The facility has the capacity to recycle 25,000 EV batteries a year. Image: Hydrovolt/Northvolt.

Commercial operations have begun at the Hydrovolt battery recycling plant in Norway, a joint venture (JV) between Norwegian materials processing company Hydro and Sweden-headquartered lithium battery manufacturing startup Northvolt.

The facility in Fredrikstad, southern Norway, has been under construction since February last year and its JV partners have invested NOK120 million (US$13.94 million) into the project while another NOK43.5 million was put in by Norwegian government enterprise Enova.

It is Europe’s largest electric vehicle battery (EV) recycling plant with the capacity to process approximately 10,900 tonnes (12,000 tons) of battery packs per year, equating to around 25,000 EV batteries. The batteries will be supplied by Batteriretur, a Norwegian company that collects batteries for recycling.

That is sufficient to recycle the entire end-of-life battery market in Norway, Hydrovolt said. CEO Frederik Andresen told Energy-Storage.news when construction started that, although it was EV-focused, the facility is also capable of recycling batteries from stationary energy storage systems (ESS).

Hydrovolt has a long-term aim of increasing its recycling capacity in Europe to 63,500 tonnes of battery packs by 2025 and 272,000 tonnes by 2030.

The Fredrikstad facility can recover and isolate some 95% of the materials in a batteries including plastics, copper, aluminium and black mass, a compound containing nickel, manganese, cobalt and lithium. The recovered aluminium will be delivered to Hydro for recirculation into commercial grade aluminium products.

The facility features a dust collection system to ensure the capture of material typically lost in mechanical recycling processes, one of several novel concepts the company said are being deployed.

Northvolt, founded in 2016, is one of a few startups launching large gigascale lithium-ion battery projects across Europe with significant backing, another being Norway-based FREYR.

Northvolt is the largest of these by money raised (US$2.7 billion) and planned pipeline (170GWh annual production capacity). It most recently announced the site for its third gigafactory, in Schleswig-Holstein, Germany, and acquired a site for a 100GWh cathode material production facility in Sweden.

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Amphenol Industrial Sustainable Technologies, an interconnect systems company, has partnered with Melni Technologies, an electrical device design and manufacturing firm, to offer a “crimpless” butt splice solar connector that utilizes Melni’s patented dual spiral technology to make secure, long-lasting connections. The RadCrimp solar splice connector was developed to significantly improve crimp reliability in the field while helping to reduce the amount of crimp related failures that are directly related to improper crimping, as well as incorrect mating issues between connector mismatched manufacturers.

The RadCrimp is ideal for use in new solar PV installations, field retrofits and repairs, in solar installations, and any other field terminations requiring a robust sealed power connection. The simple and fast termination eliminates the need for crimping and specialized crimp tools. It can be safely installed by field technicians.

Melni’s dual spiral technology allows for a very quick, easy and long-lasting connection. The RadCrimp connector is assembled by stripping the PV wires/cables, inserting them into the connector and tightening the connector end caps to the specified torque. Since the RadCrimp is a single connector, there is no risk of mating incompatible connectors from different manufacturers and violating UL 6703 requirements. The secure “crimpless” termination eliminates the risk of crimp related assembly failures in the field.

Certified to UL6703 for 1500V DC specifications, this solar connector has a current rating of 20A for 12AWG wire and 30A for 10AWG wire. There plans to release an approved product for 6 and 8 AWG sizes later this year.

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A solar PV farm on Terna’s grid in Italy. Image: Terna.

Battery energy storage system (BESS) capacity in Italy reached 587MW/1,227MWh in the first three months of 2022, of which 977MWh is distributed energy storage, according to the national renewables association, ANIE Rinnovabili.

Like Germany, Italy’s BESS market is currently dominated by the residential and commercial & industrial segments.

ANIE said that 20,832 DER BESS units – Elettrochimico Distribuito in Italian – were installed from January through March, totalling 123MW/264MWh. That brings the total installed power and capacity of DER BESS units in the country to 527MW/977MWh.

