Energy Storage updater

BESS opportunities in the Australian National Energy Market

The entrance of battery energy storage systems (BESS) to the Australian National Energy Market (NEM) is operating ahead of any significant changes to the regulatory framework to address the role that BESS can play in the market. The Australian NEM began its operation in 1998 and operates across, and connects the densely populated areas of the eastern and southern states and territories of Australia. The NEM operates to facilitate the exchange of electricity through generation, transmission, distribution, retail and end user.

Batteries offer an opportunity to rethink the Australian electricity network. A frequently heard complaint regarding the operation of the NEM is the bottleneck experienced by new generation facilities trying to connect with the grid due to the aging and lagging investment in the transmission network. BESS can offer a work around. Technically BESS can be built together with the generation systems or simply store power from the grid when necessary – whether it be at grid-scale or at the household level. BESS are dispatchable and can provide NEM the opportunity to rethink the design of supply to the grid and utilise redundancies in not only grid-scale generation but also rooftop solar. 

There are however a number of barriers to entry for BESS to the NEM. Whilst regulatory framework does not prohibit the connection an participation of BESS in the NEM, it does not enable or incentivise BESS connection and participation. Proposals for reform have been made by the Australian Energy Market Operator (AEMO) and the Energy Security Board. However, these proposals do not go far enough to remove the barriers for BESS. The NEM’s regulatory framework needs to be continually challenged and tested in the context of delivering the best outcomes for end users and the reliability of supply to the market. 

Notwithstanding the regulatory limitations, there has been a rapid increase in the development of, and investment in battery storage assets. A forecast from the AMEO in 2016 suggested Australia might have 4 MW of large scale batteries by 2020. By late 2020, over 280 MW were already in operation or committed to construction and more than 2 GW of new BESS projects have been announced since then. 

BESS technology is constantly being tested and proven in the market, in Australia and elsewhere, at a rapid pace despite the limitations of the regulatory framework of the NEM and the Australian political environment. Based on the history of change in the NEM, changes to the NEM’s regulatory framework (and arguably political attitudes) further changes will have to be driven by BESS investment. 

Read the full article by Jo Crew and Nicola Pearl here. 

Technology and corporate news

Africa and the Middle East

Large-scale solar-plus-storage project commissioned at Mali gold mine

German partners BayWa r.e. and Suntrace have successfully brought online an off-grid hybrid energy system, combining solar PV and battery storage alongside the mine’s existing fossil fuel generators. The solar capacity will slash the mine’s reliance on fossil fuels during daylight hours, while the batteries will compensate for fluctuations in solar generation throughout the day. Wärtsilä supplied the hybrid energy solution and integrated it into the existing systems. The gold mine’s owner has praised not only the environmental credentials of the solution, but also its economic viability.

Asia Pacific

Hitachi ABB Power Grids’ battery storage to be used at 214 MW industrial micro-grid in Thailand

Hitachi ABB Power Grids will implement a digitally-enabled micro-grid using its battery energy storage system and controls technology in an industrial park in Thailand. The micro-grid will behave like a utility-scale power system, managing and optimising power output from various distributed energy resources such as co-generation gas turbines and rooftop and floating solar PV. This will be the country’s largest private micro-grid, providing 214 MW of distributed energy resources.

Wärtsilä to install ‘first-of-its-kind’ floating battery storage solution in Southeast Asia

Wärtsilä Corporation will deploy a large-scale floating battery energy storage system with capacity to store 54 MW / 32 MWh for a thermal power facility in the Philippines. This “floating power barge” is the first of its kind in the region of Southeast Asia. Due to the Geography of the Philippines, power plants on floating barges are seen as an answer to meeting energy demand and implementing renewable power into the country’s power supply.

Coal-dependent Mongolia's first solar-plus-storage project will use NGK's sodium-sulphur batteries

Sodium-sulphur (NAS) batteries made by Japanese industrial ceramics company NGK Insulators will be used at a solar PV plant in Mongolia. These batteries can provide long-duration energy storage and have a capacity of 600 kW / 3,600 kWh. This is part of a strategy to increase the use of renewable energy in Mongolia which currently derives the majority of its power from a fleet of ageing combined heat and power coal power plants.

