Robert Sanchez, president and CEO of New York utility Orange & Rockland (left) with Key Capture Energy project engineering and construction manager Matthew Rariden at KCE NY 3 in Pomona, New York. Image: Key Capture Energy.

This is the second and final instalment of our interviews with grid-scale battery energy storage developers on the market for battery storage in New York, a state with high ambitions and tall challenges when it comes to clean energy.

New York consistently ranks among the top US states for energy storage according to consultancy and research groups like Wood Mackenzie Power & Renewables.

But the drop-off from the standout leaders like California or Texas down to New York is a big one. Texas is at around 2GW of large-scale deployments and California more than 4GW of cumulative installations, while New York has scraped together just over 110MW to date, albeit with more than a gigawatt of contracts in place.

New York’s high ranking is down largely to the ambitions of the state’s policymakers, who have set a deployment target of 6GW by 2030 and an interim 3GW by 2025 target, expected to comprise largely of what the state defines as ‘bulk’ storage assets of over 5MW each.

We hear directly from two leading developers of energy storage resources in the state, who explain what the industry can get excited about as the market develops – and what it should be wary of.

These interviews, with Kelly Sarber of Strategic Management Group, and Jeff Bishop of Key Capture Energy, were used in part for the recent feature article, ‘Hunting the ‘missing money’ in New York’s energy storage market’.

The article ran in our quarterly journal PV Tech Power (Vol.34), which you can subscribe to, to read in full, or read an exclusive extract of the article at Energy-Storage.news, here.

In today’s instalment, we speak with Jeff Bishop, CEO of Key Capture Energy. Key Capture Energy is headquartered in Albany, Upstate New York, and while it has developed and owns projects in various states – with a growing portfolio in Texas – the company holds its home state dear.

Key Capture Energy (KCE) actually delivered New York’s first-ever grid-scale battery storage project back in 2019, making it a genuine first mover. It continues to work on other projects in the state, with its latest, KCE NY 6, a 20MW/40MWh asset, expected to go online soon.

The company develops projects to own and operate, and Bishop says that he’s confident New York will have a robust energy storage market within the next couple of years, and says it’s probable the 6GW target will even be surpassed, such is the fundamental need for storage in New York’s energy system.

You can read yesterday’s published interview with Kelly Sarber, CEO of Strategic Management Group, here.

We’ve heard it has been quite challenging to get projects off the ground in the state, but can you briefly summarise Key Capture Energy’s view of the energy storage market in New York?

We’ve been developing in New York state since 2017. And we have a portfolio of about 1,000MW of projects that are under development there, including two projects that are currently in operation, KCE NY1 and KCE NY 3, we have one that is at the very end of construction now, KCE NY 6, over near Buffalo.

As for the rest of the state, the key question just has been how do you get the ‘missing money’? Where New York doesn’t have the volatility of a market like Texas and so hence, there’s not really the same value proposition there is down in Texas. But with New York, they have the goal through the Climate Leadership and Community Protection Act (CLCPA) of 100% zero-emissions generation by 2040.

So as we look at everything that New York is doing: from distributed solar to massive amounts of offshore wind, to trying to retire all the New York City and Long Island fossil fuel plants, to increasing amounts of wind, utility-scale solar, storage is desperately needed.

And so there was a original goal back in 2018, 2019, for 3,000MW by 2030. Governor Hochul, she doubled it to 6,000MW by 2030. Just recently, NYSERDA, along with the Public Service Commission, came out with a proposal on how the market would be structured for battery storage projects.

We really think that after this goes through all of the regulatory processes, and once they start issuing RFPs, that this will be a way that we’re going to be seeing storage really taking off in New York State by 2025.

That implementation plan from NYSERDA and the New York Public Service Commission (PSC), Energy Storage Roadmap 2.0, includes proposals for new incentive schemes to support large-scale energy storage, which would be tendered for. Key Capture Energy was one of the few available to avail of the Market Bridge Acceleration Bridge Incentive scheme that was previously in place. Which of your projects got that?

