Independent power producer Neoen Australia said an expansion of the world’s largest lithium-ion battery system has completed its network connection, bringing the Tesla-supported Hornsdale Power Reserve, adjacent to a wind farm in South Australia, to a rated size of 150 MW/193.5 MWh.

It’s the latest in a series of projects being developed worldwide to add energy storage to solar arrays, at wind farms, and even thermal power plants as growth in battery energy storage systems (BESS) continues. The industry is moving forward, even though growth will likely be slowed by the coronavirus pandemic.

“This was expected to be a banner year,” said Kelly Speakes-Backman, CEO of the Energy Storage Association, in an April 17 interview with POWER. “We’re going to see a real hit on that, especially with behind-the-meter projects. People don’t want workers coming to their home, and businesses are closed.”

Speakes-Backman acknowledged the problems that storage and other energy industry sectors are facing from COVID-19, with equipment shortages and supply chain issues, along with a struggling economy, impacting project financing and construction. But she said the pandemic is highlighting some of the issues that make energy storage so important.

“The things that are pushing us forward have to do with resilience and making the grid stronger,” she said. “A lot of people that are going in for solar, are also going in for storage. On the commercial and industrial side, as opposed to a diesel backup generator, now they’re looking at providing for resiliency with storage. We certainly can see the importance of adding resiliency to hospitals and other critical facilities.”

Hornsdale Is Largest, but Not for Long
The Hornsdale project (Figure 1), adjacent to the 315-MW Hornsdale Wind Farm in Jamestown, South Australia (a POWER Top Plant in 2018), is an example of a storage project with several benefits. Neoen Australia reported work on the Hornsdale expansion network connection was completed earlier this month.

Utility PG&E finalized its contract with a battery project slated to displace a jet-fuel-burning power plant in downtown Oakland, California.

The Oakland Clean Energy Initiative models a pathway for removing decades-old power plants in dense urban settings while keeping the lights on with new lithium-ion batteries. But the project’s collaborative business model also makes it potentially groundbreaking for energy storage development, by formalizing the use of the battery for discrete grid services on behalf of two different clients.

PG&E, which is working to emerge from bankruptcy by the end of June, has experience building batteries and contracting with third parties for the use of their batteries. Battery owners often contract services to an offtaker while playing in merchant markets themselves. But the Oakland project marks a new foray into an owner sharing a front-of-meter battery plant with multiple customers.

Independent power producer Vistra Energy, which owns the 165-megawatt jet-fueled plant in question, signed a deal with PG&E to build a 36.25-megawatt/145-megawatt-hour battery at the existing site in Jack London Square. The facility will provide “local area reliability service,” helping the utility with its job of transmitting power to residents in Oakland. Doing so avoids a far costlier investment, like running new wires over the hills from the Moraga substation.

But those consumers now buy their power from a community-choice aggregator called East Bay Community Energy, a locally administered group dedicated to rapidly scaling up clean energy. EBCE contracted with Vistra last year to use the same battery as a capacity source to fulfill its resource adequacy requirements, which provide power to ride out extreme peak events. The battery originally was going to deliver 20 megawatts/80 megawatt-hours, but the planned capacity has expanded since then.

The double-dipping addresses a structural challenge facing the rise of storage technology on the grid: Batteries can do all sorts of useful things, but it’s often hard to find one customer that needs all of those capabilities. A world that constrained batteries to single uses for single customers would result in redundancy and inefficiency compared to a system where multiple stakeholders use the same equipment for different purposes.

Among states with established climate change mitigation and carbon reduction goals, one of the first issues addressed is peak energy demand, with New Jersey being no exception to this trend. In this pursuit, the New jersey Board of Public Utilities (BPU) has developed a straw proposal on energy efficiency and peak demand reduction programs.

In short, the proposal looks to reduce statewide energy costs, give all residents access to energy efficiency upgrades and create jobs through programs administered by the state and the state’s utilities.

