An energy storage system that ECO STOR delivered for developers Kyon Energy and financier Obton. Image: ECO STOR / Kyon Energy / Obton.

An evaluation of 2022 and predictions for the coming year from German battery storage developer and system integrator ECO STOR, and UK-based second life energy storage firm Connected Energy.

Last year was a breakout year for the German grid-scale energy storage market and the global second life energy storage market.

While the official numbers are not yet out, it will be clear to regular readers of Energy-Storage.news‘ coverage of the country that Germany most likely beat its best ever year of grid-scale battery storage deployments of 200MW (back in 2018). A growing comfort with the asset class for investors is one of the main reasons cited by Georg Gallmetzer, director of ECO STOR which deployed over 100MWh last year.

For second life energy storage, the practice of taking used battery modules from EVs and repurposing them into stationary systems, 2022 was also something of a breakout year but for altogether different reasons (although clearly it is riding the coattails of the booming broader energy storage market).

The sector is reaching something of an inflection point with the supply of battery modules, with several OEMs taking the lead on working with outside companies for second life applications. Severe bottlenecks in the supply of new lithium-ion batteries has also bettered the business case using EV batteries.

Several companies providing solutions deployed their first major systems across Europe and the US last year, while Energy-Storage.news has been told hundreds of MWh have been installed in China. Several companies also completed fundraise rounds in the double-digits, including the UK’s Connected Energy, whose CEO Matthew Lumsden also shared his thoughts on the year gone by and the year ahead.

Georg Gallmetzer, director, ECO STOR 

What did 2022 mean for your energy storage business, and how did the year compare with last year?

With the foundation and completion of a strong sales campaign in 2021, 2022 was the year of demonstrating our deployment capabilities and resilience towards supply chain constraints and other risks. In 2022, ECO STOR deployed 27 of its ES-3450 storage systems in 7 projects in Germany totaling 108 MWh. These projects were delivered on time, within budget and full contractual performance, which is extraordinary in the context that the world did everything to prevent it. The market circumstances have improved in 2022 despite material price increases and material delivery constraints. In 2022 battery storage has become part of security infrastructure in the context of the Ukraine war and gas shortage in the European power markets.

What were some of the biggest gains and steps forward made by the industry, including your company, during the last 12 months?

According to the MaStR registry in 2022 about the same volume of >1MW battery storage systems were deployed in Germany compared to the cumulative volume of all years before, see Battery Storages Germany (eco-stor.de). So 2022 was the year of regaining dynamic growth in the grid battery storage segment after a few years of slow market development.

Also the battery storage business models were increasingly adapted to more challenging market opportunities like trading / load shift applications that allow very large volumes to be added to the market in comparison to the rather small auxiliary markets (FCR, aFRR, etc.) but require a different technological setup.

In 2022 in Germany we observed a diversification of players in the field of equity & debt financing, project development and engineering, procurement and construction (EPC). Germany in 2022 made large steps towards a liquid and mature market. 

The industry faced some well-documented challenges during the year, with the highest profile being supply chain constraints. How have those challenges affected the industry and how should they be confronted?

The challenges in the supply chain may be confronted with alignment of risks and chances along all players in the value chain of a large scale project. If battery manufacturers want material index pricing, this risk and chance shall be shared on a fair basis among all players, including developer, EPC, equity and debt financing actors.

At the same time, the industry faced an unseen rise in the financial opportunity for battery deployment that in my view overcompensates the downsides of material shortage and price risks. These upsides for investors have, to my notion, widely not been shared with developers and EPC’s. 

So my suggestion is, to have both ends of the business case (increased risk, increased opportunity) well under observation and allocate both ends symmetrically to the whole value chain of the industry.

Which technology and industry trends would you recommend our readers keep a close eye on in 2023?

In our market and technology data driven business development we see a bank case for asset investments with regard to short term trading / load shift operation. But this has a strong impact on the design/layout with regard to the robustness of battery systems. Low demand / low cost oriented battery systems may be disqualified from participation in these market applications. The industry should keep a close eye on matching the battery platform stress resilience towards the mix of applications during the project lifetime.

What are the biggest priorities for your company, and for the wider industry, in 2023 and beyond?  

With the tailwind of the strong deployments of our organisation in 2022 we want to keep up with the momentum and scale project sizes to 100MW and beyond. This makes sense because it maximises the efficiency in the value chain. It is not only material delivery constraints but also the availability of qualified teams that limits the market growth in Germany. ECO STOR and the industry is required to deploy much higher volumes in the coming years in order to deliver on the increased demand. We answer to this demand with a focus on scaling the project volumes to 100MW+.

Matthew Lumsden, CEO, Connected Energy

What did 2022 mean for your energy storage business, and how did the year compare with last year?

2022 was a significant year in the journey of Connected Energy. The drive for organisations to decarbonise combined with the global instability in the energy market has brought about a surge in interest and demand for behind-the-meter energy storage. This has led to our commercial sales turnover more than quadrupling over the last twelve months.

It was also the year that the company welcomed a £15m investment, from new investors including Caterpillar Venture Capital, Volvo Energy, Mercuria Energy Trading S.A. and OurCrowd.