First new pumped hydro plant in Australia for nearly 40 years approaches financial close

Genex Power has received significant funding for developing the Kidston Stage 2 PHES project which will be able to store 250 MW of power for up to eight hours. The project involves repurposing a former gold mine site into an emissions-free large-scale energy storage system that will be co-located with a solar PC plant with 50 MW of capacity that Genex Power has already built at the site. The entire project, including the transmission network buildout, is expected to cost around AU$777m.

Europe

Shell bets on batteries for ultra-fast EV charging

Shell are trialling a battery-backed ultra-fast charging system, provided by Dutch firm Alfen, at a Dutch filling station. The trial is part of Shell’s, and grid-equipment maker Alfen’s, prediction that VPP-connected batteries will be cheaper than grid reinforcements. The 300 KW / 360 KW-hour battery system has been optimized to charge when renewable production is high in order to avoid bottlenecks in the electricity grid when ultra-fast electric vehicle charging coincides with peak demand.

VW’s US$14bn Northvolt order is ‘significant’ for battery storage as well as electric vehicles

European lithium-ion battery manufacturer, Northvolt, recently secured an order worth US$14bn from carmaker Volkswagen taking its total sum of contracts with key customers to US$27bn. This marks a significant step for the European energy storage market as alongside Northvolt, who are now looking to expand their gigafactory from 40GWh to 150GWh annual cell production by 2030, dozens of gigawatts of advanced battery and system production capacity are due to come online in Europe in the next few years. This has led the European Commission VP for inter-institutional relations and foresight, Maroš Šefčovič, to state that Europe could be the world’s second-largest producer of lithium-ion battery cells by 2025, after China.

Pacific Green targets development of 1.1 GW of energy storage in the UK by 2023

US cleantech firm, Pacific Green, has signed an exclusivity agreement to develop up to 1.1 GW of battery energy storage systems (BESS) in the UK. As a result, the company has acquired rights to 100 MW of BESS in Kent and intends to complete the remaining 1 GW of storage by 2023. The agreement might also provide a platform for the company to scale up its other arms of cleantech, including marine exhaust gas cleaning, air filtration, desalination and solar energy, in the UK market.

UK battery storage investor Gore Street raises US$190m in share issue 

Through the sale of a portion its shares on the London Stock Exchange, UK energy storage investor Gore Street Energy Storage Fund raised £135m towards deploying a 1.3 GW development pipeline as well as a potential 80 MW acquisition for its portfolio of battery projects. The acquisition of new projects in its 1.3 GW pipeline will also draw funds from the £60m raised from the Fund’s initial placing on top of the £15m revolving credit facility secured from Santander last March.

Denmark’s largest battery – one step closer to storing green power in stones

Denmark’s GridScale technology is one step closer to solving one of the largest challenges currently facing the establishment of a 100% renewable electricity supply; storing the surplus electricity generated by intermittent windy and sunny weather. Through the heating and cooling of crushed basalt stones, the technology aims to provide a more cost effective method of supporting the electricity supply for up to a week rather than the four hours of support currently provided by lithium-based batteries.

Fortum installs innovative battery solution at Landafors hydropower plant in Sweden

Fortum, Volvo Cars and Comsys have come together to devise a solution to the Nordic electricity grid’s increasing demand for faster and more flexible electricity regulation than what the current Fortum’s Landafors hydropower plant’s turbines can handle. In Fortum’s second pilot project, a total of 48 of out-of-service batteries from Volvo Cars plug-in hybrids will be connected to the energy system enabling the increase in production of electricity from weather-dependent sources, i.e. solar and wind, without inhibiting the hydropower plant’s ability to meet future demands in the electric grid. 