Plus grid operator Terna’s own BESS units totalling 60MW/250MWh, Italy has a total of 587MW/1,227MWh of BESS.

ANIE’s bulletin said that 97% of the DER BESS units, which now stand at 95,869 in total, are combined with a solar PV system and 97% are residential. 98.2% are lithium-ion-based with lead-based, flywheel batteries and supercapacitors making up the rest.

Some 95% of them are smaller than 20kWh in size with only six of the 95,869 coming in larger than 500kWh, it said.

A handful of wealthy northern regions account for around half of the DER BESS market, mirroring their share of the wider economy. Lombardy, where Milan is, is the largest with around 22% of the market with Veneto second at 16%, Emilia-Romagna 10% and Piedmont accounting for around 9%.

ANIE said that the impressive deployment numbers for Q1 2022, which stood at 60% of 2021’s full-year figure, were thanks to new rebate schemes for deploying residential and commercial storage systems alongside PV.

The number and capacity of utility-scale BESS projects operating in Italy should grow in the coming years with several large systems set to come online in 2023, and Terna recently awarding 1.1GW of capacity contracts to energy storage assets for delivery in 2024.

Next year will see Spain-based energy conversion equipment specialist Ingeteam recently supply a 340MWh in the north to serve Terna’s grid while global system integrator Fluence will deliver a portion of 250MW of projects that won contracts to provide Fast Reserve service back in 2020.

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US Secretary of Energy Jennifer Granholm has previously highlighted a potential role for flow batteries on the US grid. Image: US DoE event screenshotted from YouTube.

The US government Department of Energy (DoE) has issued a Request for Information (RFI) as it prepares to rollout a package worth more than half a billion dollars to support the development and commercialisation of long-duration energy storage (LDES).

Through the Bipartisan Infrastructure Law which was passed in November 2021 to help fund critical investments in US infrastructure, the DoE is putting up funding worth US$505 million towards the Long Duration Energy Storage for Everyone, Everywhere Initiative (LD ESEE).

The DoE has been funding research into long-duration storage technologies for years but has stepped up its work in the area in the past couple, including the launch of an Energy Storage Grand Challenge competitive funding opportunity for LDES technology providers.

That happened during the latter days of the Trump era, but with energy secretary Jennifer Granholm having highlighted the potential of LDES including flow batteries, the government has made various other commitments including the start of construction on a US$75 million R&D centre at Pacific Northwest National Laboratory (PNNL).

The DoE is now seeking public input on the aims and administration of the US$505 million funding, opening its RFI from 12 May to 16 June 2022.

The funding covers three separate demonstration programmes:  general energy storage demonstration projects, grants for pilot projects and specific long-duration demonstrations.

During the four-year period from fiscal year 2022 to the end of fiscal year 2025, the funds will be appropriated through the infrastructure law to support the development of LDES demonstrations which can validate new technologies and enable the effective deployment of energy storage.

The Biden Administration has recognised the essential role of energy storage in enabling a carbon-free electric grid by 2035 and full decarbonisation of the economy by 2050, the DoE said.

The full RFI document can be seen here.

Corporates can make a difference

Elsewhere, the role of corporate energy buyers in accelerating the decarbonisation of grids around the world was brought to the fore in a new report published by the Long Duration Energy Storage Council (LDES Council) and McKinsey.

The report examines how corporate power purchase agreements (PPAs) need to move towards enabling the 24/7 use of renewable energy. Without this, real decarbonisation is not possible, and round-the-clock renewables will not be possible without LDES, the report argues.

24/7 clean power PPAs measure hourly use of electricity as well as greenhouse gas (GHG) emissions, enabling customers to match their power consumption with renewable energy generated in near real-time.

However, most corporate PPAs today simply match that supply and demand over annualised averages, which the authors claim only achieves decarbonisation of 40% to 70%.

