Source: BloomberNEF. Note: The map shows the technology with the lowest LCOE for new-build plants in each country where BNEF has data. The dollar numbers denote the per-MWh benchmark levelized cost of the cheapest technology. All LCOEs are in nominal terms. Calculations exclude subsidies, tax-credit or grid connection costs. CCGT is combined-cycle gas turbine.

The latest BloombergNEF (BNEF) analysis shows the cost of new-build onshore wind has risen 7% year on year, and fixed-axis solar has jumped 14%. The global benchmark levelized cost of electricity (LCOE) has temporarily retreated to where it was in 2019. Cost rises are linked to increases in the cost of materials, freight, fuel and labor.

BloombergNEF’s estimates for the global LCOE for utility-scale PV and onshore wind rose to $45 and $46 per MWh, respectively, in the first half of 2022. Despite losing some ground, this still marks an 86% and 46% reduction since 2010 in nominal terms. Global benchmarks conceal a range of country-level estimates that vary according to market maturity, resource availability, project characteristics, local financing conditions and labor costs. The cheapest renewable power projects in the first half of 2022 were able to achieve an LCOE of $19/MWh, as in best-in-class onshore wind farms in Brazil, and $21/MWh for tracking PV farms in Chile, and $57/MWh for offshore wind in Denmark. If the offshore transmission costs are excluded, the latter estimate falls to $43/MWh.

Despite temporary cost rises for renewables, the gap to fossil fuel power generation continues to widen due to fuel and carbon prices rising even faster. New-build onshore wind and solar projects are now around 40% lower than BNEF’s global benchmarks for new coal- and gas-fired power. The latter cost at $74 and $81 per MWh, respectively.

While demand for low-carbon technologies in the energy sector bounced back strongly in the second half of 2021, supply has struggled to keep up. Global supply chains were weakened by investment deferrals, staff layoffs, early retirement of assets and lockdowns. Trade flows have been disrupted by challenges in logistics and transportation, trade barriers, and a re-wiring of relationships following Russia’s invasion of Ukraine.

Shipping rates from Asia have fallen from their peak in September 2021 but are still five times higher than in 2019. Shipping routes from Asia are critical to deliver solar panels, inverters, batteries and other components. More recently, labor costs started to rise. In the U.S., labor costs 16% more than 18 months ago. Since February 2022, the price of key metals, including aluminum, copper, cobalt and molybdenum has dropped, but remains relatively high.

“These cost hikes mark a rough patch for renewables, but not an inflection point,” says Amar Vasdev, a co-author of the report at BNEF. “We see a return to long-term technology cost decline trajectories as demand continues to be strong, supply chain pressures ease and production capacity, particularly in China, comes back online.”

The battery storage sector is particularly sensitive to commodity price volatility. Our battery LCOE benchmark sits at $153/MWh today, up 8.4% compared to 1H 2021. Prices for lithium carbonate, one of the key inputs for lithium-iron-phosphate (LFP) battery systems, surged 379% over the past year. Materials hedging for projects commissioned in 1H 2022 is delaying the impact of rising material costs. BNEF’s sensitivity analysis shows that system costs subject to 2022 commodity prices should be 22% higher year-on-year at $323/kWh in June 2022, compared with $264/kWh in June 2021. However, projects commissioned over the last six months would have likely hedged their supply during 2021, before the steep rise in material costs.

Renewables remain the cheapest source of new bulk power in countries comprising two-thirds of the world population and nine-tenths of electricity generation.

“Low-carbon technologies may be insulated from an economic downturn, but they are not isolated,” comments David Hostert, global head of economics and modeling at BloombergNEF. “There is also a risk that lesser-developed economies will be disproportionately affected by price hikes. Leading up to COP27 in Egypt in November, extra attention should be paid to these markets as it will be crucial to make sure they don’t fall behind and lose valuable time in the race to net zero.”

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Smareg 4 project in Eisenach, Germany, one of those launched by Swiss Life’s invested company. Image: Smart Power.

Swiss Life Asset Managers has acquired a 50% stake in BCP Battery Holding, a company with several utility-scale battery energy storage system (BESS) developments in Germany.

