Category: Blogs

Energy-Storage.News 2017: Best of the guest blogs, Part 1.

Since the launch of the site almost four years ago, Energy-Storage.News (and PV Tech Storage as it was previously known), has consistently brought you high-quality blogs from both guest contributors and our team of journalists and experts here at Solar Media.

While we’ve been lucky to receive contributions from big names in the industry, we’ve also prided ourselves on never letting our contributors use our publishing channels to promote themselves – each blog covers a topic of genuine relevance and should give you food for thought.

Alongside these blogs were numerous features, interviews, analysis pieces and more, but here’s just a selection of some of the best guest blogs we ran from January to June, 2017:

The hope invested in rural microgrids deserves better returns – Dr Harsh Thacker

Power sector analyst Harsh Thacker, at Customized Energy Solutions and also the India Energy Storage Alliance, talked about the huge enthusiasm for microgrids in India and elsewhere in the developing world – and the factors holding a “fragmented sector” back. Financial, technical and societal limitations must be overcome, Thacker argued, to maximise the potential for “hundreds of thousands” of microgrids that could be deployed worldwide.

Published 4 January 2017

Why lithium-ion is NOT the new silicon – Ron Van Dell

Ron Van Dell, president and CEO at flow battery maker VIZn Energy systems, argued passionately against what he saw as the limitations of lithium batteries – particularly in the way the potential for cost-reduction has been compared to silicon in the solar PV industry.

“To date, the vast majority of the entries into the energy storage market have depended on lithium-based battery chemistry, but, the idea that lithium-ion is the technological and economic front-runner in the stationary storage space is a myth that is in dire need of de-bunking,” Van Dell wrote.

Published 18 January 2017

Recycle vs Reuse: Why EV batteries may not often get a second-life as stationary storage systems – Chris Robinson

The use of ‘second life’ EV batteries in stationary energy storage systems is being explored by a number of manufacturers, keen to exploit synergies where they can be found. However, it’s not as simple a solution as it may sound, Lux Research analyst Chris Robinson said. The analyst argued that recycling may actually be a much better use of resources than repurposing, but even there, barriers still exist, both technical and economic.

Published 25 January 2017

Batteries are holding back the microgrid energy revolution in Africa – Sam Duby

“Batteries – the word alone causes a sinking feeling for every rural solar microgrid operator in Africa.”

Sam Duby with TFE Consulting wrote an impassioned blog on how many ‘advanced’ energy storage technologies are beyond the reach of microgrid developers and communities in the developing world. The traditional use of lead-acid batteries causes various problems for system owners.

Published 15 February 2017

Energy storage software will help build the grid of the future – Alex Eller

Navigant Research analyst Alex Eller wrote about how critical the software component is and will continue to be in the success of energy storage system control and management. From enabling revenue stacking to safely operating the system, software is playing a more and more important role in the sector and Eller looked at some of the key ways the technology can contribute to performance and optimisation.

Published 15 March 2017

Determining direction: The three Ds of an energy sector in transition – Stephen L Prince

Decentralisation, digitisation and decarbonisation: mere buzzwords or the direction of travel for an entire industry sector? Younicos CEO Stephen Prince went beyond the hype to explain exactly what we mean when we use those terms in the context of a modern, energy storage-backed electricity network.

Published 12 April 2017

The 5 ingredients for success in the future stationary energy storage market – Florian Mayr

Apricum – The Cleantech Advisory’s Florian Mayr wrote about the five most important “ingredients” for creating a winning energy storage business model. Flexibility, ongoing cost reduction, finding new revenue streams, pro-actively seeking opportunities and bankability are all factors to consider and Mayr looked at each in detail.

Published 24 May 2017

Energy storage will transform Middle East and Africa’s energy market over next 10 years – Sami Khoreibi

Chief of renewable energy project developer Environmena, Sami Khoreibi, said the potential of battery technology to “give countries their own self-sufficient, 24-hour electricity generation systems” could have a huge impact on the MENA region. The falling costs of renewables are a “huge value proposition” for many countries in the region, and Khoreibi explained why.

