The world’s largest asset manager has a new multibillion-dollar renewable energy fund in the works, and a good chunk of it may go to batteries.

Long a major global investor in wind and solar energy, BlackRock has more recently begun buying into energy storage projects — including its acquisition last year of GE’s distributed solar and storage business.

Looking out over the next few years, energy storage is one market “where we’ll see the opportunity set expand,” said Martin Torres, head of the Americas at the renewables group within BlackRock Real Assets.

Torres and his team are also “eagerly watching” the emergence of the U.S. offshore wind market, he told GTM.

A transformed investment landscape
BlackRock shook the financial universe this month when CEO Larry Fink said the company will put sustainability at the “center” of its investment approach.

Exactly what Fink’s announcement will mean for BlackRock’s fossil fuel investments remains to be seen. But in the realm of renewables, at least, BlackRock’s green bona fides need little burnishing.

BlackRock launched its first equity fund targeting renewables in 2011; since then it’s played a major role in convincing institutional investors — think pension plans, insurance companies and endowments — to look at wind and solar like they would any other infrastructure asset: boring, safe, predictably lucrative.

Since 2011, BlackRock claims to have channeled $5.5 billion into more than 250 wind and solar projects around the world, a fleet that generates enough power to keep the lights on in Spain. And its appetite for renewables investment keeps growing.

BlackRock’s first renewables private-equity fund drew around $600 million of commitments from big investors. The second, launched a few years later, brought in $1.65 billion.

With its third “vintage,” known as the Global Renewable Power III fund (GRP III), BlackRock is targeting $2.5 billion of commitments; in December it announced a record $1 billion “first close,” meaning the fund can begin making investments even as it continues to bring in more capital.

A growing number of U.S. utilities plan to add energy storage to their resource plans this decade, as declining renewable energy costs and investor and public pressure to curb emissions have significantly changed the market over the past few years.

More and more utilities across the United States plan to add more wind and solar capacity and retire coal-fired power plants to start addressing climate change and to take advantage of falling renewable energy procurement costs. And a growing number of those utilities are combining battery energy storage with their new solar and wind capacity plans.

The utilities’ integrated resource plans (IRPs) for the next few years include significant growth in battery energy storage. Battery storage deployments are even expected to exceed the utilities’ expectations in their IRPs, according to a new analysis by Wood Mackenzie.

The energy consultancy’s analysis of the plans of 43 utilities showed “exponential growth in expected utility demand for battery energy storage system procurements, as utilities adopt more aggressive clean energy portfolio strategies,” WoodMac says.

Last year was a crucial year in battery energy storage plans as the utilities with plans to add energy storage increased their combined expected storage deployment five times compared to the 2018 plans, WoodMac’s analysis showed, as carried by Greentech Media.

Currently, utilities in the United States expect 6.3 gigawatts (GW) of battery deployment this decade.

Utilities are starting to move from pilot projects to wider deployment of battery energy storage because they gain experience with the technology, according to Wood Mackenzie’s storage researcher Gregson Curtin.

“Once utilities test energy storage and like it, they keep procuring more and more,” Curtin tells Greentech Media, a unit of Wood Mackenzie.

As the global economy attempts to further distance itself from fossil fuels, renewable sources of energy are receiving increasing attention.

Yet for all the potential of green energy sources – be it solar or wind power – there remains the unavoidable problem of intermittency. Wind power generation is contingent on windy conditions, just as solar is reliant on it being sunny, meaning predictable energy generation is never a given.

In order to ensure the grid has enough energy in its system – and avoids blackouts – long-term energy storage is required. Only then will there be enough power to keep the lights on in the event of a sunless or still day.

While traditional lithium ion batteries are able to store energy for short amounts of time, they are insufficient when it comes to long-term energy storage. And while there is evidence to suggest pumped hydro-storage might be able to store energy for longer periods, with large generation capacities, it remains incompatible with grids with smaller demand.

However, a new paper to come out of the Austria-based International Institute for Applied Systems Analysis (IIASA) has proposed a new concept that could be the answer to the storage service question. And the system is based upon that most awe-inspiring of topographical features: the mountain.

Going off-piste: introducing MGES
Known as mountain gravity energy storage (MGES), the technology works by simply transporting sand or gravel from a lower storage site to an upper elevation, storing potential energy from the upward journey and releasing it on the way back down. The higher the height, the greater the amount of stored energy, claims the research.

The paper’s writer is Julian Hunt, who headed up the IIASA team of researchers. It also proposes that MGES could be combined with hydropower in the case of river streams on a summit, whereby water, in periods of high availability, could replace sand and gravel in the storage vessels.

Yet, the concept of gravitational energy is not entirely new, says Hunt, who has published previous papers on its potential. He also alludes to an attempt by Bill Gates back in 2012 to create an energy storage system by transporting gravel on ski lifts. The project was later abandoned.

NextEra Energy signaled a strong quarter and year judging by the stock’s greater than 50% rise over the past twelve months.

