by Julian Spector
August 24, 2017

The Great American Solar Eclipse has passed, and as far as I can tell no part of the grid imploded.

Many clean energy experts had downplayed the threat to electric reliability by comparing the eclipse to a very large cloud passing over the sun, albeit an eminently predictable one. That comparison seemed apt in the Bay Area, where the event was largely hidden behind a thick layer of San Francisco fog.

Further inland, though, the solar resource did dip visibly, and the California Independent System Operator toggled its switches in response. Gas and hydro ramped up, and within two hours solar production was back on its typical noontime trajectory.

So, what happened to #Storageclipse, in which the energy storage resources on the grid, mostly in California but elsewhere too, would use their unique abilities to save the day? I laid out this potential scenario last week. The real outcome proved a bit more complicated.

Stem's bid to leverage its distributed storage fleet for demand reduction in the day-ahead market was not picked up, the company told me. The first-hour ramp-down evidently drew plentiful competition from in-state peaker plants, demand response and out-of-state assets, producing a low clearing price.

With so much advance notice, it makes sense that a bevy of competitors would turn up for the event. The real star of the show was customer-side demand reduction, in the view of California Public Utilities Commissioner Michael Picker.

“Frankly, engaged customers are far more efficient than battery storage,” he told my colleague Julia Pyper.

If you can convince millions of people to change their behavior in response to abnormal grid events, so be it. Asking everyone to turn off their air conditioning when they stepped outside to glimpse a partially obscured sun might have done the trick. 

At this point, though, few market signals exist to give consumers a compelling reason to change their behavior, besides the old standby, altruism. Nest gave its smart thermostat users a nudge to front-load cooling before the eclipse, but they weren't paying customers to do so.

By 2019, all California residents will be on time-of-use rates, which will send a proper price signal to shape consumer behavior. Until then, expecting consumers to cut their use is a bit like schools hitting up students for donations even after they've paid their tuition in full. 

Storage aggregators, on the other hand, deliver demand reductions because they make money on it, and they have dedicated professionals overseeing the process. Beyond the C&I storage companies, several grid-scale batteries were on hand to help out.

"We intend for the batteries to be fully charged going into the eclipse event, and then we will discharge them during the solar eclipse duration to make up for the lost solar energy," Arizona Public Service spokesperson Anne Degraw emailed before the event. "This mode of battery operation will contribute to the reliability of the grid during the event."

And I hear from San Diego Gas & Electric that its big Escondido battery did indeed help absorb the flood of solar power that came as the eclipse waned.

#Storageclipse wasn't flashy, and energy storage didn't single-handedly save the day. But it helped out quietly on the grid, as a good utility asset should. 

Cash 4 Charge

One of the interesting tidbits that came out of the eclipse reporting is the fact that grid operators don't pay for storage to charge. There are products for storage to discharge capacity onto the grid, and to discharge behind the meter for demand response, but not to soak up that belly of the duck curve.

Wholesale markets can incentivize this with negative pricing, which creates an arbitrage opportunity for those companies qualified to play in that market. But that's not quite the same as saying, "Instantaneous absorption of excess renewable power is valuable, and we're going to pay for it."

That could change, however. CAISO has begun investigating a “load consumption” product to better leverage storage to reduce the amount of solar energy California throws away via curtailment. That will be a process to watch as the storage grid service economy matures.

Alevo leaves the game...

The mystery behind Alevo, with its exotic battery chemistry and obscure European financial backing, may never be revealed.

The company declared bankruptcy Friday and began the process of selling off all assets. It will lay off a total of 290 employees at its massive North Carolina factory, which started life as a Philip Morris tobacco warehouse. 

This isn't terribly surprising, because this company had numerous challenges stacked against it.

It was trying to commercialize a new sulfur-based inorganic lithium-ion electrolyte chemistry. That puts it in competition with all the traditional, scaled-up lithium-ion producers, plus all the other upstart lithium-ion alternatives.

Alevo's GridBank, though, came with a short duration and targeted the narrowing market for frequency regulation; it didn't target the long-duration market that most exotic chemistries use to differentiate themselves from lithium-ion. The company also decided to be its own developer, which complicates matters further. 

It was just getting started on deployments after several production delays. Funding ran out before Alevo could ship products in earnest.

...but Sungevity reappeared

Don't let anyone say it's only bad news in cleantechland. 

After a bankruptcy-induced hiatus, the Sungevity brand came back to sit over Solar Spectrum and Horizon Solar Power. The same private equity firm that bought Sungevity's assets and created Solar Spectrum just acquired Horizon, and has plans for national growth and more strategic acquisitions.

No word yet on whether they'll be offering storage, but that could be just the thing to round out this fairytale ending. 

The PV+storage inflection point

This feels like the Year of Impressive PV+Storage Announcements, but with few operational projects at the utility scale, it's hard to know how the economics really work.

Now we've got a study from the National Renewable Energy Laboratory that breaks down the value of different storage-paired configurations versus standalone solar. The upshot: Solo PV has a better benefit-cost ratio now, but as solar penetration increases and battery costs come down, that will flip. 

At 15 percent PV penetration in 2020, a DC-coupled system becomes more attractive than standalone solar. At 24 percent penetration, standalone solar's benefit-cost ratio dips below 1, making all configurations of paired storage look more favorable.

The analysis also shows how the federal Investment Tax Credit pushes behavior that's not intrinsically more valuable to the grid. You have to charge solely from renewables to qualify for the full credit, and that rules out charging from the grid when it's very cheap. The tightly coupled DC configuration is intrinsically less valuable than a flexible DC-coupled design -- until you add the ITC.

This is something that standalone storage developers have been talking about for a while: Tying storage incentives exclusively to renewables isn't sophisticated grid policy. The ITC, though, wasn't really written with storage in mind; these compliance obligations stem from the lack of a standalone policy to encourage storage wherever it might most benefit the grid.