In other words, while today’s corporate PPAs allow for increased shares of renewable energy to be used, there’s a fixed limit on how much emissions reduction benefit they can offer.

While lithium-ion may be prohibitively expensive to use in such a way, new alternative technologies for energy storage could hit the spot, the report said. It claimed that while the levelised cost of electricity from a solar or wind hybrid Li-ion battery storage system currently exceeds US$200/MWh in most regions, a scale-up in deployment of LDES could offer a levelised cost of renewably-generated electricity of less than US$100/MWh “in the near future”.

However, there are barriers in place to prevent widespread use of 24/7 clean power PPAs.

These include a lack of industry-agreed definitions of what the PPAs should look like and the significant ‘chicken and egg’ problem that LDES costs will reduce with scale, but cost reductions are generally the biggest driver of demand – which in turn creates scale.

The report, was written by McKinsey for LDES Council, and is the second in a series of reports the consultancy is writing for it. The first report argued that a massive rollout of LDES will lead to much lower electricity system costs the world over and enable renewable energy to form the bulk of electrons carried on those systems, but also said that the technologies need support to achieve required cost reductions of about 60% by 2030.

The new report recommends that an internationally standardised PPA framework should be in place and overseen by an independent governance body.

It also suggests incentives should be in place to encourage 24/7 clean power PPAs, such as including them in carbon accounting standards. There should also be transparency of data around the topic, while specific regulations should be created to eliminate barriers and catalyse deployment, as well as finding measures to lower barriers to corporate 24/7 renewable energy procurement for smaller businesses.

LDES Council was launched at last year’s COP26 talks and is a trade association led by the CEOs of various stakeholders, from long-duration energy storage technology providers to a number of influential corporate energy buyers, including Microsoft and Google.

The organisation recently unveiled its first board of directors. Julia Souder, formerly of the Long Duration Energy Storage Association of California (LDESAC), was appointed as executive director.

The full report can be viewed here.

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Andrew Waranch

Spearmint Energy has its new business and platform for battery and solar project development, energy storage offtake, and renewables power trading. The company is aligned with the objectives of the Paris Climate accord to achieve Net Zero by 2050 by improving overall power grid resiliency.

Founded by energy industry veteran Andrew Waranch, in partnership with Kevin Kelley, CEO of Roscommon Analytics LLC, Spearmint is comprised of energy professionals, including renewables developers, power market researchers, seasoned electrical engineers, and power traders with financial hedging solutions and insight.

“As our world shifts away from fossil fuels and moves rapidly toward low carbon power generation, it is critical that we be prepared with affordable, clean power sources, such as wind and solar, regardless of season or location,” says Waranch. “Battery energy storage – the process of collecting excess, unneeded power during times of surplus and releasing it when most needed – is the ideal solution to ensuring we have clean energy 365 days a year and limit waste generation.”

“Inflation, grid instability and rising energy prices are prompting an inflection point in our transition to cheaper, renewable energy solutions across the U.S.,” adds Kelley. “We are incredibly proud to partner with Andrew and the Spearmint team, who bring decades of collective experience and deep relationships with skilled regional developers to this complex market. We are excited to work together as we seek to generate attractive, risk-adjusted returns for investors and back next-generation renewable energy projects that make the power grid more resilient.”

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David Barnes

BayWa r.e. has entered into 10-year agreements with REV Renewables to provide operations and maintenance (O&M) services to 13 existing solar power plants in the ISO New England and PJM Interconnection territories, including sites in Vermont, Ohio, North Carolina, Maryland, Delaware and New Jersey.

Launched in 2021, BayWa r.e. Operation Services LLC, the third-party operations and maintenance company of the BayWa r.e. group, offers comprehensive O&M and asset management services for utility-scale solar, wind farms and energy storage systems in the U.S. and Mexico. BayWa r.e. will monitor operations of approximately 202 MW DC of REV Renewables’ solar assets at its NERC-compliant Remote Operations Control Center (ROCC), keeping the solar plants operating at peak performance with minimal downtime by anticipating maintenance and repair needs.