This additional funding alongside the strategic value of these new parties will make a real contribution to our ability to scale up our business and move into utility scale project development. This will bring huge opportunities to the company in the year ahead.

The year brought a welcome respite from the challenges of 2021. Working through COVID brought many compromises, not least the ability to meet face to face with customers, however, we have seen real signs of recovery this year.

What were some of the biggest gains and steps forward made by the industry, including your company, during the last 12 months?

To see the profile of the circular economy being high on the agenda of Cop27 was a key step forward for the second life battery energy storage industry. We are also seeing a greater understanding of the benefits of second life systems amongst our customers, especially those driven by meeting net zero targets.

There needs to be more emphasis on the reuse philosophy – up until now the emphasis has been on recycling which overlooks the value that second life systems can bring. In the year ahead I hope that we will build on this conversation to see incentives that recognise the negative environmental impact that we are displacing by re-using electric vehicle batteries.

The industry faced some well-documented challenges during the year, with the highest profile being supply chain constraints. How have those challenges affected the industry and how should they be confronted?

The lack of activity during COVID caused manufacturing to come to an abrupt halt and as things ramped up, the industry was simply not ready to meet the renewed demand. This has led to an impact on availability, lead times and price increases for components. Larger manufacturers, able to absorb rising costs, have also led to spot market pricing, which has further exasperated the market.

All these things combined have made it difficult to plan and, with the logistics sector in a volatile state, there are no guarantees of delivery until components physically arrive.

2023 will remain challenging, not least with the war in Ukraine, and we don’t anticipate things will start to improve until the latter half of next year. The only mitigation is careful planning, building relationships, open communications with suppliers and committing to materials as early as possible to manage risk.

Thankfully, due to our second life approach working with Renault in particular, battery availability has been less of a challenge for Connected Energy. However, demand for batteries has led to a detrimental impact on the price and availability of first life systems and this cannot be good for the sector.

A Connected Energy project in Belgium, with repurposed Renault EV batteries. Image: Connected Energy.

Which technology and industry trends would you recommend our readers keep a close eye on in 2023?

The energy storage market is maturing at pace and there is a growing recognition of the range of technologies that can benefit different applications. We are beginning to see emerging technologies finding their niche, for example, longer duration non-lithium ion systems which are suited more to energy shifting and gravity-based energy storage systems. This demonstrates that the market is maturing and illustrates the different values of the new technologies coming onto the market, a trend to watch.

What are the biggest priorities for your company, and for the wider industry, in 2023 and beyond?

For us, the priority is to continue to scale up our business and systems to meet the growing availability of second life batteries and to capitalise on the market opportunity that brings.

Recent events in the energy market have placed a real focus on energy resilience. We are now seeing interest from commercial and industrial customers who are focussed on de-risking supply and moving towards self-sufficiency, as well as a low carbon energy supply. Localised energy systems are a good route to both and now that many new technologies are maturing, their co-location and optimisation will create a level of sophistication that our new energy systems require.

The recognition of the role that energy storage can play must be a priority for the industry as a whole.

Energy-Storage.news’ publisher Solar Media will host the 8th annual Energy Storage Summit EU in London, 22-23 February 2023. This year it is moving to a larger venue, bringing together Europe’s leading investors, policymakers, developers, utilities, energy buyers and service providers all in one place. Visit the official site for more info.

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16 August 2022: President Joe Biden signing the IRA into law. Image: President Biden via Twitter.

The Inflation Reduction Act’s incentives for energy storage projects in the US came into effect on 1 January 2023.

Standout among those measures is the availability of an investment tax credit (ITC) for investment in renewable energy projects being extended to include standalone energy storage facilities.

Alongside the rest of the act’s US$369 billion package of climate spending, the change has been forecast to transform the US clean energy industry, bringing certainty for investment into deployment as well as manufacturing.

The Inflation Reduction Act (IRA), and primarily the storage ITC, have prompted analysts at the likes of BloombergNEF and Wood Mackenzie Power & Renewables to up their forecasts for energy storage installations significantly.

Previously, storage projects were only eligible for an ITC if paired directly with solar PV and the storage system charged directly from the solar.

The standalone option now decouples developers from this need, opening the possibility of charging directly from the grid, and reducing the development timeline of storage projects, which require far less land than solar-plus-storage. Energy storage projects of 5kWh or more will be eligible.

The change brings the industry “to the next level,” according to American Clean Power Association energy storage VP Jason Burwen, who was formerly interim CEO of the national Energy Storage Association before the merger of the two trade associations at the start of last year.

“Starting today, all US #energystorage projects can avail a 30+% investment tax credit. Excited to see the industry go to the next level,” Burwen tweeted.

“Happy clean energy new year all!”

As mentioned by Burwen, the ITC can therefore reduce the capital cost of investment by about a third, or more, depending on whether projects meet certain criteria on using domestically produced materials or equipment, and whether unionised and local labour works on them.

The ITC, which was also extended for clean energy technologies like solar that it already applied to, lasts until 2034, although incentive levels start to climb down towards the latter end of the regime. The storage ITC also includes a direct-pay option, which many commentators have said will simplify and speed up the process of monetising incentives.

