BloombergNEF energy storage analyst Helen Kou at IBESA’s workshop at RE+ 2022. Image: Andy Colthorpe / Solar Media

Supply chain constraints impacting the energy storage industry have come at a “critical” stage for the sector’s development, a BloombergNEF analyst has said.

Speaking at a workshop hosted by the International Battery Energy Storage Alliance (IBESA), at the RE+ 2022 industry event in California, BloombergNEF (BNEF) energy storage analyst Helen Kou said that supply chain problems could signal a 29% reduction in forecasted deployments in the US.

The forthcoming edition of the firm’s annual battery pricing reports confirms that the constraints have also been the main driver of “significantly higher” prices along the value chain found this year over 2021, Kou said. The situation is occurring at the same time as customer demand for battery storage grows.

“I think the industry is in this really critical period, where demand is actually kind of clear. A lot of utilities want batteries to put on their grid to help firm renewable [energy generation], but supply is actually quite uncertain,” Kou said in a presentation of some of BNEF’s key findings.

Causes of the issues are well documented and include logistical bottlenecks stemming from COVID-19 and raw materials price rises for lithium batteries.

Kou noted that, for example, some battery storage project components or systems had been shipped as long ago as April 2020, a few weeks into the pandemic, but have gotten caught up in the backed-up queues of containers at ports like the Port of Los Angeles, which had on average 84 ships a day waiting to unload at the height of the pandemic.

They “still have not made it onto the grid today in 2022, because of congestion and logistics constraints,” Kou said. However, the logistics situation, although likely to remain challenging for some time, is now showing some signs of easing, BNEF believes.

Likely to remain a much longer-term problem is raw materials pricing volatility, at least until much more lithium mining capacity comes online towards the end of this decade.

‘Pretty controversial question’

All components of the various subsystems that make up a complete energy storage system have seen inflationary cost rises and higher labour costs over the past few months, Kou said, but battery cells have seen the most increases in costs.

“This is really important because the battery cell is the largest cost component of an energy storage system,” Kou said, and the cathode is the highest cost component of the battery cell.

Price spikes for key cathode materials lithium carbonate, cobalt sulfate and nickel sulfate all affected the industry. Yet although supply constraints of the latter two have eased, the growing popularity of lithium iron phosphate (LFP) batteries for the electric vehicle (EV) sector as well as for battery storage, means lithium carbonate prices “will remain elevated for some time,” BNEF has forecasted.

The firm’s analysts are often asked a “pretty controversial question,” Kou said, namely: whether battery manufacturers were inflating their costs a little bit higher than would be commensurate with commodity price increases.

“After a lot of analysis, our conclusion is that it’s not likely the case,” Kou said.

There are apparently two main reasons for that. The first being that pricing varies heavily, depending on a manufacturer’s size, scale and company strategy. The analyst pointed to data on how greatly different cathode costs were recorded by Korean manufacturers SK Innovation, LG Energy Solution and Samsung in their quarterly filings. The other reason is that so-called ‘Cathode Production Premiums’ have decreased over time.

BloombergNEF was able to calculate what these premiums added on by manufacturers were worth using spot market prices for materials used in LFP and nickel manganese cobalt (NMC) cathodes.

In 2020, the Cathode Production Premiums averaged out at about 2.8, meaning that while it cost around US$10,000 to manufacture each kilogramme of LFP cathodes material, each kilogramme was then priced at around US$28,000 to the customer. As of July 2022, that premium had eroded to a factor of 1.3.

BloombergNEF’s revision to its forecast is broadly in line with that made by rival analysis group Wood Mackenzie Power & Renewables, which recently said 2022 US deployments could be 30% less than previously expected. Alongside energy storage-specific supply chain challenges, Wood Mackenzie also pointed to the uncertain future of tariffs on imported solar modules, causing companies in the solar-plus-storage space to put some investment decisions on hold.

Wood Mackenzie does however think in spite of these challenges, total deployments could reach 13.5GWh for the year and more than 50GWh later this decade. As also acknowledged by BloombergNEF’s Helen Kou, it is clear there is demand for energy storage even with the challenging logistics and price dynamics.

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Gov. Gavin Newsom

California Gov. Gavin Newsom has signed Senate Bill 1340, which extends the existing property tax exclusion for newly constructed, active solar energy systems by two years.

