Like other ‘agrivoltaics’ projects springing up around the world, the land at Blind Creek will continue to be used for sheep farming. Image: Rob Davis / Agrisolar Clearinghouse via Flickr.

Australia’s Clean Energy Finance Corporation (CEFC) and Octopus Group have followed up their recent development deal for a mixed renewables hub, announcing a utility-scale solar and battery project in New South Wales. 

The national CEFC and Octopus Australia said earlier this month that their joint venture (JV) is developing a 1.5GW renewable energy hub to help replace Victoria’s soon-to-retire Yallourn coal power plant. 

As reported by Energy-Storage.news, the hub, Gippsland Renewable Energy Zone (REZ) will be one of six of its kind in the state and could include solar, wind, battery storage and possibly green hydrogen electrolyser technology.  

Last week, the pair said they will jointly develop Blind Creek Solar and Battery Project in Bungendore, New South Wales. CEFC is committing up to AU$5 million (US$3.75 million) investment into it. 

Blind Creek will feature a 300MWac solar PV plant. It is on a location between major load centres in Sydney and Canberra and Octopus Investments said it can be built and integrated into the electricity network without major transmission works being required. 

Sonia Teitel, co-head of investment and development at Octopus Investments, told Energy-Storage.news that the sizing and configuration of the battery energy storage system (BESS) is underway.

The BESS could be up to 300MW/600MWh, based on the area available. The system will be available “for the typical revenue streams in Australia, which include load shifting, ancillary services and network services,” Sonia Teitel said. 

In a statement, Teitel called it a “huge opportunity in large-scale storage in NSW,” while it will support the state’s energy transition and grow Octopus’ renewables portfolio. 

Octopus and CEFC will work together with the project’s founders, which include local landowner Dominic Osborne. Osborne said that the goal of Blind Creek is that it will colocate renewable energy generation with regenerative agriculture and carbon sequestration. Sheep grazing will continue to take place on the site. 

“The development at Blind Creek is a significant opportunity for solar and storage generation between two major load centres and in a state which will see some coal fired generation retiring in the short term, requiring significant new generation to support security and reliability,” Monique Miller, CEFC executive director, said.  

Investing in the project continued CEFC’s strategy of “closely cooperating with landowners and maintaining existing regional farming activities in conjunction with clean energy generation,” Miller said. 

Octopus Investments Australia is part of the Octopus Group, which has invested in more than US$6 billion in clean energy projects since 2000 and entered the Australian market in 2018. The group’s portfolio companies also include Octopus Energy Group which has retail and generation operations in 13 countries and largely focuses on low carbon energy. 

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Jennifer M. Granholm, Secretary of U.S. Department of Energy

The Department of Energy (DOE) has released a new issue brief that details a future for solar power, good jobs and affordable energy in the United States. President Biden’s proposed investments in the Bipartisan Infrastructure Deal and Build Back Better Agenda will invest in the infrastructure, manufacturing, innovation and incentives for solar energy to grow good-paying union jobs at home, make solar energy affordable for all American families and accelerate the deployment of net-zero energy across the country.

The DOE issue brief – Investing in the Clean Energy Future: Solar Energy Research, Deployment, and Workforce Priorities – details the growth opportunities that exist in the solar energy industry for workers and families, and how investments like those proposed by President Biden can supercharge the benefits of these opportunities.

In particular, the issue brief explains how investment in solar deployment supports the U.S. clean energy revolution. Solar will play an important role in reaching President Biden’s 2035 clean electricity goal – alongside other sources of carbon-pollution free electricity, including onshore and offshore wind, existing power plants retrofitted with carbon capture or green hydrogen, geothermal, hydropower, and nuclear. Solar is already the fastest-growing source of new electricity generation in the nation – growing nearly 4,000% in just over a decade, from about 2.5 GW DC of solar capacity in 2010 to over 100 GW DC today.

The pipeline of new solar projects in 2021 is on pace to hit record highs. To reach a largely decarbonized electricity sector by 2035, solar deployment would need to accelerate to three to four times faster than the current rate by 2030. Large scale decarbonization of the electricity sector could move solar from 3% of generation today to over 40% by 2035.

Realizing this potential for solar generation requires historic investments to accelerate deployment of residential, commercial and utility-scale solar systems, including in disadvantaged and low-income communities. The proposed clean energy investments in the Bipartisan Infrastructure Deal and the Build Back Better Agenda will serve as this catalyst for jobs and economic opportunity. This includes the extension of $300 billion in tax cuts for clean electricity, including solar, making it cheaper to build, funding for new transmission and energy storage infrastructure to help deliver clean, reliable power to homes and businesses.

