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.

Results announced last week in a Capacity Market (CM) auction in France which had low-emissions requirements, saw 253MW of energy storage awarded 7-year contracts, along with 124MW of demand response capacity.

The European country holds CM auctions which ensure electrical capacity is available guarantee the lights stay on event at times of peak demand or during unexpected stress events that could otherwise cause blackouts. In the latest auction, the electricity transmission network operator (RTE), awarded 377MW of contracts.

Corentin Baschet, a markets analyst at consultancy firm Clean Horizon, told Energy-Storage.news that the latest auction was “only for new build capacity and had emissions requirements enabling only demand side response (DSR) and energy storage to participate”. Emissions were fixed at 200g of CO2 per kWh or less.

Baschet said that the four auctions run since June 2019 are roughly equivalent to Britain’s T-1, T-2, T-3 and T-4 auctions in its own Capacity Market. However, as frequently reported on this site, regulatory and market design issues have effectively locked batteries out from competing in latter auctions in the UK, leading to two asset operators instead registering their battery systems as demand side response – and winning contracts.

Although France’s market rules had no such stipulations, Baschet said, only two of those four French auctions awarded capacity contracts (for the periods between 2021-2027 and between 2022-2028) as market caps were already reached in periods 2020-2026 and 2023-2029. The Clean Horizon analyst noted that the contracts were awarded prices of €29k per MW/year (2021 period) and €28k per MW/year (2022 period).

“These contracts use the same principle as Contracts for Difference (CFDs), capacity has to bid in the yearly capacity market auctions – clearing at an average of €20k/MW/year today,” Corentin Baschet of Clean Horizon said, adding also that some big players in the French market such as EDF and NW Energy were absent due to their having large storage deployment plans already announced separately.

A California county has given the green light to what officials say will be part of the largest renewable energy storage facility in the world.

The project, which is a partnership between Tesla and Pacific Gas & Electric (PG&E) won unanimous approval from the Monterey County Planning Commission Wednesday, NBC Bay Area reported. It is the second clean energy battery facility to be approved at the site of an underused power plant in Moss Landing.

“Certainly, combined, this is going to be the largest battery facility in the world, so it’s a big boost to our community and our country,” Monterey County Supervisor John Phillips said, as CleanTechnica reported.

The Tesla/ PG&E facility will have the capacity to store up to 730 megawatts of wind and solar power during off-peak hours, the Monterey Herald reported. The other project recently approved on the site, which is being built by Vistra Energy, will have a capacity of 1,200 megawatts.

The most recent project will involve the installation of 268 Tesla Megapack lithium-ion batteries.

The Megapack is a relatively new Tesla design, following the Powerpack batteries it used at its storage facility in Hornsdale, South Australia, which is the largest lithium ion battery in the world.

Tesla explained how they work:

Megapack significantly reduces the complexity of large-scale battery storage and provides an easy installation and connection process. Each Megapack comes from the factory fully-assembled with up to 3 megawatt hours (MWhs) of storage and 1.5 MW of inverter capacity, building on Powerpack’s engineering with an AC interface and 60% increase in energy density to achieve significant cost and time savings compared to other battery systems and traditional fossil fuel power plants. Using Megapack, Tesla can deploy an emissions-free 250 MW, 1 GWh power plant in less than three months on a three-acre footprint – four times faster than a traditional fossil fuel power plant of that size. Megapack can also be DC-connected directly to solar, creating seamless renewable energy plants.
The Megapack also replaces the need for “peaker” natural gas power plants, Tesla explained. These are power plants that fire up whenever the local grid can’t meet demand.

“They cost millions of dollars per day to operate and are some of the least efficient and dirtiest plants on the grid,” Tesla wrote.

Construction on the company’s Moss Landing project will begin at the end of the month and should be completed by the end of 2020, NBC Bay Area reported.

The global energy storage market is expected to grow to $546 billion (£424bn) in annual revenue by 2035, according to a report released by Lux Research.

The report estimates battery deployment across mobility applications, electronic devices and stationary storage will reach an annual level of 3,046GWh during the next 15 years, up from the current 164GWh.

It is expected plug-in light-duty vehicles will remain the largest market with a predicted $24 billion (£18.6bn) increase in revenue by the end of 2022 with medium- and heavy-duty vehicles following, growing from $600 million (£466m) a year in 2019 to a projected $3.6 billion (£2.7bn) per year in 2022.

Mobility applications will continue to drive the growth for energy storage through 2035 with personal mobility devices expected to increase to $43.7 billion (£33.9bn) from their current $2 billion (£1.5bn) in revenue.

Meanwhile, energy storage demand for electronic device applications is expected to remain the same as the markets for laptops, cell phones and tablets are already saturated.

Chloe Holzinger, one of the report’s lead authors, said: “The energy storage industry is poised for a massive increase as key innovative technologies, such as solid-state batteries and flow batteries, reach commercialisation.

“We expect electric mobility applications to be the principal driver of energy storage annual revenue and demand, with a total market share of 74% by annual revenue and 91% by annual deployed GWh by the year 2035.”

esVolta, a developer of utility-scale battery energy storage projects, recently closed a $140 million senior secured credit facility to finance a 136 MW/480 MWh portfolio of eight storage projects in California.

It’s this type of institutional investing that’s going to drive the massive growth expected from the energy storage industry.

It’s not the next lithium-ion battery breakthrough that’s going to accelerate the energy storage industry. It’s not the next inflated promise from a flow battery startup, compressed-air scheme, solid-state battery research project or energy storage dream funded by Bill Gates.

It’s energy storage projects as investment-grade finance tools for institutional investors that will grow the energy storage market to $546 billion in annual revenue by 2035, as predicted by Lux Research or grow the business tenfold from 2018 to 2023, rising to $5 billion annually, according to Wood Mackenzie.

One of the largest debt transactions in the energy storage market

CIT’s power and energy business led the financing round, along with Siemens Financial Services (SFS), CoBank, ACB, and KeyBanc Capital Markets.

These investor names can typically be found financing natural gas power plants and wind projects — so this entry into energy storage is a bit of a watershed moment.

Krish Koomar, CFO of esVolta said it was “one of the largest and most innovative debt transactions” in energy storage.

There was a wave of finance directed at energy storage a few years ago — more in the behind-the-meter realm than these projects. Stem, a provider of commercial energy-storage systems, added $100 million in financing from energy investor Starwood Energy Group, Generate and Clean Feet Investors. Mainstream infrastructure investor Macquarie Group planned to put $200 million into a fleet of battery projects from Advanced Microgrid Solutions.

Since then, Stem and AMS have had to retrench and alter their business plans. Stem has recently signaled that it is up for sale.