BCP Battery Holding is a newly-formed platform which, concurrent with Swiss Life’s investment, has acquired a portfolio of 220MW of BESS projects in Germany from developer Smart Power. Zurich-based asset manager B Capital Partners is an investor in both Smart Power and BCP, alongside Swiss Life.

Smart Power will continue to develop those projects, providing a turnkey solution and bringing the units’ energy to market once operational, the company said in a statement.

One of those projects is a 68MWh site in Eisenach, Thuringia, which Swiss Life said will be the largest industrial battery in the German battery storage market once completed. Eisenach was also the location for a 10MW system that recently came online.

BCP, through relationships with several BESS developers in the country, has exclusivity rights to further build up the portfolio to 420 MWh of capacity.

Swiss Life said that the main purpose of energy storage is to stabilise the transmission and distribution grids in light of volatility in electricity generation from solar and wind parks. Energy-Storage.news is increasingly hearing that arbitrage opportunities in wholesale energy trading are the main market driver of utility-scale projects in Germany, alongside the state-led Innovation Tender which is opening up opportunities for co-location.

“We are very pleased to be entering this exciting sector and to support its growth. Demand for storage will increase to balance the higher proportion of variable, renewable generation in the electricity system. Batteries will increasingly be chosen to manage this dynamic supply and demand mix,” said Marc Schürch, head of renewable energy at Swiss Life Asset Managers.

“Through the cooperation with B Capital Partners, an asset manager specialising in sustainable infrastructure, and the co-investor Swiss Life Asset Managers, both based in Zurich, we are strengthening our market position as a full-service provider of MW battery storage systems in a dynamically growing Market,” said Thorsten Klöpper, managing director Smart Power.

Germany has around 600MW of operational utility-scale BESS at the time of writing according to developer ECO STOR, which Energy-Storage.news recently interviewed. That is about the same size as the existing primary reserve/FCR market, meaning new large-scale projects have to primarily go for trading as a revenue source.

The entry into the market of Swiss Life, which has CHF276 billion (US$297 billion) in assets-under-management, follows the entry of UK-based energy storage-focused investor Gore Street Capital.

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Lithuania’s energy minister (second from right) and Fluence’s Michael Gillessen (far left) at the launch of one of the BESS developments. Image: Energy Cells.

Construction has begun on the first of four battery energy storage systems (BESS) totalling 200MW/200MWh from global system integrator Fluence in Lithuania.

The Ministry of Energy of the Republic of Lithuania announced the launch yesterday (June 29) of “one of the most important energy projects in terms of national security”.

The project, which was confirmed in December 2021, will see state-owned special purpose group Energy Cells take responsibility for installing and operating the lithium-ion systems in partnership with Fluence and Siemens Energy.

The latter two will design, manufacture and connect the BESS to the transmission system and provide maintenance services for 15 years thereafter. Energy Cells is a subsidiary of state-owned energy sector holding company EPSO-G.

The storage units will connect to substations in Šiauliai, Alytus, Utena and Vilnius, the capital where the construction was announced yesterday. They will enable the country’s energy security and reliable operation of the grid, mainly providing the instantaneous restoration of power through primary reserve.

They are set to be completed by the end of 2022 and will total €109 million of investment (US$114 million). Funding was allocated to the project under the EU‘s Recovery and Resilience Facility (RRF) NextGenerationEU plan called New Generation Lithuania.

The project is part of a wider push to synchronise and connect the grids of Baltic states and Ukraine with European grids, partially in order to make them independent of Russian energy and fuel (though obviously the project pre-dates the latter’s invasion of Ukraine).

Lithuania recently cut off its Russian fossil fuel supplies and is targeting a domestic energy generation mix of 70% by 2030, of which half will be renewables.

“The 200 MW portfolio of battery-based energy storage will be a critical component in providing resilience and energy security to the Lithuanian power system and continue to enable the accelerated integration of renewables,” commented Fluence’s growth & market development director EMEA Julian Jansen in a LinkedIn post.