“This partnership with REV Renewables solidifies our East Coast presence – a key market for our O&M and asset management services, along with Texas and the Southwest,” says David Barnes, executive vice president at BayWa r.e. Operation Services LLC. “In addition to leveraging BayWa r.e.’s ROCC, our prime focus is operational excellence, ensuring renewable assets operate safely, compliantly and profitably using ROI-based software tools and timely action to optimize performance and availability in a cost-effective manner. We’re honored to have been selected by REV Renewables to manage a portion of their solar fleet and look forward to working with their remarkable team.”

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Like many others
in the industry,
Fluence has
moved away
from fixed price
contracts in
recent months. Image: Fluence.

The rising demand for lithium-ion batteries far outstrips the available supply, even asinvestments into materials extraction and manufacturing ramp up like never before. But what doesthe situation really look like and when will it ease up? Andy Colthorpe investigates.

This is an extract of an article which appeared in Vol.31 of PV Tech Power, Solar Media’s quarterly technical journal for the downstream solar industry. Every edition includes ‘Storage & Smart Power,’ a dedicated section contributed by the team at Energy-Storage.news.

It’s no secret there’s a tightness constricting the energy storage supply chain. A few weeks ago, on EnergyStorage.news, we heard from a specialist on procurement, lawyer Adam Walters at Stoel Rives, that lithium carbonate price rises in particular are at “crisis point”.

Rising demand for batteries, largely coming from the electric vehicle (EV) sector, means raw materials prices continue to be volatile. Cell supplier contracts are moving to shorter and shorter term pricing. With terms changing over periods as short as a week, it becomes more difficult to get them signed off.

Fluence noted in its Q1 2022 financial results that while the company’s US$1.6 billion backlog of energy storage orders has been hedged with fixed price contracts, future contracting will be based on raw material indexed pricing to minimise exposure to fluctuations. The system integrator is not alone in this.

“Historically, it was possible to do off-take agreements at fixed price, that’s no longer the case. Certainly now, all new agreements use index referenced pricing. You’re not going to be effectively getting a stable price. Fixed price contracts, very common up until this year in lithium, don’t really exist anymore,” says Caspar Rawles, chief data officer at lithium battery supply chain information provider Benchmark Mineral Intelligence.

The demand situation has been exacerbated by the COVID-19 pandemic, which has thrown logistical headaches into the mix for over two years.

The two-level problem comprises logistical problems arising as a knock-on effect of the pandemic — made worse by China’s lockdowns — alongside the ongoing demand-driven undercurrent of raw material prices soaring.

Factor in that the thirst for economic recovery is leading politicians, particularly in Europe, to place that within a ‘green recovery’ agenda. That’s undoubtedly a positive thing, says Rawles, but puts more strain on already-constrained supply.Russia’s invasion of Ukraine is also bringing energy security issues to the fore, alerting Europe to its dependency on Russian gas, driving higher sales and awareness of battery storage and EVs as well as exerting pressure on nickel prices.

Joseph Johnson, market and data analyst with solar and storage market intelligence group Clean Energy Associates (CEA), says dramatic increases in pricing not just for lithium, but also cobalt, nickeland other materials affects the stationary storage market “very much”.But — and it’s important to note this — many EV manufacturers are also switching to lithium iron phosphate (LFP) chemistries instead of nickel manganese cobalt (NCM) or nickel cobalt aluminium (NCA)to reduce their exposure to cobalt and nickel price rises.

Both Benchmark and CEA have noted about a 500% increase since early 2021 in the cost of battery grade lithium carbonate from China, which translates to prices going up ten-fold in dollar values, from about US$8 per kilogram to more like US$80.

The rapid rise in cost of lithium carbonate. Based on data
provided courtesy of Benchmark Mineral Intelligence.