Published 1 June 2017

Energy storage and solar – a lawyer’s perspective – Elizabeth Reid

Energy and defence law expert Elizabeth Reid of Bird & Bird blogged about the legal implications of the surge in interest in energy storage in the UK, particularly from the renewables industry. Reid discussed why developers are looking to retrofit batteries at solar farms and the opportunities – and regulatory obstacles – that exist.

Published 26 June 2017

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Blockchain, energy storage as T&D infrastructure and Jigar Shah’s ‘freedom to invest’

“Hype meets reality” when the worlds of digitalisation and the grid collide. The digital ledger system blockchain has been both praised and misunderstood in equal measure and its relationship to the physical world of electrons is at its earliest stages of exploration. In the latest ‘Storage & Smart Power’ section of PV Tech Power, Carsten Reincke-Collon, CTO of Younicos looks at how energy storage and management software will interact with blockchain-led or blockchain-like systems of data processing and recording. PV Tech Power is a quarterly technical journal for the global downstream solar PV industry from our publisher Solar Media, with the ‘Storage & Smart Power’ section brought to you by Energy-Storage.News. 

“Blockchain became famous as the technology behind the Bitcoin digital currency. But its decentralised nature, fault tolerance and security also make it suitable for many other applications, ranging from identity management to food traceability.

“Energy trading is a great fit too. Blockchain allows for the creation of an automated trading platform that links producers and consumers in real time and lets them engage – via “smart contracts” – in a (quasi-) direct transaction. 

“The electrons thus sold still don’t go straight to the buyer, but both parties know that at the (exact) time in question, one party is producing just the amount of energy that the other party needs. Provided both parties are also physically close (which is a big if ), this transaction has relatively little impact on the grid. 

“As almost all contributions on the subject point out, blockchain has the potential to make a utility redundant by enabling consumers and (independent) producers or prosumers to trade directly without any intermediary.”

Reincke-Collon goes on to look at both the potential – and potential limitations – of this exciting innovation.

Theory was put into practise when grid operator TenneT ran a blockchain-driven trial to trade and share renewable energy across Germany and the Netherlands via the grid. Jean-Baptiste Cornefert of Sonnen, whose systems and controls were used, contributed a case study for this issue of PV Tech Power.

‘Non-wires alternatives’ to T&D spending

Elsewhere, Navigant Research analyst Alex Eller explores the growing interest in the strategic and smart deployment of energy storage as a more cost-effective and efficient alternative to investment in the grid. Transmission and distribution (T&D) network operators could increasingly look to such non-wires alternatives (NWA) to expensive infrastructure assets like substations.

“The electric T&D system is a constantly evolving machine that requires continual monitoring, maintenance and upgrades. Traditionally, the required upgrades to the T&D system were relatively easy to predict and could utilise a consistent and standard set of grid equipment and infrastructure to meet growing electricity demand. Rapidly evolving technologies and evolving customer demands have made predicting and performing grid upgrades much more complex in recent years.” 

Factors such as the growth of renewable energy and the need to meet future load increases with the addition of EVs and chargers are meeting head-on with evolving regulatory environments and favourable economics, Eller writes, leading to a number of projects already going ahead – mainly in the US, to date, to address these issues.

Jigar Shah’s ‘freedom to invest’

Always informed, often outspoken, a conversation on energy storage and solar-plus-storage investment with Jigar Shah rounds off our last edition of the journal for 2017. As you may have seen in last week’s news story, Shah thinks 2018 will be a combative year for the industry, as utilities start to see energy storage projects as desirable assets to own. 

We also talked about revenue stacking, how institutional investors and other capital can be brought into the sector on a big scale, financing community solar and why his speciality is negotiating the Wild West frontier of the good, the bad and the misunderstood deals.   

All of this exclusive content is available as part of PV Tech Power Volume 13. We’ll be posting individual articles on the site too in the coming weeks and most papers will be archived and available free of charge in the ‘Resources’ section of the site shortly.