Yet with these goals laid out, there’s one glaring omission, one that Luis Davila, a consultant with the Distributed Generation Advocacy Coalition claims could set the state back nationally: there’s no mention of the benefits of storage technologies for peak reduction and efficiency in the entire proposal.

“It’s baffling that Jersey hasn’t taken advantage of [storage], even though others have done the analytical studies and have started to implement the non-energy benefits of battery storage – the efficiency benefits.”

Industry responses

Davila is not alone in this opinion, as during the proposal’s comment period, Sunrun issued twofold recommendations, with one calling on the BPU to establish “bring-your-own-device (BYOD) programs that leverage customer sited energy storage assets” as a core peak reduction program offering.

The company went on to outline how Green Mountain Power, Public Service Enterprise Group of Long Island and the state of Massachusetts have all established BYOD programs and how such programs could be used to evaluate New Jersey’s proposed peak demand reduction strategy.

The Energy Storage Association (ESA) also filed comments, focusing on how the state already has an energy storage target of 600 MW by 2021 and 2,000 MW by 2030. With such a goal already laid out and with storage’s proven ability to provide overall system reliability and drive down the peak — the strange exclusion of storage from the straw proposal is magnified.

Nevada became the sixth state to adopt an energy storage procurement goal on March 12. The Public Utilities Commission of Nevada (PUCN) adopted a regulation in Order No. 44671 that establishes biennial energy storage procurement goals of 100 MW by December 31, 2020, and increasing to 1 GW by 2030. The new regulation is consistent with a 2018 Brattle Group study commissioned by the PUCN that determined a 1 GW level of deployment by 2030 would be cost-effective for Nevada. Nevada utilities will now have to include a plan to meet the biennial storage targets as part of their integrated resource plans and submit progress reports to the PUCN starting in 2022. NV Energy is already on track to meet those targets with the utility’s plans to bring nearly 1.2 GW of new solar energy projects to Nevada and an additional 590 MW of energy storage capacity by 2024.

Nevada became the sixth state to adopt an energy storage procurement goal on March 12. The Public Utilities Commission of Nevada (PUCN) adopted a regulation in Order No. 44671 that establishes biennial energy storage procurement goals of 100 MW by December 31, 2020, and increasing to 1 GW by 2030. The new regulation is consistent with a 2018 Brattle Group study commissioned by the PUCN that determined a 1 GW level of deployment by 2030 would be cost-effective for Nevada. Nevada utilities will now have to include a plan to meet the biennial storage targets as part of their integrated resource plans and submit progress reports to the PUCN starting in 2022. NV Energy is already on track to meet those targets with the utility’s plans to bring nearly 1.2 GW of new solar energy projects to Nevada and an additional 590 MW of energy storage capacity by 2024.

Just a few weeks later, on April 12, Governor Ralph Northam signed the Virginia Clean Economy Act (the Act), which requires Virginia utilities to generate electricity from 100% renewable energy sources by 2045. In furtherance of Virginia’s goal for a carbon-free electric grid by mid-century, the Act sets an ambitious 2.7 GW deployment target for energy storage by 2035. The Act directs the Virginia State Corporation Commission to approve new energy storage projects up to the 2.7 GW capacity target, provided that 35% of the energy storage capacity procured by utilities comes from energy storage facilities owned by nonutility parties.

Procurement targets and mandates for energy storage are emerging rapidly across the country. The current state goals are summarized on our energy storage tracker. Please follow our blog for the latest developments on actions states are taking to deploy energy storage within their borders.

The US state of Massachusetts has issued an emergency regulation to its Solar Massachusetts Renewable Target (SMART) programme, that includes doubling the PV capacity it seeks to help deploy as well as mandating the addition of energy storage on projects over 500kW.

In a move that national trade body Solar Energy Industries Association (SEIA) said will “help stabilise the solar industry” during the difficult period of the COVID-19 crisis, Massachusetts Governor Charlie Baker and other policy makers announced on 14 April a set of revisions to the existing programme. SMART will now support 3,200MW of new solar generating capacity, instead of 1,600MW, the revised document reads.