“The COVID-19 pandemic and supply chain delays have contributed to project delivery interruptions, including planned solar energy projects,” Gov. Newsom says in a statement. “That said, this policy has a direct impact on property tax revenues that support essential services at the local level. I believe this two-year, temporary extension strikes an appropriate balance between ensuring that these delayed solar projects are brought online quickly, while recognizing the impacts to local governments.”

“Further, this year’s budget included $300 million to create the Local Government Budget Sustainability Fund, which provides bridge funding to support county governments who are committed to advancing climate resilient projects that will bolster local revenues and contribute to long-term budget sustainability,” Gov. Newsom continues. “In signing this bill, I urge the legislature to consider the impacts to local agencies before bringing forward another extension of this policy.”

“Gov. Newsom’s signature on this two-year tax exclusion will help ensure solar and storage projects continue providing clean, reliable power to California at a time of unprecedented stress on the state’s electric grid,” says Rick Umoff, senior director and counsel for California at the Solar Energy Industries Association (SEIA). “With incentives in the Inflation Reduction Act, California’s solar market is expected to nearly double in size over the next five years to 61.5 gigawatts of electricity generation capacity. This growth requires tens of thousands of workers and billions of dollars of private investment, and companies now have near-term tax certainty to ensure these investments are made in the California communities that rely on a robust clean energy economy.

“The solar and storage industry thanks Senator Hertzberg and dozens of clean energy champions in the Legislature for recognizing the importance of this exclusion and getting it extended,” Umoff adds. “SEIA now turns its focus to securing a well-rounded energy policy in California that strengthens every sector of this critical industry.”

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Suvi Sharma

Independent power producer Silicon Ranch Corp. and solar recycling platform SOLARCYCLE are partnering to process end-of-life solar modules from Silicon Ranch projects through SOLARCYCLE’s advanced, high-recovery recycling platform. SOLARCYCLE’s approach to module recycling recovers approximately 95% of solar panel value, which can be returned to the supply chain and used to manufacture new panels.

With an operating portfolio of more than 145 solar power facilities across 15 states, Silicon Ranch is SOLARCYCLE’s first utility-scale partner. The partnership between the two companies will allow SOLARCYCLE to establish a model for recycling solar materials at the utility scale.

“As the long-term owner of every project in our portfolio, we at Silicon Ranch are deeply committed to our relationships and responsibilities in the communities we serve. These responsibilities include end-of-life equipment management,” says Reagan Farr, Silicon Ranch’s president and CEO. “Embracing this opportunity to pioneer recycling and re-use processes at scale with SOLARCYCLE is a significant step in meeting these responsibilities. This partnership supports our commitments to advance domestic solar manufacturing, a circular solar economy, and economic development opportunities in communities across the country.”

“SOLARCYCLE’s team is taking what we learned in the solar, sustainability and recycling industries and applying it to our tech-driven recycling solutions. We know that scale matters in order to be able to drive costs down and bring quality up,” states Suvi Sharma, CEO and co-founder of SOLARCYCLE. “We are thrilled that our partnership with Silicon Ranch–an innovative leader in bringing solar to scale sustainably and responsibly–will help us make solar across America fully sustainable.”

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One of First Solar Inc.’s manufacturing plants

Azure Power Global Ltd., an independent sustainable energy solutions provider and renewable power producer in India, has entered into an agreement for 600 MW DC of high-performance, advanced thin-film photovoltaic (PV) solar modules from First Solar Inc. The agreement is the first for production from First Solar’s new manufacturing facility in Tamil Nadu, India, which is expected to be commissioned in the second half of 2023. Under the agreement, Azure Power is expected to take delivery of First Solar’s Series 7 PV solar modules from the fourth quarter of 2023 to 2025.

“We are pleased to partner with First Solar with their latest Series 7,” says Rupesh Agarwal, acting CEO of Azure Power. “Having a long-term agreement with global solar modules technology leaders like First Solar is key to de-risking our supply side with the latest technology available in the market.”

First Solar’s vertically integrated manufacturing facility, located near Chennai, is projected to have an annual nameplate capacity of 3.3 GW DC and is expected to produce a version of the company’s Series 7 modules that is optimized for the Indian market.