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100MW installed is just the beginning for UK’s large-scale battery storage sector

The UK’s large-scale battery storage installations have reached 100MW of capacity, made up of around 50 individual sites larger than 250kW. The data from our UK Battery Storage Project Database report shows that these projects can be split into three categories: pre-2017, stand-alone in 2017 or co-located with generation in 2017.

We have chosen these categories as 2017 was the first year where commercial projects began to take off. Before 2017 the majority of completed batteries were demonstration or research projects, such as the Leighton Buzzard battery by UKPN or the Northern Powergrid battery storage trial in North East England, and account for around a quarter of  installed capacity.

Of the 100MW nearly 60% of capacity added in 2017 has come from batteries co-located with generation, both renewable and non-renewable. Solar Media Market Research has good visibility of the batteries co-located with solar farms and these have been both new build and retrofit projects. Solar farms either added the battery at the build stage, before the RO deadline in March when new solar capacity was added or more recently as part of subsidy-free solar projects.

In 2017 we saw the beginning of commercial stand-alone batteries with investor Hazel Capital completing two projects; Lockleaze, a stand-alone battery, and Staunch, a hybrid battery/engine while E.On completed Blackburn Meadows. Both of these companies have projects with capacity market contracts either from 2015 or 2016, with the E.On project also receiving an EFR (enhanced frequency response) contract, which will be in place up until the capacity market contract begins. Meanwhile, Staunch by Hazel Capital also has a two year firm frequency response (FFR) contract from 1 October 2017 to 30 September 2019.

But what can we expect in the coming months? In the near term we have visibility of projects that have won contracts and when they are due to start. For example the 200MW of successful EFR projects from 2016 will need to come online by the end of February. Out of the eight projects, we know of one that has already come online, with the others following closely.

Out of these projects five also won contracts in the 2016 T-4 capacity market, which will follow the four year EFR contract. With this in mind we can expect to see the remainder of the EFR projects built in either Q4 2017 or in the first 2 months of 2018 which would be an addition of around 190MW, effectively tripling the UK’s installed battery capacity within the space of a few months.

With five of these also winning capacity market contracts, and by looking at those that have been completed, we start to see the capacity market becoming a recurring and important trend within a stacked revenue model.

Going forward we know that there will not be any more rounds of procurement for EFR in its current form but we have seen interest from battery storage developers and owners in FFR increasing over the past few months. Battery storage projects have begun to submit applications and after some trial and error there are now at least four large battery projects with FFR contracts.

The developers or aggregators submitting these projects have used different variations of availability and price and after a lot of rejections we are now seeing some of these companies having success in this area. Once again we are seeing projects with capacity market contracts due to start as the FFR contracts come to an end.

The pre-qualification window for the 2018 capacity market recently closed and there are projects which have already made known their intention to participate. The upward trend in planning applications over the summer also suggests that this year’s capacity market will be hotly contested.

Going through changes

National Grid previously announced its intention to change how it procures balancing services such as FFR and EFR so going forward project owners know that this area will be changing. It therefore appears that the relative stability and longer term contracts of the capacity market are highly important in making the business cases stack up for new battery storage projects.

Capacity market pre-qualification results will be announced on 10 November and a lot of questions will be answered about who is active and how much capacity will be competing for contracts.

The main conclusion we can come to at this point is that over the lifetime of a project new revenue streams and functions of the batteries will emerge and the technology will evolve to serve these needs. But it is important for these companies to secure some level of revenue to get their projects off the ground in order to take advantage of these opportunities as they emerge.

For more information about proposed and operational storage projects, the UK Battery Storage Project Database report from Solar Media market research provides comprehensive details across more than 200 battery storage projects. For more information, click here, or email: marketresearch@solarmedia.co.uk.

Read the entire story

100MW installed, but this is just the beginning for large-scale battery energy storage

The UK’s large-scale battery storage installations have reached 100MW of capacity, made up of around 50 individual sites larger than 250kW. The data from our UK Battery Storage Project Database report shows that these projects can be split into three categories: pre-2017, stand-alone in 2017 or co-located with generation in 2017.

