March 6 (Renewables Now) – NEC Energy Solutions, a wholly-owned subsidiary of Japan’s NEC Corp (TYO:6701), announced today that it has commissioned a 2-MW/2-MWh lithium ion battery energy storage system in Chile.

Located in Arica, northern Chile, the system will serve Engie Energia Chile, the local business unit of French utility Engie SA (EPA:ENGI). Connected to an existing substation, the energy storage unit will provide spinning reserve and other ancillary services to help with the integration of solar photovoltaic (PV) and wind projects, the company said.

The installation uses a GSS grid storage solution and includes containerised lithium ion batteries, a power conversion system and NEC Energy Solutions’ AEROS controls system. The firm is also in charge of service and maintenance.

This is the first plant of its kind operated by Engie in the region, but is the third for NEC Energy Solutions in the country. In all, the latter has 34 MW of grid energy storage in Chile.

Last week’s Energy Storage Summit 2019 saw the great and the good of Europe’s energy storage sector gather at London’s Victoria Plaza for two days of discussion, debate and networking.

The Energy Storage News, Solar Power Portal and Current± editorial teams were present throughout the event, highlighting give key themes that emerged at a crucial time for the storage sector.

Deepening discussions and openness of plans and strategies
One big sign of maturity was the elevated level of discussions, now that the show has reached its fourth year. Topics previously off-limits due to commercial sensitivity or just a lack of experience from the field, were explored in depth.

Developers Zenobe Energy and Anesco, aggregator Kiwi Power and technology provider Belectric discussed the “Revised front-of-meter business model” with openness. For instance, Kiwi Power business development head Quentin Scrimshire said that the wholesale market might not offer as much opportunity in the UK as in other markets.

Anesco’s commercial operations director Lily Cole even gave a rough breakdown of the elements that comprise project costs: revenue streams, Capex, Opex and the cost of capital.

“An O&M for a battery is about £4,500 per megawatt. Then on top of that you have business rates, which is £5,500 per megawatt – but then you get a 0.48 factor against that, so it’s about £2,300 per megawatt. Then you’ve got insurance on that; whether you want to insure against revenue streams, in our case, about £700 to £1,000. Then you’ve got rent,” Cole said, explaining that that currently stands at about £1,000 per megawatt.

The record year for storage in 2018 reflects the increasing competitiveness of batteries and enhanced utility familiarity with the new technology.

Growth in FTM storage was especially pronounced in the fourth quarter, when the U.S. deployed 352 MWh of batteries. Many of those installations were used for capacity, the authors wrote, and had durations of more than four hours.

As in recent years, California led the nation for storage deployments as its utilities aim to meet the state’s ambitious energy storage mandates. Texas, New York and Hawaii also were hotspots for growth, the authors said.

Battery storage growth came despite more modest price reductions in lithium-ion technologies than researchers originally anticipated. While they had originally forecasted a 14% decline in battery prices, supply shortages meant overall price declines were only estimated at about 6%.

“2018 was also marked by battery supply shortages, as manufacturers committed capacity to the South Korean market to take advantage of incentives,” the authors wrote in a release. “Consequently, U.S. storage system price declines slowed in 2018, with some products even seeing slight price increases.”

Analysts expect those supply shortages to abate after the first half of this year as manufacturers bring new battery factories online. That will help drive growth in U.S. battery storage that could reach more than 4 GW of annual additions by the next decade.

Portugal is to kickstart its energy storage sector by arranging its first ever dedicated auction next year, Energy-Storage.news can reveal.

João Galamba, secretary of state of energy, told this publication of plans to put forward 50-100MW worth of capacity for dispatchable renewables in 2020, at a date that has yet to be decided.

“We want to keep it fully open, attract the best, most innovative technologies,” said Galamba, who replaced predecessor Jorge Seguro Sanchez in October 2018.

“It could be batteries, it could be anything else, as long as it’s renewable and dispatchable – we will let the market decide what the best solution is,” he added.