‘Massive opportunity to decarbonise’

Even just a quick glance of Energy-Storage.news’ special year in review articles looking back on 2022 and looking ahead to 2023 shows how much the industry values the introduction of the storage ITC. Many in the industry had advocated and fought for the measure for years before the IRA’s surprise passing in late August brought it to reality.

“The passing of the Inflation Reduction Act in the US will be the next catalyst for energy storage and propel the market forward,” Tom Cornell, senior VP of energy storage at Mitsubishi Power Americas said when asked what the biggest steps forward taken in 2022 had been for the industry.

“Any mention of 2022 has to include the passage of the Inflation Reduction Act. For the first time, standalone energy storage will enjoy tax credit incentives similar to other renewable technologies. The industry deserved a pat on the back for never stopping to advocate for [the] storage ITC,” LS Energy Solutions’ director of strategy and analytics Ravi Maghani – himself a former industry analyst at Wood Mackenzie – said in response to the same question.

“The timing couldn’t have been better as there’s a massive opportunity in front of us to decarbonise the power grid and storage will have a key role to play in getting there.”

A 183-page guide to the Inflation Reduction Act’s clean energy and climate investments, published by the White House can be viewed and downloaded 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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Dr. Shawn Qu

CSI Energy Storage, which is part of Canadian Solar Inc.’s majority-owned subsidiary CSI Solar Co. Ltd., is providing up to 550 MWh of SolBank energy storage products to Pulse Clean Energy to be used in various U.K.-based projects.

The 550 MWh of energy storage projects covered in the agreement will utilize CSI Energy Storage’s SolBank, a proprietary battery energy storage solution designed and manufactured for utility-scale applications. Under the agreement, CSI Energy Storage will also provide commissioning services for the products, in addition to long-term warranties and performance guarantees.

The new agreement expands CSI Energy Storage’s relationship with Pulse. In May 2022, Pulse announced that it selected CSI Energy Storage to provide the engineering, procurement and construction services for a total of 100 MWh across four projects. The agreement also included a 10-year long-term services agreement (LTSA) for the operation and maintenance of the facilities.

“This large order commitment underscores the viability of Pulse’s project pipeline and our commitment to strengthening energy security in the U.K. by reaching 1 GW+ of installed capacity in the near term,” says Trevor Wills, COO of Pulse Clean Energy. “Enabling decarbonization and renewable integration remain a key focus of our efforts as every MW of storage we install will allow locally produced wind and solar to efficiently and reliably serve U.K. customers.”

Pulse has developed a pipeline of more than 2,000 MWh of grid-scale battery storage and energy optimization opportunities across the U.K. CSI Energy Storage’s SolBank will be deployed to support the capacity needs of the grid at a number of these sites and additional sites across the U.K.

In September 2022, CSI Energy Storage launched SolBank, a proprietary designed and manufactured energy storage battery solution. At the same time, CSI Energy Storage also announced the expansion of its battery manufacturing capacity from the existing 2.5 GWh to 10 GWh by the end of 2023.

“We are excited to expand our relationship with Pulse Clean Energy as they ramp up execution on their pipeline of diesel-to-battery conversion projects and beyond,” states Dr. Shawn Qu, chairman and CEO of Canadian Solar. “Pulse’s projects will have a meaningful environmental benefit while also further enabling the energy transition in the U.K. We look forward to supporting Pulse as they continue to grow their project pipeline.”

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Gregory Poulos

ArcVera Renewables, a global provider of consulting and technical services for wind, solar and energy storage projects, has revised its strategic growth objectives upwards as market demand in key renewables project services segments rapidly expands. In its new strategy update, ArcVera expects to continue reaping the benefits of its diversification into solar and storage, in support of hybrid and green hydrogen projects, with solar energy services becoming a key engine of its growth alongside onshore and offshore wind.

Over the past three years, ArcVera Renewables has experienced strong development with an average 20% year on year growth. With the Inflation Reduction Act policy driver set to create very positive market conditions for renewable energy deployment in the United States, the company forecasts another 30% demand increase for its services in 2023 and beyond.

“This steady performance is largely supported by our company’s long-term commitment to continuous innovation, and an intrinsic desire to help renewable energy projects succeed across the globe,” explains ArcVera Renewables’ CEO Gregory Poulos. “It has been strengthened by timely investments in key overseas markets, notably South-Africa, Brazil and India. We are now actively seeking new administrative and technical talents to join our teams of atmospheric scientists, engineers, data analysts and commercial specialists to deliver technical excellence for our clients’ projects around the world and contribute to maintaining our leadership position at the forefront of renewable energy technical innovation.”

For the last four decades, ArcVera has built its success by leveraging a deep expertise at the intersection of science, technology, and engineering to meet some of their clients’ most complex project technical challenges. Its teams mobilize their advanced technical expertise and decades of global experience to provide trustworthy, insightful, risk-mitigating, and accuracy-driven renewable energy project services.

“2022 has been a great year for ArcVera and its clients,” states Poulos. “We were particularly excited to see the billion-dollar acquisitions of Scout Clean Energy and TriGlobal Energy, two loyal clients, whose projects we have proudly supported from company inception. These success stories underpin what ArcVera really stands for, which is to provide our clients with a significant technical edge to increase their projects’ value. We will keep doing what we do best and seize the new opportunities presented by the IRA to accelerate our growth next year.”