A supply chain situation some saw coming

From 2018 to the end of 2020, there were essentially three years of falling prices, which meant hardly anyone was investing in new supply.“Despite companies like Benchmark saying ‘this is coming, we can see the numbers and we know what’s going to be needed, and we know how long it takes to bring this new supply online,’ there wasa lack of supply chain investment. It was already on the horizon that we were pretty much there with lithium, the market was going to get very tight. Then the pandemic hit. Following the pandemic, it has amplified demand,” Rawles says.

Lindsay Gorrill, CEO of US-based cell and systems manufacturer KORE Power, was previously head of a company selling feedstock for lithium battery electrolyte.From working in the supply chain for 20 years, Gorrill says he understood that creating upstream and downstream capabilities in the US would be the only way to solve the problems that he too saw coming.KORE Power has 2GWh of manufacturing in China, which it is expanding to 6GWh in 2023 as well as developing a 12GWh plant in Arizona, US, on which it plans to break ground later this year. Helping solve those long-term supply chain issues was what drove the CEO to found the company in thefirst place, he says.“That whole process was in my head even six years ago. I was saying, ‘If we don’t start bringing supply all the way through upstream to downstream to the United States or near the United States, there’ll bea problem,’ because before anybody was even talking about supply chain problems, there was already a shortage in late 2019.”“It was already coming before the pandemic — the pandemic just basically magnified it 30 times over!”

‘Great raw material disconnect’

Supply chain investments are now starting to happen, but the market dynamic is still characterised by what Benchmark Mineral Intelligence has dubbed “the great raw material disconnect” — while new battery factories can be built in timeframes of as short as two years in some cases, new material extraction facilities take much, much longer.As expansion takes place, the market will eventually reach some kind of balance in the latter part of this decade, but the wave of electrification, from transport to heating to the grid and beyond, is on anunprecedented scale.

LFP has been the most affected among commonly used battery chemistries. Based on data provided courtesy of Benchmark Mineral Intelligence.

CEA’s Joseph Johnson also refers to a “huge disconnect” even between planned manufacturing capacity additions and projected stationary storage installation figures, somewhere between 2x and 4x— albeit mining and refining is the “real limiter that determines how many cells can get produced”.That upstream capacity is starting to come online, but where a battery factory can be built in perhaps two to three years, a new mining operation can take much, much longer, anything from five years atbest to decades in extreme cases.With investments having begun at scale from 2019, that points to 2024 being the earliest the supply chain will start to ease.It’ll take at least another couple of years for the material extraction side to really catch up to demand.CEA believes logistics issues will likely ease over a two-year window, viewing the end of 2023-beginning of 2024 timeframe as when availability of containers, additional vessels and sea lanes to carry freight will improve. Port congestion and backlogs will start to be resolved and worked through.

While demand for ESS, or EVs, hasn’t been hugely negatively impacted by the supply chain situation, it has led to delays for many ESS projects. As pointed out by Stoel Rives’ Adam Walters, we are likely tosee many more projects get delayed.However, Rawles says that a number of ESS providers which have moved into a cost pass-through structure in their contracts are finding it a tough financial hit to bear, eroding “all of the margin”.

All our interviewees say the situation will ease and that actions being taken today can make for a more robust industry and value chain tomorrow. But it will take time, it will take investment, it will takehard work.

It also represents an opportunity to create a huge industry, a global source of new jobs and of course the very engine of the transition to sustainable energy.

This is an extract of an article which appeared in Vol.31 of PV Tech Power, Solar Media’s quarterly technical journal for the downstream solar industry. Every edition includes ‘Storage & Smart Power,’ a dedicated section contributed by the team at Energy-Storage.news.

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JinkoSolar PV modules at Intersolar Europe 2022 last week in Munich, Germany. Image: PV Tech.

Last weeks’ Intersolar Europe / ees Europe trade event in Germany saw a number of energy storage-related announcements from Chinese solar PV industry players including JinkoSolar, Trina Solar and Huawei.

