Policy in the Commonwealth of Massachusetts favouring the use of clean energy during peak times has brought behind-the-meter energy storage company Stem Inc into the state’s utility-scale solar-plus-storage market.

The commercial and industrial (C&I) system provider has partnered with private equity firm Syncarpha Capital Partnership to develop 28.2MWh of large-scale energy storage projects, co-located with solar PV in the US state.

Stem, which touts AI-driven software platforms aggregating commercial and industrial (C&I) energy storage systems into virtual power plants among its strengths, had met with Energy-Storage.news last September to discuss its wider launch into the solar-plus-storage space. At the time, that had been mostly limited to the Arizona market with earlier projects built in Hawaii, with the announcement this week its first real foray into the front-of-meter.

Thus far, the company is known for delivering energy cost savings to C&I customers by reducing their amount of energy drawn from the grid at peak times, while also using the capabilities of those systems in interconnected networks. The company was profiled in a piece co-written by Energy-Storage.news’ Andy Colthorpe and IHS Markit analyst Julian Jansen for PV Tech Power along with the likes of Green Charge Networks (now Engie Storage) and AMS.

The 28.2MWh of storage systems will be deployed across five distribution grid-connected sites totalling 26MW of solar PV that Syncarpha Capital is developing and will own once complete. They will comply with both federal tax credit and state SMART (Solar Massachusetts Renewable Target) criteria for eligibility and will participate in New England ISO wholesale markets, all using Stem’s AI software platform, Athena. The partners also expect other revenue opportunities, retail and wholesale, to open up for other services via regulators that the systems could tap into.

Massachusetts policy has opened up to energy storage since introducing 200MW and then 1GW deployment targets by 2025 and standards for using renewable and low carbon energy during peak times. Albeit the standards have been set at a low benchmark to begin with, which dismayed some, it the ‘clean peak’ has nonetheless been described as a ‘historic’ policy standard. In June, Energy-Storage.news reported that NEC had switched on a 3MW / 5MWh system which stores energy to be outputted at times of peak network demand in the local area for utility Ashburnham Municipal Light Plant (AMLP).

The U.S. Department of Energy (DOE) and members of Congress are looking at legislation concerning research and regulation of energy storage. Sen. Lisa Murkowski (R-Alaska), who chairs the Energy and Natural Resources committee, on July 9 said there is bipartisan interest in combining a handful of bills on energy storage, dealing with research and development (R&D) and funding, into one combined bill.

Bruce Walker, assistant secretary for the Office of Electricity, said the DOE supports a number of research efforts into storage, which Walker said could “revolutionize the energy industry.”

Murkowski at Tuesday’s committee hearing in Washington, D.C., said, “My goal, recognizing that we have five different bills out there, is to really evaluate where we are with them and synthesize the various bills and concepts, taking the best provisions that we have in each of them, combining them perhaps into a larger, more comprehensive energy storage package that we will be able to report out of the committee. I would hope we would be able to do that even possibly as early as the end of this month, or more likely in September. I’m optimistic about this space and what we can do.”

‘Holy Grail’
Deployments of energy storage are becoming part of states’ power portfolios, mostly due to storage’s capability to support intermittent renewable power sources such as solar and wind. Energy Secretary Rick Perry has called storage the “holy grail” of U.S. energy and has touted the technology’s ability to make the power grid more resilient.

Storage used in concert with wind and solar farms is just one area of growth. The DOE has said that as of a year ago, there was 23.6 GW of operational pumped-storage capacity in the U.S., accounting for 94% of the country’s energy storage, as storage continues to change the country’s power profile.

Mitsubishi Hitachi Power Systems and Magnum Development, which owns a large underground salt dome in Utah, in May said they have teamed to develop a massive project that could store up to 1,000 MW of renewable energy year-round and provide it to variability-challenged Western power markets. Florida Power & Light earlier this year announced plans to build the world’s largest battery storage system.

Arizona Public Service in February said it plans to add as much as 850 MW of battery storage capacity to its solar power plants by 2025.

Researchers Martin Rüdisüli, Sinan Teske, and Urs Elber of the Swiss Federal Laboratories for Materials Science and Technology (EMPA) have studied what will be needed to make Switzerland able to use only zero carbon energy. Among their main conclusions is that the country can produce more electricity than it needs from renewable sources in the summer but will need to import electricity from its more southerly neighbors in winter.

In a report published in the journal Energies, they used data provided by Swissgrid to determine the current demand for electricity in quarter-hour increments year round. They then posed the question, “How would demand change once most heating and transportation in Switzerland is electrified?” The answer they came up with is that demand will increase by approximately 13.7 terawatt-hours on an annual basis.