Under the SMART programme, solar power system owners in the Commonwealth of Massachusetts receive fixed rate payments for the solar energy they produce based on the kilowatt-hours of power produced. Those agreements last 10 years and vary based on system size, with owners of smaller systems receiving a little more than double what larger systems get, per kilowatt-hour.

Electric distribution company service areas are each set an amount of capacity eligible for awards. This was originally set in proportion to the electrical load served to customers in their services areas in 2016, but the revision now states that the energy department may update that capacity based on updated data as becomes available.

The emergency revision includes various other provisions, including set-asides for at least 5% of available capacity in each awarded ‘capacity block’ to go to low-income community areas. Low-income area projects also receive the highest compensation rates under the programme. Also added were provisions to enable mid-sized and community projects of between 25kW and 500kW, as well as provisions favouring floating solar installations and solar canopies.

Under the SMART programme, an extra ‘energy storage adder’ incentive can be triggered if solar projects – described as Solar Tariff Generation Units for the purposes of the scheme – are co-located with an energy storage system that has a nominal rated power capacity of more than 25% of the solar system. Perhaps most striking of the other revisions is the requirement that Solar Tariff Generation Units >500kW that apply for the SMART incentives now have to be co-located with an energy storage system.

Europe is sinking billions of dollars into research in an attempt to overturn Asia’s dominance of the battery market, but analysts believe it could be in vain.

Along with various national initiatives, the European Union has put half a billion euros ($550 million) into battery projects within its Horizon 2020 global competitiveness program, which had a total budget of €80 billion ($88 billion) from 2014 to 2020.

And last December the European Commission approved €3.2 billion of state funding under its “important project of common European interest” (IPCEI) rules. The investment will support battery research and innovation across Belgium, Finland, France, Germany, Italy, Poland and Sweden.

The project is scheduled to run until 2031 and is expected to unlock a further €5 billion in private investment. French oil firm Total and German automaker Opel will receive €1.3 billion of public funding on IPCEI terms for a major manufacturing program. It could see as much as 48 gigawatt-hours of capacity added across sites in France and Germany.

“Battery production in Europe is of strategic interest for our economy and society because of its potential in terms of clean mobility and energy, job creation, sustainability and competitiveness,” Margrethe Vestager, the European commissioner for competition, said in a statement.

Given the array of various support programs, “it is difficult to calculate the exact amount of funds currently invested” across Europe, said Doriana Forleo, communications and events manager at the European Association for Storage of Energy. But Bloomberg last July reported that total battery supply-chain investments from European governments, manufacturers, development banks and commercial lenders could top €100 billion.

A quarter of energy storage companies expect to reduce their workforces due to the impact of the COVID-19 pandemic, while more than half are anticipating a loss in revenues, according to a new survey from the U.S. Energy Storage Association.

The ESA study queried 101 representatives from the sector. Most of the companies plan and hope to retain their employees while waiting out the virus which has killed more than 22,000 Americans so far this year, but they also confirm that the resulting work stoppage will cut into revenues and projects.

Sixty-three percent of the ESA survey respondents said they expected a decrease in revenues. A third went as far as to predict it would be a 20-percent drop or deeper.

Three-fourths of those energy storage respondents did not expect to reduce employment, but most of the rest admitted that reductions of up to 20 percent were possible.

“The COVID-19 pandemic has impacted the energy storage industry tremendously. While we still anticipate year-over-year growth, it is clear our industry is suffering with immediate and significant risks of workforce reductions and economic damage,” remarked Kelly Speakes-Backman, CEO of ESA. “These delays upend grid reliability and resilience efforts, just as we enter fire and hurricane season, and as states, towns, and utilities are beginning to incorporate energy storage systems as backup power to prevent power system disruptions for critical healthcare facilities. As such, ESA is actively seeking immediate relief from Congress and the Administration to relieve the financial stresses on our members and the industry, which represents more than 60,000 people, caused by the virus.”