President Biden also proposed a new Clean Energy Accelerator to leverage private capital for community solar projects, particularly in low-income and disadvantaged communities. These investments, along with the proposed Energy Efficiency and Clean Electricity Standard, can help achieve the President’s goal of 100% carbon pollution-fee power by 2035.

Solar innovation can lower costs for consumers and communities. Thanks in part to DOE investments, solar costs have declined 70% to 80% since 2010 – lowering the price of a typical 6 kW residential system by almost $30,000. While solar photovoltaic (PV) is already the least expensive electricity option in dozens of states, it is important to bring this low-cost, zero-carbon electricity to more parts of the country to save American families money.

The Biden Administration is committed to continually investing in solar innovation and lowering the cost of energy for families and communities across the country. This is why the Solar Energy Technology Office at DOE set a new 2030 goal of cutting the cost of solar (PV) to $0.02 and $0.05 per kWh without subsidies, for utility and residential scales, respectively. This would deliver nearly $14,000 in savings for a typical home system.

DOE is also celebrating the Summer of Solar 2021 to promote a new, free, web-based tool – the Solar Automated Permit Processing (SolarAPP+) – that helps local governments speed up the review and approval of permits for residential solar and solar plus storage systems. Faster permitting times will attract businesses to work in jurisdictions that use it. After implementing a similar tool to fast-track permits in San Jose, Calif. residential installations increased by 600%.

Build Back Better investments proposed by President Biden can help DOE achieve these solar cost reductions. Investments in clean energy R&D, supply chains of critical materials, and tax cuts for new and retooled factories for advanced energy manufacturing will help lower costs across the solar lifecycle. Extending the tax cuts for both utility and residential renewable energy project can help lower the upfront costs of new solar and accelerate deployment so that everyone can benefit from the economies of scale. Lower solar costs overall can put downward pressure on utility energy costs for ratepayers, and make solar more affordable for more families while reducing the greenhouse gas (GHG) emissions of their energy use.

In 2020, there were over 300,000 people employed in the American solar industry – 230,000 of whom worked in solar for a majority of their time. Employment in the solar industry has been one of the fastest growing sectors over the past decade – increasing by 150% between 2010 and 2020. These workers are employed by over 10,000 solar businesses across all 50 states, the District of Columbia, and Puerto Rico – many of them small businesses. While clean energy jobs broadly were hit by the economic shutdown due to the COVID19 pandemic, they have bounced back substantially – adding back over 300,000 jobs this past year – and recovering at a rate faster than most other sectors of the economy.

A pathway to a largely decarbonized electricity sector by 2035 can add millions of new jobs across clean energy technologies, including potentially 500,000-1,500,000 people working in solar by 2035. To match this demand with supply, investments are needed to expand the talent pipeline by increasing access to training opportunities across the entirety of workforce development stakeholders, such as labor unions, community colleges, nonprofits and other training providers. This could include apprenticeship-based career pathways that contain solar work as part of a broad-based career path. The President’s agenda will ensure that these investments produce good-quality jobs with strong labor standards, including prevailing wages and the free and fair choice to join a union and bargain collectively.

As previously announced, DOE is pursuing new policy to ensure that all innovations that are developed with taxpayer dollars through DOE’s Science and Energy Programs require awardees to substantially manufacture those products in the United States, creating good-paying domestic jobs. This change will cover more than $8 billion in clean energy and climate innovation funding requested in the President’s Budget for Fiscal Year 2022, as well as future fiscal year spending. DOE will implement these actions through a Determination of Exceptional Circumstances under the Bayh-Dole Act.

Read the full issue brief here.

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The McKellar Solar Farm will be similar in scale to Silicon Ranch’s Lancaster Solar Farm, which supports Meta’s renewable energy goals in Georgia.

The Tennessee Valley Authority, Meta (formerly the Facebook company), Jackson Energy Authority (JEA) and Silicon Ranch broke ground on a new 70 MW AC solar facility in Madison County, Tenn. The McKellar Solar Farm will help support Meta’s regional operations with 100% renewable energy.

Originally announced in August 2020, the McKellar facility is part of TVA’s Green Invest program, which helps customers such as Meta meet their long-term sustainability goals with new utility-scale solar projects located within the Valley.