KCE NY 1 and KCE NY 6 both received a Market Acceleration Bridge Incentive (MABI). Those were [state] grants in order to be able to start demonstration projects, and then KCE NY 3 is a 4.4 megawatt project that was won in a non-wires alternatives RFP for one of the New York utilities (Orange & Rockland).

The MABI, this original pot of US$150 million, New York State hasn’t seen the full take-up of those projects in the way that everybody was expecting, and that’s because the cost of construction went up dramatically in the past year and a half.

We are expecting, [assuming getting regulatory approval for the tenders take most of 2023], New York will probably do a 1,000MW solicitation in 2024, followed by another 1,000MW in 2025, and another 1,000MW in 2026 for the Index Storage Credit.

Functionally, it acts like a Contract for Difference (CfD), and it both incentivises battery storage owners to have really good software that can be able to optimise revenues, in a way that the New York grid needs them, while also giving a financial backstop to be able to get financing for these projects.

KCE NY 1. Image: Key Capture Energy.

Is there anything you can share with us, in terms of lessons learned about how to operate and optimise battery storage in New York from the first couple of years of operation of the 20MW KCE NY 1 project?

We’ve invested very heavily, internally and on systems to really be able to have great algorithms that can allow batteries to participate in day ahead, real time market bid-in based on machine learning and artificial intelligence (AI).

We always have to start with small projects, in order to learn, be able to get our software working correctly for revenue optimisation, and then we can scale. We did that in Texas, with 10MW projects, we’re now building 100MW projects.

In a similar way, in New York, KCE NY 6, it’s a two-hour battery system. We’re probably going to be doing a fair number of two-hour systems in New York. So, we really needed to get that one online this year, so that way, whenever we build 150MW projects in the upcoming years, that we already have the software that’s ready to go. For us, that’s been the approach, and that’s been a learning and anytime you make assumptions on how batteries can actually bid in the market, they behave slightly differently, the rules are slightly different, the software is slightly different, so that really is key.

We’ve heard from Dr William Acker, executive director of trade group NY-BEST, that the new scheme for solicitations, the Index Storage Credit, has really come after extensive consideration of why the MABI scheme had slow uptake and that NYSERDA and PSC have tried to design a scheme that will work better.

Ever since I started the company in 2016, I’ve always been trying to figure out when talking with legislators with regulators, what is the storage [equivalent to] the Renewable Energy Credit (REC)?

The renewable portfolio standards are pretty well defined, where you have 1MWh of carbon-free electricity, that equates to one renewable energy credit (REC). It’s fungible, you can trade on it, you can contract on it. It’s really easy.

With storage, it’s always the question of: what are you procuring? And California has been able to do it through their resource adequacy programme. Other states haven’t quite followed that, where it’s procuring the capacity.

So instead here [in New York] we are excited by the Index Storage Credit, and there’s been a lot of interest from regulators on it, because everyone, every state, is trying to figure out exactly how to procure. We think that this might be the start of a trend.

Some of the other challenges for energy storage in New York that we’ve heard about include long queues for grid connections, and lack of availability of suitable land. Meanwhile there are other challenges to the industry today that aren’t particular to New York, such as supply chain and procurement. If the market is to take off from around 2025 as you predict, could any of those – or other factors – pose challenges to getting New York to 6GW by 2030?

My macro view is: good projects will always get built. It’s just a question of timing.

When I started a wind energy company in Houston in 2006, we had been developing a project in Wisconsin since 2003. Kept bidding it out, kept bidding it out, had to extend lease terms multiple times. And I believe in 2018, the project finally got built.

It’s going to be something similar here, where for the projects that are in really key pockets, where energy storage can provide most value, interconnection may take longer, permitting may take longer.