That figure further assumes that significant steps are taken to shift to electric vehicles where possible in the transportation sector and to improve the energy efficiency of existing residences and commercial structures. According to a report in Science Daily, the research assumes heating requirements of all buildings will first be reduced by around 42% through renovation measures and that 3/4 of the remaining heating requirements in houses and apartments will be achieved using electric heat pumps. It further assumes about 2/3 of all private car trips will be in electrically-powered automobiles.

The research focuses on five areas. First, replacing conventional furnaces with heat pumps. Second, because Switzerland proposes to end its use of nuclear power, each nuclear power plant must be replaced with about eight times the photovoltaic output. A nuclear plant delivers around 8,000 hours of electricity per year but a solar cell delivers only about 1,000 hours a year. As a result, solar panels will need to be installed on virtually all available surfaces.

Third, a dramatic increase in electrical storage capacity using all available technologies including batteries and pumped hydro as well as geothermal and technologies that convert electricity into chemical energy sources. Fourth, they recommend heat storage technologies so the use of heat pumps can be reduced as much as possible in winter.

Fourth, create seasonal heat storage facilities so that the electricity requirements of the heat pumps can be reduced in winter. Fifth, new HVDC transmission lines that will bring electrical power from sunnier southern countries to Switzerland in the winter when electrical demand is highest. A bright spot in the analysis for electric vehicle advocates is that EVs will not unbalance the grid as they can be charged when electricity is plentiful, assuming a proper charging infrastructure is created.

Although utility scale energy storage has been driven by state-run projects thus far in China, an evolution in the way ancillary grid services are rewarded will pave the way for exponential growth in storage capacity next year.

U.K. consultancy Wood Mackenzie has cited announcements by China’s National Energy Administration that compensation for grid balancing and other services offered by energy storage would change by next year.

The current flat payment system will, according to WoodMac, change “to a market integrated with spot energy prices by 2020” and that change, together with technology advances and cost reductions, will pave the way for China to supplant South Korea as the biggest energy storage market in the Asia Pacific region.

The consultant predicted the 489 MW/843 MWh of installed energy storage in China two years ago would rise to 12.5 GW/32.1 GWh in 2024.

WoodMac highlighted the role the state played in the deployment of energy storage last year with public utility the State Grid Corporation of China deploying 452 MWh of the 1.14 GWh/580 MW of capacity added, to account for 83% of the year’s utility scale storage growth. The state-run storage pilot projects concerned were backed by government research grants.

Grid services hold the key

At current cost levels and under the existing payment system for grid services, there is no business case for utility scale storage, particularly as far as solar project developers are concerned, with the state winding down public solar subsidies in a push for ‘grid parity’ PV.

With China last year reaching a cumulative 1.07 GW/1.98 GWh of energy storage – most of it ‘front of meter’, grid connected capacity, it is the grid services the tech offers that will drive its wider adoption.

WoodMac stated, in a press release yesterday, 60% of the grid ancillary service-targeted energy storage facilities deployed last year were standalone projects, 14% were installed alongside coal power plants and 19% were developed with solar or solar-wind hybrid power generation assets in Qinghai province to reduce curtailment of excess energy.

Private equity firm Energy Capital Partners has bought its way into the energy storage development business with Convergent Energy + Power, the companies announced Wednesday.

New York-based Convergent develops, owns and operates large-scale storage for industrial customers and utilities. It distinguished itself as a rare startup that chose to self-fund its projects, raising $70 million to do so. Convergent also took the title for largest commercial and industrial storage project, with a 10 megawatt/ 20 megawatt-hour system in Ontario, Canada.

Energy Capital Partners owns and invests in a wide portfolio of energy companies, including gas generator Calpine and residential solar company Sunnova, but this marks its first storage acquisition. The firm acquired Convergent as part of its multi-billion dollar Fund IV.

The companies declined to name the sale price, but noted that upfront acquisition payments and ongoing funding for projects will amount to several hundred million dollars of investment. Convergent will put that capital to work in what CEO Johannes Rittershausen calls a “storage IPP,” self-financing projects for customers and owning them for the long haul.

“The model we have now, moving forward with ECP, is much more efficient, and we can offer better value propositions,” Rittershausen said. “Funding is of no issue to us.”

From the buyer’s perspective, Convergent stood out for its track record of operating projects and customer relationships, said ECP principal Andrew Gilbert.

“We’ve been pitched on pipelines, but Johannes and team have actually executed,” Gilbert said. “Convergent delivers real savings to customers almost immediately, in material ways. The returns are quite attractive compared to other things we see in renewables or storage.”

