dwh4l3 - Pro Bid Energy - Page 226 of 476

New standalone ITC incentivising US developers to overbuild projects

Project site of the Madero and Ignacio BESS assets in South Texas. Developer Eolian claimed they are the first to utilise the ITC for standalone storage. Image: Wärtsilä

The new investment tax credit (ITC) for standalone energy storage means some US developers are opting to overbuild instead of augment later, system integrators told Energy-Storage.news.

The standalone ITC, brought in as part of the Inflation Reduction Act and effective as of 1 January this year, has meant a significant uptick in developer interest in the US grid-scale energy storage market.

New entrants are coming into a market where existing participants are increasingly having to think about augmenting existing systems as well as deploying new ones, as Energy-Storage.news recently wrote in an interview with EPC firm Burns & McDonnell.

The ITC means that developers are increasingly opting to invest more now and overbuild rather than augment several years down the line as the systems’ batteries degrade, executives from system integrators Powin and Wärtsilä told Energy-Storage.news whilst attending Energy Storage Summit USA last month. A third, LS Energy Solutions, gave a different viewpoint.

“The IRA incentivises Capex spending now to get the tax credit so we are seeing customers overbuild, like deploying 120MW with a 100MW interconnection,” said Kate Sherwood, director of energy storage North America at Wärtsilä, though emphasised some were still opting to avoid the current high costs of lithium-ion batteries and augment later.

“Others are taking the bet that batteries will go down in cost so they’ll build 100MW and augment in 3-5 years.”

Anthony Carroll, president of Powin, echoed these comments: “One very nice thing about the IRA is that we’re getting many more customers augmenting at the initial part of the lifetime of the project and not seven years from now. The ITC means that people are investing more upfront in those batteries whereas before people were trying to divert costs as much as they could. We’re seeing both approaches to augmentation play out.”

“Augmenting in 7-10 years means leaving space for those new ones, so it’s less efficient in its design, and also the battery and inverter technology will change. I can guarantee you that the inverter technology in 7-10 years from now is not going to be what it is today.”

He added that he nonetheless expected augmentation to become a substantial market in and of itself in the coming years, with companies specialising purely in adding capacity to existing projects.

Ravi Manghani, director of strategy and market analytics at LS Energy Solutions, did not agree that this move to overbuilding at deployment rather than augmenting later was a given. His firm released its utility-scale product in late 2021.

“Yes, that (overbuilding) would be the first approach. But we still don’t know how the IRA will rule on augmentation specifically. In theory, you could pay upfront for augmentation further down the line and still take advantage of the ITC. It’s still not clear what the IRS (Internal Revenue Service) will decide on and what kind of guidance they’ll provide on sizing and oversizing and augmentation.”

Updated IRS guidance on various aspects of the new ITC mechanisms brought in by the Inflation Reduction Act is expected during the current quarter (Q2).

Solar Developer Acquiring 1.5 GW of Huasun HJT Modules

Anhui Huasun Energy Co. Ltd. has signed a cooperation agreement with INERCOM Ltd., a European EPC company, for the supply of at least 1.5 GW of Himalaya series ultra-high-efficiency HJT modules by the end of 2025.

Huasun first worked with INERCOM in 2021, supplying 86 MW of HJT solar modules to its utility solar project in southern Bulgaria. According to the supply plan, by the end of 2023, Huasun will deliver more than 500 MW of modules for INERCOM.

“We choose Huasun as the exclusive supplier of HJT modules because they have provided a great guarantee in terms of product quality, technical performance and delivery capabilities,” says Malina Varbakova, heads of INERCOM. “We are very happy to build a long relationship with Huasun and hope both of us can keep strengthening connections, supporting each other and exploring the international market together.”

“INERCOM has been deeply involved in the Bulgarian market for decades and has participated in the development and construction of photovoltaic projects in many regions,” adds Dan Zhou, CEO of Huasun. “It is the first company that used HJT modules on a large scale at an early stage in Europe, which indicates that HJT has very broad prospects and significant value in Europe.”

Chinese Firm Completes Semi-Submersible Offshore Floating Solar Power Platform

CIMC RAFFLES recently delivered a semi-submersible offshore floating solar power platform to CIMC Solar Marine Technology (Yantai) Co. Ltd., and it has been towed to the designated location for deployment.

The platform has four single float arrays and a total installed capacity of 400 kW, as well as net deck area of approximately 1900 square meters. The platform is equipped with eight systems: floating structure support, buoyancy material, multi-body connection and mooring, fender collision avoidance, photovoltaic power generation and inverter, intelligent monitoring, dynamic subsea cable transmission, and power consumption.