All the normal things, whether it’s extreme delays on main power transformers, whether it’s waiting for the battery storage manufacturing industry to scale, there are headwinds, but ultimately the good projects will be built. As we’re looking at New York, with all of their climate goals, 6,000MW is going to be the minimum of storage, quite frankly, where they’re going to be needing longer duration storage coming up, they’re probably going to be needing some clean hydrogen. They’re going to be needing a lot more than just 6,000MW.

[In New York] we regularly bid in with both onshore wind, utility-scale solar, as well as offshore wind, and it’s always just a question of when one of those projects will hit.

The state needs it all, and then the energy storage Roadmap 2.0, I believe they’re trying to get a third of energy storage into Upstate. So it’s going to be needed everywhere. Energy storage projects definitely help optimise the existing transmission system. The new transmission systems coming in are also going to be providing all sorts of benefits. Overall, it’s definitely ‘all of the above’, as far as where we’re going to be seeing storage, and where we’re going to be seeing new generation.

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Rendering of the Waratah Super Battery, a project Powin will deliver in Australia which will be the largest BESS in the world. Image: Powin Energy.

Battery energy storage system (BESS) integrator Powin has announced a 3GWh purchase agreement with China-based lithium-ion battery supplier Rept.

Rept Battero, part of stainless steel and nickel firm Tsingshan Industry, has been validated as a supplier for Oregon-based Powin and will provide the firm with over 3GWh of lithium iron phosphate (LFP) battery cells in the next 12 months.

“As demand for electric vehicles and stationary storage continues to surge, building a diverse network of highly qualified suppliers is essential. REPT not only meets our extensive safety and performance requirements but also has the financial backing investment strategy and global footprint needed to successfully keep up with this booming industry,” said Stuart Bolland, Powin’s chief operating officer.

Rept is currently ranked as a Tier 2 suppler in Benchmark Mineral Intelligence’s widely-cited Tier system. Benchmark’s Tier 1 suppliers are CATL, Envision, BYD, LG Energy Solution, Panasonic, Samsung, SK Innovation and, as of mid-2022, Northvolt and Sunwoda.

Powin said Rept’s batteries have “…excelled at meeting key industry safety standards of UL1642, UL9540a, and UL1973, but have also fulfilled all the requirements put forth by Powin’s own evaluation framework”.

Powin’s previously-announced battery supply deals have been with a mix of Tier 1 and non-Tier 1. In 2020 it announced a procurement deal with CATL while it tied up deals with EVE Energy in 2021 and Norway-based company Freyr last year, with aims to start production in 2024.

The company has a battery lab in its home state, which it recently expanded, where it can test battery cell performance of lithium-ion technology but also newer chemistries which haven’t yet penetrated the grid-scale segment.

When asked about the firm’s approach to technology during a wide-ranging interview at Energy Storage Summit USA last month, Powin president Anthony Carroll told Energy-Storage.news:

“We have no concern around our LFP technology. If anything, I want to make sure that if somebody comes up with the next cool thing I want to either own it, think of it or buy it, so I don’t get outsmarted by another company.”

Read more news about Powin and its projects here, including the start of construction on the first utility-scale BESS in Idaho, its 1GW UK pipeline and groundbreaking on a 1.9GWh BESS in Australia, billed as the largest in the world.

The company has 6GWh of BESS in operation or construction and an additional contracted pipeline of 11GWh.

Rept recently revealed plans to IPO later in 2023.

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.

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According to nonprofit group the SUN DAY Campaign, a review of fresh data from the U.S. Energy Information Administration (EIA) and the Federal Energy Regulatory Commission (FERC) shows that U.S. wind and solar combined now provide more generating capacity and produce more electricity than coal. 

In the first two months of this year, electrical generation by solar (including small-scale distributed systems) grew by 6.7% compared to the same two-month period in 2022 – faster than any other energy source. This was driven in large part by growth in “estimated” small-scale (e.g., rooftop) solar photovoltaic, whose output increased by 23.6% and accounted for 32.5% of total solar production.

The mix of utility-scale and small-scale solar PV plus utility-scale solar thermal provided 3.9% of the nation’s electrical output. 

