What's in storage?
This article is drawn from the Energy Weekly newsletter from GreenBiz, running Thursdays.
The amount of moolah being committed to encourage installations of energy storage is mindboggling, an additional $2 billion in the past 10 days alone.
On Tuesday, the pool of incentives for batteries at California homes, apartment buildings, factories and other commercial sites topped $1 billion, when Gov. Jerry Brown officially extended an existing program. And during Climate Week in late September, the World Bank pledged $1 billion toward projects in the developing world — an investment that it hopes will attract $4 billion more in capital.
From an innovation perspective, you don’t have to look far for news of the next big thing. This week’s illustration of that is the introduction of a zinc-air combination that’s been tested in Asia and Africa for at least six years and that is touted as a far more cost-effective alternative than lithium-ion formats. The inventor, California billionaire Patrick Soon-Shiong, got some of the financial backing for his company NantEnergy from the aforementioned World Bank as well as the U.S. Department of Energy. "It could change and create completely new economies using purely the power of the sun, wind and air," Soon-Shiong told The New York Times.
Another potential plus: The batteries apparently aren’t prone to overheating, like their lithium-ion cousins.
To be clear, a fair amount of sturm und drang still surrounds the topic of energy storage. That is, the arguments in favor of specific approaches and technologies can be vociferous and subjective. There's definitely good reason to hedge bets. General Electric, for example, is testing several approaches in upstate New York (thanks to another supportive state incentive program).
But what’s absolutely irrefutable is that it’s difficult to find new renewable generation projects — commercial or utility-scale — that don’t consider the role that batteries or some sort might play if the economics make sense. Just this week, New York utility Con Edison launched an energy storage joint venture with technology company Johnson Controls, in a bid to capitalize on the need for related services.
I chatted about the evolving market dynamics several weeks ago with Alan Russo, senior vice president of Stem, which differentiates its offerings with artificial intelligence software that helps with applications such as managing time-of-use pricing strategies. The company boasts more than 500 installations. Right now, most of those projects aren’t paired with solar, although more companies are considering integrated installations as a way to maximize the value of those investments, Russo said. "This is the right time to step into the market," he said.
Much of the activity is in friendly markets such as California, Massachusetts and Texas, where the electricity rates and incentives can help justify the investment, as well as at sites that can accommodate the equipment from a physical perspective. For now, at least, the integrated projects that are happening are associated with new installations. That’s because most rebates or tax credits can’t be applied to retrofits. (Although a move is afoot to change that.)
Energy strategists that I’ve spoken with during the past month from Walmart, Ingersoll Rand and Whole Foods Market are taking a more active interest in potential applications that pair onsite solar generation with energy storage equipment — the capability to automate utility demand response programs is a shared interest.
"We’ve worked with a number of partners on these, a few successfully and a few where we are still trying to make the projects work," observed Aaron Daly, global energy coordinator with Whole Foods, speaking generally about the organization's energy storage projects. He’s less concerned about the actual hardware and more interested in the software application possibilities, such as how to use installations for peak shaving when rates are high or how to island certain buildings from the main electric grid for resilience considerations.
The economics don’t often pencil out easily. "It’s very difficult to have the generation profile of the solar match the load profile of the building and the rate structure of the utility," Daly said.