The platform can operate safely in open sea areas with wave heights of up to 6.5 meters, wind speeds of up to 34 meters per second, and tidal differences of up to 4.6 meters, the company says.

Last year, CIMC RAFFLES partnered with the Yantai Municipal Government to jointly establish CIMC Solar, which offers integrated solutions for the comprehensive development of offshore PV, leveraging CIMC RAFFLES’s experience in semi-submersible product engineering.

The successful installation and delivery of this PV power generation platform demonstrates the company’s delivery capability in the commercial-scale semi-submersible PV platform, CIMC says.

Utility Buying 108 MW Longroad Energy Project in Virginia

Renewable energy developer, owner and operator Longroad Energy has has sold its 108 MW DC Foxhound Solar project to Dominion Energy.

Foxhound, located in Halifax County, Va., has been in development for six years and recently begun construction. Foxhound is the first-utility scale project to be certified as Virginia Pollinator-Smart, a biodiversity program overseen by the Virginia Department of Conservation and Recreation and Virginia Department of Environmental Quality. As part of its certification, the Foxhound project will use native plant species under the solar panels and a pollinator-friendly seed mix around the arrays.

First Solar is supplying Foxhound with its domestically made Series 6+ solar modules. Nextracker is supplying trackers for the project, and TMEIC is supplying the solar inverters. The project will interconnect near the Clover Power Station. Foxhound is projected to employ 150-200 workers during peak construction.

Financial close of the acquisition is expected upon mechanical completion of the project, which is anticipated for January 2024.

“Foxhound marks Longroad’s first solar project in Virginia and our first greenfield development project in PJM,” says Paul Gaynor, CEO of Longroad Energy. “We are pleased that Dominion Energy will be acquiring Foxhound to help support the sustainability goals of its key customers and renewable energy objectives set out in the Virginia Clean Economy Act.”

KeyBank N.A. and HSBC served as lenders. Balch & Bingham served as Longroad’s counsel on the transaction.

Soltech deploying 12MWh BESS in Sweden for Q4 2023 COD

A battery co-located with a solar PV farm that Soltech deployed last year for developer Alight. Image: Alight.

Soltech Energy Solutions is installing a 12MW/12MWh battery storage unit in Sweden for municipal energy firm Nybro Energi, set to come online before the end of the year.

The clean energy solutions arm of energy firm Soltech Group will deploy the one-hour system for Nybro Energi. The project is set to reach commercial operation date (COD) in the fourth quarter of 2023, a spokesperson for Soltech told Energy-Storage.news.

The battery energy storage system (BESS) will mainly provide frequency regulation services to transmission system operator (TSO) Svenska Kraftnät, but in future may also provide power to the grid during times of high demand, they added.

Nybro Energi will be the project owner. Its CEO Håkan Dahlgren commented on the announcement: “We are among the first energy companies in Sweden to invest in a large-scale battery storage of this kind. We see there is a market for these solutions and there will be a need to store energy and to stabilize the grid, when we are getting more and more renewable sources.”

Soltech Energy Solutions has been active in the Swedish battery storage market recently, last year announcing 2MW projects for an EV truck charging park (Scania) and a solar PV plant (Alight). In September it revealed another project at a solar PV plant but did not reveal the buyer or details about the project size, only saying it was a SEK 15 million order (US$1.4 million).

The country’s market has been picking up lately with frequency new project announcements, as BESS projects increasingly provide the flexibility services which were previously exclusively done by Sweden’s hydroelectric portfolio.

The latest was a 20MW/20MWh project acquired by Switzerland’s largest energy firm Axpo, set to come online next year. Developer Ingrid Capacity, interviewed whilst at Energy Storage Summit 2023 in London in February, estimated some 100-200MW of BESS would come online in Sweden this year.

“We are very happy to help Nybro Energi with a tech solution that stabilizes the regional electricity grid. The battery storage will contribute with frequency services, cost optimization and will cut the power peaks that the increased electrification brings. This is a scalable future investment that will create great benefits onwards,” said Rickard Lantz, Business Development Manager, Soltech Energy Solutions.

Schletter Opening New Solar Mounting Manufacturing Facility

Solar mounting systems company The Schletter Group is commissioning a new manufacturing site in Dilovasi, near Istanbul, Türkiye, this month, as well as expanding its logistics network with a new 12,000-square-meter logistics center.

