithium-ion may have dominated many of the presentations and panel discussions at the two-day event, the signs of a growing appetite for non-lithium ion technology were certainly appearing. Talk turned to lithium-ion alternatives, and the longer duration and seasonal storage that often comes with it, in almost every panel discussion at the conference.

Across the conference, speakers agreed that storage may now be capable of solving intermittency as renewables come onto the grid, the big question is now to be seasonal storage, with hydrogen lauded as a possible solution by Manuel Baritaud, senior economist of the energy department of the European Investment Bank.

However, on a panel session dedicated to non lithium-ion technology, Gauthier Dupont, director of power business batteries at NGK Europe warned that cost competitiveness remains a huge challenge for alternative technology.

This, combined with a lack of visibility of new technologies and projects deployed by companies specialising in these technologies, means that lithium-ion alternatives are often overlooked, even when a technology might be better suited to that specific application, and funding difficult to secure.

Describing the discrepancy of R&D investment between lithium-ion and non lithium technologies as “a joke”, Dupont stressed the importance of access to investment and how partnerships are key to non lithium-ion storage.

“We have great technology, but we will not succeed alone,” DuPont said.

1. Revenue stacking continues to de-risk projects for investors as more firms turn to co-location.

Revenue stacking is not a particularly new topic for the Energy Storage Summit, or for anyone making a profit – or attempting to make a profit – from energy storage.

However, greater weight is being given to the importance of projects having the agility to switch between multiple revenue streams, as well as the stacking of revenues through co-location with other low carbon technology, with the topic regularly acknowledged as one of the big enablers of storage throughout the event.

Access to a variety of markets, including frequency response, the UK’s Capacity Market and wholesale optimisation, was lauded as being what makes battery storage projects financially viable by EDF Energy’s director of energy solutions Vincent de Rul, adding that while it is a difficult market, “it is possible”.

A land of high energy consumption, reliant on imported fossil fuels, Japan is also globally known as a country where everything from traditional crafts to high-tech industries are always striving to improve and innovate. As the energy market moves towards deregulation and wider competition, the solar PV sector within that bigger picture moves away from the feed-in tariff (FiT) subsidy-driven phase.

Just announced as this edition of PV Tech Power went to press (mid-February 2020), were FiTs for the 2020 Japanese financial year, which begins in April. While small-scale solar of under 10kW capacity continues to receive a fairly generous ¥22 (US$0.20) per kWh, anything between 10kW and 50kW gets ¥13 and 50kW to 250kW gets ¥12; anything larger than that has to compete in auctions.

“The big difference [to previous years] is that anything over 250kW has to enter into a competitive bidding process. It was the case that [only] 500kW capacity projects and over were eligible for auctions but it is now at the 250kW+ threshold,” says Izumi Kaizuka, manager at Tokyo-headquartered analysis firm RTS Corporation.

Of a possible 416MW in a recent auction, only 39.8MW of contracts were handed out by the Ministry of Economy, Trade and Industry (METI) across 27 bids from an initial 72 project proposals, totalling 185.6MW. Successful bid prices ranged from ¥12.57 (US$0.115)/kWh to just ¥10.99 (US$0.1)/kWh.

“The price was low, but also having spoken to many in the industry, developers are really busy with contracts for projects that are not yet in operation but have been awarded the FiT in previous years; they are working very hard to get these built, rather than being able to focus on new projects,” Kaizuka says.

“Anything awarded up to 2014 needs to be built this year or show evidence of construction by this March, so they are extremely busy and are finding it difficult to even think about new projects.”

Indeed, the first few years of the FiT saw dozens of gigawatts of awarded projects apparently stall, for various and widely reported reasons. So, as our show preview for the upcoming PV Expo in Tokyo demon- strates (see p.100), activity in the ground- mounted sector focuses to a greater extent on these already-awarded but nowhere- near shovel-ready projects.

Taken from a different perspective however, the ¥22 per kWh for sub-10kW projects remains fairly generous. Kaizuka says it is also indicative of both a natural market shift and government policy shifting solar away from the fields – and hills and mountains – of Japan and towards domestic, commercial and industrial rooftops. These still-to-come rooftop sites will join Japan’s existing high installed base of ground-mount capacity (installations have ranged from over 6GW to 9GW in years since 2013 with around 10.5GW deployed in 2015, the ‘peak’ year of the FiT).

POWERGEN International is strengthening bonds with the on-site power and energy storage industries, both of which will play crucial roles in the future of power generation.

POWERGEN has renewed its agreement with the Electrical Generating Systems Association for the event happening December 8-10 in Orlando, Florida. EGSA is made up of more than 750 companies dedicated to on-site power generation such as gen-sets, microgrids and emergency backup power.

POWERGEN also has announced a strategic partnership with the U.S Energy Storage Association (ESA) focused on education around battery and other forms of energy storage.