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Workers photographed at the Waikoloa site earlier this year. Image: Baywa r.e.

Utility Hawaiian Electric has said that the AES Waikoloa solar PV and battery storage project on Hawaii Island is nearing completion.

The system is due to begin commercial operations by April this year, or earlier. When it does, it will begin delivering power to the utility under a 25-year power purchase agreement (PPA) at just US$0.09/kWh – which Hawaiian Electric Co (HECO) said is one of the lowest rates payable for energy anywhere in the US state.

As reported by Energy-Storage.news back in August 2022, US power producer AES Corporation is developing the plant, featuring 30MWac/43MWdc of bifacial solar PV modules on single-axis trackers, and 30MW/120MWh of lithium-on battery storage.

As noted in the August article, AES appointed German renewable energy company Baywa r.e. as engineering, procurement and construction (EPC) contractor.

Around the same time, AES announced the start of construction on another Hawaii solar-plus-storage project, Kuihelani Solar + Storage, which pairs 60MW of solar PV with a 240MWh battery energy storage system (BESS), on another Hawaiian island, Maui.

A PPA is also in place for Kuihelani, with both projects’ contracts awarded in 2018 and then signed off and approved by regulators in 2019.

Baywa r.e.’s assessment in August that the Waikoloa project would be “substantially completed” in the four remaining months of 2022 appears to have been held to. Hawaiian Electric said on 29 December that Waikoloa Solar + Storage is already being tested at 85% of its capacity.  

Hawaii, as an island state historically dependent on imported fossil fuels – mainly diesel and fuel oil but also with some coal until the closure last year of its last remaining coal plant – has long seen solar and batteries as an answer to its energy security, pollution, and climate change challenges.

Perhaps most important however is that renewable energy and battery systems offer the potential to lower the cost of electricity and of operating the grid, with utility-scale projects like AES’ and several others awarded through HECO solicitations, and high adoption rates for residential rooftop solar.

For instance, Waikoloa alone when up and running is expected to lower a household on Hawaii Island’s electricity bills by about US$2 a month, HECO said.

Meanwhile, HECO is seeking to incentivise residential battery storage adoption too. The utility also said in late December that it has experienced healthy customer demand for its scheme, called Battery Bonus.

Launched in July 2021, enrolments on the island of O’ahu have already filled the 15MW cap on the programme’s first tier, and now it moves to Tier 2, which will award incentives for a further 15MW on O’ahu, but at a lower rate.

A total 50MW of deployment is being pursued on O’ahu, with the 20MW Tier 3 again set to pay out at a lower per-kilowatt rate for capacity of battery systems installed.

Tier 1’s per-kilowatt payment was set at US$850, while Tier 2 customers get US$750, while participants also get bill credits for exporting to the grid and monthly peak capacity payment. The latter is important to the purpose and design of the programme.

Essentially, HECO wants to use Battery Bonus systems to help manage peak demand – customers must use their own stored energy, or export energy to the grid, within a two-hour period during evening peak times.  

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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Rendering of the Salvador Battery Energy Storage Project in Chile’s portion of the Atacama desert. Image: (Rendering Credit: Mitsubishi Power) (CNW Group/Innergex Renewable Energy Inc.)

Thoughts from a trio of energy storage technology providers and system integrators on the year just gone, and what lies in store in 2023 (no pun intended).

Our respondents in this edition are all vying to gain a foothold in key battery storage markets around the world, but understandably with a primary focus on North America’s booming opportunities.

However, as you’ll see from their responses, even within the North American market, opportunities are spreading from the existing energy storage market strongholds of Texas and California to other US states, to Canada.

And there is of course plenty going on outside the North American market too, as the global need for energy storage is becoming widely recognised.

It’s fair to say our three interviewees come from companies at quite different stages of their journey into that global market.

Mitsubishi Power Americas is involved in major large-scale battery storage projects with recent project contract awards in regions including the south-eastern US and Chile.

The company’s battery storage solution, called Emerald, is based on lithium iron phosphate (LFP) battery technology, but Mitsubishi Power Americas is involved with a broad range of other technologies, including working on what could be the largest green hydrogen storage facility in the US, the ACES project in Utah. 

LS Energy Solutions, backed by South Korean conglomerate LS Group, began deliveries of its first containerised battery energy storage system (BESS) units last year, after LS Group acquired the grid-tied energy storage division of inverter maker Parker Hannifin in 2018.

IHI Terrasun is a system integrator working on some of the largest solar-plus-storage projects in the US, such as developer Primergy Solar’s US$1.9 billion Gemini Solar-plus-Storage plant in Nevada. Gemini will include 1.4GWh of batteries, with cells to be supplied by CATL, alongside 690MWac/966MWdc of solar PV.

What did 2022 mean for your energy storage business, and how did it compare with the year before that?

2022 exceeded our expectations in many ways. We went through a wave of commissioning 1.5GWh of projects in California and Texas, which are historically robust markets for battery storage. The year has also seen a transition to other markets in the Eastern US and emerging market opportunities in Canada, Latin America, and Western Europe.

