The energy storage industry is in the early stages of what will become a giant global market.
Energy storage will support and compete with conventional generation, transmission and distribution resources. As the industry evolves, new business models will emerge where companies make, apply and operate storage assets to allow the grid to work more reliably and cost-effectively while decreasing negative impacts.
For the past eight months I’ve been studying the grid-scale energy storage market in North America. GTM Research has published the results of my research in a special report, Grid-Scale Energy Storage Opportunities in North America. Based on my research, the following five companies seem especially well positioned to succeed in the emerging grid-scale energy storage market in North America.
ABB is a global leader in power technologies and operates in more than 100 countries. ABB can provide turnkey storage solutions or just equipment and components. It is not a battery manufacturer, and that independence can be an asset in helping customers optimize system designs to meet specific needs.
ABB’s storage experience ranges from small projects to the largest commercial battery storage system ever built, a 40-megawatt nickel-cadmium system. The firm has the ability to support a storage project at any level, virtually anywhere in the world. It can qualify equipment and components or an entire system. ABB’s core power electronics capabilities are an advantage, and its packaging and system designs are elegant.
ABB may not always be the lowest-cost provider, but ABB’s systems work, which is a critical distinction. Its financial strength is another major benefit in supporting the bankability of a grid-scale storage project. ABB is perfectly positioned to benefit from the globally expanding grid-scale energy storage industry.
AES Energy Storage
AES Energy Storage operates the largest fleet of battery-based storage assets in North America. Its stated business objective is to bring “the next generation of flexible capacity to the power grid through advanced energy storage technologies that are scalable, commercially viable and emission-free.” The company currently has over 1,000 megawatts in development in the U.S., South America, Europe, and Asia.
AES Energy Storage is a wholly owned subsidiary of AES Corporation, a global utility. AES Corporation is more than just a source of project financing and credibility to AES Energy Storage. It’s a built-in customer seeking to apply storage across its global operations to improve the operating and financial returns of its generation assets. That’s a decisive advantage for AES Energy Storage.
AES Energy Storage has built large frequency-regulation projects in North America, including 8 megawatts in NYISO and 32 megawatts in PJM Interconnection, and it’s now building another 20-megawatt project in PJM’s territory. The 32-megawatt project is notable because it was the first big storage project to benefit financially from PJM’s new tariff for fast-response regulation designed to comply with FERC Order 755. Under this new tariff scheme, the firm gets paid more than conventional regulation resources whose speed and accuracy are lower in comparison to energy storage. Batteries for the project were supplied by A123 Systems.
AES Energy Storage has a clear market-leadership position, grid-scale project experience, and the deep financial backing needed to continue to expand at a fast rate in the energy storage industry.
Convergent Energy + Power
Based in New York state, Convergent Energy + Power develops energy storage assets that provide peak demand limiting, demand response, and other energy-balancing applications. Convergent is a fully integrated storage project developer targeting four- to six-hour energy storage assets for locations that create high value. The company has a battery supply agreement with Eos. It also has partnership agreements with Fisher Brothers, a real estate developer/manager with over $4 billion in assets, and Plaza Construction, a general contractor with over $1 billion in annual revenues.
While small, Convergent has multiple strengths: technical know-how, financial origination capability, insider market access, and design/construction resources. Look for this firm's success to expand.
Eos has developed a low-cost zinc-air energy battery projected to cost $1,000 per kilowatt, or $160 per kilowatt-hour (DC-to-DC), assuming large-volume purchases. Cycle life is projected to be 10,000 full cycles (equating to a 30-year life). The storage system has a 75 percent round-trip efficiency. Utilities are showing very strong interest.
NRG Energy has become an investor in Eos, and at least six utilities have joined Eos’ Genesis Program, designed to help accelerate commercial deployment of Eos’ storage systems around the world. Collectively, Eos’ Genesis partners represent over 76 million customers in over 70 countries, creating an enormous marketing platform that Eos is leveraging to achieve scale faster than its competitors.
We really like Eos’ low-cost zinc-air technology, as well as its business development and marketing acumen. This company actually understands how to create industry buzz -- a rare talent in the space.
S&C Electric may have more practical experience in delivering design and integration services for large-scale storage projects than any other company in North America. A profitable employee-owned business, S&C Electric has a long history and is highly respected by utilities. S&C has a strong culture of innovation and has developed IP that helps it deliver turnkey solutions with advanced features.
Combined with S&C’s deep capabilities and experience related to substations and distribution networks, this company’s storage design and integration know-how make it a powerhouse resource. Expect S&C to be a major “go-to” company for utilities as they start to buy energy storage on a much larger scale.
Seeo is developing a new class of high-energy rechargeable lithium-ion batteries based on a nanostructured polymer electrolyte developed at Lawrence Berkeley National Laboratory (LBNL). Seeo has an exclusive license to core patents from LBNL. Its top-shelf VC investors include Khosla Ventures, GSR Ventures (a Chinese company), Google.org and Presidio Venture Partners (a Sumitomo fund).
Safety will be a defining attribute of successful storage companies going forward, and Seeo’s solid-state battery has great safety characteristics. According to the company, if conventional lithium-ion batteries are overcharged, they can typically withstand “over-voltage” of about 20 percent above the max voltage of the battery. In contrast, Seeo batteries have a margin of error of 100 percent over max voltage.
Seeo has been engaged in demonstration activities with SunEdison to test its batteries for use in solar PV applications. Given the rapidly rising interest in combining storage with PV, as well as Seeo’s inherent safety characteristics, this emerging market opportunity may be a perfect match for Seeo’s technology.
You’ve got to like Seeo’s safety characteristics, its investors, and its demonstration partner. Seeo’s technology also has multiple application and market opportunities.
About Grid-Scale Energy Storage Opportunities in North America
This 275-page GTM Research report provides an in-depth review and discussion of the best grid-scale energy storage applications, technologies, suppliers and business strategies in the North American energy storage industry. It identifies the best current and future markets for storage and profiles over 150 companies currently active in the North American storage industry. Key contacts are provided for each of the 150 companies profiled. The report can be purchased by contacting Tate Ishimuro, Senior Research Sales Manager, GTM Research, at firstname.lastname@example.org, Direct: +1 (646) 719-1380.
About Chet Lyons
Chet Lyons is the founder of Energy Strategies Group, an energy storage consulting firm that assists innovative manufacturers, utilities, project developers and investors in establishing an early, profitable and sustainable role in the rapidly growing energy storage industry. An industry expert, Chet has extensive experience in the development and commercialization of advanced energy technologies. Chet has held key positions at DNV KEMA Energy & Sustainability, Beacon Power Corporation, American Superconductor, Evergreen Solar, Energy Resource Associates and Johnson Controls.