We have chosen these categories as 2017 was the first year where commercial projects began to take off. Before 2017 the majority of completed batteries were demonstration or research projects, such as the Leighton Buzzard battery by UKPN or the Northern Powergrid battery storage trial in North East England, and account for around a quarter of  installed capacity.

Of the 100MW nearly 60% of capacity added in 2017 has come from batteries co-located with generation, both renewable and non-renewable. Solar Media Market Research has good visibility of the batteries co-located with solar farms and these have been both new build and retrofit projects. Solar farms either added the battery at the build stage, before the RO deadline in March when new solar capacity was added or more recently as part of subsidy-free solar projects.

In 2017 we saw the beginning of commercial stand-alone batteries with Hazel Capital completing two projects; Lockleaze a stand-alone battery and Staunch a hybrid battery/engine and E.On with the completion of Blackburn Meadows. Both of these companies have projects with capacity market contracts either from 2015 or 2016, with the E.On project also receiving an EFR contract, which will be in place up until the capacity market contract begins. Meanwhile, Staunch by Hazel Capital also has a two year firm frequency response (FFR) contract from 1 October 2017 to 30 September 2019.

But what can we expect in the coming months? In the near term we have visibility of projects that have won contracts and when they are due to start. For example the 200MW of successful EFR projects from 2016 will need to come online by the end of February. Out of the eight projects, we know of one that has already come online, with the others following closely.

Out of these projects five also won contracts in the 2016 T-4 capacity market, which will follow the four year EFR contract. With this in mind we can expect to see the remainder of the EFR projects built in either Q4 2017 or in the first 2 months of 2018 which would be an addition of around 190MW, effectively tripling the UK’s installed battery capacity within the space of a few months.

With five of these also winning capacity market contracts, and by looking at those that have been completed, we start to see the capacity market becoming a recurring and important trend within a stacked revenue model.

Going forward we know that there will not be any more rounds of procurement for EFR in its current form but we have seen interest from battery storage developers and owners in FFR increasing over the past few months. Battery storage projects have begun to submit applications and after some trial and error there are now at least four large battery projects with FFR contracts.

The developers or aggregators submitting these projects have used different variations of availability and price and after a lot of rejections we are now seeing some of these companies having success in this area. Once again we are seeing projects with capacity market contracts due to start as the FFR contracts come to an end.

The pre-qualification window for the 2018 capacity market recently closed and there are projects which have already made known their intention to participate. The upward trend in planning applications over the summer also suggests that this year’s capacity market will be hotly contested.

National Grid previously announced its intention to change how it procures balancing services such as FFR and EFR so going forward project owners know that this area will be changing. It therefore appears that the relative stability and longer term contracts of the capacity market are highly important in making the business cases stack up for new battery storage projects.

Capacity market pre-qualification results will be announced on the 10 November and a lot of questions will be answered about who is active and how much capacity will be competing for contracts.

The main conclusion we can come to at this point is that over the lifetime of a project new revenue streams and functions of the batteries will emerge and the technology will evolve to serve these needs. But it is important for these companies to secure some level of revenue to get their projects off the ground in order to take advantage of these opportunities as they emerge.

For more information about proposed and operational storage projects, the UK Battery Storage Project Database report from Solar Media market research provides comprehensive details across more than 200 battery storage projects. For more information, click here, or email: marketresearch@solarmedia.co.uk.

Read the entire story

Quantifying the UK’s energy storage ‘world of opportunity’

Chris Pritchett is a contract lawyer working in Britain for law firm Foot Anstey, as a partner heading up the energy and environment practice. Pritchett recently served as moderator for the “Developers and financiers debate” at the Energy Storage Conference at the Solar & Storage Live 2017 show in England. In attendance were fund managers and project developers and a robust discussion followed. Afterwards, Andy Colthorpe caught up with Chris for an in-depth interview on camera.   