As reported by our sister site PV Tech, JinkoSolar announced its first European energy storage system (ESS) framework deal with a German wholesale company, while Trina’s energy storage division officially launched the Trina Storage Elementa utility-scale ESS platform. Huawei launched an all-new smart PV and energy storage solutions range.

Here’s a quick roundup of the three announcements, which were among the many items of news and exclusive content gathered by PV Tech. See the site’s coverage including an Intersolar Europe 2022 Live Blog for more.

JinkoSolar

JinkoSolar has signed its first European energy storage solution (ESS) framework agreement with German solar and energy storage wholesaler Memodo.

The products in the agreement include an all-in-one system, a stackable low-voltage and high-voltage storage system and a single or three-phase hybrid inverter.

The ‘Solar Module Super League’ member will have its products sold exclusively by Memodo in Germany, Switzerland and Austria for 2022 and 2023.

All the power storage devices are installed with lithium iron phosphate batteries and are compatible with well-known inverters.

By Jonathan Jacobo Tourino

To read the full version of this story, visit PV Tech.

This morning PV Tech also reported that JinkoSolar has signed a distribution agreement with Must Zimbabwe, one of the biggest distributors of photovoltaic modules, inverters, batteries and energy storage systems in the Zimbabwean market. JinkoSolar will supply over 100MWh of its ESS products to Must, including lithium iron phosphate battery system units for residential use and LFP container storage systems for C&I power demand.

Trina Storage

Launch of Trina Storage’s Elementa at last week’s event. Image: PV Tech.

Following on from the “unveiling” or soft launch of its battery energy storage system (BESS) at Intersolar 2021, Trina Storage officially launched its Elementa BESS, with an particular focus on safety features and cell performance, at Intersolar 2022.

The “all new” Elementa system is a LFP BESS system in a DC cabinet with busbar connection resulting in easy scale up, the company said. It is a product of continued research and development (R&D) in China, Trina said, adding that it had over 100 researchers working on storage innovation across its facilities.

Trina Storage has a annual LFP cell production capacity of 3GWh but plans to scale this up by “several” gigawatts over the new “few years” as it strives for greater vertical integration.

Established in 2021, Trina Storage has already successfully supplied one 50MW / 56.2MWh BESS project in the UK and has more than 100 customers globally.

By Sean Rai-Roche

To read the full version of this story, visit PV Tech.

Huawei

Huawei has announced all-new smart photovoltaic (PV) and energy storage solutions at Intersolar Europe 2022. The intelligent solutions enable a low-carbon smart society with clean energy, demonstrating Huawei’s continuous commitment to technological innovation and sustainability.

The company’s new Smart String ESS addresses the limited capacity, short service life, complex O&M, and high safety risks of conventional solutions. Huawei draws on more than ten years of R&D experience in energy storage systems to deliver a unique smart string structure that integrates digital power electronics and energy storage technologies, overcoming the limitations of lithium batteries.

Smart String ESS adopts pack-level and rack-level optimisation, distributed cooling and an all-modular design, enabling a battery’s full charging and discharging potential and providing optimal LCOS for PV plants.

Industry update by Huawei

To read the full version of this story, visit PV Tech.

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Fluence’s 10.8MW battery energy storage system (BESS) delivered for a windfarm in Ireland during the quarter. Image: Fluence.

Global energy storage system integrator Fluence increased its revenues for the first three months of 2022, its second quarter, by 249% to US$343 million.

Financial and operational highlights

The company, which has a fiscal year that runs to September 30, saw a net loss of US$61 million and negative adjusted EBITDA of US$53 million in the period, both of which increased in proportion with revenue. It has reaffirmed previous guidance of US$1.1-1.3 billion in revenue for fiscal year 2022.

By March 31, total cash and cash equivalents grew around 6% to US$723 million and its total backlog reached US$2.2 billion worth of orders. US$1.8 billion of this is from energy storage products segment, with the remaining US$400 million from long-term energy storage services and Fluence IQ, its software platform.