“With our new plant in Türkiye, we are not only significantly increasing our production capacity, but also placing our production on a broader basis,” says Florian Roos, CEO of Schletter.

The plant, which will initially focus on ground-mount systems, has a maximum capacity of around 1 GW per year and is equipped with state-of-the-art machinery. In addition to the plant in Türkiye, Schletter maintains production in Asia, as well as a flexible network of certified suppliers.

Schletter has also commissioned its new warehouse in northern Germany. As a central logistics center for northern Europe, the hub will be able to supply Schletter customers in Scandinavia, Great Britain, and the Benelux countries much faster.

RevoluSun Massachusetts Changes Name to Solaris Renewables

Matt Powers

RevoluSun Massachusetts, a company providing solar solutions and installations, has changed its name from RevoluSun Massachusetts to Solaris Renewables, effective immediately.

The decision to change the company’s name comes after careful consideration and the end of a partnership with its former parent company, RevoluSun Smart Home. Though the company is changing its name, the operation and team will remain the same.

“We are thrilled to announce this name change and are excited about the future of our company,” says Matt Powers, CEO of Solaris Renewables. “With the rising costs of energy, we’re grateful to continue helping people reduce their spending on electricity.”

Both new and existing customers will receive the same service and quality products they have come to expect from RevoluSun over the last decade. The company’s website, email and social media handles will also be updated to reflect the new name.

Tesla chooses Shanghai for next Megapack factory; targets 40GWh production

The Megapack facility will be the company’s second in Shanghai, after its gigafactory which produces EVs, pictured. Image: Tesla.

Tesla will start producing Megapacks, its utility-scale energy storage product, from a new plant in Shanghai from Q2 2024.

The company announced the deal with the Lin-gang Special Area Administration, which administers the Pilot Free Trade Zone where the plant will be located, on 9 April. The facility will be Tesla’s second factory dedicated to producing Megapacks after its first in Lathrop, California, opened in 2021.

The Shanghai factory is targeting an initial output of 10,000 Megapacks a year or around 40GWh of energy storage capacity, the same as its California site. It is schedule to break ground in the third quarter of this year, and adds to an existing EV plant in the city.

“Five years ago, the Tesla Gigafactory helped Shanghai become a hub for the new energy vehicle industry. Today, we witness the signing of Tesla’s energy storage Megafactory, which will definitely become an important driving force in promoting the development of energy storage in Shanghai and its low carbon transition,” said Zhuang Mudi, deputy secretary-general of the Shanghai government.

The products from the new Shanghai Megapack facility will be sold worldwide, the company said. However, the location will likely be particularly useful for gaining market share in the Asia-Pacific region, where competitors Fluence, Wartsila and Powin have gained a strong foothold.

The announcement is also noteworthy as other battery energy storage system (BESS) integrators are by and large increasing or moving more production capacity to the US itself, Powin and Fluence being recent examples.

CEO Elon Musk alluded to an upcoming announcement about a second Megapack site in a recent investor call, as reported by Energy-Storage.news. Tesla deployed 6.5GWh of energy storage across its utility-scale, commercial and industrial (Powerpack) and residential (Powerwall) segments in 2022.

Energy-Storage.news’ publisher Solar Media will host the 1st Energy Storage Summit Asia, 11-12 July 2023 in Singapore. The event will help give clarity on this nascent, yet quickly growing market, bringing together a community of credible independent generators, policymakers, banks, funds, off-takers and technology providers. For more information, go to the website.

Evolution of business models for energy storage systems in Europe

Available payment for a storage system under several capacity markets. Image: Clean Horizon

Energy networks in Europe are united in their common need for energy storage to enable decarbonisation of the system while maintaining integrity and reliability of supply. What that looks like from a market perspective is evolving, write Naim El Chami and Vitor Gialdi Carvalho, of Clean Horizon.

This is an extract of a feature which appeared in Vol.34 of PV Tech Power, Solar Media’s quarterly technical journal for the downstream solar industry. Every edition includes ‘Storage & Smart Power,’ a dedicated section contributed by the team at Energy-Storage.news.

New opportunities emerge to offer stable revenues as the need for storage in Europe is rampant

As markets in Europe gain in complexity and require extensive trading measures, some opportunities such as capacity auctions and storage-related tenders help ensure a “stable” revenue that supports financing decisions and mitigates market risks.