Simultaneously, electrical generation by wind increased by 6.6% compared to the same period a year ago and provided 12.2% of total electrical generation. Thus, wind and solar combined provided 16.1% – or nearly one-sixth – of U.S. electrical generation in the first two months of 2023. 

By comparison, electrical generation by coal plummeted by 32.7% and provided just 16% of total U.S. electrical generation.

When generation by all renewable energy sources (i.e., including biomass, geothermal and hydropower) is considered, renewables accounted for nearly a quarter (24.1%) of total generation and out-produced coal by 50.8%.

Electrical production by the mix of renewables also surpassed that of nuclear power by 21.9%.

Data from FERC – also for the first two months of 2023 – show that wind energy’s share of total available installed utility-scale generating capacity has grown to 11.5% while that of solar is now at 6.6%. Combined, wind and solar account for 18.1% of installed U.S. generating capacity. On the other hand, coal’s share has continued its downward slide and is now just 17.1% of the total.

Moreover, the mix of all renewables now accounts for 27.6% of the nation’s generating capacity and appears to be on track for rapid expansion over the next three years. 

Between now and February 2026, FERC anticipates 17,690 MW of “high probability” net capacity additions by wind and 77,791 MW of “high probability” solar.

FERC also reports that there may actually be as much as 66,322 MW of wind and 213,969 MW of solar in the three-year pipeline.

In contrast, no new coal capacity additions are anticipated, and total installed coal capacity may actually shrink by 28,507 MW. The net “high probability” capacities of both oil and natural gas are also seen as declining – by 1,572 MW and 574 MW, respectively – while that of nuclear power may fall by 123 MW.

“The trend lines are fairly obvious,” notes Ken Bossong, the SUN DAY Campaign’s executive director. “The gaps between the installed capacity of, and electrical generation by, renewable energy sources – led by wind and solar – and those of coal and nuclear power are not just growing but accelerating rapidly.”

Photo by Andreas Gücklhorn on Unsplash

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The U.S. House of Representatives has passed the Limit, Save, Grow Act of 2023, a bill intended to increase the federal debt limit while decreasing spending, while repealing nearly all of the clean energy measures enacted by the Inflation Reduction Act (IRA).

“House leadership is attempting to halt the nation’s accelerating momentum toward a clean energy future,” said Gregory Wetstone, president and CEO of the American Council on Renewable Energy (ACORE). “The IRA tax incentives that would be repealed by this legislation have spurred American companies to announce dozens of new clean energy generation and manufacturing projects.

“Backtracking on these popular programs would harm our economy, weaken American competitiveness in the booming global clean energy marketplace and undermine our climate goals,” he added.

The 217-215 vote was along party lines: Only four Republicans joined 211 Democrats to vote “no.”

“The Inflation Reduction Act has sparked billions of dollars of new clean energy investments and supported a domestic manufacturing renaissance,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA). “The 255,000 Americans in the U.S. solar and storage industry are calling on congressional champions to defend these job-creating policies.”

Jason Grumet, CEO of the American Clean Power Association (ACP), highlighted the deeply divisive nature of the bill.

“No American industry enjoys being used as a pawn in partisan political negotiations,” he said, noting, however, that the ACP is still confident that the Congress and Biden administration “will not interrupt the burst of private sector investment in American clean energy production and manufacturing.”

“In the last nine months, 46 new clean energy manufacturing and production facilities have been announced, creating high-wage jobs in communities across the country,” he noted.

The vote is likely to set off rounds of negotiations among Republican leadership, key Democrats and the Biden administration.

“We urge House leadership to negotiate a clean debt limit increase, avoid the risk of a national default, and support the ongoing renewable energy transition that Americans want and scientists say we desperately need,” Wetstone remarked.

Photo by ElevenPhotographs on Unsplash

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A unit Brenmiller installed in New York, US. Image: Brenmiller Energy.

