Convergent Energy and Power has over 500MW/800MWh of storage and solar-plus-storage (pictured) in operation or under development. Image: Convergent Energy and Power.

You’ve likely heard about the Inflation Reduction Act (IRA) and its US$369 billion commitment to climate change mitigation and energy security.

Chief among those commitments, at least for our readers, will likely be the introduction of the investment tax credit (ITC) for energy storage systems not paired directly with solar, so-called standalone energy storage systems.

At the same time, tax credits for wind and solar have been extended. With all of these incentives in place until at least 2032, with the possibility of further extension, for perhaps the first time ever, developers and investors have a degree of certainty around their investments.

We often write about the US battery storage market as being on an upward trajectory of growth and breaking deployment records consistently. And this is certainly true. But what is also true is that until now, most of the activity has been limited to a handful of places, with California, New England New York, and Texas the standout leaders for utility-scale battery installation.

Some other places like Arizona, Hawaii and Puerto Rico are also on increasingly strong and consistent footing, yet if you look towards much of the rest of the country, things are at a far earlier stage.

With tax credits equivalent to roughly 30% of the total capital cost of a project and potentially rising to as much as 70% (based on bonuses, including those tied to developing projects in low-income communities or using US-made products), it has made energy storage increasingly viable across the US – and expected to boost the more advanced energy storage markets to ever-new heights.

Analysis firms BloombergNEF and Wood Mackenzie Power & Renewables are among those tracking the industry closely, and both have said they expect to see a major upturn in energy storage deployments as a direct consequence of the Inflation Reduction Act.

Image: Convergent Energy and Power.

‘Playing a role in America’s clean energy transition’

Energy storage, most commonly deployed in the form of battery energy storage solutions, is not just about cutting edge technology and innovative applications. At its core, energy storage allows the electricity industry to instantaneously match supply with demand.

Electricity is a rare example of an industry without inventory. That constant balancing act played by utilities and grid operators to be able to deliver power to customers, whenever it’s needed, puts a continuous strain on the system.

Even without renewable energy in the equation, the ability to store energy is a desirable thing. Couple that with today’s ongoing transition to low-carbon resources, and the variability of generation from solar PV or wind, and energy storage becomes essential to maintain balance and reliability.

Energy storage also means lower costs for operating the grid, and with solar and wind now among the cheapest sources of power generation, it also means lower energy costs.

The importance of energy storage is why Neil Chatterjee, former chairman of the Federal Energy Regulatory Commission (FERC), recently joined energy storage and solar developer Convergent Energy and Power on its board of directors.

“I have spent my career advocating for new energy infrastructure that meets the moment, and I am honoured to join the Convergent Board and have the opportunity to continue playing a role in America’s clean energy transition,” Neil Chatterjee said.

“We are at an important point in the clean energy transition, and it is vital that we continue working to build an energy landscape that is less expensive, more reliable and increasingly sustainable,” Chatterjee added.

There are already clear indications this legislation has the potential to be a powerful engine for driving the post-fossil fuel economy and the emphasis is just as much on economy as it is on clean energy.

Energy storage systems that meet requirements on metrics such as use of local labour and domestically produced components will be eligible for bonus tax credits, while projects in areas with close historical – or present-day – connections with fossil fuel industries will also earn higher ITC rates.

The IRA has already resulted in billions of dollars investment flowing into the sector, not to mention new entrants into the market from home and abroad. North of the border, Canada has already reacted by saying it too will introduce a tax credit scheme for energy storage in response.

Opportunities require action

Media coverage of the Inflation Reduction Act largely focuses on what it will do for US manufacturing and the whole battery storage and solar value chain. And it will do a huge amount for US manufacturing, make no mistake.

Again, investment is already flowing in to build factories, refining facilities, recycling plants and much more–to the extent that Europe, which has a considerable head-start on the US in getting battery production up and running, is also going to introduce a similar plan of its own.

But, when those things come together, investment in making things as well as investing in putting them in the ground and onto the grid, we can really start to see how transformative the IRA will be.

There’ll still be a big market for hybrid resources such as solar-plus-storage, but the IRA means better opportunities to put standalone energy storage systems where they’re most needed. Image: Convergent Energy and Power.