All three segments saw strong operational growth. Energy storage products deployed and contracted doubled (+94%) from the same period last year to 4,832MW. Energy services deployed and contracted tripled (+207%) to 3,283MW while deployed and contracted MW under its Fluence IQ platform was in between the two, growing 150%.

Fluence said US solar and storage greenfield projects have accounted for about 30% of total order intake in the first half of its 2022 fiscal year (October 2021 to March 2022). It added 582MW of new contracts in contracts for energy storage products in Q2 and made progress on contract manufacturing locations in EMEA and Americas, it said.

In the company’s Q1 (October-December) results presentation Fluence CEO Manuel Perez Dubuc revealed that future contracts would include pricing based on raw material indices (RMI) to minimise exposure to fluctuations which, along with inflationary pressure, were a “concern for many in our industry.”

In last week’s Q2 earnings call, he said Fluence had increased its prices on new contracts by 15-25%, related to its new RMI-based pricing, and that no cancellations had occurred after those price changes. “So far, we have seen a broad acceptance by our partners to engage in finding optimal and creative solutions for all parties,” he said.

Some 343MW of new contracts for energy services were added in the period while Fluence IQ grew its assets under contract by 2.8GW which excludes its acquisition of Nispera in April. It does include Fluence IQ’s first pumped hydro asset of 1.2GW.

In an update on the quarter-on-quarter development of its supply chain, Fluence cited disruptions like reduced battery production in China due to lockdowns and multiple Force Majeure declarations by manufacturers there. On the upside, shipping rates are stabilising, port congestions are moderating and raw material price volatility is improving, it said.

Although occurring after the period in question, Fluence recently tied-up with Amazon Web Services (AWS) for cloud computing services to support its hardware and software platforms.

‘Fluence well-positioned to capitalise on increased renewable deployments in Europe’

The company cited the EU’s REPowerEU initiative to increase the renewable energy transition and reduce reliance on Russian gas, by nearly doubling renewable asset deployments from 42GW to 78GW annually to 2030. While industry advocates have expressed concern that REPower EU excludes explicit mention of the role of energy storage in that endeavour, it appears Fluence believes the fundamental drivers for energy storage will be strong.

Dubuc said: “As you can imagine, this increase in renewable asset generation will create more grid reliability and stability issues, thus, necessitating additional energy storage. We have already seen increased interest from our customers in Europe from energy storage. As the market leader in Europe, Fluence is very well positioned to capitalise on this emerging need, enabling Europe to achieve its energy independency and security goals.”

He also highlighted the opportunity of data centres globally looking to replace existing traditional forms of carbon-emitting backup power systems with emission-free energy storage. Fluence completed a 2.75MW project for Google in its Belgium data centre during the period, and Dubuc said this sub-segment totals about 20GW globally.

Fluence’s chief digital officer Seyed Madaeni provided some colour on the Nispera acquisition mentioned earlier.

“The bidding app is currently Fluence IQ’s flagship application, we are in the process of developing a dispatch app, manage app and invest app, but we intend to utilise Nispera’s APM (asset performance management) as a foundation for our manage app, which we expect will accelerate the time to deploy this application to the market. Not only does Nispera provide us with a solid foundation for our manage app, but it also expands our digital portfolio’s geographic footprint,” he said.

Rebecca Boll, chief producer officer, added in response to an analyst’s question that the Fluence is on track to reduce its supply chain exposure to China to 70% by the end of the year through deals with other suppliers. By 2025, the company hopes it will be about 50% as Europe and North America-based manufacturers ramp up.

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Hornsdale Power Reserve: the large-scale BESS which in many ways kicked off the journey Australia’s market is now on. Image: Neoen.

Battery storage has become the leading provider of frequency control ancillary services (FCAS) in the National Electricity Market (NEM) which covers most of Australia.