Capacity mechanisms help solve the missing money problem for generating assets while pushing towards energy decarbonisation

In order to support their decarbonisation efforts while maintaining adequate capacity thresholds to ensure power system security, diverse countries such as Italy, the United Kingdom and Poland (among many others) have created capacity mechanisms.

As most of the revenues for large generating assets operating in a liberalised market come from wholesale energy markets (often led under the pay-as-clear mechanism), expensive thermal peakersare progressively being pushed out of the selection thresholds. As such, these assets risk going out of business due to the lack of sufficient revenues, jeopardising system security.

That is why capacity markets aim to solve this ‘missing money’ problem by providing revenues to new and existing generating capacity without interfering with the wholesale markets by ensuring:• An additional revenue stream to wholesale revenues via a capacity payment (TSOs are not allowed to interfere with the energy markets)• Visibility through long-term contracts for investors.

Among others, the Polish and Italian markets have been gaining remarkable interest from storage developers as they offer long-term capacity contracts for hefty annual payments, which eventuallysupports final investment decisions in their project.

Renewable-plus-storage auctions as a means to accelerate the energy transition

Germany’s ‘Innovation Auctions’

In 2021, Germany’s Federal Network Agency (Bundesnetzagentur) launched Innovation Tenders that provide developers with fixed premiums on energy injected onto the grid for a period of 20 years to encourage renewable-plus-storage deployment throughout the country. This tender is set to occur on an annual basis with an expected procurement of 5,450MW of total capacity by 2028.

Under this process, battery storage systems must be charged from the renewable asset and need to havethe ability to provide aFRR (automatic Frequency Restoration Reserve) services (with no obligation to participate in aFRR).

Spanish Innovative Hybrid Tender for renewable-plus-storage projects

Eligible energy storage systems must be larger than 1MW or 1MWh with a minimum discharge duration of 2 hours. The storage-to-plant capacity ratio (in MW) must be larger than 40% and smaller than 100%. Selected entities will benefit from grants of up to €15 million per project and €37.5 million per company. The grant value will be assessed based on the company size, location and a series of evaluation criteria.

Volumes of Germany Innovation Tender auctions out to 2028. Image: Clean Horizon

As energy storage systems become less expensive and competition grows, trading strategies gain in complexity

Until recently, energy storage systems in Europe relied on “traditional” revenues that were mostly reliant on frequency control services such as the Frequency Containment Reserve (FCR) in countries like France or Germany.

In some cases, arbitrage revenues were also considered as an additional revenue – even though their impact on project profitability has been somewhat limited over the past few years, especially before the start of the Russo-Ukrainian War and the tensions that hit the energy markets.

However, the ever-growing competition among market players has pushed towards more complex trading strategies that aim to capture a maximum of revenues – both existing and new.

The secondary reserve market: a new opportunity to storage systems

Frequency control reserves are crucial in order to maintain system stability by countering frequency drifts then restoring it to normal levels. Among these services is the automatic Frequency Restoration Reserve(aFRR), which has witnessed an overhaul over the past few years under the ENTSOE’s PICASSO (Platform for the International Coordination of Automated Frequency Restoration and Stable System Operation) project.

Across Europe, 26 states have already expressed their interest in joining the PICASSO platform with each having its own timeline, presented in the image below. What follows is a look at the opening of the secondary reserve market in Europe, taking Germany’s example as a reference.

Map of the PICASSO implementation timelines. Image: Clean Horizon.

The aFRR provisioning is remunerated via two market mechanisms:• Capacity reservation bids to reserve assets. Capacity reservation is not symmetrical,meaning that two bids are possible for an energy storage system:

1. aFRR UP (or positive): to help counter an under-frequency event

2. aFRR DOWN (or negative): to help counter an over-frequency event• Energy activation (UP and DOWN) bids in real time to remunerate the energy injected or withdrawn from the grid by the energy storage system.

On the national level, every prequalified asset can place a capacity bid (in € per MW per 4 hours) for up to six four-hour slots and for the UP, DOWN or both directions. This asset may or may not get “reserved” based on the local transmission system operator’s (TSO) specific selection process (pay-as-bid in this case).

On a supra-national level, reserved assets can be activated via the PICASSO platform over a pay-as-clear process that is based on activation prices that each bidding asset placed simultaneously with the capacity bid.

Average aFRR reservation price. Image: Clean Horizon.

The figure to the left shows the rolling average over seven days for the aFRR PICASSO historic prices since May 2022 when the PICASSO platform was launched. As the prices have a 4-second step, the 7-day rolling average is the method to show trends in both markets.