Some of the impacts of the IRA further downstream are a little harder to predict; for instance, it could be a driver of investment into newer or alternative technologies, whether that means different types of batteries like flow or sodium-ion, or other types of energy storage advancements in the form of mechanical or thermal storage.

Other impacts of the Inflation Reduction Act will be immediate and perhaps more obvious. For example, the ITC has been available to energy storage systems when paired with solar, and the batteries are charged directly from the grid. The new ITC for standalone energy storage projects uncouples developers from this restriction.

That means energy storage systems can be built where they have the most strategic benefit, not just where there’s enough land and grid hosting capacity to also build solar.

There’ll be plenty of what’s called solar-plus-storage too, or more technically, ‘hybrid resource’ power plants, but now, energy storage can go (almost) anywhere.

Do not delay, because the increasing demand may lead to supply chain bottlenecks. The ability to both reduce costs and carbon emissions with battery storage or solar-plus-storage has never been more incentivized at the federal or state levels and the clean energy transition requires us all to adapt.

The opportunities are bigger than the challenges ahead, and your competitors are certainly not waiting around. If you need a trusted partner with a head-start and a great track record of results, speak with leading developer Convergent Energy and Power, which takes the hassle out of energy storage.   

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Julia Souder, executive director at the LDES Council, speaking at the Energy Storage Summit EU in London, UK. Image: Gareth Davies / Solar Media.

Long-duration energy storage (LDES) was firmly on the agenda and one of the main talking points among attendees at last week’s Energy Storage Summit EU in London.

As the global transition to renewables-based energy systems picks up speed, so too does the need for energy storage. Balancing the grid at less than 20% penetration of variable sources like solar PV and wind is not considered challenging, but once that threshold is exceeded, it becomes more complicated.

Some grids have already passed that mark and are for the most part where the biggest markets for battery storage tend to be found. In those situations, lithium-ion battery energy storage systems (BESS) are being commonly used, with between about an hour and four hours storage duration.

However, as Julia Souder, executive director of the Long-duration Energy Storage Council (LDES Council) said in a presentation, once the share of renewables goes to about 60% or above, the need for LDES assets becomes acute.

The LDES Council was launched at COP26 in 2021. What Souder said is remarkable about it is that along with numerous LDES technology providers, there are also service providers and large energy off-takers among them – including Google and Microsoft to name just two.

Part of the council’s role is to “debunk the myth” around LDES – that the technologies involved are not commercial yet. Many of them are, and they just need to scale up, Souder tells Energy-Storage.news in an interview.

Another part of its role is to show the world not only how urgent the need for long-duration is and will be, but also that long duration technology, like solar, wind and BESS before it, represents a huge business opportunity.

Power, heat, hydrogen: all long-duration options with purpose and a place

To date the LDES Council has launched four reports with McKinsey on that opportunity and need. The first, published shortly after the council came together, highlighted a US$3 trillion market opportunity just on the power and energy system addressable market for LDES.

The second report focused on the need for policy and regulatory support for LDES until the forecasted maturation of the market in 2030-2035, followed by a report on creating 24/7 renewable energy power purchase agreements (PPAs) for corporates, with LDES as a cornerstone. It was the fourth and most recent report however, highlighting the applications for LDES in net zero heating, that added another US$1 trillion to that addressable market value.

Getting across the message that there’s a diversity of LDES technologies for those different sector applications is essential, Souder says. Having worked previously in grid operation and planning, the executive director was made aware that “grid operators love pumped hydro [energy storage],” for example.

Bringing that “trust factor” to other types of long-duration storage is “part of the discussion too,” Souder says.

Technology providers and energy storage developers convened to discuss some of those points in a panel session later that day, titled ‘Technology planning for the future of energy storage’.

On that panel were representatives of flow battery provider (and energy storage subsidiary of Spain’s Gransolar) E22, ‘CO2 battery’ company Energy Dome and RheEnergise, which has developed a proprietary High-Density Pumped Hydro technology which replaces the water in a pumped hydro energy storage (PHES) plant with a more viscous fluid.

As E22 commercial director for the UK and Ireland Matt Denyer said, the vanadium redox flow battery (VRFB) tech the company provides “works very well,” but like other LDES, it’s largely a market-ready technology looking, or waiting for, market structures that reward its ability to offer 4–10-hour durations of storage at scale.