His statement follows recent calls by experts for Portugal to “urgently” move towards storage technologies, to help manage the annual 800–1,200GWh surplus in renewable production expected by 2020; power-to-gas options are seen by researchers as particularly promising.

PV auctions of 1.35GW (2019) and 700MW (early 2020)
The energy storage drive comes as the socialist government of prime minister Costa works to deliver a boom of PV solar, whose contribution last year (1.5% of national power use) was far outstripped by wind (23%).

Two PV-specific auctions this year and next will lay the foundations for Portugal’s roadmap, which requires boosting PV capacity from 572MW in 2018 to 1.6GW by 2021 and 8.1GW-9.9GW by 2030.

On February 26, 2019, Administrative Law Judge Stevens of the California Public Utilities Commission (CPUC) issued a proposed decision (Proposed Decision) ruling on the applications for programs and investments in energy storage systems submitted by the state’s three investor-owned utilities (IOUs) pursuant to Assembly Bill (AB) 2868. The Proposed Decision rejected a number of energy storage programs proposed by San Diego Gas & Electric Company, Pacific Gas and Electric Company, and Southern California Edison Company, including each IOU’s proposed front-of-the-meter energy storage program. To address the applications’ deficiencies, the Proposed Decision issued guidelines on how the IOUs must seek future approvals for front-of-the-meter energy storage projects. If adopted, these guidelines should lower competitive barriers and present new opportunities for storage developers to bid into competitive solicitations on a more neutral playing field.

AB 2868, passed in 2016, directed the CPUC to encourage the IOUs to “accelerate widespread deployment of distributed energy storage systems” by adding up to 500 megawatts (MW) of new storage capacity. Accordingly, the CPUC directed each IOU to incorporate proposals for programs and investments for up to 166.66 MW of distributed energy storage systems into their 2018 energy storage procurement plants. In early 2018, each IOU filed its application for up to 166.66 MW of new storage projects, which included behind the meter as well as front-of-the-meter projects.

The Proposed Decision accepts certain aspects of each IOU’s application, but rejects a number of proposed programs including each IOU’s front-of-the-meter investment proposal. To help the IOUs gain approval for future front-of-the-meter investment proposals, the Proposed Decision includes a set of guidelines to better ensure that the IOUs’ future AB 2686 applications for energy storage projects comply with CPUC requirements.

These new guidelines require the IOUs to procure energy storage through a competitive solicitation process involving requests for offers (RFO). The guidelines state that IOUs may only procure energy storage resources that are cost effective and meet a least-cost, best-fit criteria.

The guidelines go on to address a number of areas in which the Proposed Decision considered the IOUs’ applications deficient. In particular, the guidelines require the IOUs to consider all forms of resource ownership rather than providing preference to utility-owned projects. The guidelines require the IOUs to evaluate RFOs without bias towards any ownership model. They also mandate that each IOU employ an independent evaluator to assess the competitiveness and integrity of its solicitation. The independent evaluator must prepare a detailed post-solicitation report that the IOU must submit to the CPUC as part of its application for approval. The guidelines also provide a detailed list of information each IOU must include in each application to the CPUC.

Alberta, Canada-headquartered energy storage system maker Eguana Tech appears to have found a route to market in Europe, signing an exclusive distribution deal with Hanwha Q CELLS.

Eguana’s own-branded AC-coupled home energy storage unit, Enduro, will be made available through the sales networks of Hanwha Q CELLS, currently among the leading PV module suppliers into Europe, focused mainly on its rooftop solar business.

The two have entered an exclusive agreement for Hanwha Q CELLS to market, sell and distribute Enduro into the European Union countries, Switzerland and in Norway under the Q CELLS brand. Q CELLS has its own opt-in installer programme, Q.Partner, where solar installers can leverage the brand and benefit from its networks, training and sales channels.