UK battery storage has seen a ‘turning point and become an economically viable investment’

Speaking at the Energy Storage Summit 2021, Jonty Lovell of the Foresight Group stated that the battery storage market in the UK is entering into a new phase of economic viability. Whilst battery storage as an investment remains a fairly new phenomenon, Lovell argues that, with the UK and other nations striving to reach net zero emissions by 2050 and the increasing rise of renewable energy reducing our reliance on fossil fuels, “the fundamentals are there and have been for a while”.

North America

Energy hedging: a new way to make demand response pay in California?

East Bay Community Energy (EBCE) and OhmConnect have formed a partnership to test a new way to make demand response pay, by using a portion of OhmConnect’s existing and new customers’ load-reduction capacity to serve as an energy trading hedge for EBCE. EBCE’s COO, Howard Chang, said that the 25 MW of load reduction OhmConnect is making available will help particularly during hot summer afternoons and evening hours when California’s grid is under the most stress, but didn’t disclosing any pricing information. The companies will review the pilot later in the year to decide whether the approach will be implemented in future years.

Nexamp gets US$440m debt financing for community solar and battery storage portfolio

US community solar provider Nexamp has closed a US$440m credit facility for a 380 MW portfolio of PV and energy storage assets, the largest debt financing of its kind. The portfolio spans five US states and consists of almost 100 community solar projects as well as energy storage capacity totalling 120 MWh. The company’s CFO, Peter Tawczynski, said that lender interest in response to the new portfolio was a “clear validation” of Nexamp’s approach to community solar, and that the financing positions the business for accelerated growth over the coming year.

Canadian Solar and Habitat Energy form strategic partnership

Canadian Solar Inc. has announced a strategic partnership with UK-based Habitat Energy Limited, a power trading and asset optimisation company for battery storage assets that uses a combination of forecasting and artificial intelligence to maximise asset performance. The partnership will allow Canadian Solar to offer enhanced technology solutions for developers and owners of battery storage assets to capture additional revenue from trading optimisation, while improving grid stability and contributing towards the move to a cleaner, smarter and more efficient power grid. 

Latin America and the Caribbean

ESS Inc’s all-iron flow battery will add long-duration storage to micro-grid in Patagonia, Chile

ESS (currently the only manufacturer in the world of a commercially available flow battery using iron electrolytes) is deploying a battery energy storage system with more than six hours duration to a microgrid in Chile, for utility company Edelaysen. The company’s flow battery will be integrated with renewable energy in the microgrid to help the local utility reduce its reliance on diesel generators when the grid needs are not met by hydroelectric turbines, which have seasonal variations in output. Work is already underway in the Patagonia plateau and is due to complete later this year. 

Highview Power unveils plan for first 500MWh liquid air storage project in Latin America

Highview Enlasa, a 50:50 joint venture between UK-headquartered liquid air energy storage (LAES) technology provider Highview Power and Chilean power generation company Energia Latina SA, is planning a 50MW / 500MWh project in Chile’s Atacama region, in the city of Diego de Almagro. Highview Power’s CRYOBattery technology will offer up to 10 hours of storage, and it is hoped that by pairing the LAES system with solar power, renewable electricity will be available 24/7.  The system represents an investment of about US$150 million and is currently undergoing pre-feasibility engineering work ahead of environmental assessments later this summer, with construction expected to begin in the second half of 2023.

Policy and regulatory news

Africa and the Middle East

Batteries will enable large-scale dispatchable renewable energy on South Africa’s grid

1300 MWh of grid-connected energy storage is set to be deployed in South Africa in combination with a number of large-scale renewable energy projects. In a recent tender for up to 2 GW of energy capacity to reduce electricity supply constraints, nearly a quarter was awarded to renewable energy-plus-storage projects, competing against gas for dispatchable power capacity contracts. Energy majors including EDF, Total and ACWA Power were among the successful bidders.

USTDA funding feasibility studies for Mozambique and Senegal battery storage projects

A US$1m grant has been made available to renewable project developer, Lekela Power. Lekela Power already operates the largest wind farm in Senegal, Taiba N’Diaye, a 158.7 MW facility, where the battery energy storage system is set to be located. A second grant will be put to use by POWER Engineers, Incorporated on a 30 MW wind power and battery storage project in Mozambique. It is hoped the projects will demonstrate the technology’s capability to balance local grids and its suitability for similar projects in the region.