One main topic that comes up often is the relative complexity of modelling returns for energy storage projects, compared to the simplicity enjoyed by solar developers and financiers.

“[With the feed-in tariff (FiT), renewables obligation (RO) and PPAs]… you got used to a quite straightforward and really quite easily modellable return. You knew what it was going to be – it was government-backed for 20-25 years. There has been a journey whereby the investment community has had to detach themselves from that way of thinking.

“Some of the most sophisticated guys haven’t come from that background, they’ve come from tech investment. Actually, they’re far more used to the way this is working. There’s still a willingness to say, ‘what’s the aggregation agreement, or the FFR (fast frequency response) agreement? That’s the financeable proposition’.

“And you say ‘no, actually, here… is an asset – we’ve got grid, all the connections, we’ve got the battery modules and control system. And we’ve got a world of opportunity, where somebody, at some point, will pay you to do lots of stuff with it’.

“People who are well placed to take advantage of that market will be people with assets deployed and ready to go.”      

In the video, Chris Pritchett also talks about:

  • Why the development and project sector needs to be stronger in its lobbying of utilities and regulators to “get behind the industry and make some change”.
  • How to make investors more comfortable with getting involved in energy storage projects – with factors including technological risk mitigation and sharing data from successful projects.
  • How best to work with DNOs (distribution network operators), the regional organisations which ensure Britain’s homes and businesses are supplied with power, as well as with the national regulator, Ofgem.
  • Why some things should be standardised to accelerate the market – and why some things should not.
  • How behind-the-meter energy storage, despite smaller revenues, is attracting strong interest from financiers, due to its relative simplicity and lower initial outlays being required.

Read the entire story

EFR: Inside Vattenfall’s first grid-balancing UK project

No one moment took energy storage into the mainstream of the UK power system more than the outcome of transmission system operator (TSO) National Grid’s August 2016 tender for Enhanced Frequency Response (EFR).

The new service, seeking just 200MW of capacity, attracted over 1.5GW of applications and the seven companies to have won eight contracts between them have had the eyes of the sector trained on them since.

After some pre-construction acquisitions, seven winners fell to six after Foresight entered the fray picking up projects from RES and Belectric, while Enel bought its way in through Element Power’s contract. And after a quiet but competitive race, it was E.On who crossed the line first with completion of its EFR project last month.

Some EFR developers have taken a more leisurely approach in order to complete other more pressing projects in the meantime. One such winner is Vattenfall, which is scheduling the completion of its project for 28 February 2018.

High up in the rural hills of south Wales sits Pen y Cymoedd wind farm, the largest onshore project in Wales at 228MW, which was opened recently by first minister Carwyn Jones.

Nestled among the 76 turbines is, when our sister site Clean Energy News visited last month, what appears only as a small building site with a single shipping container sat in the middle. What this simple scene belies is the site of Vattenfall’s 22MW battery which, once completed, will offer sub-second frequency response to National Grid. It marks a first for the Swedish company, which is developing its maiden battery storage in the UK through the EFR win.

As Vattenfall’s senior project manager in charge of planning and operations Stephen Holdroyd explained, a total of 500 individual batteries from BMW will be used. The first were delivered in the final week of September, with the rest of the site a hub of development activity in preparation for the four additional shipping containers destined to join the site.

“We were lucky to win the tender from National Grid last year for an EFR battery which will effectively deliver 22MW for half an hour. The commissioning date is the 28 February next year and as things stand we’re on target to achieve that date,” Holdroyd said.

‘Almost vertical learning curve’

By winning a contract along with the seven other winners, Vattenfall joins the small number of companies to be dealing with an EFR contract for the first time. As a new service called for by National Grid, none of these companies had experience in meeting its demands and as Holroyd explained, the process has been anything but simple.

“Nothing’s been straightforward, there’s been a lot of work internally within Vattenfall to understand what we need to do to deliver on the EFR contract. The whole deadband issues, when you can charge and when you can’t, when you’re charged for charging and when you’re not and trying to work all that out into some form of business model was quite complicated,” he said.