“Our relationship with Azure Power goes back over a decade and we are pleased that it is the launch customer for a product that has not only been designed for India, but made in India, for India,” states Georges Antoun, chief commercial officer at First Solar. “This deal demonstrates how experienced developers and independent power producers in India are increasingly taking a strategic view on procurement and securing long-term commitments that help tackle the risks of short-term pricing and supply volatility. When working with First Solar, they benefit from certainty of pricing and supply, and a technology that is advantaged in India’s operating environments.”

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Cindy Tindell

Matrix Renewables, the TPG Rise-backed global renewable energy platform, has secured a 4.6 GW portfolio of utility-scale solar energy projects across the central U.S. It has also signed a broader development joint venture with the projects’ original developer, SolarStone Partners. The two will jointly develop the 4.6 GW portfolio, while exploring and originating additional opportunities across different markets in the U.S.

“Matrix is very excited to partner with SolarStone in the further development of this portfolio and looks forward to our ongoing collaboration on new opportunities across the country,” says Cindy Tindell, managing director and head of U.S. business for Matrix Renewables.

“We could not ask for a better partner than Matrix Renewables to help SolarStone expand its U.S. utility scale renewables business,” adds Joe DeVito, CEO of SolarStone.

Matrix Renewables’ current portfolio is comprised of 2.3 GW of operational, under construction, or near ready-to-build solar PV, wind and storage projects, with a further 7.3 GW pipeline.

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APsystems, a multi-platform solar MLPE technology company, has unveiled the QT2 series, a four-module, three-phase microinverter product line for commercial, industrial and residential 3-phase solar applications.

The second generation of APsystems’ 3-phase quad microinverter, the QT2 comes in various models being launched in multiple global regions: 208Y/120V and 480Y/277V models in the U.S., 127/220V in Latin America, and 380V for Europe and Australia. The QT2 offers higher power output than the previous generation product; 1,800W (480V) and 1,728W (208V) in the U.S., and 2,000W in EU, LATAM and Australia markets.

The QT2 is ideal for use with four high-capacity commercial PV modules from 450W to 600W+, enabled with Reactive Power Control (RPC) and UL 1741 SA (CA Rule 21) compliant. With high DC input current support up to 20A, the QT2 has been engineered to pair with the highest-power modules available in the market today, including the 182/210 cell panels.

“The QT2 series represents a significant breakthrough in solar panel current and power, power density, conversion capability,” says Yuhao Luo, APsystems’ CTO. “This powerful capability combined with intelligent firmware, built-in rapid shutdown compliance, and fast installation makes this a truly unique product in the marketplace.”

The QT2 series continues to build on the APsystems line of multi-module microinverters, offering reduced logistics costs, faster installation, improved communication and connection features, and a wide MPPT voltage range for greater energy harvest during low light conditions.

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The Hecate Grid Johanna 80MWh BESS in Santa Ana, California. Image: Ingeteam.

Hecate Grid has progressed a 300MW/1,200MWh battery storage project in California, US, signing off-take contracts for its stored energy and gaining a key local authority approval.

The independent power producer (IPP) said last week that it has achieved what it described as two key milestones in the development of Humidor Battery Energy Storage System (BESS) Project, in Los Angeles County, California.

That included contracts signed with two California energy suppliers, the major investor-owned utility (IOU) Southern California Edison (SCE) and with MCE, one of the state’s community choice aggregator (CCA) groups.

CCAs are like non-profit utility companies which allow customers to choose where their energy comes from, with many electing to offer renewable energy-rich tariffs.

The contracts are for resource adequacy (RA), the main mechanism through which load-serving entities in California have to ensure they have sufficient energy resources available. RA contracts are typically long-term, typically providing secure revenues to BESS asset owners and investors over terms in excess of 10 years.

RA is particularly important in helping utilities and the main California grid operator CAISO ride out peak demand periods and over four-hour windows throughout the day and night. Contracting for RA has therefore led to a proliferation of four-hour duration battery projects in California.

Hecate Grid’s Humidor project will similarly charge up from the grid during times of surplus renewable energy and at off-peak times when power prices are cheaper and then discharge into the grid when demand peaks.

As widely noted, battery storage is playing an increasingly major role on the CAISO grid in managing the crunches in supply and demand, especially from the 4pm to 9pm daily window when solar PV generation tails off and evening demand for power from consumers kicks off. That role was brought to widespread attention during the August heatwaves, when there was serious risk of CAISO having to enact rolling outages – a risk which was eventually averted. More than 3GW of battery storage was discharging to the grid at certain times during evening peaks in that heatwave.

