An image of battery modules issued by the Valley Center Sheriff Department, which it said are similar to those which were taken: Image: Valley Center Sheriff’s Deptartment.

The Valley Center Energy Storage project in Southern California from where the battery packs were stolen. Image: Terra-Gen.

Cameron Murray talks to industry experts about the physical security risks to battery storage sites, and how the security and insurance aspects of operating BESS sites are evolving.

As battery energy storage technology becomes more widespread and well-known in today’s maturemarkets and, increasingly, new ones, the risk of attack and theft is also likely to grow.

In this report, we talk to those active in emerging markets as well as an energy asset security expert from Sandia National Laboratories (SNL) – one of three research and development labs of the US Department of Energy’s National Nuclear Security Administration – about the main risks versus other types of clean energy assets, and how to mitigate them.

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.

Just before the edition was about to go to press, a high-profile theft incident was reported at a grid-scale battery storage site in California, Terra-Gen’s Valley Center BESS. Energy-Storage.news has since revealed numerous details about the incident, namely that the batteries were decommissioned, placed away from the operational BESS and awaiting transport, as well as why they were taken offline in the first place.

How big is the risk?

Notwithstanding the Valley Center incident, it’s fair to say the risk of battery storage site break-ins for either theft of components or battery modules or for sabotage has been relatively small withfew occurrences to date.

But there is still a risk and this is expected to grow as energy storage becomes more prevalent and, more importantly, grows in importance for the stability of the electricity grid. Jeffrey Hoaglund is project lead at Sandia National Laboratories (SNL) where he focuses on physical protection systems (PPS) analysis and design for critical energy infrastructure.

“Energy storage could increasingly be targeted because it is a critical node in the energy infrastructure pipeline,” Hoaglund says.

Alejandro Fajer, managing director of Mexico-based battery storage solutions firm Quartux, says his main concern is during the transportation and installation process. Similar issues exist in Brazil, says consultancy Harmattan Renewables’s Adam Terry:

“When we’ve done projects there, even getting the staff to site, we run the risk of them getting hijacked. The main advantage with battery storage is that it’s all containerised but there is still a security risk. We don’t travel at night and have not suffered any intercepts yet.”

Hoaglund does expect the security threat of theft to increase. “Some of these battery systems are high value and very technologically advanced, especially the newer ones, so they are critical target areas for sabotage but also for theft. That could be for nefarious use or just to sell those components on the black market.”

“Theft is going to become a more likely target vector in the future as these systems become more advanced whereas sabotage has been historically the vector of choice.”

Terry agrees to an extent: “I think as the technology matures, what you’ll actually find is that the risk might go up because you will be less likely to bother putting people on site when you realise there’s nothing for them to do and that all they’re really doing is being glorified security guards.”

Measures to take

The three core pillars of any battery storage physical security system are detection, delay and response,Hoaglund says.

Detection and assessment about knowing the threat is there and involves layers of security including cameras, infrared sensors, microwave sensors or other detection methodologies at both the outer perimeter of a battery storage site and the inner security area.

These can and should also be on the battery storage containers themselves. The second, delay, is about increasing the amount of time available for the third pillar, response, to take effect.

Insurance

Since these projects are typically insured against the risk of physical theft or sabotage and, as mentioned above, the reputational risk of such events is fairly low, most of the thinking around this is left to insurers.

Charley Grimston, executive director of specialist battery storage insurance firm Altelium, also says that insurance costs are falling because of improving loss experience and a better understanding of the risks involved.

Future

“I have seen a change, especially over the last 10-15 years, where people are taking it (security) more seriously and doing a more systemic analysis of all these sites being interrelated and also the physical security systems at individual sites,” Hoaglund says.

Ultimately, the risk of thermal runaway and other fire events will remain the primary concern for those involved in battery energy storage projects and insurers for some time, well ahead of physical security. But it’s clearly worth giving serious thought to the physical security risks facing the technology, particularly with the most valuable, critical or remote projects being deployed.

Energy-Storage.news’ publisher Solar Media is hosting the 5th Energy Storage Summit USA, 28-29 March 2023 in Austin, Texas. Featuring a packed programme of panels, presentations and fireside chats from industry leaders focusing on accelerating the market for energy storage across the country. For more information, go to the website.