For the full year of 2019, the company’s GAAP net income was $3.8 billion. NextEra Energy Resources, a group within the company that owns a majority of its renewable resources, earned just under $1.7 billion on the year. The company’s broader financial results can be found on its investor page.

The company commissioned 2.7 GW of renewable energy capacity including 700 MWac of solar power and 340 MW/~1.3 GWh of energy storage. In Florida, the company brought on 300 MWac of solar under its utility Florida Power & Light. That subsidiary of NextEra also noted that in 2020, it will deploy the first 750 MWac of its “10 GWac by 2030 goal,” and that it had secured the sites needed to build out those facilities.

5.8 GWac of future capacity was originated in the year, which included 900 MW/~3.6 GWh of energy storage. Of that newly originated solar volume, 50% of it included a battery storage component. The company also noted that more than 2 GW of that future capacity were “trifecta projects that combine wind, solar and battery storage together.”

CEO Jim Robo noted;

We continue to expect that by the middle of this decade, without incentives, new near-firm wind is going to be a $20 to $30 per megawatt hour product, and new near-firm solar is going to be a $30 to $40 per megawatt-hour product. At these prices, new near-firm renewables will be cheaper than the operating cost of most existing coal, nuclear, and less efficient oil and gas-fired generation units.

The terminology “near firm” means the plants will have some form of energy storage included in those prices. The company said it “increasingly sees storage as an important standalone business in its own right, as we are reviewing a number of opportunities to add storage to our existing solar sites to take advantage of the ITC and enhance the value of our existing projects for customers.”

US construction and home improvement company PetersenDean has selected Enphase’s equipment including battery storage for its solar home offerings, with a particular emphasis on California’s Home Solar Mandate.

Enphase will be the contractor’s “premier supplier”, the tech company said. While originally best known for its panel-level microinverters, Enphase’s “all-in-one smart energy system” now includes the solar microinverters along with battery storage and an energy management suite.

The battery energy storage systems are available in 3.4kWh and 10.1kWh usable capacities and are scalable to larger sizes, coming with 10-year limited warranties, while the microinverters have a 25-year warranty in line with solar system lifetime expectations.

Branded Encharge 3 and Encharge 10 respectively, the company opened pre-orders for the batteries in November last year at the height of conversation around California’s power line shut-offs in the wake of wildfires. Enphase said the microinverters are grid-forming and have an Always-On setting to allow homeowners to keep appliances running even when grid power is not.

As of the beginning of this year, California’s various existing policy measures to drive forward solar adoption in the state including the Self-Generation Incentive Programme (SGIP) were joined by the mandate, the first in the US to be introduced at state level.

Part of the building codes, solar installation company EnergySage recently wrote on its company blog that new homes constructed this year require the addition of a solar photovoltaic (PV) system as an electricity source, and should be sized adequately to meet the building’s annual electricity consumption. EnergySage noted that the addition of battery energy storage can somewhat reduce the sizing requirement – by as much as 25% in some cases as the batteries help to meet the required load.

While PetersenDean and Enphase are rolling out the systems in nine US states in total, Enphase president and CEO Badri Kothandaram referred directly to the importance of the California Home Solar Mandate in a statement.

When designing a house, one of the most important issues is energy efficiency. That means there needs to be the right amount of insulation in the foundation, walls and roof, energy efficient windows, and well placed on the periphery of the house. The house also should be placed on the property for optimal solar orientation. With these factors covered, the house will require minimal energy for heating and cooling.

A perfect solution for efficiently providing the energy for electricity is to install photovoltaic (PV) solar panels on the roof or next to the house. The house can get energy from the grid when there is no sun or inclement weather and feed energy back to the grid where this is allowed.

Some houses are totally off the grid because connecting to the grid would be too expensive or unavailable in that area. These houses require photo voltaic (PV) panels to provide energy and batteries to store the energy for periods when there is no solar energy and/or inclement weather. When a household stores solar energy produced on site and uses that energy when solar production is less than than the energy requirements in the house – it is called “self consumption.”

The house may also be connected to the grid and return excess energy to the grid when the battery is full or during peak periods of the day when the grid is overloaded.

I interviewed Lior Handelsman, VP of Marketing & Product Strategy and Founder of SolarEdge, a global leader in smart energy technology to get very up-to-date information on solar energy. The interview with Handelsman follows:

We are on the cusp of the next major energy transition – a transition that will move us towards a more sustainable future where renewable energies replace fossil fuels. But this transition is not going to happen overnight.

Academics and analysts are predicting that it could still take decades for the world to wean itself from fossil fuels, since some of the key technologies needed to deploy renewable energy on a massive scale, have seen very slow improvements over the years. For this transition to be expedited, energy storage solutions need to be improved and batteries are going to play a huge role in this evolution.

Current batteries and what could be next

Although constant improvements have been made in the 150 years that batteries have existed, only four commercially relevant chemistries have made it to market. The last major development was the lithium-ion (Li-ion) battery, whose identification and development are widely credited to Professor John Goodenough. His research in the 1980s led to its commercialisation by Sony in 1991.