The first markets likely to support that are already emerging. Energy Dome senior VP of corporate development Ben Potter pointed to requests for proposals (RFPs) for LDES in the southwestern US, as well as growing interest from Chile and India which are both rapidly adding solar to their grids. Heavy industrial electricity consumers could also be a first-mover market segment, Potter said.

Moderator Sam Wilkinson, director of clean energy technology at research firm S&P Global Insights (formerly IHS Markit) asked the participants from three developer-investor companies what it would take for them to choose an LDES option as an alternative to lithium-ion.

Sonia Quitero, new business director at developer Conrad Energy, said that her team studies markets, liquidity and forecasts pricing before selecting technologies. Both the right technology and application need to be there to support a business model for any new option, Quitero said, hinting that Conrad Energy will be announcing a project soon – although she made it clear that it will not be in the UK.

Renewable energy innovation manager Eurico Correia of Portuguese utility Galp had reached the same conclusion as Quitero, he said. Galp is technology agnostic and would have “no specific reason to go for one tech or the other, except the value we can bring”.

On a related note, Canada-headquartered developer CarbonFree has recently submitted its bids to an RFP in Ontario with 600MW of 4-hour duration lithium-ion battery storage.

“We had to choose lithium,” CarbonFree founder and CEO David Oxby said, for reasons that included cost and energy density. It would also be a challenge to choose a new or alternative technology with which to bid into that RFP and get approval to use it on the grid at scale within the required timeline.

However, Oxby said the lithium-ion battery supply chain, characterised for most people by its huge relevance to electric vehicles (EVs), is itself constrained and challenging to negotiate and get those projects online in time by 2025.

“We’d love to find something else we can use [besides lithium],” Oxby said, although he added that it would be preferable to find a technology proven in the field in other territories already than for CarbonFree to become a first-mover in that regard.

Panellists at the LDES technology session, moderated by analyst Sam Wilkinson (left). Image: Gareth Davies / Solar Media

Scale of challenge equals scale of opportunity

According to the LDES Council, about 8TW of long-duration storage is need by 2040 to keep the world on-track for limiting the impacts of climate change and transitioning to renewables. Around the world, there are 10 countries that now have energy storage targets, which is a great start, Julia Souder says in her presentation, “but nowhere near enough”.

Somewhere in the order of 131GW to 531GW of annual growth would be needed to hit various climate targets, and while LDES Council sees a big pipeline of announced long-duration projects around the world, it is still too small, albeit rapid growth if not doubling of that pipeline could be expected within the next 12 months.

The good news is that there are a lot of options available in the policy and regulatory “toolbox” that can offer long-duration tech providers and customers long-term market signals, revenue mechanisms and direct support for technologies.

What may be needed above all, however, is “a policy landscape of collaborative competition”; a recognition that no country, state or region can achieve this transformation alone. And the same goes for clean energy technologies, Julia Souder says.

At last year’s COP27, LDES Council partnered with global industry organisations representing wind, solar, hydroelectric power and green hydrogen to form the Global Renewables Alliance. There was a ‘eureka’ moment when the groups all sat down together to discuss their strategies for the next two to five years and came to the conclusion that these clean energy technologies are not competitors to one another, but instead can be “really powerful” by working together.

“We signed a memorandum of understanding (MOU) so that we can work globally to show: ‘look, all these countries have net zero goals. You will need us to succeed’.”

“How do we make your lives easier by coordinating planning efforts so that we can actually all work together to speed up the scale of renewable energy development and storage?”

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The firm makes a stackable battery unit with a proprietary zinc hybrid cathode technology, and is one of the leading non-lithium energy storage companies by orders booked. Image: Eos Energy Enterprises.

Zinc battery firm Eos Energy Enterprises had a disappointing Q4 2022 with revenue falling both year-on-year and quarter-on-quarter, although its orders booked and order backlog continue to grow strongly.

In its full-year results for 2022, the company said revenue reached US$17.9 million, nearly four times higher than the US$4.6 million the prior year. But the final quarter of the year did not follow the same trend, and perhaps should come as no surprise after the company warned in November that it would not achieve its initial guidance for full-year 2022 revenues.

Q4 2022 revenue of US$2.7 million was less than half that of the previous quarter – US$6 million in Q3 2022 – and 13% lower than the US$3.1 million reported for Q4 2021.