Hecate Grid said it has also received site plan approval from LA County officials for Humidor. It expects to have the project commissioned and in commercial operation in H1 2024.  

The IPP was started up by US renewable energy developer Hecate Energy as a joint venture (JV) with investor InfraRed Capital Partners and is now a separate entity, having been spun out.

The company brought online Johanna Energy Storage System, a 20MW/80MWh standalone BESS project in Santa Ana, California, in late 2021. Johanna is serving as a pilot project for SCE to assess how battery storage can help the utility match its electricity supply and demand, which are increasingly fluctuating with the addition of variable renewable energy to the CAISO energy mix.

Hecate Grid is also now building a further three California BESS projects totalling 105MW/210MWh in Riverside County and aims to issue Notices to Proceed on a portfolio of 750MW/1,500MWh of battery projects in Texas’ ERCOT market later this year, it claimed.

“Energy storage packs a one-two punch. It supports wide scale deployment of renewable energy while mitigating energy costs for consumers,” Hecate Grid VP of business development Gabe Wapner said.

2.15GWh buildout in SCE territory nears completion

In related news, the construction partner contracted to deliver 2.15GWh of battery storage projects in Southern California Edison (SCE) service territory for developer Ameresco said work is nearing completion.

BEI Construction said the three-site project, on which construction began in April 2022, should be finished by the end of this year.

One of the biggest battery storage buildouts ever contracted, SCE signed up Ameresco for the total 537.5MW/2,150MWh of projects in Southern California to help it manage its peak demand.

The contracts had originally been signed and then announced in 2021 on the basis that they would be delivered before this August, helping to mitigate the fierce California summer peak in demand.

However, in April Ameresco said it was encountering circumstances amounting to force majeure events that would prevent it from meeting the deadline, citing factors including COVID19-impacted shipping and supply chains and new rules in China on the safe import of batteries.

By the beginning of August, when Ameresco announced its most recent financial results, CEO George Sakellaris said project teams were “working around the clock” to get them finished as soon as possible, by the end of the year.

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Habitat’s optimised assets include the hybrid lithium-vanadium BESS at the Energy Superhub project in Oxford, England (pictured). Image: Pivot Power.

UK-based Habitat Energy has expanded into the US power market with plans to optimise a portfolio of 60MW of battery energy storage system (BESS) assets.

With a partnership signed with Glidepath Power Solutions, Habitat will optimise the company’s 10MW/10MWh Prospect battery storage project in West Columbia, Texas. Habitat will also optimise Glidepath’s 50MW Byrd Ranch storage project in Sweeny, Texas.

The optimisation of the projects will be achieved via the use of Habitat’s trading platform, with full route-to-market capabilities for both the wholesale and balancing markets. It is based on the company’s proprietary software PowerIQ, which combines algorithmic forecasting and AI.

Habitat will aim to increase its overseas portfolio building on its over 700MW of storage capacity in the UK.

For the US market, Habitat will not only focus on battery storage optimisation, but also on renewables and hybrid facilities.

The firm stated that it recognises the substantial revenue opportunity that sophisticated AI optimisation can deliver by trading across Day Ahead and Real Time markets in addition to dynamically analysing hub and node price differentials in real time.

Habitat and Glidepath are both portfolio companies of Quinbrook Infrastructure Partners.

This is the latest development in Habitat’s expansion of its services into North America. In May 2021, the firm agreed a partnership with Canadian Solar, one of the world’s largest solar technology and renewable energy companies.

As reported at the time, the partnership would see the Ontario based company offer Habitat enhanced technology solutions for developers and owners of battery storage assets across its operations, enabling them to capture additional revenue from trading optimisation.

To read the full version of this story, visit Solar Media’s UK energy transition site, Current±.

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Fluence Cube units at one of the company’s Gridstack utility-scale BESS projects. Image: Fluence.

Large-scale fire testing of Fluence’s battery storage solution showed that thermal runaway in one ‘Cube’ would not spread fire to surrounding units.

The system integrator said last week that testing of its products against UL9540A – considered one of the main standards for energy storage safety – has been successfully completed.

Fluence’s sixth generation of products, launched in 2020 and currently used in all its projects globally, were put through the tests, assessing their ability to limit the spread of potential fire to subsystems without thermal runaway propagating from one to the next.