POWERGEN’s renewed partnership with EGSA will include a dedicated pavilion in the exhibit hall (the On-site Power Pavilion, sponsored by EGSA) for members to display their products and services. While on-site, standby and emergency power generators continue to be a crucial part of the electricity mix, the gen-sets are taking on a growing role in distributed energy, and many are shifting from diesel to natural gas and upping their power density while improving emissions.

“I am excited about the improvements to POWERGEN International and anticipate increased value for our members, as exhibitors and attendees,” EGSA President Kurt Summers said.

The pavilion will be complemented by POWERGEN’s dedicated On-site Power educational track in the Conference Workshop program, along with a curated platform for connections and face-to-face meetings between manufacturers, OEMs, suppliers, distributors and power producers through POWERGEN’s MATCH! and Connect programs.

The partnership with ESA will include participation by ESA member companies in POWERGEN’s content program through thought leadership, speaking opportunities and peer-to-peer discussion platforms around marketing, policy and technology.

China’s energy storage industry entered a period of “rational adjustment” in 2019, as overall growth in new projects and capacity slowed down, yet deployed around 519.6MW/855MWh of new electrochemical energy storage capacity domestically.

The latest quarterly report figures from the China Energy Storage Alliance (CNESA) were sent to Energy-Storage.news at the very end of February. As is generally the case with the year-end editions of quarterly market reports, it gave a short year in review synopsis.

CNESA notes that the report’s statistics are provisional and a full year review is pending, however, from the figures given, it is indicated that electrical energy storage project capacity in China now exceeds 32.3GW – including mechanical or physical and molten salt thermal storage as well as electrochemical. That compares to 183.1GW of operational energy storage of all types installed worldwide to date, meaning that China is host to about 17.6% of the global total.

In total more than 1GW of new operational capacity was deployed in China, so just over half of that figure was batteries, it appears. China experienced a 3.2% increase in total capacity, while the global increase was about 1.2%. According to CNESA, the industry began – and is still undergoing – a “period of rational adjustment”.

Indeed, the Alliance has also posted a year-in-review set of survey interviews with some of China’s key industry players. In his interview segment CNESA Chairman, Chen Haisheng, pointed out that the slowdown in growth was quite steep; in 2018 an annual growth rate of 464.4% of new electrochemical storage capacity was experienced in China, compared to 2019’s far more modest increase.

Renewables, and distributed energy: Storage is still of ‘strategic importance’
Chen Haisheng said that the drivers of energy storage deployment have not changed however, with large-scale growth of renewable energy and distributed energy projects the main focus. He noted that “the development of any industry is a process, on which there will be several ups and downs, all of which are normal”.

“In many ways, the necessary adjustment of an industry once it has reached a certain stage is more conducive to the long-term development of the industry than if no such adjustment were to occur,” the CNESA Chairman said.

In the US, energy storage has quickly become a featured issue among legislative and regulatory discussions across the country.

States are tackling a myriad of issues within legislation, executive orders and commission proceedings that will impact the overall cost and value of energy storage, the process of connecting energy storage to the grid, and the extent to which energy storage is integrated into long-term grid planning and operations.

Last year alone, state legislatures across the country considered over 30 energy storage related bills, and regulatory commissions in over a dozen states tackled an array of regulatory proceedings impacting energy storage deployment.

As more states take steps to ensure energy storage can be integrated on the grid and contribute to the achievement of aggressive clean energy goals, the implementation details are critical. Although it may seem straightforward to integrate energy storage into state energy markets, the characteristics that make storage so valuable and attractive also make it challenging to address in policy and regulatory contexts.

Historically, aspects of the technology itself have made it less understood and more complex to integrate into state policy and regulatory frameworks, traditional utility planning and electricity markets.

State-by-State: Leaders, not followers
Fortunately, more states are leading the charge for energy storage, and demonstrating diverse approaches to support market growth.

New York has long been at the forefront of clean energy policy discussions. It has garnered significant attention over the past five years for its initiatives, including massive regulatory undertakings aimed to increase the resiliency of the electric grid and enable more efficient and equitable integration of distributed energy resources. Though its work is still underway, a major policy move in 2019 is certain to accelerate clean energy progress in the Empire State.

New York’s Climate Leadership and Community Protection Act calls for both 100% carbon-free electricity by 2040 and economy-wide, net-zero carbon emissions by 2050. Meeting these ambitious goals will require considerable effort, especially given the fact that New York is the third-largest economy in the country. To reach the new targets, the bill calls for a 23% increase in energy efficiency, 9GW of offshore wind energy by 2035, 6GW of distributed solar energy capacity by 2025, and 3GW of energy storage capacity by 2030. The storage target, approved by the New York Public Service Commission in December 2018, is one of the biggest targets set in any state.