The full-year figure was 64% lower than the US$50 million in 2022 revenue Eos was initially guiding for before announcing in November that target would not be achieved, hinting that supply chain issues were the cause. Supply chain has been an issue across the sector and was a major talking point at Energy Storage Summit last week.

Q4 revenue was mainly driven by the completion of an 80MWh project for developer Pine Gate Renewables. A major order booked during the period was a 3MW/35MWh system for a hybrid renewables microgrid in California part-funded by the California Public Utilities Commission.

Eos sells a stackable energy storage system based on proprietary zinc hybrid cathode technology configured for different applications. Its main product is the Eos Cube for the commercial and industrial (C&I) or utility-scale sectors.

Eos has grown its ‘booked orders’ by 146% to 1.4GWh, worth US$338.6 million in revenues. Booked orders means deals with legally binding agreements executed by both parties. Its ‘orders backlog’ meanwhile grew even faster at 214% to 1.9GWh and its pipeline, which includes technical proposals and non-binding quotes, is now at 29GWh.

CEO Joe Mastrangelo said: “Heading into 2023, we believe we are in one of the strongest positions in our company’s history as we continue to see a shift in the demand for longer duration energy storage. The passage of the Inflation Reduction Act and our progression through the DOE loan due diligence phase provides the growth catalysts to expand our increasingly commercially viable technology.”

The firm is mainly targeting California, Texas and New York.

The company’s share price sits at US$2.19 at the time of writing and does not appear to have been materially affected by the results which were within the new guidance. See all previous Energy-Storage.news coverage of Eos Energy Enterprises here.

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

Battery packs stolen from the Valley Center Energy Storage project in California were decommissioned and awaiting recycling, developer Terra-Gen has told Energy-Storage.news.

Some 100 LG lithium-ion battery packs were stolen from the battery storage project – pictured above – from late December through January 2023, the San Diego County Sheriff’s Department said on 16 February.

The project was energised in December 2021 and announced as online by developer Terra-Gen in March 2022.

In response to questions sent earlier this week, a representative for Terra-Gen gave more details on how the incident occurred to Energy-Storage.news:

“These were decommissioned batteries, palletised and ready for transport to a recycling centre.”

“The decommissioned batteries were packaged and staged in the Project lay-down area, outside the fence line, for transport to a recycling centre. Because of holiday scheduling, the pick-up was delayed. The theft occurred during a period between Christmas and New Years,” they said.

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.

In its media release the Sheriff’s Department warned the public not to attempt to use or connect the batteries because of the risk of a fire or explosion.

“The batteries should only be operated in a commercial facility and require several external design parameters to operate safely. The batteries must have a system to monitor current, voltage, temperature and other conditions. They require strict environmental conditions to maintain temperature parameters and a water-cooling system in case of an overheating emergency,” it said.

The battery packs have a capacity of around 15kWh each meaning a total stolen capacity of 1.5MWh, worth around US$300,000 according to the Department.

Because the batteries were decommissioned and housed separately to the live containerised battery storage units, they obviously had no implications for the system’s ability to provide services, nor did they impact the project’s insurance policy covering such incidents.

Terra-Gen is developing one of the largest battery storage projects in the world, totalling nearly 3,300MWh as part of the Edwards Sanborn Solar-plus-Storage facility in California.

The next edition of PV Tech Power, the quarterly journal of our sister site PV Tech, will include a feature about the physical security of battery storage as the technology becomes more widespread and well-known.

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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AVANGRID says it has achieved commercial operation at its 150 MW Lund Hill solar farm in Klickitat County, Wash.

The new PV plant – the largest in Washington – will supply Puget Sound Energy’s Green Direct program, which gives large commercial and governmental participants the ability to purchase 100% of their energy from dedicated, local renewable energy resources.

“Lund Hill represents a major milestone for us at AVANGRID and is proof of our commitment with accelerating the energy transition in the U.S.,” says Pedro Azagra, AVANGRID’s CEO. “We are pleased to work with Puget Sound Energy to help it meet its ambitious goals to reduce emissions and provide clean, reliable power to its customers.”

“We’re excited to see AVANGRID’s Lund Hill project go into full operation as we start to receive clean energy from the largest solar project in Washington state,” adds Mary Kipp, PSE president and CEO. “This project will help our Green Direct customers meet their clean energy goals as we work together to create a cleaner energy future for all.”