Earlier this week, Chris Ruckman, energy storage director with EPC firm Burns & McDonnell, contributed a blog focused on the pandemic’s impact to the sector. He cautioned that while projects should eventually move forward, project leaders will inevitably endure shipping delays and supply line disruptions.

Some manufacturers, for example, have shifted from making batteries to producing face masks and disinfectant bottles in the near term, Ruckman noted. It will be a while to reconfigure those production lines.

Last year was the first year we saw installations of grid-connected battery energy storage decline. A total of 2.7 GW of grid-connected battery energy storage was deployed globally in 2019, compared to 3.7GW in 2018.

While the market was ready to accelerate again in 2020, the outbreak of the global COVID-19 pandemic and subsequent economic shock have significantly impacted the short-term outlook for energy storage.

Revising down our forecast by 19%, IHS Markit expects installations to total 4 GW / 10.9 GWh in 2020. While demand in the residential and commercial and industrial (C&I) segment will particularly suffer over the coming months, the overall market will still grow by 49% compared to 2019.

COVID-19 pandemic disrupts the global stationary energy storage market
Initial estimates show that the economic downturn caused by the coronavirus may be very severe. Preliminary results from IHS Markit’s Economics and Global Risk team’s latest global forecast update indicate a global GDP decline that will be far worse than the contraction in 2009”.

This highlights the wider financial difficulties in the coming months as this is not a crisis purely defined by temporary restrictions on workforces and logistics, but increasingly by an economic collapse of unprecedented proportions.

The energy storage industry is still in an early stage of rapid development. Thus, the epidemic should have a limited impact on the overall market development in 2020. As the fundamental need for the technology underpins strong project pipeline and the existing steep growth curve. Growth in 2021 and beyond will thus continue to accelerate.

Across the world, the effect of the COVID-19 pandemic will be diverse. Despite severe economic challenges the United States will be the largest global market installing just over 2 GW in 2020 – with a drop in behind-the-meter demand and project delays in the front-of-the-meter (FTM) market causing the forecast to be lowered by 18%.

The US Energy Storage Association (ESA) today released survey results that show the impact that the novel coronavirus will have on the industry. The study was focused on analyzing the covid-19 effect on energy storage companies’ revenue, employment and projects in the second quarter.

The survey, which was answered by 101 representatives across the storage industry, revealed:

• While 63% of respondents indicated they expected a decrease in revenues (with 33% expecting 20% or greater reduction), 75% did not expect to reduce employment (inclusive of contractors).
• The top three reasons cited for potential reductions in revenues and/or employment were:
  • Customer delays or cancellations;
  • Difficulty in obtaining equipment, supplies or logistical delays; and
  • Permitting and approval delays.
• Of the 25% of respondents that indicated they expect to reduce workforce, most expected reductions of up to 20% of their employees.
• The manufacturing segment of the industry expected more widespread and deeper revenue reductions than the industry segment that includes developers and installers who implement storage projects.

As evidenced by the survey results, it is clear the energy storage industry expects a deep, albeit brief, revenue downturn this quarter. Most companies are focused on retaining their employees during this time in order to better prepare and respond once business returns. However, ESA assesses these results are consistent with the possibility that respondents plan to defer significant workforce reductions until after the end of the second quarter, if conditions do not rapidly improve.

“The covid-19 pandemic has impacted the energy storage industry tremendously. While we still anticipate year-over-year growth, it is clear our industry is suffering with immediate and significant risks of workforce reductions and economic damage,” said Kelly Speakes-Backman, CEO of ESA. “These delays upend grid reliability and resilience efforts, just as we enter fire and hurricane season, and as states, towns, and utilities are beginning to incorporate energy storage systems as backup power to prevent power system disruptions for critical healthcare facilities. As such, ESA is actively seeking immediate relief from Congress and the Administration to relieve the financial stresses on our members and the industry, which represents more than 60,000 people, caused by the virus.”