Due to a relatively high energy-to-weight ratio, Li-ion batteries became very popular and are still considered the most promising battery chemistry. Although Li-ion offers many advantages over previous battery materials, improvements can still be made.

Electric modes of transportation will be a major driver of battery technology advancements. Bloomberg New Energy Finance (BNEF) predicts that by 2040, 57% of all passenger vehicle sales and over 30% of the global passenger vehicle fleet will be electric. If the electric vehicle predictions being forecasted are accurate, the commercial batteries market offers unlimited opportunity.

As such, researchers from large multi-national corporations, academic institutions, and technology startups are all looking for the successor to Li-ion.

Everyone wants to discover a battery that has a faster rate of charge and a higher energy density. But how do we get there? Experts, scholars, and the media, continue to speculate about battery technology and what’s going to be the next big breakthrough. Will it be new organic compounds, solid-state batteries, or something completely revolutionary that doesn’t require changing the chemistry of the battery?

Most startups looking to improve the performance of batteries are looking at solid-state batteries or improving Li-ion batteries using new chemical compounds. The main challenges with new chemistry include time and resources. If advancements are discovered in a lab environment, scaling the technology to commercialisation is a very, very long road.

According to Professor Paul Shearing, the Royal Academy of Engineering’s chair in emerging battery technologies: “The next 10 years are going to continue to be lithium-ion dominated. It’s taken a long time to get to this productivity and technological maturity level. For anything to catch up will take a while.”

As the world looks for reliable and cost-effective means of housing energy for long periods of time, a new study is proposing using mountains and gravity as giant storage systems. The paper’s author, Julian Hunt, a researcher at the International Institute for Applied Systems Analysis, tells us about his findings.

As the global economy attempts to further distance itself from fossil fuels, renewable sources of energy are receiving increasing attention.

Yet for all the potential of green energy sources – be it solar or wind power – there remains the unavoidable problem of intermittency. Wind power generation is contingent on windy conditions, just as solar is reliant on it being sunny, meaning predictable energy generation is never a given.

In order to ensure the grid has enough energy in its system – and avoids blackouts – long-term energy storage is required. Only then will there be enough power to keep the lights on in the event of a sunless or still day.

While traditional lithium ion batteries are able to store energy for short amounts of time, they are insufficient when it comes to long-term energy storage. And while there is evidence to suggest pumped hydro-storage might be able to store energy for longer periods, with large generation capacities, it remains incompatible with grids with smaller demand.

However, a new paper to come out of the Austria-based International Institute for Applied Systems Analysis (IIASA) has proposed a new concept that could be the answer to the storage service question. And the system is based upon that most awe-inspiring of topographical features: the mountain.

Going off-piste: introducing MGES
Known as mountain gravity energy storage (MGES), the technology works by simply transporting sand or gravel from a lower storage site to an upper elevation, storing potential energy from the upward journey and releasing it on the way back down. The higher the height, the greater the amount of stored energy, claims the research.

The paper’s writer is Julian Hunt, who headed up the IIASA team of researchers. It also proposes that MGES could be combined with hydropower in the case of river streams on a summit, whereby water, in periods of high availability, could replace sand and gravel in the storage vessels.

Yet, the concept of gravitational energy is not entirely new, says Hunt, who has published previous papers on its potential. He also alludes to an attempt by Bill Gates back in 2012 to create an energy storage system by transporting gravel on ski lifts. The project was later abandoned.

“He spent several million dollars trying to develop the technology, but gave up in the end,” says Hunt. “But if you want storage for the long term, it’s a still a viable alternative.”

The technology group Wärtsilä has signed an Engineering, Procurement and Construction (EPC) contract for a new 100 MW/100 MWh total capacity energy storage project in South East Asia.

The energy storage system facility, including Wärtsilä’s GEMS, an advanced energy management software platform, and GridSolv solution, will be used for grid support purposes. The order was booked with Wärtsilä in Q4 2019. This contract comes in addition to the similar size contract announced in July 2019.

Wärtsilä is enabling the transition towards a 100% renewable energy future around the world by designing and building flexible systems that integrate renewables, traditional thermal assets and energy storage.

In 2018, the Association of Southeast Asian Nations (ASEAN) committed to meeting 23 percent of its primary energy needs from renewables by 2025. The region is aiming to leverage its abundant wind and solar resources and reduce its reliance on fossil fuels, especially as grid systems develop and economies grow. Wärtsilä’s new 100 MW/100 MWh energy storage project will help provide some of the reliability necessary to support South East Asia’s transition to renewable energy sources.

Wärtsilä’s GEMS platform has the ability to react near-instantly to smooth the integration of renewables, enabling the grid to emerge more stable and responsive. Grid support applications of GEMS include voltage and frequency regulation, reactive power support, spinning reserve, ramp rate optimization, renewable energy output smoothing and energy arbitrage. GEMS will make it possible for grid operators to rely on renewables as baseload power.

Wärtsilä Energy Business has delivered more than 35 EPC projects totaling 1500 MW in the South East Asia region.