Thermal energy storage solution firms Brenmiller and Kraftblock have agreed to deploy large-scale commercial projects for large European utilities, totalling 2GWh and 150MWh respectively.

Brenmiller Energy has signed a non-binding term sheet with an unnamed ‘Leading Global Clean Energy Utility Partner’ and developer Green Enesys Group for nine projects totalling 2GWh of thermal energy storage capacity.

The company’s solution, bGen, charges by heating rocks and discharges by releasing the accumulated heat to heat pressurised water and generate steam for electricity.

Under the agreement, Brenmiller’s bGen units will be produced at its gigawatt-scale production facility in Israel. Once the projects have been deployed the parties may join forces to build-out a manufacturing facility in Europe.

The term sheet also includes an option for the utility partner to become a strategic minority investor in Brenmiller.

Meanwhile, Germany-based firm Kraftblock has provided Energy-Storage.news with additional details on a project it announced in late 2022 with Dutch utility Eneco and PepsiCo, the soft drinks and snacks conglomerate.

Lay’s crisps at a PepsiCo facility north of Amsterdam will be fried using Kraftblock’s net-zero heat system powered by wind energy from Eneco.

The two-module system will replace an existing gas-fired boiler to and will have a thermal energy storage capacity of 70 MWh, making it the biggest commercial high-temperature energy storage project in the world, Kraftblock claimed.

A spokesperson told Energy-Storage.news that after phase one, three more modules will be deployed bringing the total capacity to 150MWh and increasing the emissions reduction to 98%, from 51% in phase one.

They added that Kraftblock is targeting markets like steel, metal processing, ceramics, food, paper and chemicals for its commercial rollout.

The Long-Duration Energy Storage Council (LDES Council) last year released a report that said thermal energy storage has the potential to expand the overall installed capacity potential of LDES by to 2-8TW by 2040, versus 1-3TW without.

Brenmiller, which is based in Israel and currently listed on both the Nasdaq and Tel Aviv Stock Exchange, recently announced plans to voluntarily de-list from the latter, with all ordinary shares transferred to the former which would not be affected by the move.

Read more coverage of thermal energy storage projects here.

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The bubble on the right is the ‘dome’ where CO2 is stored in Energy Dome’s 2.5MW/4MWh plant in Sardinia, Italy. Image: Energy Dome

Energy Dome, the European startup with an energy storage system technology based on CO2 and targeted at long-duration applications, has closed its Series B funding round.

The Italy-headquartered company announced the €40 million (US$44.15 million) closing today. The round was led by Eni Next, the venture capital (VC) arm of Italian oil company Eni and co-led by the VC arm of private bank Intesa Sanpaolo, which is also Italian.

Also taking part were a mix of existing and new investors into the company, including Barclays Sustainable Impact Capital, Japan Energy Fund and US climate tech accelerator Elemental Xcelerator.

Energy Dome makes a ‘CO2 Battery’ that compresses carbon dioxide gas while storing heat produced by the adiabatic compression process, then liquifying the CO2. The evaporating CO2 is subjected to the stored heat and then expanded under pressure to drive turbines that generate electricity in a closed loop process.

The startup has one megawatt-scale commercial demonstration project in operation already and claims the technology can charge and discharge with a roundtrip efficiency (RTE) of around 75%. While that is lower than lithium-ion battery storage, which typically achieves higher than 95% RTE, Energy Dome claims it can be a much cheaper way to store energy for hours at a time.

Standardisation means rapid Capex reduction, company claims

In a recent interview VP of strategy, corporate development and investor relations Ben Potter told Energy-Storage.news the technology can come in at half the Capex of lithium-ion, while around 10 hours of storage is the CO2 Battery’s ‘sweet spot’.

Potter noted that founder and CEO Claudio Spadaccini, came up with the idea and developed it through combining various principles learned from working as an engineer and entrepreneur in different industries.

One result of that is that the technology can be assembled using off-the-shelf components which Energy Dome sources from Tier 1 OEMs in existing industries, rather than requiring a whole set of bespoke or heavily customised components made-to-order.