We started the year mostly focused on US-based project opportunities and the anticipation of a US$3 billion to US$4 billion market. That has quickly evolved into a more global view of opportunities across Canada, Western Europe, Latin America, and the US with an estimated US$9 billion market outlook over the next two years.

Overall, it was a strong year not only for Mitsubishi Power but the energy storage industry as a whole.

Tom Cornell, Senior VP of energy storage, Mitsubishi Power Americas

For LS Energy Solutions (LS-ES), 2022 was the year of product fine-tuning and getting into the big league of energy storage system integration.

LS-ES launched its all-in-one (AiON) energy storage solution in the fall of 2021 and spent 2022 certifying our AiON energy and power series, as well as taking the all-in-one concept to our customers. We ended the year with six awarded projects and installation underway on three of them.

Ravi Manghani, director of strategy and analytics, LS Energy Solutions

2022 has been a year of tremendous growth, both for the industry and IHI Terrasun. With the Inflation Reduction Act (IRA), the need for storage has skyrocketed and that is amplifying an already increasing and expanding market. This hot market keeps getting hotter.

The war in Ukraine has further illustrated that energy independence – both regional and national – is essential for a stable and sustainable economy. And that has also increased the need for energy storage worldwide.

We’re seeing increases both in the size of projects – to the orders of magnitude to what we saw only two years ago, but also the frequency of new projects being developed. This year has seen a notable increase in the speed of the energy transition with the strong boost to climate and energy funding provided by the IRA.

Ray Saka, VP sales, product management and services, IHI Terrasun

What were some of the biggest gains and steps forward made by the industry, including your company, during the last 12 months?

One of the biggest steps forward we have seen as an industry is the increased confidence and adoption in battery energy storage outside of the mature markets in the United States, including California and Texas. Mitsubishi Power is seeing this within our business with the projects awarded in the Southeast United States and Chile.

As more battery energy storage assets are successfully commissioned and continue to meet customer expectations, it is resulting in more confidence and understanding of the many roles battery energy storage has in the energy landscape as a generation and transmission asset.

The passing of the Inflation Reduction Act in the US will be the next catalyst for energy storage and propel the market forward.

Tom Cornell, Senior VP of energy storage, Mitsubishi Power Americas

Any mention of 2022 has to include the passage of the Inflation Reduction Act. For the first time, standalone energy storage will enjoy tax credit incentives similar to other renewable technologies. The industry deserved a pat on the back for never stopping to advocate for [the] storage ITC.

The timing couldn’t have been better as there’s a massive opportunity in front of us to decarbonise the power grid and storage will have a key role to play in getting there.

Another big gain, which truly still has to materialise is the recognition that for the US energy storage market to prosper, the country will also need to advance as a manufacturing hub for strategic energy storage components such as batteries and inverters.

On the topic of manufacturing incentives, LS Energy Solutions supports the inclusion of inverters for advanced manufacturing credits and has requested the Treasury to go one step further to explicitly include storage inverters for those benefits.

Outside of IRA becoming law, other noteworthy gains and steps have been in the area of interconnection reform, as FERC, as well as a few ISOs under its jurisdiction, have started on the path of streamlining of interconnection rules that will enable deployment of the massive backlog of solar, wind and storage assets.

Ravi Manghani, director of strategy and analytics, LS Energy Solutions

This year, IHI Terrasun launched our next generation power plant software for control, advanced diagnostic and monitoring of storage and solar-plus-storage systems. This solution allows for vendor-agnostic integration as well as augmentation and long-term power plant maintenance. We’ve built an analytical system for monitoring and diagnostic of assets, so we’re able to provide bankable 10- and 20-year long-term service agreements (LTSAs), and at times even longer, such as the work we’ll be doing for the Gemini Solar and Storage project in Nevada.

The biggest step forward for the industry, and one that is long overdue, is the development of diversified supply chains for batteries. The world will have so much demand as we electrify everything from cars to mobile phones, all of which will need batteries.

So far, battery production has been centred in China with very few limited options outside. With the IRA, there is now ample incentive for US-based manufacturing of batteries, and we hope to see those incentives adopted around the world to create a truly diverse supply chain.

Ray Saka, VP sales, product management and services, IHI Terrasun

Rendering of Gemini project aerial view issued in 2019. Image: Primergy/Quinbrook.

Well underway, the Gemini Solar and Storage project in Nevada will include 1,400MWh of battery storage. Image: Quinbrook.

The industry faced some well-documented challenges during the year, with the highest profile being supply chain constraints. How have those challenges affected the industry and how should they be confronted?

The challenges affecting battery storage and solar projects have been a huge topic this year. These challenges affected not only the supply but also costs related to projects forcing our independent power customers to renegotiate their power purchase agreements (PPAs). Despite the challenges, the impacts have mostly resulted in project delays instead of outright projects being cancelled.

The height of the supply chain challenges will be an inflection point in our industry along with the IRA as we evaluate our supply models and as the industry looks to diversify the supply chain across multiple continents.