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Barrett Bilotta

Agilitas Energy, an integrated developer, builder, owner and operator of distributed energy storage and solar photovoltaic systems in the northeastern U.S., has agreed to acquire a portfolio of six standalone energy storage system projects in the greater Houston, Texas, area from Gulf States Renewable Energy, a subsidiary of GSR Energy. The deal value approximates $75 million.

The acquisition and new market entry will add 60 MW to Agilitas Energy’s renewable energy and battery storage project pipeline of more than one gigawatt.

The projects will operate in the Electric Reliability Council of Texas, which manages the flow of electric power to more than 26 million Texas customers—representing about 90% of the state’s electric load. 

The battery storage systems will deliver low-cost energy for customers of CenterPoint Energy, a domestic energy delivery company headquartered in Houston. It will enhance the grid’s reliability and resiliency by charging batteries from the grid at low peak when there is excess energy and costs are lower, and then subsequently discharging that energy when demand is high.

“Our strategy is to continue expanding into new geographies, but we’re also planning to bolster our renewable portfolio to include sources beyond solar, partnering with other leading renewable developers to achieve these goals as necessary,” says Barrett Bilotta, president, CEO and co-founder of Agilitas Energy. 

Each of the six projects has an identical design with battery supply from BYD Energy batteries and a system size of 9.96 MW/20.721 MWh. Two of the six projects are expected to begin commercial operation in 2023, with the other four following in 2024. Agilitas Energy expects to purchase each of the six projects in the portfolio when they are fully permitted and ready for construction.

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Eolian made the first use of tax equity financing to get the ITC for standalone BESS projects in February. Image: Eolian

The investment tax credit (ITC) for standalone energy storage is an undoubted game changer for the US industry, but it isn’t easy or cheap to capture its benefits.

The ITC came into effect at the beginning of this year, offering upwards of a 24% reduction in the capital cost of investing in eligible energy storage project equipment. With the addition of various provisions for things like locally produced content and labour being used, or siting a project in a low-income area or one historically associated with fossil fuels, potential reductions can reach as much as 70%.

As such, it’s been widely anticipated to have a transformative positive impact on the business case for energy storage in the US. That remains the case, but according to sources Energy-Storage.news spoke to, the industry is having to be well resourced for both expertise and cash to monetise it fully.

“The investment tax credit for standalone battery storage now puts us on parity with other forms of generation. That has been a very, very long time in the making,” said Jeff Bishop, CEO of developer and asset owner Key Capture Energy (KCE).

In an interview with Energy-Storage.news, Bishop said it was “heartening” to see the first tax equity investment made using the ITC for a standalone battery energy storage system (BESS) project a few weeks ago, for two projects in Texas totalling 429MWh of capacity by developer Eolian.

Calling the start of the ITC-era an “exciting” development, the CEO nonetheless noted that tax equity financing is a lot more complicated than raising project debt, and more expensive to do so.

“The developers that have enough size that can really be able to handle the transaction fees, are going to be the ones that will be able to monetise it in the best way,” Bishop said.

Lawyer Morten Lund of California-based firm Foley & Lardner, a specialist in the energy sector, said that for a typical tax equity financing, transaction costs “frequently exceed US$1 million,” and that even for a “simplified and streamlined transaction,” that cost will be most likely above US$250,000.

Industry ‘staffing up’ to handle complex financings

As Jeff Bishop alluded to, the energy storage and wider clean energy industries had been advocating for a long time, around a decade, for the introduction of the ITC to accelerate the deployment of storage in the way it had successfully done for solar PV in the past.

In addition, it had also been calling for a ‘direct pay’ option to be included, which would make the tax credits easily monetisable and transferrable. This option was eliminated from the IRA legislation as the deal-making to get the policy signed into law went on, and its inclusion “would have made life very, very easy,” Bishop said.

As well as the tax equity option being more expensive, KCE and others across the space are “all staffing up now on our financing teams internally to be able to handle the complexity associated with tax equity”.

That’s an assessment that rang true for lawyer Morten Lund and Foley & Lardner colleague Adam Schurle, who is focused on tax aspects of renewable energy.

Even many of the US’ highly-profitable companies do not have, or are not focused on, the “sophisticated level of tax planning” required for structuring a tax equity deal, the pair said. Complex tax structures are usually needed to monetise non-transferable ITCs, such as partnership “flip and sale lease-back”.

However, as Jeff Bishop pointed out, even with the requirement for tax equity, the ITC changes the game for the energy storage industry and makes utility-scale standalone BESS projects pencil out even against the backdrop of supply chain constraints and rising costs that have hit the industry.

