We begin this week with Tesla, which is facing some Gigafactory constraints.
Tesla had hoped to build 5,000 Model 3 cars per week by the end of year, but it's pushing that target back by up to three months.
The bottleneck, Elon Musk explained, is the Gigafactory's highly automated battery module packaging line. Tesla chose to move a few steps of the assembly process in-house, but reportedly a supplier "dropped the ball" and forced Tesla to rewrite much of the software.
Establishing new battery production lines at such an enormous scale takes considerably more time than Musk has claimed publicly. Simultaneously scaling production from zero to 60 compounds the difficulty.
Tesla's response: throw its best engineering talent at the problem and station top executives in the Gigafactory pretty much 24/7.
Once fully operational, the Gigafactory is expected to produce significant cost reductions in battery production. But Tesla still has a lot of capital to burn before it reaches the other end of the tunnel.
AMS flips the switch on utility contract
After years of preparation, Advanced Microgrid Solutions went live with its virtual power plant contract for Southern California Edison.
The storage company owes SCE 50 megawatts/200 megawatt-hours of distributed capacity as part of the 2014 Local Capacity Procurement. The first batch, 2 megawatts/8 megawatt-hours, activated November 1. The remainder of the obligation will phase in through the end of 2018.
SCE will bid the resource into the California wholesale energy market, at which point AMS calls up the appropriate amount of power from its distributed fleet based on its in-house optimization software.
This amounts to an early wide-scale test for the virtual power plant concept, which makes a lot of sense in the abstract, but has been harder to implement in practice. Back in 2014, SCE took a chance on a new idea from a new company. Soon it will discern whether that bet pays off.
Dominican Republic storage stands up to hurricanes
AES released a case study documenting how two Advancion systems it has in the Dominican Republic performed during Hurricane Irma.
The 10-megawatt, 30-minute duration systems stayed on-line even as some 40 percent of the nation's generation assets had to shut down.
"The period of increased frequency disturbances lasted for more than 10 hours and the Andres energy storage array delivered 56.5 percent greater energy throughput than under typical operating conditions," the report says of a facility installed in Santo Domingo in June.
Both battery units charged and discharged at full capacity numerous times to manage the extreme frequency fluctuations.
Image credit: AES Energy Storage
Rocky Mountain storage surprise
Chicago-based SoCore Energy aims to build the largest storage system in Colorado for an electric co-op in the town of Firestone.
The company chose Tesla to supply the 4-megawatt/16-megawatt-hour system at an office of co-op United Power. The system will help the utility with energy arbitrage, reducing peak demand and increasing efficiency of grid utilization.
This is notable as an update in Colorado's generally sleepy storage market, and another data point in the trend of co-ops and municipal utilities embracing storage to reduce their system-wide demand charges. More intriguing is how the cooperative plans to connect its customers to the project.
United Power will test out a "community battery" program, in the vein of community solar, whereby customers subscribe to a share of the asset. In this case, that means getting a demand charge reduction on one's monthly electric bill via a stake in the offsite battery system.
“United Power was one of the first utilities in the country to experiment with the ‘community solar’ concept with our Sol Partners program, and now there are community solar projects all over the country. 'Community batteries’ are the next big trend,” said United Power’s New Business Director, Jerry Marizza, in a statement.
That sounds like an innovative way to defray the upfront capital costs of a storage investment. But first, we'll need to see how they handle the logistics of subscriptions and billing.
Portland General Electric wants to spend nine-figure sum on storage
PGE said on an earnings call it plans to spend up to $100 million on 39 megawatts of storage, the Portland Business Journal reported.
It's easy to forget that Oregon was the first state to follow California in passing a storage procurement mandate. Rather than the massive, industry-sparking target California chose, Oregon picked a measly 5 megawatt-hours and imposed a cap equal to 1 percent of 2014 peak demand.
PBJ (great acronym) points out that 39 megawatts maxes out the cap for this utility. Perhaps, in time, the legislature will re-evaluate that arbitrary limitation. Even so, this procurement would make Oregon a top market for storage development outside of California. New York and Massachusetts had better watch out.
In several different states, utilities are taking the initiative to invest in storage beyond the levels required by legislators. In Arizona and North Carolina, we're seeing storage investments in the absence of a central state directive. Conversely, New York City and Massachusetts have storage targets on the books and have yet to develop projects of considerable size.
Targets alone are not sufficient. Open-minded utilities that can monetize the multifarious benefits of storage count for a lot.
Goodbye, Shayle
Shayle Kann, the guiding force behind GTM's research operation, announced this week that he's moving on to greener, yet-to-be-defined pastures.
He'll take with him a knack for translating solar market data into live oratory that enters the realm of storytelling. I had the pleasure of working with him on several occasions, notably on this analysis of the cost of storage versus the proposed Puente gas plant.
He'll still be around on The Interchange Podcast, and may well pop up at future GTM events. In the meantime, take a look at his valedictory missive, where he lays out a vision for what needs to happen for the grid to really modernize in an efficient way.
I wanted to draw attention to the section on the potential role for energy storage in wholesale capacity markets:
"These capacity markets are huge -- GTM Research analysis earlier this year estimated that $14 billion went through these markets in the 2015/2016 delivery year. If energy storage were to gain a 10 percent share, this would open up roughly 30 gigawatts of demand for batteries -- around 50 times today’s total capacity."
That's a huge deal, but achieving it requires the Federal Energy Regulatory Commission to shift its attention away from rewarding coal plants that stock a lot of coal and instead return to its notice of proposed rulemaking on storage from 2016.
Perhaps Shayle can figure that one out in his newfound free time.
Solar trade case draws conservative opposition
The International Trade Commission released its recommendations for protecting what's left of America's solar manufacturing, and they weren't as drastic as Suniva and SolarWorld had hoped.
The commissioners suggested higher cell import quotas than what petitioners asked for, with tariffs calculated as a percentage of value for imports beyond that quota. This looks less disruptive to the market than the absolute numbers the petitioners wanted, which equated to a much higher percentage of today's cell and module prices.
Suniva and SolarWorld responded by saying that the proposed remedies were a step in the right direction, but didn't go far enough.
Free-market conservatives are opposing any potential tariffs.
A coalition of conservative groups, including the American Legislative Exchange Council, FreedomWorks, and the R Street Institute, denounced trade restrictions in a letter to the president. They called out the trade case as an attempt by "bankrupt, foreign-owned solar firms" to distort the market, jeopardizing thousands of domestic jobs.
These groups have traditionally critiqued renewable energy policies they believe distort markets. But wind and solar are a lot cheaper, and can often compete head to head with fossil fuels. If these groups continue to argue for uninhibited competition in energy markets, they could be a valuable ally for the clean industry as markets evolve.