Energy Minister Dainius Kreivys said that the project will help Lithuania to implement the ability to work in an isolated mode, described as ‘one of the most important tasks before synchronisation’ by the Ministry.

“The war in Ukraine has once again demonstrated the need for full energy independence, and with the beginning of installation of the batteries we are witnessing the beginning of yet another important phase for energy independence. We are ready for any action against our electricity system,” he said.

Michael Gillessen, Fluence Managing Director and Vice President EMEA Delivery added: “Despite challenges brought by the current geopolitical situation in Europe and the impact of a still present global pandemic, the majority of the equipment, including Fluence Gridstack storage products, have been already delivered in accordance with the project schedule.”

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FREYR is listed on the New York Stock Exchange. Image: NYSE.

FREYR Battery is set to go ahead with construction of its first battery gigafactory in Norway, having received assurances of financial and strategic support from the country’s government.

The Norway-headquartered battery cell manufacturing startup said it has sanctioned the construction of Giga Arctic and has confirmed it will have access to more than US$1.6 billion in debt financing.

The announcement by the company came yesterday as the Norwegian government announced a new National Battery Strategy policy at FREYR Battery’s offices. Like nearby Finland, Norway has decided to promote homegrown industries in the battery value chain.

The country’s Ministry of Trade, Industry and Fisheries said that its 10-step plan could help unlock opportunities for industry with a turnover of NOK90 billion (US$9.02 billion) by 2030 (see release here, in Norwegian language-only).  

Through the strategy, Norway’s export credit agency Export Finance Norway (Eksfin) has indicated that it will support FREYR with up to €400 million (US$418 million) worth of guarantees, loans, or a combination of the two.

FREYR has some large off-take agreements already in place with a number of customers in the stationary battery energy storage industry, some of which have been named, like a 28.5GWh deal with US manufacturer Powin, and a 19GWh deal with Honeywell, along with others which have not.

Although it is likely a large majority of initial demand will come from the electric vehicle (EV) sector, which is booming in Norway and growing around Europe and other territories, in an interview with this site in March, FREYR CEO Tom Einar Jensen said that up to half of its products could be sold into the energy storage system (ESS) sector over time.

Securing of financing has enabled the company to ramp up its production plans: Giga Arctic will be aimed at 29GWh annual production capacity, while a 2030 target for 200GWh annual capacity will be met from expansions and other new facilities FREYR intends to build.

The initial plan had been to build two smaller factories at the site in the town of Mo i Rana, but these will be consolidated into a single site. FREYR believes the Giga Arctic plant’s construction and commissioning will require around US$1.7 billion total capital investment. The company noted that factors including supply chain constraints and inflation have driven an uplift in the expected cost since plans were first announced.

FREYR recently also signed a renewable energy power purchase agreement (PPA) with Norwegian state-owned energy company Stakraft, and has materials supply deals in place with the likes of Glencore.

The manufacturer aims to run all of its production off renewable energy and is partnered with US battery technology platform company 24M, which has developed a process for making batteries with so-called SemiSolid electrodes, aiming to produce more energy dense cells at lower cost and with lower energy use required.

In his March interview with this site, CEO Jensen said FREYR Battery’s initial production lines would produce lithium iron phosphate (LFP) cells but retain the option to add nickel manganese cobalt (NMC) manufacturing capacity.

However, a press release sent yesterday to Energy-Storage.news noted that the initial planned production capacity at the first two gigafactories would be NMC. A request for clarification from the company had not been responded to by the time of publication.

China’s Gotion to make ESS, EV products at 18GWh site in Germany

In related news, this week Chinese battery company Gotion High-Tech said it will establish production bases in Germany that will make LFP products for the stationary energy storage and e-mobility markets.

Along with launching a ‘portable’ home battery energy storage product range, the company announced it will build up to 18GWh of annual production capacity at its existing site in the Lower Saxony university town of Göttingen, in two phases.

Preparation of the brownfield site for construction will begin before the end of this year, and an initial 3.5GWh of production put into action by September 2023, before subsequent phases bring that up to 6GWh and then add another 12GWh.