AVANGRID’s facility will supply the solar for PSE’s second-round offering of their Green Direct program, for which more than 40 customers have already signed up, among them six Washington state government agencies, including the Departments of Health, Ecology, and Transportation, among others.

Lund Hill is located on approximately 1,800 acres, a mix of land leased from private landowners and the Washington Department of Natural Resources – the state’s first solar power land lease.

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Crimson Energy Storage in California, at 1,400MWh was the largest single site BESS project to come online in the US during 2022. Image: Recurrent Energy.

The US utility-scale battery storage sector achieved its highest-ever annual deployments in 2022, a year in which solar PV and wind underperformed against expectations.

According to the latest edition of Clean Power Quarterly, published by trade group American Clean Power Association (ACP), which collects stats for the full year 2022 as well as the fourth quarter, 4,027MW and 12,155MWh of battery energy storage was deployed in the country last year.

That exceeded the previous record, set just a year before in 2021, when 3GW/9.5GWh was commissioned. That amounted to an increase in cumulative operating battery storage of 80% in megawatt terms, bringing it to a total of 9,054MW, and a total 25,185MWh of energy storage capacity – an increase of 93% in megawatt-hours.

During the fourth quarter, 850MW/2,375MWh of battery storage was commissioned. That was an increase of 31% year-on-year. However, with solar PV installations down 5% and wind power down 37% for the same period, there was a 21% drop in total installations across the three key technologies tracked by ACP. A similar trend was seen throughout the year, which tallied with ACP’s third quarter report findings.

California remains the US’ leading state for battery storage, with 4,938MW of cumulative installations to the end of 2022, and in fact more battery storage than solar PV was commissioned in the Golden State for the year.

In terms of development pipeline, ACP said the energy storage sector had rebounded in Q4 2022 from weakened second and third quarter growth rates, with a 17% increase from Q3 seen. The total battery storage development pipeline in the US as counted in the report adds up to 16,711MW/45,638MWh, again, record levels for the technology.

California leads that pipeline with 5,846MW in development, while the US’ second biggest market, Texas’ ERCOT, is host to a 3,802MW pipeline. Only two other states, Arizona (1,911MW) and Nevada (1,693MW) have more than a gigawatt of projects in the development pipeline.

That said, 14 states have more than 100MW in development and half of the country’s states have at least some battery storage in development.

Across the US, ACP noted that almost 70% of development battery energy storage system (BESS) projects are planned to be paired with solar PV and wind. It remains to be seen if the introduction of the standalone energy storage investment tax credit (ITC) will spur higher proportions of non-hybrid and co-located storage in those pipelines, as seems likely.

Of projects commissioned in 2022 meanwhile, over half of a total 88 battery storage projects (48) were hybrids and the remainder standalone.

Across the nation’s network of grids and wholesale markets, Texas leads for BESS in its interconnection queues, with 67GW awaiting connection, PJM Interconnection in second place with 50GW and California’s CAISO grid with 48GW in third. With grid connection queues often saturated with more projects than could ever be connected in some cases, CAISO actually stopped adding new megawatts to its queue in 2022 after being heavily oversubscribed in 2021.

Overall there was a 16% decline in clean power installations in 2022 versus 2021, which was largely attributable to lengthy delays faced by projects, particularly solar PV, which is in the midst of import tariff disputes.

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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Eddie Obropta

Raptor Maps, a provider of solar lifecycle management software, has published the fifth edition of its Global Solar Report, featuring data that illustrates the underperformance of solar assets.

The report finds that the amount of power loss due to anomalies nearly doubled from 1.61% in 2019 to 3.13% in 2022. The revenue loss is estimated at roughly $82 million for the more than 24 GW of solar assets analyzed by Raptor Maps in 2022.

“Raptor Maps now has data on 80 GW of PV systems from thousands of individual inspections in dozens of countries, and the numbers tell us that power loss from anomalies has nearly doubled in four years,” notes Eddie Obropta, CTO and co-founder of Raptor Maps. “The implications for the industry’s long-term bankability run deep at a time when legislation like the Inflation Reduction Act is supercharging growth in solar.”

For the first time, the 2023 edition of the Global Solar Report includes benchmarks of power loss by site size, granular module-level anomalies insights by PV cell type, and a view of the shifting module OEM landscape.