“TVA is the nexus for reliable, economical renewable energy solutions, and we have already committed $3 billion to bring more than 2,000 MW of new solar to the Valley since 2018,” said Doug Perry, TVA Senior Vice President, Commercial Energy Solutions. “This public-private partnership with Meta and Silicon Ranch demonstrates the strength of TVA’s community energy model to attract capital investment and high-quality jobs into the communities we serve while helping businesses meet their sustainability goals.”

Nashville-based Silicon Ranch will fund, own, operate, and maintain the McKellar Solar Farm, a disciplined approach the company takes with every project it develops. Silicon Ranch expects to invest upwards of $90 million to construct the facility, and the project will contribute millions of dollars more in property taxes, which benefit all Madison County residents by supporting local government services and the local school system. As part of its commitment to the communities where it sites solar projects, Silicon Ranch plans to support additional educational outreach opportunities to help teach students about the role projects like the McKellar Solar Farm play in the energy transition.

SR EPC, LLC (SR EPC), a wholly-owned Silicon Ranch subsidiary, is the prime contractor for the project. SR EPC engaged PCL Construction as the subcontractor for the PV plant and EPC Services Company as the subcontractor for the substation. “Solar energy plays a critical role in our pathway to a more sustainable future. PLC is excited to leverage its experience in building over 50 utility-scale projects, to construct the McKellar solar facility,” said Brad Hise, PCL’s Solar Operations Manager.

Construction of the solar facility will create more than 350 construction jobs, with preference given to the local labor pool and the military veteran community. The solar farm will also provide additional employment for ongoing operations and maintenance, including ranchers and farmers to care for the land as part of Silicon Ranch’s Regenerative Energy® holistic approach to land management.

“At Silicon Ranch we believe that solar projects can create enduring value and deliver a meaningful legacy for communities, and we thank TVA, Meta, JEA, and the Jackson Chamber for making this significant investment in Madison County possible,” said Silicon Ranch Co-Founder and CEO Reagan Farr. “Silicon Ranch has been proud to partner with Meta to supply renewable energy to its data center operations in Georgia, and we’re honored to support Meta’s operations right here in the Tennessee Valley. McKellar Solar Farm is yet another innovative, customer-driven renewable energy solution made possible through TVA’s meaningful leadership in our home region.”

“We are thrilled to be partnering with TVA and Silicon Ranch to bring this new solar facility to the grid in support of our operations in the Tennessee Valley,” said Urvi Parekh, head of Renewable Energy at Meta. “The more than 850 megawatts of new solar energy we are developing with TVA is an important part of our goal to support our global operations with 100% renewable energy. We thank our partners Silicon Ranch and TVA for sharing our commitment to have a positive impact on the communities where we locate.”

Construction of the facility is expected to be completed before the end of 2022, with interconnection to the TVA grid facilitated by the JEA distribution system.

“This solar farm is the largest project to date in JEA’s service territory, reflecting our commitment to providing sustainable, reliable, and affordable power in the Tennessee Valley,” said Jim Ferrell, President and CEO of Jackson Energy Authority. “We are proud to partner with Meta, TVA, and Silicon Ranch to supply carbon-free solar power for many years to come.”

This year, nearly 60% of TVA’s electricity is from carbon-free generation. To meet the region’s renewable energy needs and lower Valley carbon, TVA plans to add 10,000 MW of solar by 2035. The additional solar will help TVA reach 70% carbon reduction by 2030, about 80% reduction by 2035, and an aspirational target of net-zero carbon emissions by 2050.

The McKellar Solar Farm will integrate Silicon Ranch’s transformative Regenerative Energy® model, a holistic approach to design, construction, and operations that co-locates renewable energy production with regenerative agriculture practices. The innovative platform delivers valuable environmental, social, and economic outcomes above and beyond the significant positive impacts a solar facility alone can generate, creating additional value for the surrounding communities and project stakeholders. Through managed sheep grazing using regenerative pastureland management practices, Silicon Ranch restores the land housing each array to a functioning grassland ecosystem, while keeping each site in agricultural production.

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Azelio’s first-ever project was commissioned at a solar farm in Morocco in 2020. Image: Azelio.

Chakratec raises US$30m for ‘Kinetic Power Booster’ flywheel

A company making energy storage systems based on flywheels and aimed at supporting ultra-fast charging for electric vehicles (EVs) has raised IS96 million (US$30 million) in capital. 