Notably, both parties expressed wariness about competing in the major utility-scale procurements, where big players like NextEra and First Solar compete on tight margins for massive projects. They described that market as more commoditized than the middle ground where Convergent operates, which is bigger than the typical commercial project, but still driven by private customer needs.

That’s not a particularly crowded field right now, and Convergent’s self-funded model differentiates it from the competition. Venture-backed developers typically hand off their projects to project financing funds to own.

Over half a million dollars of contracts to supply flexibility to a distribution network in Britain have been awarded through a commercial tender to resource operators including behind-the-meter energy storage systems.

Distribution network operator UK Power Networks (UKPN) and its technology platform provider Piclo celebrated the the completion of a new flexibility auction last week, the first time the latter’s online platform has been used for commercial purposes.

The platform, years in development, has been tested extensively but has now been used at the commercial scale for the first time, helping UKPN procure 18.1MW of flexibility.

Contracts worth £450,000 (US$560,000) have been awarded to AMP Clean Energy, aggregator Limejump (a recent acquisition by Shell) and residential and commercial energy storage providers Powervault and Moixa, with the flexibility procured used by UKPN to offset more costly grid reinforcements in constrained areas of the network.

The Piclo platform creates a heat-map of areas of congestion, correlating them with providers of flexibility with resources such as demand side response, battery storage and behind-the-meter generation. Network operators can then contract this capacity to minimise these bottlenecks.

The auction was first announced in May this year, with details to follow “in due course”, and following its success, UKPN has now handed Piclo an ongoing commercial contract, the tech company’s second such contract having secured a similar arrangement with Scottish and Southern Electricity Networks earlier this year.

James Johnston, chief executive and co-founder at Piclo, said the company was thrilled from the results of its first auction, realised after “years of trials and ongoing development”.

Gas peaker plants may be among the first casualties of a new Minnesota law requiring utilities to include energy storage as part of their long-range plans.

The provision, part of an omnibus jobs and energy bill, “puts energy storage on a level playing field with natural gas plants and other resources,” said Ellen Anderson, executive director of the University of Minnesota’s Energy Transition Lab. “Utilities will have to acknowledge the capabilities storage can provide as an alternative to, say, a fossil fuel plant.”

The most likely victim could be peaker plants, which operate when utilities face high demand for short durations, such as hot summer days, she said.

A 2017 study commissioned by the Energy Transition Lab found that peaker plants are a “marginal resource for meeting capacity needs” and that storage, and solar-plus-storage, are “becoming increasingly cost competitive.” By 2023, the report predicts, the cost of storage becomes less than building new peaker plants.

Minnesota’s investor-owned utilities are in different phases of presenting their integrated resource plans before the state Public Utilities Commission. The first utility to unveil an integrated resource plan since the law passed is Xcel Energy, which included energy storage in its forecasts.

The major aspects of Xcel’s plan call for retiring all its remaining coal plants within the next decade, operating the Monticello nuclear plant until 2040, and adding 4,000 megawatts of solar and 1,200 megawatts of wind. The plan calls for the acquisition of one combined cycle natural gas plant and the construction of another, along with an aggressive energy efficiency program.

Xcel goals call for reducing carbon by 80% by 2030 and for producing no carbon through energy production by 2050.

Consultancy and rating agency Wood Mackenzie has revealed that the cumulative energy storage capacity in China is projected to skyrocket from 489 megawatts (MW) or 843 megawatt-hours (MWh) in 2017 to 12.5 gigawatts (GW) or 32.1GWh in 2024. This represents an increase in the installed base of 25 times.

According to the firm, policy incentives have been the main drivers behind the country’s rapid growth in storage deployments in 2018, already pushing it to become the second-largest market behind South Korea in terms of annual deployment. The market deployed 580MW (1.14GWh), reaching a cumulative market size of 1.07GW (1.98GWh) last year. Front-of-the-meter (FTM) storage led growth, up five-fold in terms of installed power capacity compared to 2017.

State Grid Corporation of China, a state-owned utility company, itself deployed 452MWh of grid-connected FTM pilot projects, which accounted for 83% of FTM market growth nationwide last year. These pilot projects were supported by government research grants.

Dr. Le Xu, senior analyst at Wood Mackenzie, commented: “Based on current project economics and without policy support, utilities have limited incentive to scale-up investment in FTM storage as part of grid infrastructure.”

This is set to change next year. According to China’s National Energy Administration, the ancillary services market will be transitioning from a basic compensation mechanism to a market integrated with spot energy prices by 2020. That, along with maturity in technology and subsequent cost reduction, are key factors that will contribute to the exponential growth in the nation’s energy storage market through to 2024.