Tom Cornell, Senior VP of energy storage, Mitsubishi Power Americas

For the US to truly see the fruits of accelerated renewable deployments, including storage, a lot of manufacturing will have to be onshored and re-shored.

Without a clear roadmap for such, the industry is destined to face the pains of extended delivery times, higher costs, and trade policy-related uncertainties. For instance, we saw lead times of 60-70 weeks on transformers and lead times of similar scale on other components needed to integrate storage solutions.

In addition to these delays, the industry has also had to open to alternate suppliers, and in general, expand the universe of suppliers to mitigate availability constraints. While a diversity of suppliers is generally good for competition, it has also opened up the need for robust quality control.

Ravi Manghani, director of strategy and analytics, LS Energy Solutions

Source diversification is the best solution to bottlenecks and constraints. Right now, China is effectively the only lithium refiner in the world. That must change if we are to succeed in creating a robust supply chain and enable worldwide manufacturing of Lithium-ion-based batteries.

We have also seen promising development of non-lithium technologies such as sodium and zinc-based energy storage systems, which also hold promise in diversifying the supply chain. 

Another important topic that does not get enough attention is the shortage of skilled labour in the electrical fields from master electricians to electrical engineers who are going to be needed over the next 30 years to achieve the transition to renewable energy.

More skilled workers retire every year than enter the profession, so there is already a shortage. Add to that the growing demand of renewable energy transition and the country will be unable to meet our climate targets in 2030.

This is a great opportunity to train and invest in our young adults who could secure well-paying jobs for decades to come. To meet the need, we must invest in outreach, workforce training and retraining, and mentoring. Plenty of great work is already being done to address this problem, but it will need to be significantly scaled if we want to build the solar, wind, and storage installations that will power our lives in 2030, 2040 and beyond.

Ray Saka, VP sales, product management and services, IHI Terrasun

Which technology and industry trends would you recommend our readers keep a close eye on in 2023?

There are several trends around energy storage people should keep a close eye on in 2023:

The improvement in lithium-Ion cell technology that currently exists. We are typically deploying 280 amp hour (Ah) cells and are moving toward over 300Ah cells, which will improve Lithium Ion’s density and more cost effective.

Developments in other cell chemistries including Sodium-ion as more R&D investment is placed in it

Longer duration storage in the 8-hour and above range through some demonstration projects using flow and nickel hydrogen-based technologies

Tom Cornell, Senior VP of energy storage, Mitsubishi Power Americas

At the risk of sounding a pessimist, 2023 in many ways will look a lot like 2022 in terms of battery costs and supply tightness. 2022 is primed to end with lithium carbonate prices at an all-time high and while the larger economy is slowing down after a year of high inflation, I suspect that the prices in 2023 will be a bit stickier in the energy storage world. There are certainly some promising trends to look out for, such as higher energy density products from several LFP suppliers, and further commercial advancement from a few non-lithium technologies.

Ravi Manghani, director of strategy and analytics, LS Energy Solutions

2022 has been a big year for many companies and consortiums to announce giga-sized battery factory plants in the US.

While it takes years to build a factory, in 2023 we will begin to see whether these plans materialise into ground-breaking ceremonies which will determine the trajectory of the rest of the ‘20s decade. If we see factories being built, we can expect an ease in the constriction of the battery supply in three to four years. If we don’t, batteries will continue to stay a prime commodity.

Ray Saka, VP sales, product management and services, IHI Terrasun

LS Energy Solutions’ AiON ESS made its debut in the field this year. Image: LS Energy Solutions.

What are the biggest priorities for your company, and for the wider industry, in 2023 and beyond?

Managing growth. With the rapid industry growth and expanding market opportunities, we are expanding our team to double its current size in the next 12 months while balancing the need for capital investment into people and R&D efforts supporting product development.

Successful Implementation of 2GWh of projects. We will always prioritise the commitments made to our customers to deliver projects in a safe and reliable way.

Understanding and leveraging the effects of the IRA. When the treasury department guidance is out, this will shape our strategy going forward with domestic content.

We will also be keeping an eye on what happens with Canada’s version of the IRA over the next year as well.

Tom Cornell, Senior VP of energy storage, Mitsubishi Power Americas

Our priority for 2023 is to start delivering 100+ MWh project orders, and we’re extremely proud of what we’ve accomplished with the AiON product in such a short amount of time.

Additionally, we will be adding more product options for our customers in terms of capacity and technology options. We want our customers to able to have a variety of solutions to choose from, all standardised and factory assembled to provide ease of onsite installation and reliable operation.

This pretty much dovetails into the biggest priorities for the industry – scale, standardisation, and certainty. Scale is a well-understood requirement and doesn’t need elaboration.

For the industry to become more robust, and yes, profitable, we need to move away from selling projects to selling products, and for our developer customers to be able to operate portfolios of assets. That’s how we grow and do so taking on proportionate levels of risk.

Ravi Manghani, director of strategy and analytics, LS Energy Solutions

Creating a diversified supply for batteries and power conversion systems (PCS) is top of mind. Going further, we will be looking at ways to offer more functionality (application stacking) from energy storage systems.

Right now, most installations are used to perform only one to three applications, usually storing electricity that would otherwise be curtailed, but storage can offer so much more for the electricity grid with correct system design and the right power plant controller.