Chakratec, headquartered in Tel Aviv, Israel, develops and markets its kinetic energy storage systems and is targeting markets in the US and Europe with its newly raised funding, having issued new shares and warrants convertible into shares. 

The company has adapted flywheels to support fast charging even in grid-constrained regions, it claimed, potentially customers saving big money on expensive upgrades to transmission and distribution (T&D) infrastructure. 

The latest model in its Kinetic Power Booster range, KBP100kW, can handle more than 200,000 charge and discharge cycles at high power, can be used with chargers from multiple vendors and has a 20-year lifespan, the company claims.

Funding was raised from investors including three Israeli investment houses, More, Melin Lapidot and Meitav Dash, as well as insurance company Phoenix. The round was led by Israel-headquartered infrastructure services group Afcon Holdings. 

Chakratec has a patent pending for its flywheel design. 

NREL researchers look at ESS-specific battery design

A group of experts at the US National Renewable Energy Laboratory (NREL) is developing lithium-ion battery designs aimed at behind-the-meter (BTM) stationary energy storage systems (ESS). 

NREL’s researchers have joined the US Department of Energy’s BTMS Consortium, which largely looks at the role of batteries in enabling decarbonisation in buildings alongside energy efficiency, EV charging, solar PV and controlling building loads. 

They have been investigating the potential — and the limitations — of lithium titanate (LTO) anode and lithium-ion manganese oxide (LMO) cathode batteries for stationary storage, a market which has different demands to meet versus electric vehicles. 

LTO and LMO are free of critical materials, particularly cobalt, and offer high levels of safety and long expected lifespans. However, conventional designs of batteries using the chemistries have comparatively low energy density and they are temperature-dependent for their performance. 

By using thicker electrodes and adjusting the operating temperature of the battery, NREL researchers have attempted to identify a “‘sweet spot’ to leverage the advantages of electrode loading and increased temperatures to maximise the performance of LTO/LMO battery cells,” NREL researcher and project leader Yeyoung Ha said. 

Using electrochemical modelling, the team have verified their findings, simulating reactions at different temperatures and different thicknesses of electrodes. 

Strategies for use are also being looked at: for example researchers found that with stationary storage, electrode utilisation was significantly improved for batteries that were left to rest intermittently during discharge, as opposed to fully discharging as would be the case for batteries used in vehicles. 

Azelio looks at US certification for thermal storage technology

Thermal energy storage provider Azelio has begun work on a project which the company claimed will help open up opportunities for its technology to be used in the US.

The Swedish startup has a technology that stores energy as 600°C heat in a phase change material (PCM) made of a recycled aluminium alloy. The heat then drives a Stirling engine, which converts the energy into electricity. 

According to Azelio that makes it suitable for charging with solar energy and then to be used in long-duration energy storage applications of 10-12 hours and it is capable of daily cycling. Azelio won the first commercial order for its product, TES.POD, which is a stackable 13kW unit, in December 2020.  

Azelio said today that it will work with electrical and instrumentation contracting and technical services company MMR Group to carry out a certification project in Baton Rouge, Louisiana, US.

TES.POD units will be certified as compliant with US standards, and MMR Group will carry out necessary modifications to units shipped from Azelio’s manufacturing facility in Sweden to make sure they meet those standards. The units will also be used to train up MMR Group staff in their installation and operation. 

Azelio is one of the founder member organisations in the Long-Duration Energy Storage Council, which launched last November at COP26 and counts the likes of Microsoft and Google among its members. The company already has DNV’s verification for the performance of TES.POD systems. 

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The signing took place during the University Ecosystem of Lazio Region: Knowledge as a Heritage Forum, held in Dubai at the Expo Italy Pavilion. The MoU was signed by IRENA Director-General Francesco La Camera and Prof. Stefano Ubertini, president of CRUL.

The Lazio Region Universities Coordination Committee (CRUL) and the International Renewable Energy Agency (IRENA) have signed a memorandum of understanding (MoU) establishing a new partnership aimed at developing joint research on how to boost renewable energy as a key element in energy transition.

The research will focus, among others on bioenergy, geothermal, hydroelectric, ocean, solar and wind energy in pursuit of sustainable development, access to energy, energy security, economic growth and low-carbon prosperity. With nearly 210.000 students and programs in all fields of knowledge, the CRUL, made up of 13 universities, hosts 13% of the entire student population in Italy, being the second largest in Italy.