Energy storage regulatory framework on its way in Namibia

Namibia’s reliance on electricity imports could be eased by energy storage capacity, though there is currently no regulatory framework to support the sector’s development. The country relies heavily on solar and hydro power, with generation fluctuating throughout the day and with the seasons. Having received significant interest from investors on energy storage opportunities, the government has begun drafting the energy storage regulation, which is expected to come into force in early 2022.

Asia Pacific

Coal power station retires to fond farewell as massive battery project steps in to take its place in Australia

Australian energy retailer EnergyAustralia has announced plans to build a 350 MW, four-hour standalone battery energy storage system (BESS), with the project enabling it to retire the Yallourn coal-fired power station “after decades of faithful service”. The coal-fired power station has been in operation in its current state since 1974, although the site has housed a power plant since 1921. EnergyAustralia, who are targeting carbon neutrality by 2050, have said that retirement of the power plant would lower the company’s carbon dioxide emissions by more than 60% relative to today’s figures.

India’s ‘first grid-connected community energy storage system’ inaugurated in Delhi

India has deployed a 150 kWh / 528 kWh lithium-ion battery energy storage system in Delhi, aimed at improving the local electricity grid and community. Described as India’s first grid-connected energy storage system, the companies behind the project have said that they hope the battery would encourage a wider rollout of similar solutions across the nation. The battery storage system will charge during off-peak times and discharge to the grid during peak times, which would help regulate power supply during Delhi’s peak load summer months of June and July.

Europe

UK government’s £68 million long-duration energy storage funding competition underway

Following the announcement in December last year, the UK government has released details of its long-duration energy storage innovation competition. The competition is open to technologies that can be deployed at large scale, provide longer-duration storage – which is defined as over four hours – and can provide competitive flexibility services and system benefits. The application window is now open, with an event to provide application support and encourage the development of consortia to be held on 17th June.

Spain puts European recovery funds into electric car push 

Spain has announced that its first payout of coronavirus recovery funds will focus on clean transportation with a project to create a domestic industrial supply chain for electric vehicles and battery manufacturing. The public-private partnership for battery manufacturing will be the first strategic project within the Spanish Recuperation, Transformation and Resilience Plan and will involve Seat, Iberdrola, Caixabank and Telefónica. Details of the project, including cost, remain unclear.

Poland adapts energy policy to ‘give green light to development of energy storage’ 

Poland has removed legal and regulatory barriers to the development of an energy storage industry based in the country. The new rules incentivise energy storage by reducing the fee payable by owners and operators of energy storage assets for connecting to the grid rather than focusing on government subsidies or support funding.

Solar-plus-storage projects win 258 MW of capacity in Germany’s latest renewable energy auction

Germany’s federal network operator, Bundesnetzagentur, has announced the awarding of 258 MW of capacity to solar-plus-storage across 18 bids. This was as a result of its second “Innovation Tender” for clean energy projects combining different technologies. Notably, the solar and innovation categories were oversubscribed and every one of the 18 awarded combined technology projects is a solar PV plant with energy storage.

New high of 17 batteries clear in T-1 Capacity Market auction in Britain

The Capacity Market T-1 auction cleared at a record high price in the UK in early March, with 17 batteries securing places. This represents a marked increase from last year where only two assets secured spots, highlighting an increase in the role of renewables and storage in the country.

Turkey’s first battery storage system for the grid ‘could drive faster renewables adoption’

Aggreko, a Scotland-headquartered multinational power solutions company, has recently installed a 500 kW / 500 kWh lithium-ion battery storage system to help local grid infrastructure near the town of Alaca. The aim is for this to deliver reliable electricity, smoothing out peaks in supply and demand. Aggreko is hopeful that this “first of its kind” project for Turkey could help prove the business case for a wider rollout of battery storage in the country.