Lund and Schurle were not aware of any specific reason why a direct pay, or cash benefit option was excluded from the ITC scheme, but noted that the US federal government has “a long history of choosing tax credits over cash benefits”.

“This is broadly true across a number of industries,” Lund said.

However, the lawyers also argued that the impact of a cash incentive may be limited since depreciation value would remain. With depreciation not being easily converted into a cash incentive and being “inherently non-transferable,” there would likely still be tax equity financings for larger projects to capture the depreciation benefit, they said.

Energy-Storage.news’ publisher Solar Media will host the 5th Energy Storage Summit USA, 28-29 March 2023 in Austin, Texas. Featuring a packed programme of panels, presentations and fireside chats from industry leaders focusing on accelerating the market for energy storage across the country. For more information, go to the website.

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A render of Britishvolt’s gigafactory in Northumberland, which was thrown into doubt after the company went into administration in late 2022. Image: Britishvolt.

The decision by the new owners of UK gigafactory startup Britishvolt to pivot its initial focus towards energy storage rather than EVs has pros and cons, a senior industry consultant told Energy-Storage.news.

Australia-based Recharge Industries acquired Britishvolt in February after the company startup went into administration at the start of 2023, having failed to secure the additional investor funding to continue trading. Britishvolt has been aiming to build a lithium-ion battery plant near the Port of Blyth in Northumberland, with a required investment of around £4 billion (US$4.9 billion).

Recharge is owned by New York-based investment fund Scale Facilitation. Scale’s CEO David Collard told BBC News in an interview last month that Britishvolt now plans to focus on energy storage and hopes to have the first products available by 2025.

Energy-Storage.news has requested additional comment from both Recharge Industries and Scale Facilitation numerous times about the decision, and how the company views the energy storage system (ESS) market, but has not received a response.

Dr. Nicolo Campagnol, manager of global consultancy McKinsey’s Battery Insights subsidiary, told Energy-Storage.news there are pros and cons to a switch in target market from EVs to ESS.

“Looking at battery cell supply/demand dynamics in Europe today, there is still space for producing non-captive battery cells for OEMs. Of course, your cost/performance etc has to be right, but that’s a problem in every market. A change in tack towards ESS can have some advantages but also downsides,” he said.

“First, you can sell what you produce while you ramp up rather than being closely tied to the OEMs’ production schedule, and you face fewer entry barriers than in the e-mobility market where only 3-4 suppliers at most are selected for each platform.”

“At the same time, in the ESS market the competition is more global than regional, and the market is also comparatively smaller. Pivoting to the ESS market also means you will face the dilemma of whether to integrate downstream with a full ESS solution or not.”

While the vast majority of lithium-ion battery supply goes to the EV sector, there is a growing number of ESS-focused gigafactories being developed in geographies with the more advanced existing energy storage ecosystems, like the US, Europe and China.

Lithium-ion battery OEM LG Energy Solution this week announced it will build a new battery cell factory in Arizona, US, which will have 16GWh of annual production dedicated to the ESS market. Turkish firm Pomega is building a smaller, 6GWh facility in South Carolina which will be entirely dedicated to ESS as will one from new company American Battery Factory (ABF), also in Arizona. All are set to come online between 2024 and 2026.

In Europe, Swedish gigafactory firm Northvolt is setting up a facility in Poland which will manufacture ESS solutions using the firm’s own lithium-ion cells, while China is significantly ramping up its ESS-dedicated gigafactory capacity.

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Michael Stein

Genie Renewables, a division of energy services supplier Genie Energy Ltd., says it has acquired site rights to a community solar generation site in Upstate New York. 

Once built out and brought online, the proposed project is expected to have an aggregate generating capacity of approximately 6.25 MW. 

“Community solar and other utility-scale solar generation are essential to meaningful reductions in carbon emissions,” says Michael Stein, chief executive officer of Genie Energy. “Now, improved economics are driving strong project demand in our current markets and energizing implementation of solar generation initiatives in new markets across the country.”

Genie Renewables also says it received a favorable coordinated electric system interconnection review and estimate of interconnection cost from Con Ed for its 3 MW proposed community solar project in downstate New York. The company expects to receive its notice to proceed and begin construction in the coming months subject to negotiating a land lease and obtaining local permits.