“This was a very steep, almost vertical learning curve so I think we’ll be ready for whatever National Grid dream up next. Any National Grid contract is never straightforward but we’ve got the right people on the job, we understand what it is we need to deliver and we’re on target.”

While this is surely the case, EFR in itself only offers four years of revenue meaning despite the very select – and “lucky” – few to have won contracts, these firms like any others developing storage will need to build other revenues around their batteries.

Future-proofed investment in batteries

The demands of the EFR mean that the Capacity Market offers the only other viable source of income – Vattenfall’s project recently entered pre-qualification for early 2018’s auction. However, according to Gunnar Groebler, senior vice president of Vattenfall’s wind division, the variable nature of batteries means they offer a future-proofed investment.

“The beauty with the battery is that you have a wide range of options of how to place a battery in an electricity system, be it EFR like here or back-up. So there’s much more flexibility around the business case with batteries. Here we have a four year contract with National Grid and after that we are merchant, or we find another way of offering that service to National Grid or anybody else,” he said.

“The flexibility around the business case is much higher so we’re taking to some extent a higher risk on the investment but also I think the flexibility provides us with some kind of genuine certainty that there is a business case for it.”

Like any co-located project, the sharing of infrastructure at Pen y Cymoedd means the capital expenditure of the project is lower than other new build projects – a factor which no doubt helped Vattenfall take the leap into UK storage.

‘Right direction’

While the regulatory and incentive landscapes for utility-scale storage remain uncertain as National Grid develops new products and services – likely meaning we won’t see these exact types of EFR contracts handed out again – the malleability of storage remains a key draw for Vattenfall in considering the future of the Pen y Cymoedd project and potential others.

Piers Guy, UK country manager, summed it up: “If we look at the cost of frequency stabilisation compared to the conventional way of doing it, the bigger picture is that it needs to happen. It’s going to have to happen and so whatever regulation put in place needs to work and I get the impression that they’re feeling their way with how best to deal with ancillary services, how best to create the right structure for the right revenue stream.

“Things are moving very quickly and we’re confident it’s in the right direction to invest in something like this, even if it’s a four year contract, because it’s flexible enough that we know that it will be competitive to offer other ancillary services going forward.”

With the next tranche of EFR projects expected throughout November and others in February alongside Vattenfall’s – all no doubt vying for Capacity Market contracts – they’ll all be up and running in time to see what National Grid has lined up next.

However, having adapted to the newest form of frequency response and with four years of delivery experience once the contracts end, Vattenfall and the rest of the class of 2016’s EFR auction will no doubt be set up better than many in tackling whatever is needed next from grid-level storage in the UK.

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Video interviews: AES, Eaton, SolarEdge and more at our Energy Storage Summit

Solar Media’s Energy Storage Summit took place at the end of February and was attended by around 350 delegates and stakeholders, looking at energy storage markets in the UK and beyond.

Collected here are seven interviews with leading figures at the event spanning utility-scale, commercial and residential energy storage: Carla Tully, president of AES UK & Ireland, John Zahurancik, president of AES Energy Storage, Louis Shaffer, distributed energy management head for EMEA at Eaton, Mateo Rizzi, director of global sales in PV and BESS at Nidec ASI, Randell Johnson, chief analyst at Alevo, Lior Handelsman, VP of marketing and global strategy at SolarEdge and Dr Ian Chilvers, chief power systems engineer at Smart Power Systems.

Carla Tully, president, AES UK & Ireland

Tully says AES believes energy storage is at the “beginning of an explosion” that will see the technology become the “glue to optimise the infrastructure that’s already in place and make it work together”. Tully explains why the UK and energy storage are such a good fit, and why with over 3 million hours of energy storage operation under its belt AES is well positioned to serve the market.

John Zahurancik, president of AES Energy Storage

Zahurancik gives a quick primer on AES’ past 10 years in energy storage, including a recent 37.5MW/150MWh project in the US, adding that from observing growing markets including Germany, the US and Australia and the Philippines and India he now sees energy storage serving bigger and bigger applications. Zahurancik says AES saw 60% to 70% growth in the energy storage market last year and expects the pace of growth to persist or accelerate.