“Through the signing of this protocol, CRUL will be able to become part of the agency’s network to exchange good practices, teaching, training, researchers, students and present joint projects on sustainable energy, renewable energy and data collection,” says Paolo Orneli, Lazio Region councilor for economic development, commerce and handicraft, research, startup and innovation. “An important opportunity towards the internationalization and attractiveness of our university system which already boasts world-class excellence.”

Within the framework of this MoU, IRENA and CRUL will work closely on a number of key areas, including studying the use of renewable energy sources in different territorial contexts and the research on hydrogen and multi-energy systems, and promoting higher education in the field of renewable energy. In addition, they will formulate common policy advice to accelerate the expansion of renewable energy and facilitate knowledge sharing and technology transfer to provide clean and sustainable energy to the growing world population. IRENA and CRUL will exchange academic knowledge, research results and experiences for the development of renewable energies as well as jointly organize advocacy activities to raise awareness on viable renewable energy solutions.

“A knowledge ecosystem that advances research and creates skilled human workforce is crucial to scale up renewable energy deployment swiftly and sustainably,” adds Francesco La Camera, IRENA’s director-general. “I am confident this partnership will bring valuable contribution to the energy transition discourse and the net zero pathway.”

“Energy represents a necessary opportunity to be seized, without further delay, towards which all institutions will have to converge simultaneously by investing on research and knowledge exchange,” states Stefano Ubertini, president of CRUL. “The memorandum represents the shared path undertaken towards energy transition, as the only goal to be achieved, favoring the transfer of technology for the well-being of the planet and the community.”

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Invinity Energy’s Systems vanadium redox flow battery at Energy Superhub Oxford. Image: Invinity Energy Systems.

A major new vanadium processing facility is set to open in Finland in late 2024 after the formation of a joint venture (JV) to deliver the project.

Australian project development companies Critical Metals and Neometals have formed the JV with support from EIT RawMaterials, part of the European Institute of Innovation & Technology (EIT), an EU agency.

The Vanadium Recovery Project (VRP), located in Pori on the southwest coast, will produce the vanadium to be used in grid-scale vanadium redox flow batteries (VRFB), specialty steel applications and next generation lithium-vanadium cells, the announcement said.

It will use ‘slag’ from local steel producers to recover the metal. Today, around 70% of the metal comes from this method with three primary producers of the chemical sharing another 20% of the market: Largo Resources, Bushveld Minerals and Glencore.

VRP will rely on a novel proprietary hydrometallurgical process that results in no waste and its by-products will be used in the production of co2-free cement.

The European Commission classifies vanadium as a critical raw material and wants to diversify the source of the chemical, which is currently 75% supplied by China (almost entirely as by-products of steel and other industries). There is minimal vanadium processing or production capacity in Europe outside of Russia.

Darren Townsend, Chief Development Officer at Neometals, said: “We believe that in the next 10years vanadium will be the ‘new lithium’. We see a lot of parallels on where the vanadium industryis now versus where the lithium industry was 10 years ago. We are happy that EIT RawMaterialsagrees with this assessment and continues to support us in driving this project rapidly forward.”

Vanadium is increasingly being seen as an alternative to lithium-ion batteries in light of its longer duration, lower fire risk and lower reliance on lithium which has gone through big price spikes recently – and for which electric vehicles (EVs) will likely always be prioritised. However, not all are so convinced long-duration storage technologies like it are likely to take off in the way some are hoping or predicting.

That the two companies involved in the joint venture are Australian is noteworthy as the country is making a big push to set up a domestic supply chain, as Energy-storage.news has reported. It has no production or processing facilities despite having the third-largest natural reserves in the world. The primary producers’ vanadium production facilities are in South Africa and Brazil.

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Bill Gross

Heliogen Inc., a provider of AI-enabled concentrated solar energy, and Woodside Energy (USA) Inc., a wholly owned subsidiary of Australian energy producer Woodside Petroleum Ltd. are deploying a commercial-scale demonstration of Heliogen’s AI-enabled concentrated solar energy technology proposed to be built in Mojave, Calif.

The project agreement follows the previously announced limited notice to proceed (LNTP) granted by Woodside to Heliogen to begin procurement of key equipment for the deployment of a commercial scale, single-module 5 MWe facility. Heliogen will complete the engineering, procurement and construction of the facility, with construction expected to begin once permits are approved.