“What that translates into is very scalable supply chains which are ready to go, and we don’t have to build a factory to go to market, we just get an order from customers and we place back-to-back orders from our suppliers,” Potter said.

Energy Dome also believes there is good scope for cost reduction. It is currently selling its ‘first-of-a-kind’ CO2 Battery at €220kWh per kilowatt-hour including EPC cost and margin for a 20MW/200MWh configuration. However, according to Potter, the company could get Capex down by 44% if making between 30 and 50 more identical units.

Artist rendering of a large-scale CO2 Battery project with solar PV. Image: Energy Dome.

The company said today that the latest round brings the amount invested into it to EU54 million since it was founded in 2020. In January, it also got €17.5 million (US$18.5 million) grant and equity financing from the European Commission-founded European Innovation Council.

Series B proceeds will be used to further commercialise the technology and help Energy Dome expand into key markets, with the company naming the US as a market of “specific focus”.

There is a claimed pipeline of 9GWh opportunities for the CO2 Battery across markets in the Americas, Europe and Asia, while the company will have built its first two full-sized 20MW/200MWh units and have them operational by the end of 2024 – the project in operation in Sardinia since last summer is a smaller-scale and shorter duration 2.5MW/4MWh system.

Energy Dome has attracted the attention of some big names, with Denmark’s Ørsted signing a Memorandum of Understanding (MoU) last September to explore the feasibility of a 200MWh CO2 Battery project.

While the company therefore does see a massive addressable market opportunity, and like other long-duration energy storage (LDES) providers sees the global drive to decarbonisation as an inevitable driver of demand, Potter said there are challenges that need to be overcome.

These challenges are not to be found in the technology space, but rather in markets, policy and regulation, with few energy markets around the world valuing the capacity value of several hours of stored energy.

This shared challenge for the LDES industry is about “solving the market offtake side,” Potter said.

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The House of Representatives, the lower chamber of the US’ legislative body, Congress. Image: NATO North Atlantic Treaty Organization.

Clean energy trade bodies ACP, ACORE and SEIA have denounced an attempt by Republicans to roll back the Act, which has spurred unprecedented investment in the US market.

House Bill ‘H.R.2811 – Limit, Save, Grow Act of 2023′, put forward by Republican Representatives passed in the House yesterday (26 April). It would significantly scale back the the federal support for renewable energy and energy storage enabled by the Inflation Reduction Act (IRA), which came into law this year, as well as other non-energy federal financial support schemes.

“This bill increases the federal debt limit and decreases spending. It also repeals several energy tax credits, modifies the permitting process and other requirements for energy projects, expands work requirements for the Supplemental Nutrition Assistance Program (SNAP) and other programs, and nullifies regulations for the cancellation of federal student loan debt,” the Bill reads.

The Bill “…repeals or modifies tax credits for renewable and clean energy, energy efficient property, alternative fuels, and electric vehicles”.

‘Putting private sector investment in clean energy at risk’

Clean energy trade bodies have been quick to slam the move, pointing out that the Inflation Reduction Act (IRA) has spurred billions in investment and created thousands of high-paying jobs since it was announced.

The American Council on Renewable Energy (ACORE) said: “With passage of the Limit, Save, Grow Act of 2023, House Leadership is attempting to halt the nation’s accelerating momentum toward a clean energy future. The IRA tax incentives that would be repealed by this legislation have spurred American companies to announce dozens of new clean energy generation and manufacturing projects that are driving economic development, lowering energy costs, and creating good-paying jobs in red and blue states across the country.”

American Clean Power Association (ACP) CEO Jason Grumet, pointing to this being part of a broader debt ceiling debate, said: “No American industry enjoys being used as a pawn in partisan political negotiations. The American Clean Power Association is nevertheless confident that Congress and the Administration will not interrupt the burst of private sector investment in American clean energy production and manufacturing.”