By 2025, Gotion High-Tech aims to have 300GWh of production capacity worldwide, siting some 100GWh of that in overseas territories such as Germany.

Meanwhile, LG Energy Solution has revealed that it is reconsidering investment into a production plant for EV batteries in Arizona. The plant is one of several the Korean company is putting into action in the US. Reuters, which reported the company’s potential change of heart this week, said analysts it had spoken to considered rising inflation to likely be the main cause.  

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Sitework for the Rabbitbrush solar project

Leeward Renewable Energy (LRE) has closed $58.5 million in construction financing and secured tax equity commitments for its Rabbitbrush Solar Facility located in Kern County, Calif. Wells Fargo served as the administrative agent on the construction financing, and Silicon Valley Bank and MUFG served as joint lead arrangers. Wells Fargo served as green structuring agent, and Wells Fargo, Silicon Valley Bank and MUFG also were the bookrunners. The debt was issued under the Green Loan Principles, which aims to facilitate and support environmentally sustainable economic activity. J.P. Morgan provided approximately $12.5 million in tax equity financing and has agreed to invest an additional approximately $50 million once the project is operational, which is expected to occur in August 2022.

The Rabbitbrush Solar Project is currently under construction and, when completed, will have a solar generation capacity of 100 MW. The project also integrates a 20 MW, 50 MWh battery energy storage system (BESS). The project utilizes 415,000 photovoltaic modules provided by U.S.-based First Solar.

“We are pleased to have secured financing for the Rabbitbrush facility, which will be LRE’s first financing for a solar and BESS facility,” comments Chris Loehr, LRE’s CFO. “This is the first of many LRE solar and BESS financings to come as we build out the contracted pipeline in 2022 and 2023. We appreciate the strong support from our offtake partners and participating financial institutions, and we look forward to working together throughout the lifecycle of the Rabbitbrush project.”

Energy generated by the project will be provided to not-for-profit, community-owned electricity providers Central Coast Community Energy and Silicon Valley Clean Energy through two previously announced 15-year power purchase agreements.

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Energy-Storage.news proudly presents this sponsored webinar with Clean Horizon, discussing the prime potential of India’s energy storage market, which has only just begun its story.

The Indian government is putting strong efforts into developing the energy storage sector, recognising its vital role in supporting the country’s transition to greener electricity. The framework of a very promising market and more than 100GWh of potential opportunities are coming into place in this decade.

Speakers in this webinar:

Dr Rahul Walawalkar, of Customized Energy Solutions, speaking in his capacity as founder and president of India Energy Storage Alliance (IESA), presents an overview of the drivers and activity underway in India’s energy storage market.

Dr Bharath Reddy of the Solar Energy Corporation of India (SECI) offers insights into the business models that are being developed, learning through deployments as well as studies. Dr Reddy discusses SECI’s pilot 1,000MWh standalone energy storage tender and many other developments.

Rachel Loquet from consultancy Clean Horizon presents some of the findings of her comprehensive work, crunching the numbers and modelling how India’s tenders for energy storage that are taking shape will work.

Our webinar includes three short presentations from the speakers, followed by a Q&A discussion.

View the video below:

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You can also register to receive presentation materials and view the session again on-demand here.

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Wärtsilä’s 50MW/100MWh energy storage system will be directly connected into the transmission system for SSE. Image: Wärtsilä.

News in brief, from another busy week for our colleagues reporting on the UK battery storage market.

Wärtsilä deploying 100MWh transmission-connected BESS

Wärtsilä is to provide a 50MW/100MWh energy storage system for SSE’s first grid-scale battery project in Salisbury, Wiltshire.

It will be the first such site to be directly connected to the transmission network by major UK-headquartered energy supplier SSE’s new solar and battery division. The battery order was booked in April 2022, and the system is expected to be operational by September 2023.

Wärtsilä’s GridSolv Quantum, a fully integrated, modular and compact energy storage system, will be used for the site, as well as its energy management software GEMS Digital Energy Platform. The asset will provide grid balancing services such as wholesale energy trading.