Relying on a high-level approach, the average activation price over 15-minute timeslots can help assess the average daily spread. As such, Since the launch of the PICASSO platform on May 1st 2022, theaverage German daily spread on a 1-hour basis is €760/MWh. Assuming a BESS does one cycle per day over a year, it can generate a revenue of €235,000/MW aFRR so a revenue of €115k/MW installed/year assuming an efficiency of 85%.

Cover image: A recently-completed solar-plus-storage project in Saxony, Germany, the subject of a winning bid in an Innovation Tender. Leipziger Stadtwerke.

About the Authors

Naim El Chami is Training Manager and Senior Energy Storage & Hydrogen Analyst at Clean Horizon. His main expertise covers market and regulatory analyses, techno-economical and financial assessment of energy storage and hydrogen systems as well as the management of GWh-scale procurements.

Vitor Gialdi Carvalho is an optimisation support and market analyst at Clean Horizon. He has participated in the sizing of energy storage projects in various regions including Africa, Europe, and the Middle East. Clean Horizon offers a wide variety of services spanning from market & regulatory analysis to technical consulting and project procurement.

Asian Development Bank pledges grant funding for Tata Power Delhi Distribution battery storage pilot

Unveiling of Tata Power DDL’s 528kWh ‘community energy storage system’ by Delhi government minister Satyender Jain in March 2021. Image: Tata Power DDL.

The Asian Development Bank (ADB) is providing financing to Tata Power Delhi Distribution Limited towards a 10MWh battery storage pilot project in Delhi, India.

Expected to be the first-ever grid-scale battery energy storage system (BESS) project on the distribution transformer level in South Asia, it will be used as a proof of concept (POC) and demonstrate how Tata Power Delhi Distribution Limited (Tata Power DDL) can deploy a further 50MWh of BESS capacity.

To that end, the ADB will administer a US$2 million grant, provided by investment bank Goldman Sachs together with the Climate Innovation and Development Fund (CIDF) of Bloomberg Philanthropies. The funds will partially finance the pilot BESS’ purchase and integration to the network.

“Power distribution is a crucial link in the electricity supply chain, and at times one of the most vulnerable,” Suzanne Gaboury, ADB director general for private sector operations said.

“Mainstreaming a battery energy storage system at the distribution transformer level will better integrate renewable energy sources and contribute to a more disaster-resilient power distribution system for Delhi.”

The announcement, made yesterday (10 April) by the bank, comes alongside a wider package of support to support the major city’s electricity distribution network infrastructure through the commissioning of a new 66/11kV grid, augmentation and expansion of transformers and substations, as well as other work including the rollout of smart meter technology.

That will come from a separate senior secured financing, made available through an agreement between ADB and Tata Power’s distribution arm to subscribe to non-convertible debentures worth around US$18.2 million.

Parent company Tata Power was behind India’s first-ever grid-scale BESS of any kind, a 10MW/10MWh system also in Delhi, supplied by Fluence and inaugurated in 2019.

Tata Power DDL, which is jointly-owned by the power company and the Delhi state government, did connected a BESS to its distribution network in 2021, described as India’s first grid-connected community energy storage system. However at 150kWh/528kWh, it is considerably smaller than the pilot for which the Goldman Sachs-Bloomberg Philanthropies grant has been confirmed.

“The battery energy storage system plays a crucial role in building a resilient grid and paves the way for a future-ready power distribution network,” Tata Power CEO and managing director Dr Praveer Sinha said, adding that the grant, “will enable us in ensuring high-quality power supply for consumers and help integrate clean energy into the power supply mix”.

Various different assessments have been given on how much energy storage India needs, in order to integrate its ongoing adoption of renewable energy will maintaining stability and security of electricity supply, as well as achieving complementary aims like bringing electrification to rural areas.

For instance, the national Central Electricity Authority (CEA) said there was a need for 27GW/108GWh of battery storage alongside just over 10GW of pumped hydro energy storage (PHES) by 2029-2030, while the India Energy Storage Alliance (IESA) has forecast the need for about 160GWh of energy storage by the end of this decade.

Meanwhile, with India’s Ministry of Power targeting for battery capacity to be equivalent to 4% of India’s total electricity consumption by 2030, that equates to about 180GWh of battery storage being needed by that time, ADB said.

The national Union Government has backed energy storage with the introduction of tenders through agencies such as the Solar Energy Corporation of India (SECI) and recently pledged “viability gap funding” for 4,000MWh of storage in the current fiscal budget.