After the socially challenging strip-mall accommodations of Anaheim last year, the good folks who make solar and energy storage happen are no doubt craving real interaction in some place resembling an actual community. And they're in luck: Salt Lake City has real history, a downtown chock-full of creative dining establishments, and a thriving brewery scene in spite of theologically inspired limits on alcohol by weight.
But once the stage is set for socializing and networking, folks have to think of something to talk about, and complimenting someone's pairing of open-collared white shirt and blue blazer can only get you so far.
Fear not. Greentech Media is here to help anyone attending Energy Storage International with some surefire discussion starters pulled from our scrutiny of the industry's latest developments. (And for anyone with their eye on solar, make sure to check out Emma Foehringer Merchant's solar-centric guide here.)
Does the storage industry need a tax credit?
Your solar industry comrades will inevitably bring up their hope for an extension of the federal Investment Tax Credit, that much-loved adrenaline shot for the industry that's slated to step down next year. Don't feel left out: The storage industry is fighting for a tax credit of its own. In order to be taken seriously as a competitive energy industry, storage needs to prove it can extract a special dispensation from Congress.
Will it happen, and if so, how? That’s the industry parlor game du jour. All prior efforts have failed, but batteries have never been more competitive, nor have they been able to show such buy-in from red states and blue states across the nation. If they can close deals like that based on actual costs, just imagine what could be done with 30 percent chopped off the price tag.
Actually, you don’t have to imagine. The storage analysts at Wood Mackenzie Power & Renewables crunched the numbers, and they found a 30 percent standalone ITC would produce a 16 percent bump to the five-year forecast. That 16 percent translates to 2.9 gigawatts/8.8 gigawatt-hours, which just happens to be as much as all batteries installed in the U.S. since 2012 plus the expected deployments for 2019 and 2020.
Having dispensed with the blocking and tackling, you might engage your interlocutor in the higher ethical concerns at hand, namely the clash of ideals and pragmatism. Should storage prove itself in the market, as some developers have already done, or is the cold, hard cash implied by 3 additional gigawatts too good to pass up?
Why are long-duration startups finally getting money?
Long-duration storage was always the thing that had to happen eventually, to balance out the desire of renewables advocates to take over the grid with intermittent wind and solar. Now, after years of delayed satisfaction, this subdivision of the storage market is raising tons of money.
Form Energy achieved earlier-than-expected validation of its test cell, and then raised $40 million to scale it. Energy Vault extracted $110 million from SoftBank for its iconoclastic stacked-monolith gravity storage. Copenhagen Infrastructure Partners agreed to finance a pumped hydro storage plant in Montana. That all happened in the last few months.
These developments raise a host of questions, including the perennial favorite: Have these investors lost their minds? Answering that requires an explication of unit economics for custom-built concrete blocks and the ability of novel technologies to defend themselves from lithium-ion’s mass-manufactured cost declines.
Generalizing from there, one may ask whether a market for long-duration storage will be viable within the next five years, as these entrepreneurs contend. What markets could emerge first, and what will "baseload renewables" contracts look like?
This conversation could easily last longer than the four-hour duration of commercially available lithium-ion.
What's the right way to aggregate?
If you’ve been to a cleantech industry conference in the last five years, you’ve heard someone sit on a panel and talk about how, one day, software will aggregate small batteries in homes and create a useful grid asset.
This time around, there are actual contracts to talk about. Sunrun has locked down aggregation deals in New England, Oakland, Glendale and Oahu. Swell followed up on its Preferred Resources Pilot win by securing another home battery network as part of the replacement for a canceled gas plant in Oxnard. Sonnen made good on its promise to outfit a new home development with batteries and get a utility to pay for the service; that apartment complex sits just down the valley from Salt Lake City.
These deals reflect the growth of the home storage market, which just had its biggest quarter ever. But they also prove that at least some utilities are getting comfortable with the idea that a vast network of digitally controlled devices in customer homes can serve peak demand.
Now the industry needs to prove it can find customers and install thousands of batteries in the right places to fulfill these obligations, and still make a profit at the end of the journey. Then, of course, the systems need to perform as advertised.
Banter about who’s got the better storage controls and aggregation software is entertaining enough to some. But a deeper philosophical divide has emerged. Sonnen has taken a centralized approach, cutting a deal with a single homebuilder to install hundreds of batteries in one place. The others pursue a distributed strategy, finding individual customers across miles of territory. Will one model prevail?
Which new markets will burst open next?
Everybody knows what’s happening in California, and Massachusetts and New York are pretty well covered these days, too. Use ESI to gossip about what other markets will emerge out of left field.
The headlines suggest a few. Oklahoma booked the nation’s largest solar/wind/battery trifecta, thanks to a rural electric cooperative willing to compare all sources of power instead of running the usual play. Georgia Power lately fancies itself a regional leader in energy storage. Dominion Energy of Virginia aspires to diligently study a few batteries for five years. And the interconnection queue in Texas suggests developer interest will spike in the next two years.
If 2019 has proved anything, it’s that states can go from storage-indifferent to storage enthusiast with remarkable alacrity. What does the industry need to do to turn new adopters into repeat customers, and how can it bring new states into play?
Safety lessons after Arizona
The U.S. storage industry’s pretty clean safety record took a hit in April, when an explosion rocked Arizona Public Service’s McMicken battery, supplied by industry veteran Fluence. The cause has not been publicly identified, but it put battery safety top of mind in a way it hadn’t been for a while. The rash of fires in South Korea provide additional cause for concern.
Has the renewed awareness of lithium-ion risks changed conversations with new customers, old customers or regulators? What steps are developers taking to ensure non-explosive batteries, and what ideas can they share?
For a while, New York City stood out for its abundance of caution, holding up urban battery development and demanding things like ventilation for explosive gases and dry pipes that allow flooding a system without putting first responders at risk. Now those ideas look prescient, but are any other jurisdictions following that lead?
Are you at ESI? Come visit GTM and Wood Mackenzie at booth 7342.