Europe to be world’s biggest lithium-ion battery cell maker after China by 2025

The European Commission’s vice-president for Interinstitutional Relations and Foresight, Maroš Šefčovič, has stated that Europe is on course to become the world’s second-largest lithium-ion battery cell producing region by 2025. Šefčovič highlighted that 70 industrial projects are being supported by the European Battery Alliance which are expected to create as many as four million jobs by 2025. However, he noted that there are key challenges, including a skills gap among Europe’s workforce.

North America

Biden’s US$2trn American Jobs Plan for infrastructure 'prioritizes energy storage'

The American Jobs Plan proposed by President Joe Biden to invest US$2trn in infrastructure includes a major set of provisions directly relevant to the clean energy industries that promote energy storage and policies in support of the industry’s growth. Among other measures, the bill will grant a 10-year extension to Investment Tax Credit (ITC) and Production Tax Credit (PTC), and also extends the ITC to include energy storage systems. The Plan also targets grants to build or re-tool factories, which could promote the growth in battery manufacturing capacity and create a reliable and independent supply chain in the US.

How Siemens Energy is targeting the US green hydrogen opportunity 

Siemens Energy teamed up with Intermountain Power Energy Agency to perform a conceptual design study on integrating hydrogen energy storage system into the 840 MW Intermountain Generation Station in Utah, the Intermountain Power Project.  The Intermountain project was funded by the US Department of Energy. It is one of the four funding awards received by Siemens to advance hydrogen studies to further decarbonize the US power generation.

Jigar Shah’s plan to manage DOE’s US$40bn loan program

Jigar Shah, a clean energy entrepreneur with decades of experience bringing clean energy technologies to commercial scale, has been appointed as the head of the US Department of Energy (DOE) Loan Programs Office. Shah will manage a US$40bn loan program that is expected to play an important role in Biden’s administration decarbonization goals. Shah intends to revive a program that helps boost successful companies like Tesla.  From the US$40bn loan program, half of the loan is available for advanced fossil fuel and nuclear power technologies, while US$22bn could be targeted to direct loans or guarantee loans for renewable energy or advanced vehicle technologies, and another US$2bn for projects on tribal lands.

Reawakening the DOE loan guarantee programme

Roughly US$40bn in Department of Energy loan guarantee capacity to support clean energy projects has sat largely unused for a decade. Recent changes have made the program more user friendly. More types of projects now qualify. Energy storage projects that use "technologies for residential, industrial, transportation and power generation applications" now qualify.

Advanced compressed air energy storage project gets funding help from Canadian government 

The federal Department of Natural Resources Canada is financially supporting the development by Hydrostor of a 300-500 MW large-scale advanced compressed air energy storage (A-CAES) project. The project will be capable of providing up to 12 hours of energy storage. The Canadian government is providing around US$3.2mn (CA$4mn) for the completion of essential engineering and planning work of the A-CAES project.

Connecticut joins seven other US states in setting energy storage target

Connecticut’s legislature passed Bill (SB) 952, ‘An Act Concerning Energy Storage,’ that made it the eighth state jurisdiction in the US to introduce a mandate for energy storage. This bill targets the deployment of 1,000 MW of energy storage by 2030.  The bill sets interim targets of 300 MW by 2024 and 650 MW by 2027. The implementing programs must include provisions for energy storage at residential, commercial and industrial and front-of-meter electric storage.

Latin America and the Caribbean

Hitachi ABB Power Grids forms Americas battery storage partnership with Atlas Renewable Energy 

Hitachi ABB Power Grids and Atlas Renewable Energy will jointly develop and deploy utility-scale battery energy storage systems for Atlas’ renewable energy projects. Atlas is a developer, builder, financer and operator of clean energy projects in Latin America, with solar projects operating or under development in Chile and Brazil. Through their partnership Hitachi and Atlas will integrate energy storage systems into the design of early development stage projects with Hitachi providing input on appropriate technical solutions as well as interconnection.

Industry events

Solar & Storage Finance Asia – 6-8 July