The Salisbury site development follows SSE acquiring the development rights for the 50MW battery storage asset from Harmony Energy in August 2021. Additionally the company acquired its first solar farm in January 2022, taking on the development rights for a 30MW solar farm at Littleton Pastures from Stark Energy.

Wärtsilä meanwhile is installing a number of similarly sized battery energy storage systems around the UK, including working on the 50MW/50MWh Kemsley battery with EDF and Pivot Power which went live at the end of last year.

Read the full version of this story on Solar Power Portal, where it was first published.

Bulb co-founder’s battery storage company secures US$93.5 million financing

Battery energy storage company Field has secured £77 million (US$93.45 million) in funding as it looks to continue the rapid expansion of its portfolio.

This is made up of £30 million of equity funding from early-stage investor Plural, which itself was launched this week. The remaining £47 million comes as a debt facility secured from Triple Point Energy Investment Company (TEEC).

Additional participation in the fundraising came from Local Globe, which has an investment portfolio including Wise, Zoopla, M-Kopa, InFarm and Citymapper.

As part of the new funding, Field and TEEC have agreed to work on a further pipeline of over 400MWh of battery storage projects. This builds on TEEC’s £45.6 million investment into Field in April 2022, which saw the companies announce plans to construct a 110MW portfolio of storage assets.

The £77 million funding will allow Field to rapidly build battery sites across the UK, targeting 1.3GWh of operational assets across by 2024. As of April 2022, its total pipeline was 775MW/1,510MWh following a slew of acquisitions.

Since the company was launched in early 2021 by Amit Gudka – one of the founders of energy suppliers Bulb – it has acquired 110MW of storage capacity.

The company will use its own proprietary platform to manage all the battery assets, trading energy into a number of markets.

To read the full version of this story visit Solar Power Portal.

Westbridge secures grid connection for battery project adjacent to existing solar PV plant

Westbridge Energy UK has secured a grid connection for its Fiskerton 53MVA battery energy storage system from Western Power Distribution (WPD).

Located at a former Royal Air Force (RAF) airfield in Lincoln, in England’s East Midlands region, the BESS is to be strategically placed beside an existing solar farm that was previously developed by the Westbridge team.

Westbridge is now in the process of securing a long-term lease for the site land and is preparing a planning application. 

“The BESS will supply power and other services to the UK grid in a matter of milliseconds, once developed,” said Alex Dickinson, special advisor of enabling technologies at Westbridge Energy UK. 

“Such speed of response is crucial in ensuring a secure and stable energy system in terms of frequency response and dynamic control that is key to the UK transition to a low carbon economy.”

Westbridge Energy UK is the UK subsidiary of Vancouver, Canada-headquartered Westbridge Power Corporation, which has developed 40+ projects worldwide. 

Recently, it announced a 250MWp solar PV plant combined with a 100MW BESS in Alberta, Canada.

It is also developing two other plants in Alberta, these being a 278MWp solar plant and a 236MWp solar PV plant, both of which are being planned with 100MW each of battery storage.

This story first appeared on Solar Power Portal.

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Ingeteam has started manufacturing its new INGECON SUN FSK power stations for photovoltaic plants and storage systems. It is a solution for large-scale projects due to its high-power rating, which can reach up to 7.65 MW output power at medium voltage.

This new design was produced to make installation and connection work in the field as easy as possible, supplied as a “turnkey” solution with all the elements placed on a single full skid or steel platform and pre-connected at the factory. In addition, this solution can be transported both by land and by sea, as it can be placed directly on the trailer of a truck or inside a 40-foot container, enabling it to be installed anywhere in the world.

The first units of this full skid-type power station have been manufactured in Navarre and are already being supplied to several projects underway in countries such as the United States, the Dominican Republic and Spain.

This solution can integrate one or two 1,500 VDC inverters (solar or battery), enabling Ingeteam to adapt to different project configurations and sizes.

In addition to the inverters, this power station also includes the LV/MV power transformer, the transformer oil tank, medium voltage switchgear and ancillary services, thus optimizing the use of available space.

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Drilling and racking pile installation activities are underway for solar panel mounting systems at Buckeye’s Files solar project in Hill County, Texas.