That’s according to quarterly figures released by the Australian Energy Market Operator (AEMO). The latest edition of AEMO’s Quarterly Energy Dynamics report covers the period from 1 January to 31 March 2022, highlighting facts, statistics and the trends that are shaping the NEM’s dynamics.

For the first time ever, the largest percentage of frequency regulation provided by technology type came from battery energy storage systems (BESS), with a 31% market share across the eight different FCAS markets. It was a full 10% lead over black coal and hydro which tied for second place with a 21% share each.

Total estimated net revenues for batteries in the NEM were around A$12 million (US$8.3 million) for the first quarter – a rise of A$2 million year-on-year from A$10 million netted in Q1 2021. It was a dip from revenues raised during the rest of last year, but comparisons perhaps tend to be fairer with equivalent quarters due to seasonality of electricity demand patterns.

At the same time, the cost of providing frequency control fell to about A$43 million, which was about a third the cost recorded in Q2, Q3 and Q4 2021 and about the same as was recorded in Q1 2021. This reduction was however largely driven by the impact of transmission system upgrades in Queensland which had led to high contingency FCAS prices for the state as scheduled outages took place in the three preceding quarters.

While batteries took first place in FCAS, other relatively new frequency regulation sources such as demand response and virtual power plants (VPPs) have also started to eat into the share provided by conventional generation, AEMO noted.

Image: AEMO

Batteries being used for energy as well as power

Perhaps the biggest takeaway for the energy storage industry is that the share of revenues earned through FCAS is in fact at the same time decreasing relative to those earned through energy markets.

In the last couple of years, frequency has been by far the largest revenue-earner for battery storage, with energy applications like arbitrage a way behind. In a recent article for our quarterly technical journal, PV Tech Power, Ben Cerini, managing consultant at energy market expert group Cornwall Insight Australia, said that about 80-90% of battery revenues have been coming from FCAS and about 10-20% from energy trading.

In Q1 2022 however, AEMO found that the proportion gross revenues earned in the energy market by batteries jumped from 24% in Q1 2021 to 49%.

Several new large projects drove this increase in share, like the 300MW/450MWh Victorian Big Battery in Victoria and the Wallgrove 50MW/75MWh battery system in Sydney, New South Wales.

AEMO noted than in Victoria, volume-weighted energy arbitrage value rose from A$18/MWh to A$95/MWh compared to Q1 2021.

Pumped hydro energy storage (PHES) also had a strong quarter: a record quarterly high A$56.5 million of spot market revenue was earned, compared to just A$2.9 million in Q1 2021.

This was largely driven by the performance of Wivenhoe pumped hydro plant in Queensland, which made a lot of money due to high electricity price volatility in the state during the quarter. The plant saw its utilisation increase 551% from Q1 2021 and was able to at times get paid at spot prices higher than A$300/MWh. Just three days of extremely volatile pricing earned the plant 74% of its quarterly revenue.

Fundamental market drivers mean Australia is poised for strong growth in energy storage capacity. The country’s first new pumped storage plant in nearly 40 years is under construction and more are likely to follow. It’s in batteries though that the fastest and largest growth in activity is expected.

Approval granted for ‘coal replacement’ BESS in NSW

AEMO said that while there are now 611MW of BESS operating in the NEM, there are 26,790MW of proposed new battery storage projects.

One of those is the Eraring project in New South Wales, a BESS with up to 700MW output and four hours’ duration (2,800MWh), proposed by major integrated energy retailer and generator Origin Energy.

The project would be built at the site of Origin’s Eraring 2,880MW black coal power plant, which the company is keen to place into retirement by 2025. Its role in the local energy mix would be replaced by the BESS, 2GW of aggregated virtual power plant capacity and other resources including Origin’s existing fleet of thermal generation.

Origin pointed out that coal is being outcompeted by renewables, energy storage and other more modern technologies in the evolving market structures of the NEM.

Origin announced late last week that the NSW government Department of Planning and Environment has given planning approval for the BESS project, making it the largest project of its type in the country to have gotten to that point.

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