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A Texas energy storage plant

The technology group Wärtsilä has reached commercial operation date (COD) for two major interconnected energy storage systems in South Texas totaling 200 MW and owned by Eolian L.P., a portfolio company of Global Infrastructure Partners. 

The Madero and Ignacio energy storage plants will be operated using Eolian software, enabling full participation in the Electric Reliability Council of Texas (ERCOT) market. This will add year-round reliable operational ramping capacity to the system. 

Construction of the projects began in January 2021 to meet the flexibility and reliability needs of the ERCOT market. The facility reacts instantaneously to sustain electricity output and keep the lights on when power generation fails or cannot respond quickly enough to rapidly-changing conditions. 

“Adding new flexible resources today thereby preserves this older generation for more limited use in rare reliability events until they eventually retire and ensures an orderly transition during the natural replacement cycle of aging infrastructure,” says Aaron Zubaty, CEO, Eolian.

Wärtsilä’s GEMS digital energy platform monitors and controls the flow of energy, enabling these projects to provide grid support during periods of grid instability. With Wärtsilä’s Storage+ Solution, the projects will deliver ancillary services required for grid stability, such as fast frequency response and frequency regulation. 

The project includes Wärtsilä’s GridSolv Quantum, a fully-integrated modular and compact energy storage system that offers low life cycle costs, fast deployment times, quality control and flexibility. GridSolv Quantum is a certified UL 9540 compliant design fitted with several safety features.

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Thrive Renewables acquired the Feeder Road battery energy storage site in March 2021. Image: Jim Johnston (Thrive Renewables).

British renewable energy investment company Thrive Renewables is offering Bristol Energy Co-operative up to 20% investment in its new 20MW/30MWh battery energy storage project, in a first for co-ownership.

Local residents will have the opportunity to own a share of the Feeder Road battery in Bristol, which the company acquired in March 2021, and is currently being commissioned.

According to the company, this is the first time the owner of a commercial standalone battery storage project has offered the local community the opportunity to co-own the asset.

“Thrive was set up nearly 30 years ago to power the UK’s clean energy transition by connecting people to clean energy – offering co-investment to community groups helps us deliver that. To ensure a just transition, we need the benefits of renewables to be local, giving everyone the opportunity to access cleaner energy, cheaper bills and new green jobs,” said Matthew Clayton, managing director of Thrive Renewables. 

“Battery storage is a critical technology for the UK to reach net zero, storing electricity when renewable power is abundant and making it available during peak times when consumption is at its highest. We’re thrilled to be working with the local community on this project, which not only supports the UK’s net zero goals, but Bristol’s ambition to become a carbon neutral city by 2030.”

Thrive is a Bristol-based company and has invested £29 million in clean energy infrastructure in the area, including in the 8.2MW Avonmouth wind farm and providing a £4 million loan to Community Energy in 2022 to develop a community-owned onshore wind turbine.

Bristol has 133MW of clean electricity projects in operation or construction including storage projects, with Thrive having funded 37% of these (32.4MW).

The Feeder Road battery energy storage project has had community involved from its inception. The site was originally set to become a diesel-fuelled STOR plant in 2020, but local residents from St Phillip’s Marsh formed Residents Against Dirty Energy (RADE) to fight against this, and the planning application was ultimately rejected.

“Community energy gives people agency to take practical action on climate change in their local community,” said Andy O’Brien, co-director at Bristol Energy Cooperative.

“This project is a perfect example of how the community coming together can bring about real change. People power fought off a highly-polluting diesel scheme and replaced it with the storage technology we need to help us go net zero.”

Other companies involved in the development of the site include developer Aura Power, renewables consultancy Everoze, EPC G2 Energy and Trina Storage supplied the physical battery system.

With construction of Feeder Road complete, Thrive is undertaking a landscape plan to help protect and enhance the site’s biodiversity, which will see it invest an additional c.£100,000 in upgrades.

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In the US, 7.2GW of utility-scale storage projects saw delays last year due to rising battery costs. Image: NextEra Energy Resources.

The global energy storage capacity has been on the increase as a total of 16GW was added last year, equivalent to a 68% of year-on-year growth, according to BloombergNEF (BNEF).

BNEF’s Energy Storage Market Outlook series unveiled that 2022 was the global energy storage’s record addition. However, the growth is expected to continue in the following years. BNEF is forecasting a 23% compound annual growth rate until 2030, with annual additions reaching 88GW or 278GWh.