For any industry, having a single source of any product is risky, so diversification will be essential across the board next year and beyond.

Demand for energy storage is already heating up and with the IRA and the energy crisis in Europe and around the world, the push for additional energy storage resources will continue to accelerate. In 2023, we will see whether the supply constraints begin to ease up so the demand can be met with supply.

Ray Saka, VP sales, product management and services, IHI Terrasun

Additional reporting by Cameron Murray.

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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Susan Nickey

Hannon Armstrong Sustainable Infrastructure Capital Inc. (HASI), an investor in climate solutions, has closed two new programmatic investments in grid-connected renewable energy assets developed, owned and operated by The AES Corp.

Per the agreement, signed on December 22, 2022, HASI will make a common equity investment in an approximately 1.3 GW portfolio of operating solar and wind projects located across six states: Arizona, California, New York, South Dakota, Utah and Virginia. Additionally, HASI is financing land owned by AES for a solar project and a standalone battery energy storage system in California.

“We are thrilled to expand our programmatic relationship with AES through this new partnership, which is designed to encourage additional investments over the next several years,” says Susan Nickey, chief client officer of Hannon Armstrong. “AES’ purpose to accelerate the future of energy and create a sustainable future is totally aligned with our mission as a climate positive investor.”

“AES is committed to accelerating a greener, smarter energy future,” adds Leo Moreno, president of AES Clean Energy. “This investment creates an opportunity to expand our development of renewable energy projects, growing our portfolio of wind, solar and battery energy storage facilities across the U.S.”

In accordance with the terms of the equity investment in the renewable energy portfolio, HASI intends to acquire a 49% equity interest in the portfolio that includes 17 operating solar projects, and one wind project. With a weighted average remaining contract life of approximately 18 years, the portfolio’s cash flows are contracted with a diverse group of predominately investment-grade corporate, utility and municipal off-takers. AES will continue to own and operate the assets.

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A rendering of FREYR’s planned US gigafactory in Georgia. It is one of several to have accelerated plans in the US since the Inflation Reduction Act, although is going full steam ahead with its European projects too. Image: FREYR.

Some companies which were previously considering Europe for lithium-ion gigafactory projects are now looking to the US instead, executives working in site selection and design have told Energy-Storage.news.

As Energy-Storage.news has written extensively, over the course of 2022 the picture changed significantly for Europe and the US’ respective gigafactory investment climates.

Post-Inflation Reduction Act (IRA), growth in planned US production capacity started to outpace Europe’s, leading major EU policymakers to call for action to ‘to prevent an outflow of investment’ from its battery ecosystem.

What hasn’t been as concretely clear is whether these are due to respective ramping up and down of existing plans or the US taking investment away from its North Atlantic neighbour, but experts working in site selection and evaluation for gigafactories tell us this is definitely happening.

One of those is David Werner, executive VP for Industrial Market, i.e. manufacturing, at architecture and engineering firm Gresham Smith.

“One client that we’ve been helping with a gigafactory site evaluation process was initially looking at doing a project in Europe and that transitioned to now doing a project in North America. I don’t think it means the European project is off the table, it’s just the order of precedence has been reversed,” he said.

“That client saw the Inflation Reduction Act coming and shifted gears. I have had a lot of conversations with clients who are accelerating their plans in the US.”

Another is JLL, one of the world’s largest commercial real estate companies, which recently did the site selection for Turkish firm Kontrolmatik’s US gigafactory, which will be focused on the energy storage market.

Energy-Storage.news asked JLL’s International Director Meredith O’Connor if the firm was starting to see interest from companies which previously were looking at launching projects in Europe, but have pivoted to the US in light of the Act and lower power prices.

“Yes, we have a global EV steering committee, so we often compare the amount of projects in each country. There has been a rapid increase in battery and solar related projects since this summer. Our JLL team is working on several of them across the United States,” she said.

High power prices in Europe were cited as a reason for a potential delay to the third gigafactory from Northvolt, one of the leading companies in Europe’s gigafactory drive, which at the start of the year looked miles ahead of the US’.

JLL estimates a 25-35% increase in the volume of gigafactory projects since the Act was passed, in line with figures from Benchmark Mineral Intelligence provided to Energy-Storage.news at the start of December 2022. Benchmark then pegged Europe’s 2031 planned annual lithium-ion battery production capacity at 1,186.2GWh versus 992.6GWh/957.6GWh for North America/US.

Energy-Storage.news’ publisher Solar Media will host the eighth annual Energy Storage Summit EU in London, 22-23 February 2023. This year it is moving to a larger venue, bringing together Europe’s leading investors, policymakers, developers, utilities, energy buyers and service providers all in one place. Visit the official site for more info.

A month later 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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RWE’s solar-plus-storage system at one of three lignite mines it operates in NRW, Germany. Image: RWE.

RWE commissions solar-plus-storage system at lignite mine in NRW

Multinational energy firm RWE has commissioned a solar-plus-storage project at its Inden lignite mine in the district of Düren, North Rhine-Westphalia (NRW), Germany.