“Q CELLS searched the market for an AC-coupled solution that could be incorporated into our Q.HOME package. We believe that the Eguana Enduro is the product that best exemplifies our commitment to best-in-class products, quality, and reliability for our consumers and Q. PARTNERS.

“Our 2018 residential installations across Europe surpassed 15,000 customers. The addition of the Eguana Enduro to our Q.HOME package will allow us to continue this growth trajectory and maintain our leadership position,” Q CELLS head of business development and system solutions Vincent Lim said.

The initial order is for 500 units, with an exclusivity period extending into a second year, with at least 1,500 units more to be ordered in that year. From there, Q CELLS will be contracted to maintain those systems and to extend the contract into a third year.

2018 may have been the year of residential energy storage, according to a leading analyst, but grid storage was no slouch.

2018 was also the year that grid-level batteries broke out of early adopter states, said Dan Finn-Foley, a senior analyst with Wood Mackenzie Power & Renewables, and began appearing in places that might once have seemed unlikely.

“This isn’t just a Starbucks in California talking about energy storage,” Finn-Foley said Thursday. “We have Alabama, this past quarter Georgia, the Carolinas talking about energy storage. This tells you this is about cost. This is not an emotional decision. This is now about finding the least-cost solution, as a utility, to customers. And that’s a big deal.

“If you can tell a utility this is your least-cost solution, your market is about to take off, and that’s exactly what’s going to happen for front-of-the-meter energy storage.”

Wood Mackenzie has not yet released its report on 2018, but Finn-Foley offered a sneak preview to Clean Energy States Alliance members Thursday, telling them that the fourth quarter of 2018 broke energy-storage records everywhere.

“The really exciting news is Q4 2018. Q4 2018 is going to beat these records handily, quite handily. Even from the front-of-the-meter side, residential/non-residential storage, every metric is going to set a new record for quarter-by-quarter deployments of energy storage.”

While residential storage may still be driven more by emotion than economics, grid-level storage is reaching the magic point where the cost curve crosses the value line.

“That intersection is emerging, that point where cost meets value, sooner than a lot of people in the market anticipated, and the market’s responding. We’re seeing a lot of interest not only in the traditional markets with policy mechanisms in place—California, New York, Massachusetts, etc—but in these non-traditional markets where utilities are looking at solar-plus-storage competing directly with conventional generation peaking applications.”

With electric car sales forecasts increasing almost every day, the energy storage revolution that is expected to take place in the coming years is at this point very difficult to refute.

Speaking at this year’s Miller Thomson PDAC “Lithium-ion Battery Materials and Supply Chains” seminar, Benchmark Mineral Intelligence Managing Director Simon Moores said that even though the energy storage revolution is coming, it will be delayed.

Looking to 2030, Moores pointed to delays in new supply, and as a result delays in raising capital, saying that this will lead to further delays in battery supply and in new electric vehicle (EV) production.

Moores, who recently testified to the US Senate on the current outlook for the energy and minerals markets, said that understanding the supply chain is critical.

“It’s not only where raw materials like cobalt, lithium and graphite are being mined, but where they are being refined,” said Moores, pointing to how China dominates the chemical sector.

“The key is understanding the nuances of each raw material supply chain, because that is going to make or break any new supply coming into the battery EV market,” he added.

When looking specifically at lithium, there are about 15 steps from lithium mine to EV battery, “so there are 15 steps where things could go wrong,” said Moores. The expert divided the steps into five stages: mining, chemical processing/refining, cathode or anode production, lithium-ion battery cell manufacturing and end use.

Having expertise in several of those steps is what a new lithium producer has to have, “so it’s no wonder we are seeing problems in the space in scaling the supply at present.”

Speaking about the quality factor impacting raw materials, Moores said that battery manufacturers are also experiencing similar issues.

Moores then shared Benchmark Mineral Intelligence’s forecast for lithium-ion battery megafactory capacity, which for the 2019 to 2028 period has risen from 289 GWh to 1.54 TWh. However, according to the firm, the real-world expectation is that 70 percent of this capacity will be realized.