Europe, the Middle East and Africa (EMEA) added 4.5GW of capacity last year. Residential batteries, particularly in Germany and Italy, led installations in the region, and this trend is expected to continue until 2025 thanks to high retail electricity prices and government incentive programmes supporting household deployments. Currently, the residential segment is proportionally the largest in the region.

EMEA will account for 24% of capacity deployed in 2030 and is expected to reach 114GW, or 285GWh, cumulatively by the end of 2030, with the UK, Germany, Italy, Greece and Turkey leading the growth. Pipeline projects in Greece, Romania, Spain, Croatia, Finland and Lithuania will also spur the growth.

The Asia-Pacific region (APAC) is likely to dominate capacity growth in the coming years, representing 44% of additions in 2030. China is forecast to lead in deployments in the region, driven by local targets and compulsory renewable integration policies. China is expected to overtake the US as the largest energy storage market in terms of MW by 2030, as BNEF said it had increased its China forecast by 66% to account for new provincial energy storage targets, power market reforms and industry expectations supporting significant new capacity.

In Japan, subsidy programmes for utility-scale batteries were announced by federal and local governments, while South Korea set a 25GW, or 127GWh, storage target by 2036. Meanwhile, India announced a plan to fund 4GWh of grid-scale batteries in its 2023-2024 annual expenditure budget.

Therefore, the cumulative deployment for APAC is expected to increase by 42% to 39GW, or 105GWh, in 2030.

The Americas is forecast to represent 21% of annual energy storage capacity on a GW basis by 2030. Led by large-scale projects in California, the Southwest and Texas, the US is the largest market in the region. In the US, 7.2GW of utility-scale storage projects saw delays last year due to rising battery costs.

In other countries in the Americas, market reforms in Chile could pave the way for larger energy storage additions in Latin America’s nascent energy storage market, as should increasing volumes of solar and wind across Chile and Brazil, as well as grid challenges in Mexico due to underinvestment.

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The Parque Solar Los Girasoles plant

MPC Energy Solutions (MPCES) says it has completed construction and grid connection for its Parque Solar Los Girasoles, a solar photovoltaic plant in Colombia, with an installed capacity of 12.3 MW. 

Parque Solar Los Girasoles is the third project in the company’s portfolio to commence operations this year, following Santa Rosa & Villa Sol in El Salvador, and Neol CHP in Puerto Rico, and the fourth operational plant overall.

MPC Energy Solutions is selling the generated power through a long-term power purchase agreement (PPA) with Spectrum, a Colombian energy trading firm and electricity supplier. Parque Solar Los Girasoles is located in Colombia’s region of Norte de Santander and will supply around 23 GWh of solar energy per year, helping avoid the emission of close to 100,000 tons of CO2 throughout its lifetime. The project is expected to generate an annual revenue of around $1.3 million during the PPA tenor.

“Parque Solar Los Girasoles is a significant milestone for Colombia’s renewable energy targets, and a testament to our commitment to helping diversify the energy mix in the country and across Latin America”, says Juan Esteban Hernández, head of project development LATAM of MPC Energy Solutions. “We are excited to see our portfolio of operational projects grow and contribute to the region’s energy resilience and next-generation infrastructure.”

MPC Energy Solutions invested $11 million equity to develop and construct the project and intends to secure debt financing post commissioning. Colombian company Socolco S.A.S. acted as the engineering and construction contractor, and key components, such as solar panels supplied by TRINA and inverters by Huawei, were procured by MPCES directly.

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BLUETTI is slated to release its new PV420 solar panel in Europe and the UK.

PV420 features solar power of up to 400 watts and a max 23.4% high-converting rate. It’s capable of capturing about 2 kWh solar power with six hours of prime sunshine.

BLUETTI equips PV420 with monocrystalline solar cells and multi-layered ETFE to ensure better light transmittance, higher conversion efficiency and a longer lifespan. The ETFE coating surface has a rating of IP65 to protect from water splashes, scratches and dust, making it ideal for working even under extreme weather conditions. It also has a kickstand that can be adjusted to the optimal orientation to make the most of the sunshine. 

PV420 is compatible with BLUETTI power stations, including AC200P, AC200MAX, AC300, AC500, EB150, EB240, EP500 and EP500Pro, as well as other third-party power stations which have MC4 connectors and consistent voltage output with PV420.

Photo by Nuno Marques on Unsplash

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