Louis Shaffer, distributed energy management head, Eaton

There is “huge potential for growth” in the UK market, Shaffer says, due to the increasing amounts of renewables in the energy mix. Behind-the-meter, the issue of long-term cost reduction and energy independence are big drivers for energy storage, Shaffer argues.

“What we see is the overall trend of storage costs dropping so fast has really driven interest by the utilities and the regulators, the grid operators, as a new tool to manage supply and demand,” Shaffer says.

Mateo Rizzi, director of global sales for PV and BESS, Nidec ASI

Utility-scale storage could grow to 2GW in 2017 and then up to 4.2GW by 2020, Rizzi says Nidec ASI is expecting. The UK and US are likely to be where the main action is, followed by European territories including Germany, Rizzi says, with some activity expected in the Middle East and Japan too. As with AES’ Zahurancik, Rizzi says Nidec ASI sees lithium-ion continue to dominate in the near future, due to the lack of market-ready alternatives and the continuing fall of lithium-ion system costs.

Dr Randell Johnson, chief analyst, Alevo

Dr Johnson was impressed with the engagement of UK regulator Ofgem with the event and with the UK industry in general. “Stitching together” work by regulators, utilities, governments and industry is the next big step to get the most out of energy storage, according to Johnson. Policy and regulations remain the biggest barriers at the moment; recognising the value that energy storage can bring and incorporating that into planning processes remains a challenge. Johnson also discusses his 20 years in energy storage and how the technology has gone from concept to execution in that time.

Lior Handelsman, VP of marketing and global strategy, SolarEdge

Also one of the founders of the Israel-headquartered microinverter/energy management company, Handelsman talks about innovations in turning aggregated fleets of solar homes with storage into ‘virtual power plants’.

“One of the challenges with these types of services is that it is a highly fragmented market. It’s not even country-wise, in many cases its utility-wise, DNO-wise or a specific grid operator business model,” Handelsman says, referring to the myriad different services and markets aggregated solar-plus-storage could play into.   

Dr Ian Chilvers, chief power systems engineer, Smart Power Systems

Smart Power Systems has executed several commercial energy storage projects in the UK already and Chilvers offers his views on why the sector is so strong at the moment.

“I think there’s a big opportunity for commercial systems – to help get renewable energy connected to these systems as well, which many clients still want because it does have a positive impact on their profits. It is still of interest to them even though the feed-in tariff (FiT) has been eradicated.”

Using “intelligent controls”, these systems could also join capacity and grid-balancing markets, Chilvers says, making them even more interesting to clients.

Read the entire story

Energy storage: More tenders, government priorities and solving the revenue stream dilemma

While Brexit looms, bringing uncertainty into the country’s economy and international relationships, the role energy storage will play in a decentralised, low(er) carbon and more flexible energy system at least seems a little more assured than it did before.

Even Prime Minister Theresa May has namechecked energy storage and claimed a mooted research institute overseen by the government’s chief scientific advisor, Mark Walport, could make the UK a leader in battery and energy storage R&D as part of its industrial strategy reforms. It will have some catching up to do to meet advances in regions like California’s Silicon Valley and New York, but the announcement provided some rare optimism in Britain’s gloomy Brexit winter.  

Also at government level, the Department of Business, Energy and Industrial Strategy (BEIS) successor to the Department of Energy and Climate Change (DECC), is apparently currently “wading through” the many responses it received to a so-called Call For Evidence. This quasi-consultative solicitation of stakeholder responses to issues pertaining to reform of the energy sector, which was welcomed by the industry, closed in mid-January.

BEIS official David Capper, who is its Deputy Director and Head of Future Electricity Networks, told trade association the Electricity Storage Network’s annual symposium event last week that key themes emerging were the need to foster markets for flexibility services and allow developers to ‘stack’ revenues. Priority number one, he said was to remove the policy and regulatory barriers storage faces, including providing much-needed regulatory clarity. BEIS recognises that storage is important for “reducing the UK’s emissions going forward,” Capper said.  