Fluence alluded to the Cube, which is the hardware building block of its Gridstack systems for large-scale utility use, having surpassed the safety testing requirements in independent testing conducted by international certification group DNV.

UL9540A doesn’t have a specific pass or fail criteria as such, but the tests, formulated in partnership with the US National Fire Protection Association (NFPA) are widely considered indicative of system and component adequacy for safety, and by extension bankability for customers looking to procure large-scale battery storage.

Increasing numbers of technology providers are publicly sharing their results, with UL itself hosting some – though not all – providers’ results on its own website.

“The results of Fluence’s large-scale fire test show that, in the unlikely event a Cube goes into thermal runaway, the product is designed to contain extreme internal battery failures to a single Cube and not spread through an energy storage system,” DNV business development leader Martin Plass said.

Plass described the test as “particularly impressive,” because full-scale fire in the originated Cube didn’t cause internal temperatures in surrounding units to reach levels high enough to cause thermal runaway, “even without intervention from external emergency personnel”.

That means if one Cube has problems like an internal short circuit caused by mechanical damage or even defective cells, the rest of the battery storage system can be restored to full operation safely, Fluence claimed.

Fire safety: a key priority for integrators and customers alike

Safety is of course a major focus for the battery storage industry, with several industry sources telling Energy-Storage.news at the Electrical Energy Storage Europe (ees Europe) event earlier this year that there is no bigger priority for its customers.

While fires are rare, there have been a number that have caused concern, and anecdotally it seems local community reluctance to host new utility-scale battery storage facilities focuses on the safety aspect of lithium-ion batteries.

Most people are willing to have lithium batteries in their pockets in their cellphones, or even in their ears in their earbuds and headphones, but nonetheless numerous newspaper reports emerge from places like the UK – where a 20MW battery energy storage system (BESS) burned out in 2020 – of groups of residents opposing larger scale systems in their local area.

One fire expert told Energy-Storage.news earlier this year that although fire safety is and should remain of utmost importance, often the general public and even academics unconnected with the industry are unaware that, for example, failures in large-scale energy storage are unlikely to cause the sort of explosive events that one high profile academic research report warned of.

Paul Rogers, a senior firefighter and energy storage safety subject matter expert at Energy Safety Response Group (ESRG), described the authors of that report as lacking understanding of what happens when failures occur at system level, in an interview published at the beginning of this year in our journal PV Tech Power.

Meanwhile, Paul Hayes, general manager of American Fire Technologies and a witness to Fluence’s testing, said that Fluence had taken “a significant step forward by performing this full large-scale installation-level fire and explosion test”.

“Few companies understand how energy storage systems will perform under a large-scale failure and how to help protect first responders during such an event,” Hayes said.

“The test did not result in a deflagration event and, even with a fully engaged Cube, the failure was limited to one Cube with no propagation between containers at distances below code requirements. This test will help define safety standards moving forward.”

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Ove Petersen, CEO of GP Joule, and Joachim Goldbeck, CEO Goldbeck Solar Group

The Goldbeck Solar Group has acquired the North American PV-EPC business unit of GP Joule Group and is now the sole shareholder of the two North American companies: GP Joule PV Canada Corp. and GP Joule PV USA Inc. With this acquisition, GOLDBECK SOLAR is strengthening its position in the Americas, having existing operations in Chile and Mexico.

The purchase includes the acquisition of the entire GP Joule EPC NA team as well as the use of the local brand for a limited period.

“Our new local team and their expertise are the basis for this strategic step. They understand the culture and the market specifics,” says Joachim Goldbeck, CEO of Goldbeck Solar Group. “With our new colleagues, we have a strong foundation to master the opportunities and challenges of the North American market. The cultural fit of the companies was a fundamental criterion, and we are now looking forward to growing the business together in Canada and the USA.”

“This comes at a perfect time,” states David Pichard, CEO of GP Joule EPC NA. “Over the last 10 years, we have grown exponentially a team delivering world class assets in the utility scale market. Becoming part of the Goldbeck Solar family not only brings immediate synergies in systems and supply chain but also accelerates our expansion in operations and maintenance services to continue providing the best value to our clients”.

“We are convinced that we have found the right partner and buyer for our companies in North America in Goldbeck Solar,” adds Ove Petersen, co-founder and CEO of GP Joule. “We are placing our EPC business in Canada and the USA, which has developed excellently in recent years, in good hands and can focus even more strongly on our growth in Germany and Europe.”

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