The potential repeal of the Inflation Reduction Act came up during a panel discussion at last month’s Energy Storage Summit USA in Austin, Texas.

Developer Jupiter Power’s Caitlin Smith said there was state-led pushback to the Act and that there was the potential for lawmakers to “muddle the legislation”, but law firm MWE’s Carl Fleming said reckoned that “…at a federal level, you can’t unwind this.”

The Bill would also establish discretionary spending limits for FY2024-FY2033, nullify parts of planned student loan debt cancellation, and establish new work requirements for non-energy federal schemes like Medicaid, SPAN and TANF.

The Republic representatives bringing the bill, primarily Jodey Arrington and Greg Murphy, are also hoping to increase investments in the country’s fossil fuel sector.

“The bill also includes various provisions related to the development of energy resources such as oil, natural gas, and minerals. For example, the bill requires additional federal oil and gas leasing, reduces or eliminates certain royalties and fees, and expedites the permitting process for various energy projects,” it reads.

The Solar Energy Industries Association (SEIA) pointed out that new solar module manufacturing investment announcements since the Act would bring the US’ capacity to 47GW a year, and cautioned strongly against rolling it back.

“Repealing the IRA will stop this investment in its tracks, pulling the rug out from under the communities that are counting on these factory jobs,” it said.

“Playing games with the debt limit has very real consequences for businesses, workers and the entire economy. The IRA is expected to create an additional 200,000 jobs and US$600 billion in private investment in the solar industry alone over the next decade. Companies need to trust that the policy landscape will remain stable in order to put forward this level of capital, and it’s up to responsible lawmakers to ensure that certainty remains.”

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Construction picture of the Ultim Cells factory in Warren, Ohio as structural steel went up in 2021. The plant is now up and running. Image: Roger Mastroianni for General Motors

LG Energy Solution sees lithium iron phosphate (LFP) battery production to meet demand for stationary energy storage systems (ESS) in the US market as a “new growth engine” for the South Korean manufacturer.

The South Korean company announced its Q1 2023 financial results today, reporting KRW633 billion (US$470 million) operating profit from consolidated revenues of KRW8.747 trillion. EBITDA was KRW1,149 billion, versus KRW676 billion in the same quarter of the previous year and 13.1% up from the previous quarter.  

The company emphasised the importance of the US electric vehicle (EV) market in growing sales, where it has established a manufacturing presence since 2012. Indeed, last October LG Energy Solution highlighted that the US was considered the most important market by the company, aiming to put 45% of its global footprint in the US, with 35% in Asia and 25% in Europe.

More recently, it hailed the coming online of a manufacturing plant in Ohio through its Ultim Cells joint venture (JV) with General Motors, but perhaps more importantly emphasised the impact of the Inflation Reduction Act’s (IRA’s) tax credits.

Yesterday’s financial results are LG Energy Solution’s first in which the value of tax credits will be reflected in reported revenues. LG Energy Solution said of its Q1 operating profit of KRW633 billion, just over KRW100 billion would be the estimated tax credit amount.

LG Energy Solution expects between 15GWh to 20GWh of its batteries manufactured in the US will qualify for advanced manufacturing production tax credits in 2023, including higher rates payable for use of domestic content.

While it doesn’t break out figures for its energy storage system (ESS) business in its quarterly reports – as yet – LG Energy Solution (LG ES) management offered some thoughts on the company’s ESS strategy in an earnings call to explain results.

Again, emphasising the importance of the US market, the company said in a presentation that developing lithium iron phosphate cells for stationary battery energy storage systems (BESS) was one of its “key initiatives” and a “new growth engine”.

So far, the company is building a plant in Arizona with 43GWh total annual production capacity, including 16GWh for BESS-bound LFP cells among its plans for 250GWh annual production capacity in the US that it has committed to.

‘LFP for ESS can be profitable line of business’

An analyst asked on the company’s earnings call if LFP cells for ESS could be profitable, since the capex required for LFP is higher than for nickel manganese cobalt (NMC) on a per-GWh basis.