LyondellBasell has signed its first two U.S. power purchase agreements (PPA) supporting the company’s climate goal to procure a minimum of 50% of electricity from renewable sources by 2030. The combined agreements represent 216 MW of renewable energy, which is estimated to generate approximately 628,000 MWh of clean power annually.

Approximately 15% of LyondellBasell’s total scope 1 and 2 greenhouse gas emissions come from its electricity consumption. These agreements will enable the company to reduce its carbon dioxide emissions by approximately 225,000 metric tons annually.

“Creating a better future for the next generation is important to us, which is one reason we are focused on delivering on our climate goal to achieve net zero emissions from our global operations,” says Peter Vanacker, LyondellBasell’s CEO. “Renewable energy is an important component for how we will get there, and power purchase agreements are our preferred approach to decarbonizing our electricity supply. These strategic projects propel us forward in greenhouse gas emissions reduction, but they also provide scalability and support investment in new renewable energy capability.”

LyondellBasell signed a PPA with Buckeye Partners for 116 MW of renewable electricity sourced from its Files solar project located in Hill County outside of Dallas, Texas. The solar farm is expected to begin operations in the second quarter of 2023. The 10-year agreement is estimated to generate approximately 251,000 MWh of clean power annually.

“Buckeye is pleased to partner with LyondellBasell on this new power purchase agreement and to support their sustainability goals,” comments Buckeye CEO Todd Russo. “This partnership is illustrative of our focus on providing for the increasingly diverse energy needs of our customers, including solar power.”

LyondellBasell also signed a PPA with ENGIE North America (ENGIE) for 100 MW of renewable electricity sourced from ENGIE’s new Limestone wind project in Texas’ Navarro and Limestone counties. The project is expected to commence operations late in 2022. The 12-year agreement is estimated to generate approximately 377,000 MWh of clean power annually.

“This agreement demonstrates a collaboration to create a path forward that helps address the collective global challenge of climate change,” states David Carroll, ENGIE’s chief renewables officer. “We are particularly honored to work with LyondellBasell on their first PPA agreement which will deliver steady economic and environmental value in the long run for both parties.”

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The Bundestag building, Berlin.

The German parliament has passed law amendments giving energy storage its own legal definition, in a move welcomed by industry sources.

Adjustments have been made to the law on the Federal Requirements Plan (BBPlG), Energy Industry Act (EnWG) and Grid Expansion Acceleration Act (NABEG) which now define energy storage as an asset where “the final use of electrical energy is postponed to a later point in time than when it was generated,” according to a direct translation.

The move adopts the definition from Directive (EU) 2019/944 of June 5, 2019 into German law and was welcomed by the country’s Energy Storage System Association (BVES) as well as Jan Figgener, Head of Grid Integration and Storage System Analysis at ISEA RWTH Aachen University.

Both said it marks the beginning of a the development of a more storage-friendly regulatory framework. although the immediate effect on the sector is not apparent.

Figgener told Energy-Storage.news: “Until now, an energy storage system was either defined as a generation or a consumer asset based on whether it was discharging or charging. That is why regulation was extremely complex for storage, as it was originally defined for completely other assets in a traditional energy system.”

“This resulted in unfavourable regulation, complex exceptions, and thus hurdles and investment insecurity. With the new definition, regulations can be set up explicitly for energy storage to avoid these problems.”

Urban Windelen, Federal Managing Director BVES, said in a press release: “With the new definition, the energy storage industry is finally getting a suitable legal foundation. We can finally build on this and develop a stable regulatory framework for the system integration of energy storage systems that is so important.”

In addition to the new definition for energy storage, eligibility for a more streamlined digital grid connection process which was initially only intended for solar PV resources has been expanded to other energy transition assets such as energy storage. This will further remove bureaucratic obstacles and simplify and accelerate the rapid expansion of energy storage, BVES said.

However, the association warned that a technical error had been made during the translation of the definition from the EU directive to German law. The EU directive speaks of installation in an ‘electricity system’ while the German adoption mentions an ‘electricity network’, and BVES said this needed to be corrected quickly to avoid legal uncertainties.

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