“Raptor Maps provides customers with a digital twin that is a living record of a solar farm, monitoring power production – or power loss – as it occurs,” explains Obropta.

The report underscores the need for asset owners and managers to monitor equipment performance over time, proactively identifying maintenance issues and warranty claim opportunities.

“The advanced analytics in our Raptor Solar platform uses measurements like those highlighted in this report to provide a system of record that solar stakeholders can use to help installations flourish for decades,” says Raptor Maps CEO and cofounder Nikhil Vadhavkar. “Digital workflows can drive massive productivity gains by ensuring plants are operating at peak efficiency, as we have seen with our Raptor Solar Warranty Claims product, where initial data suggests a reduction in manufacturer review time by up to 90 percent.”

Raptor Maps’ dataset – which increased 21% from 2021 to 2022 – offers insights into the health of solar assets globally and provides benchmarking data for customers of its software platform, Raptor Solar.

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Georges Antoun

Lightsource bp has placed an order for 4 GW of thin-film solar modules from First Solar, scheduled to be delivered between 2026 and 2028 and power Lightsource bp projects in the U.S.

This latest deal follows a prior order by Lightsource bp for up to 4.3 GW signed in 2021 and places the company on the path to becoming one of the world’s largest users of First Solar’s technology.

“The US solar industry is at a pivotal moment, poised to expand at an exponential rate with the Inflation Reduction Act serving as the catalyst,” says Kevin Smith, chief executive officer, Americas, Lightsource bp. “We are seizing the opportunity by not just growing our 20 GW development pipeline across the United States, but also creating sizeable demand for our U.S.-based partner First Solar, which, in turn, is investing in innovation and manufacturing, and supporting thousands of direct and indirect American jobs.”

The deal includes orders for First Solar’s Series 6 Plus and next-generation Series 7 modules. Lightsource bp has committed to using First Solar’s advanced high-value recycling program to manage modules at the end of their operating lives.

“This is another sizeable commitment by Lightsource bp and a reflection of their trust in First Solar and our technology,” says Georges Antoun, chief commercial officer, First Solar. “Our relationship with Lightsource bp is a partnership in growth. We enable their growth with certainty through long-term pricing and supply commitments, and advanced technology, while they enable ours by providing the certainty of demand we need to invest in manufacturing.”

First Solar is expanding its U.S. manufacturing capacity, with a third factory expected to come online in Ohio in the first half of 2023 and a fourth factory which is under construction in Alabama and expected to be commissioned by 2025. Both factories will produce the Series 7 modules ordered by Lightsource bp.

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The signing ceremony at the site which will house Form Energy’s first major production facility. Image: Office of Governor Jim Justice / State of West Virginia.

West Virginia governor Jim Justice has signed off on a US$105 million grant to Form Energy for its iron-air battery plant in the state in a ceremony.

The signing ceremony on 24 February saw Justice officialise House Bill 2882, which appropriates US$105 million to the West Virginia Economic Development Project Fund to be used for the startup’s first manufacturing facility.

Form Energy will invest a total of US$760 million in the plant, which will begin construction this year for a 2024 commercial manufacturing start date.

The factory will be on the former site of Weirton Steel, founded in 1909 and at one time the largest producer globally of tin plate products. Former industrial locations that have been in steady decline for decades like Weirton characterise what is known as the ‘Rust Belt’ of the US, and project’s like Form Energy’s – whose battery technology is based on iron rusting – are aimed at revitalising such places.

Speaking at the ceremony, Justice said: “Today, we’re landmarking a new day where this community will thrive beyond belief. It’s incredible this is going to bring 750 great-paying jobs. I thank the West Virginia Legislature for appropriating the necessary funds to make this happen. We all see the potential of this area and company, and I’m thankful we can celebrate another step in this transformational project.”

The company claims its battery technology, which oxidises metallic iron to discharge and converts it back into iron during charging, can offer durations of up to 100 hours.

Mateo Jaramillo, co-founder and CEO of Form Energy noted at the ceremony, “It is exciting to be here today at the home of our first commercial battery manufacturing facility where we will soon break ground on construction.”

The company is in talks with utility Xcel Energy to deploy 100-hour projects at retiring coal plants and raised US$450 million to commercialise its technology in October last year.

CEO Jaramillo did a year-in-review Q&A interview with Energy-Storage.news for the turn of 2022/23.