A representative of the LG Energy Solution ESS battery planning and management team said that while it is true LFP cells have about 20% lower energy density than NMC, therefore dividing capex by capacity gives a higher per-gigawatt-hour capex for LFP, the lower cost of raw materials and simpler structure of lithium iron phosphate makes it cost competitive.

Additionally, the company representative said, LG ES will be producing locally in the US, meaning savings on import tariffs and various logistics costs, as well as making its products eligible for tax credits.

“So as a result of that all in all, we do think that we will be able to secure margins and also a sufficient level of profitability that is required for this business.”

Looking at the overall size and growth potential of the ESS market, LG Energy Solution is expecting North America to be “one of the main areas,” driving the company to establish a local production base.

In terms of competitiveness, LG Energy Solution will have a differentiated product, the representative claimed, and additionally plans to “engage upon long term supply agreements with large or large volume and very key customers,” while also establishing mid to long-term cooperations and partnerships in the market to get early or advance visibility on customer project pipeline opportunities.

On a related note, Kim Jong Hoon at LG ES’ advanced automotive battery planning and management team said some of the EV market, particularly in China, has moved towards adopting LFP batteries. While LG ES is actively exploring combining the benefits of LFP chemistry with pouch-type form factors in response to customer requests, however, the bigger opportunity for LFP lies with stationary energy storage.

“If you look at the type of LFP that we are trying to develop and focus on, the first priority right now would be to apply LFP to ESS batteries,” Kim Jong Hoon said.

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.

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The project site of River Trail in Virginia

Solar tracker company Nevados Engineering Inc. is partnering with independent power producer Energix Renewables to provide its all-terrain technology platform as a part of a long-term solar tracker supply agreement and strategic collaboration.

Energix will use American-made Nevados solar trackers to minimize grading on domestic projects with severe topographical challenges. Energix Renewables currently has over 6 GW in its U.S. solar project pipeline. Nevados’ partnership will enable Energix to develop solar projects in areas with challenging slopes without the need for extensive grading.

The new partnership with Nevados means Energix can deploy best-in-class solar assets with minimal topographical impact.

“Our goal is to build high-performing solar projects that respect the natural landscape and benefit local communities,” says Itamar Sarussi, country manager of Energix U.S. “The new partnership with Nevados means Energix can deploy best-in-class solar assets with minimal topographical impact and help ensure our projects on topographically diverse sites are successful.”

Energix and Nevados are beginning their partnership with three solar farms in rural Virginia, two of which are located on rolling topography in the highly regulated Chesapeake Bay watershed: Apple Grove Solar is a 20 MW solar project in Louisa County with plans to partner with local beekeepers to implement a fully functional pollinator garden on site. The 37 MW Endless Caverns and 25 MW River Trail solar projects are among the first large-scale solar farms to be located in Rockingham County and Carroll County, respectively.

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Trimble has broken ground on the construction of a 1.7 MW solar array at its Westminster, Colo., headquarters, offsetting more than 100% of the energy consumed by Trimble’s two-building campus in the Westmoor Technology Park.

The 4.4-acre project includes ground-mounted solar arrays and raised structures with solar panels to form 170 carports for employees and visitors. The carports will also feature 49 electric vehicle charging stations.

Trimble is working with Boulder, Colo.-based Namaste Solar to design and build the project. Several of the company’s own solutions will be used in the construction, including robotic stations for surveying and site layout, as well as machine control and guidance for pile driving.

“We are committed to pursuing innovative renewable energy solutions in terms of their environmental benefit. This includes on-site generation of renewable energy from solar, which we are implementing or pursuing across a number of our global sites,” says Rob Painter, CEO of Trimble. “Our goal for these projects is to generate our own renewable energy, and when possible, provide any excess energy production to the local electricity grid.”

The Westminster campus is LEED Gold and Silver certified and is over 240,000 square feet on 15 acres.

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