The bifacial solar PV array has an output of 14.4MW while the attached battery energy storage system (BESS) will provide 9.6MWh of energy storage capacity, and around 4.8MW of power.

The BESS will be used to optimise the solar PV’s discharge into the electricity grid. The project has come online several months later than initially expected.

RWE is building two similar units in another nearby lignite mine, Garzweiler, as reported by Energy-Storage.news recently, which will total 10.6MW/21.1MWh of energy storage.

It is aiming to deploy a minimum of 500MW in the Rhenish lignite mining district, an area with three large lignite mines it operates in NRW, by 2030.

Grid-scale battery storage deployments in Germany last year most likely eclipsed 200MW in total, a record for the market and the second-highest deployment figure in Europe after the UK, which deployed around 760MW (figure from Solar Media Market Research’s UK Battery Storage Project Database Report).

Rabobank invests in Dutch system integrator GIGA Storage

Rabobank has taken a minority stake in GIGA Storage, a developer that recently commissioned the largest BESS project in the Netherlands to-date, provided by Wärtsilä.

Rabobank said the investment will allow GIGA Storage to expand its network of large-scale energy storage projects.

The company’s two deployments so far total 57MWh of energy storage but the firm claims it has developed a project pipeline of 12,500MWh in both Belgium and the Netherlands, with 420MWh to be built in the near-term.

“GIGA Storage is a pioneer in the large-scale energy storage industry in the Benelux. We are proud to further shape our partnership with GIGA as an investor. This allows them to substantially grow both their battery projects and the self-developed IT platform in order to facilitate the further integration of renewable energy into the Benelux electricity grid,” said Francis Quint, global head of Rabo Investments.

Read more Energy-Storage.news coverage of the energy storage market in the Netherlands here. As we reported, the largest system being built was recently announced by the BESS division of Rolls-Royce.

Swiss Canton looks to energy storage

AEW Energie, the utility serving the Swiss Canton of Aargau, is adding a 5.5MW/10MWh BESS unit to its grid to help shore up energy security and decarbonise.

Hitachi Energy has been contracted to provide the system although its press release was unclear about whether the system has only been ordered or brought online already. A spokesperson said it was most likely the latter and Energy-Storage.news will update this article when confirmation has been received.

The BESS order includes Hitachi Energy’s intelligent automation software, the e-mesh portfolio which provides advanced analytics, software, and digital capabilities.

AEW will use the BESS as a learning platform to enhance grid stability and add distributed energy resources (DERs) to its operations. Looking ahead, it also wants to use energy storage to optimise EV charging, introduce virtual power plants (VPPs) and trade energy.

René Soland, head of Business Unit Grids AEW Energie AG, said: “What is exciting is that the BESS can give us new ways to orchestrate, optimise, and manage our existing infrastructure, as well as a path to the future, especially with more renewable power and the expected increase in electrification across many industries.”

Switzerland has been relatively quiet in the energy storage news world, but last year it did commission a 20GWh pumped hydro plant in the Valais mountains, one of the largest systems brought online anywhere in the world. See all other coverage of the Swiss market here.

Energy-Storage.news’ publisher Solar Media will host the eighth annual Energy Storage Summit EU in London, 22-23 February 2023. This year it is moving to a larger venue, bringing together leading investors, policymakers, developers, utilities, energy buyers and service providers from across Europe all in one place. Visit the official site for more info.

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The City of Grinnell in Iowa is partnering with Alliant Energy on a solar project to be established on a Brownfield site and soon-to-be owned city land. Upon ownership of nearly 32 acres, the City of Grinnell plans to enter into a lease agreement with Alliant Energy and proceed with the development of the solar project on 5-7 acres at 400 6th Avenue West in Grinnell.

“Our partnership with Alliant Energy to develop a 1.59 MW solar energy system demonstrates our commitment to renewable clean energy generation,” says Russell Behrens, Grinnell’s city manager. “The project will revitalize an underutilized manufacturing property, generate meaningful revenue for community projects and allow the school district to recoup their investment in this property. This would not have been possible without the bold leadership demonstrated by the school district when addressing this long-time nuisance property.” 

Alliant Energy is currently conducting land surveys and studying power grid connection opportunities in the identified project location. If the studies confirm the expected positive results, Alliant Energy will design, construct, own, operate and maintain the solar project. The City of Grinnell will receive annual fixed lease payments over the next 20 years. 

The project is part of Alliant Energy’s Customer-Hosted Renewables Program, which enables customers with available land to host solar facilities and receive lease payments and renewable energy credits. The project also furthers Alliant Energy’s goals to achieve net-zero carbon dioxide emissions from the electricity it generates by 2050.

“We are excited to work with the City of Grinnell as we strive toward a more sustainable future together,” states Amanda Accola, key account manager for Alliant Energy. “The project aligns with our mission-driven purpose to have a role in strengthening communities while providing the opportunity to enhance community exposure to renewables as well as the consideration of how renewables can integrate with community planning and development.” 

The City of Grinnell and the Grinnell School District are currently working on a purchase agreement for the land on which the solar project will be built. 

Construction could begin in late-2023 and become operational in late-2024. The timeline, as well as final approval of the project is contingent on field study results, design, permitting and equipment availability.

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