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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Panellists on the ‘Effective Management of Supply Chains’ session at Energy Storage Summit last week. Image: Gareth Davies / Solar Media.

Managing your battery energy storage system (BESS) supply chain is a complex issue with no easy fixes, according to leading developers, system integrators and investors.

That was the message from panellists on the ‘Effective Management of Supply Chains’ on day one of Energy Storage Summit in London last week (22/23 February). Supply chain has been a major topic in the BESS industry in the past few years, covered extensively by Energy-Storage.news.

Whilst clearly affecting every project to some degree, some of the most high-profile stories we’ve reported on include Fluence’s financial results taking a hit, gigafactory project delays and high-profile projects in California being pushed back or having their offtake contracts renegotiated.

Battery storage issues unlike other clean energy

“You have transformer delays, battery delays etc. Trying to tie all that up with an asset class that, if you get it online too early it sits there and degrades, is challenging. We have problems with BESS that did not exist with other supply chains,” said Matt Clare, CEO of UK developer Masdar Arlington Energy.

Alicja Kowalewska, principal at battery storage investor Gore Street Capital sounded a similar note of pessimism, saying it was “hard to see capex numbers coming down”.

That had followed on from Clare saying that broad brush stroke numbers on how much capex had risen in the past year or two were misleading because of the wide variety of factors that can go into the figure: “One of the main points that everyone needs to remember, in relation to the effective management of the supply chain, is that it’s very complicated.”

Ultimately, Kowalewska said, management of supply chain issues depended “…on the geography and the strength of the system integrator’s relationship with the key component suppliers”.

How to manage it

Unsurprisingly then, one of the key takeaways from the session on how to deal with these issues was building stronger, long-term relationships with said suppliers.

“Transparency is key. As a sales team we know what is happening in the wider market and feeding that back to our customers is key. It’s about planning and building a relationship between supplier and offtaker. We all know there are huge supply chain problems and the market is constantly shifting,” said Sonia Benard, head of EMEA sales at Trina Storage, the BESS arm of Trina Solar.

EV and energy storage solutions firm NHOA’s Lucie Kanius-Dujardin, EVP, Global Markets & Development, made a similar point.

“We are reinforcing the framework agreements we have with several players in batteries and inverters but also smaller components. We have to do long-term booking for components which are a very small part of the overall system for which we never expected to need to do that before,” she said.

Gore Street’s approach to hedging against supply chain risk was partially about diversifying into new geographies as it has been doing recently.

“As you might know, the GB market is not seeing the same numbers as it did in 2022 in terms of revenues. But other markets can keep on delivering. Ireland is still good and the US markets like Texas and California are not yet saturated,” Kowalewska said.

Both her and Clare said another hedge being seen across the BESS industry is looking outside of Tier 1 suppliers.

“You had it in the solar panel industry ten years ago where initially it was only Tier 1 suppliers that people were comfortable with but then you had the Tier 2 ones arrive in force. You’re now seeing it in the BESS industry. It’s not quite there yet, but people are becoming more familiar and comfortable with other (non-Tier 1) products,” Clare said.

Kowalewska added: “You don’t have huge negotiating power with the Tier 1 suppliers. If we can get comfortable with Tier 2 then, despite the lack of lithium pricing drops, we can keep delivering small capex price wins.”

Index pricing

Raw material index (RMI) pricing has been a big theme in the sector – which Energy-Storage.news recently wrote was starting to ease – and it was raised by NHOA’s Kanius-Dujardin, Trina Storage’s Benard and Power Electronics’ commercial director for EMEA Juan Antonio Torres. Although Torres said it had proved impossible considering the number of components that go into its solutions, which encompass parts of the broader electricity network than just BESS.

Kanius-Dujardin called RMI pricing the “new normal” which did not solve the problem, but said there has been progress on it recently.

“We explored formulas to limit the changes in capex. From this year, we have a proposal for customers to lock in pricing,” added Benard.

Reasons to be cheerful

There were other reasons for optimism too. Clare said that the investment community is becoming more familiar with the BESS sector and, as mentioned by other panellists, financing plays a huge role in managing supply chain risk.

“The investor community plays a massive part in stepping up to the plate in terms of stepping into an asset class that is commercially less well understood. There is now some really educated capital starting to understand it. That’s demonstrated by increased debt and leverage within senior lenders.”

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