Of storage projects deployed to participate in ancillary services in 2018, 60% were deployed as stand-alone, 14% paired with coal plants, and 19% were renewables-plus-storage. Utilities led the renewable-plus-storage market growth, deploying 105MWh storage – either paired with solar projects or hybrid solar and wind plants – in Qinghai province to reduce curtailments. There is no business case for solar developers to invest in utility solar-plus-storage as solar subsidies are being phased out.

Another promising spot in the energy storage market is the behind-the-meter commercial and industrial (C&I) sector which reached 513MWh last year, up 2.8 times from 2017. C&I projects were developed to save on electricity bills for industrial users in manufacturing-intensive provinces such as Jiangsu and small commercial users in urban centres such as Beijing. However, these industrial users face revenue pressure due to the uncertainty of retail power prices, especially for peak shaving.

Even the best lithium-ion batteries stink at storing the large amounts of electricity a massive wind or solar installation is capable of generating. They’re expensive and hold, at most, about four hours’ worth of that grid-scale juice. Here are five potentially less costly—if somewhat Rube Goldberg-y—methods companies are trying to store power as potential energy in other forms, smoothing out renewable energy’s peaks and valleys.

Compressed Air

Hydrostor Inc. in Toronto expends grid power to compress air, which it pumps underground for storage, with a column of water keeping it compressed. Abating the pressure allows the air to decompress, releasing its energy to drive turbines on the surface for 24 hours or more. Hydrostor has two demo plants in Canada and others slated for development in the U.S., Chile, and Australia. Chief Executive Officer Curtis VanWalleghem says Hydrostor has raised $30 million and expects to double that this year.

Liquid Air

London’s Highview Power feeds wind- and solar-generated electricity into a set of off-the-shelf components that liquefy air by cooling it. To send power back into the grid, Highview heats the liquid, expanding it to drive turbines that generate electricity for at least 12 hours. CEO Javier Cavada says the company has raised about $50 million; it’s built two small-scale plants in the U.K. and is finalizing a deal for a commercial plant in the U.S.

Mine Shafts

Edinburgh’s Gravitricity Ltd. stores gravitational energy by using power from renewables to lift a weight of as much as 3,000 tons in a mine shaft. Letting the weight fall releases the energy, generating enough electricity to deliver power for as much as eight hours. The system’s winches and cables have a working life of 50 years or more, says Managing Director Charlie Blair. The company, which has raised about $1.7 million from the U.K. government and private investors, is at work on a 50-ton demo.

India’s newly appointed finance minister, Nirmala Sitharaman, has unveiled the country’s full-year budget that discussed support for PV manufacturing, but was thin on detail, while downstream solar was more or less omitted.

The budget runs up to 31 March 2020, following prime minister Narendra Modi’s recent thumping victory in the world’s largest democratic election.

The most explicit solar support was through ‘Mega Investment in Sunrise and Advanced Technology Areas’, where the government plans to invite international companies to set up huge manufacturing plants, via competitive bidding processes, in promising sectors such as solar PV cells, lithium storage batteries, and Solar EV charging infrastructure, among others. Sitharaman promised such firms investment linked income tax exemptions and other indirect tax benefits.

“The invitation to foreign PV manufacturers to set-shop in India, without prior stabilisation of the domestic manufacturing market, is premature and may prove to be counterproductive for the demand in the sector,” said Sunil Rathi, director at major Indian PV manufacturer, Waaree Energies.

Moreover, as solar is a key factor in India’s clean energy goals, Rathi was disappointed by the lack of other solar support in the budget, noting that there are “critical gaps” that need to be plugged, with continued uncertainty around the “short-sighted” safeguard duty on solar imports, as well as little movement on anti-dumping policy.

On a more positive note, Rathi concluded: “The only silver lining in the budget is the progressive movement towards [the] adoption of electric vehicles (EVs) and the incentives being offered to the end consumer. The promotion of clean energy through the use of EVs is likely to boost the demand in the segment, thus providing impetus to achieve economies of scale and in-turn create a viable ecosystem.”

Indeed, Sitharaman’s Budget sought to “leapfrog” India into a global hub of EV manufacturing, which would boost solar-plus-storage and charging infrastructure sectors in tandem. The Goods and Service Tax (GST) has already been lowered from 12% to 5% for EVs, while the government will provide additional income tax deduction of INR150,000 (US$2,185) on the interest paid on loans taken to purchase EVs.

Dr Rahul Walawalkar, president, India Energy Storage Alliance (IESA), welcomed the GST and income tax reductions, claiming that they would speed up the EV revolution. He also praised exemption from custom duties for EV components such as e-drives and onboard chargers.