Tendered agenda

Over the past few months readers of Energy-Storage.News have seen that a 200MW tender for enhanced frequency response (EFR), grid-balancing that responds within one second of registering a frequency deviation, was completely filled by battery projects. Those contracts are just for four years, but quickly following that tender was the T-4 capacity market auction, guaranteeing capacity to ‘keep the lights on’ between 2020 and 2035. Of 3.2GW capacity secured, 500MW of storage won out in that process, with both tenders held under the auspices of the transmission operator, National Grid.

According to John West of National Grid, who is a policy and design manager at its future role of system operator (SO) project, the probability now is that further tenders will be held for the various ranges and types of frequency response, with a ‘blended’ frequency response auction likely to include enhanced frequency response along with others such as dynamic and fast frequency response expected in July this year.

Cracking the revenue stack

The appetite for storage to add flexibility exists from the network point of view and government seems committed to doing what it can – which unsurprisingly doesn’t include Investment Tax Credit-style subsidies (the US’ 30% cashback in support given for the purchase of solar PV systems or storage installed with PV)  or other financial support, but does include some direct funding for innovation projects. The economics of storage are changing too. John Prendergast, energy storage manager at Renewable Energy Systems pointed out at the ESN event that the EFR tender projects will deliver £200 million (US$253 million) in savings to consumers over four years and BEIS reports have found that by 2030 it could lead to £1.4 billion to £2.4 billion annual savings.

While Prendergast said “investable price signals” need to be added to distribution networks’ business models and other speakers said a separate definition to generation and demand and establishment of storage as an asset class in its own right are needed, one other speaker demonstrated that business models for storage can already include “stacked revenues”, i.e. providing more than one service for more than one stream of income.

A “typical” revenue stack for large-scale battery storage, loosely defined as those over 5MW, will include one or more types of frequency response, TRIAD (a form of peak demand charging), the capacity market and energy trading, according to James Stoney, a senior project developer at Kiwi Power. Kiwi has a background in demand response and aggregation and also operates the UK’s Smarter Network Storage, large-scale battery trial which has just completed two years in operation.

Enhanced frequency response could net around £105,000 yearly revenue at £12 per MWh, dynamic firm frequency response around £170,000 at £19 per MWh, TRIAD around £50,000 a year dependent on location, the capacity market around £5,000 a year per installation, and the much less guaranteed energy trading market which could net anything from £0 to £20,000 annually. The key, Stoney said, is the “flexibility to shuffle the stack” both from a technological (wear and tear of the battery and so on) point of view and an economic one.

Pipelines and possibilities

So what does this all add up to? Adriana Laguna, a low carbon tech expert from UK Power Networks (UKPN), one of the UK’s distribution network operators (DNOs), said that in the past 15 months alone, UKPN has received 600 storage applications totalling over 12GW of capacity. Average project size was 20MW, Laguna said. Bear in mind that UKPN only covers the south east of England in its service area.  

There’s still a great deal of speculation and for those that want as clear a window as you will likely get into the landscape, Solar Media’s market research and intelligence team has compiled the UK Battery Storage Project Database. Through diligent research and digging through several layers of red tape, the team has found over 2.3GW of projects at various planning stages in Britain.

Market poised to accelerate

With all of this interest combining with the development of economic and technological know-how, it seems the UK is poised to accelerate its energy storage market rapidly, at least at the utility-scale end of things. For domestic users it may take a while longer, but again, the signals are starting to point in the right direction. As the lead author of Solar Media’s UK report, Lauren Cook said at the time of its publication a couple of weeks ago: “battery storage in the UK is poised to become one of the fastest growth segments within the country’s energy sector, often co-located with conventional or renewable generation”.

Solar Media is once again hosting the UK Energy Storage Summit, from 28 February to 1 March in London, featuring a range of speakers from government, regulatory and industry circles. See here for more details.

This article originally appeared on Energy-Storage.News.

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