The two companies have agreed to include the scope and associated funding from Heliogen’s previously announced $39 million award from the U.S. Department of Energy to deploy Heliogen’s renewable energy technology in California. This means that in addition to commercial-scale demonstration of Heliogen’s 5 MWe module, the project will also include the deployment and testing of an innovative approach to converting the thermal energy produced by Heliogen’s facility into power, which has the potential to deliver higher efficiencies with a smaller footprint than traditional steam turbines.

In addition to the project agreement, Heliogen and Woodside Energy Technologies Pty. Ltd have also signed a collaboration agreement to jointly market Heliogen’s technology in Australia. The companies expect to define product offerings that use Heliogen’s modular technology for potential customers (including Woodside) in Australia. The Australian collaboration agreement includes an objective to deploy further commercial-scale modules of Heliogen’s heat and power offerings which may be combined with a hydrogen offering. The companies are also in similar discussions in relation to Heliogen’s technology in the U.S.

“We are thrilled to be working with leading Australian energy producer, Woodside,” says Bill Gross, founder and CEO of Heliogen. “Our agreements represent a pivotal next step in the commercialization of Heliogen’s breakthrough concentrated solar technology and the decarbonization of heavy industry. We are also pleased to share that, along with these agreements, our strategic alliance with Woodside includes Woodside taking an equity participation in Heliogen.”

“The proposed Mojave facility will further advance our discussions with Woodside for additional opportunities aiming to produce carbon-free heat, power and hydrogen to help them achieve their sustainability goals,” continues Gross.

“Woodside has set a US$5 billion investment target by 2030 for new energy products and lower-carbon services1,” comments Meg O’Neill, CEO of Woodside. “Our collaboration with Heliogen on this innovative technology supports our commitment to building a low cost, lower-carbon, profitable, resilient and diversified portfolio.”

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Different lithium battery cell types. ‘Runaway’ raw materials costs have hit the industry, Adam Walters of Stoel Rives said. Image: PI Berlin.

The US battery storage market is struggling to adapt to rising raw materials costs and has reached a “crisis point”, Energy-Storage.news has heard. 

The steep rise in the cost of lithium carbonate in particular means that it’s likely the industry will see a slowdown in new projects in 2022 and possibly next year, Adam Walters, a specialist lawyer with Stoel Rives, said.

“We’re at the point where batteries are going to be uneconomical in the short term for a lot of projects. The economics are not going to stack because those raw materials prices being so much extremely higher, translates to 20% to 30% higher battery prices overall,” Walters said in an interview. 

Walters provides legal counsel as a transactional, commercial and project lawyer to clients in the renewable energy and battery storage space, among others, with previous experience in-house at Tesla and First Solar.

Cobalt and other raw materials important for lithium-ion battery production have also gone up in price, but it is lithium carbonate prices, which have “quintupled since last August,” that present a massive issue, he said.

From about RMB100,000 (US$15,000) per metric tonne in China in the first half of 2022, prices are at about RMB500 (US$78,000). Prices doubled in the last two months and double two months before that. Walters said the situation is going to be a “massive break on the industry”.

“I think it’ll be a temporary break but it’s significant enough. These are runaway prices for raw materials,” the lawyer said. 

Top tier battery suppliers are now indexing their pricing to the spot market, with those prices being moved on to developers. That means firm pricing offers are very, very short-term and if vendors’ terms aren’t agreed to and deals signed off with five to 10 days, buyers lose that pricing and have to renegotiate. 

“What we’re going to see is fewer battery projects getting installed this year, and maybe even into 2023 on this basis. And you may be seeing some developers waiting out pricing to go down to a level that is more consistent with what we have seen up until six, seven months ago.”

According to the lawyer, three months ago, the situation was starting to get a little worrying, but now a “crisis point” has been reached.

The industry has become used to seeing consistent declines in the cost of battery storage, which has been seen to fall even faster than the costs of solar PV or wind before 2021. In early 2021, McKinsey associate partner Bram Smeets told Energy-Storage.news the importance of continuously falling battery storage prices in enabling rapid global decarbonisation.

It is not just that the prices have stopped falling for the first time in years, but also the introduction of uncertainty to financing that could hurt or slow down the industry.

Pricing volatility ‘making it difficult to convince banks’

Last August, Walters said in an article contributed to our quarterly journal PV Tech Power Vol.27 that energy storage equipment procurement in the US remains a chaotic endeavour, reminiscent of a ‘Wild West’.

Ensuring supply chain robustness, making sure customers understand their warranty terms and navigating the different regional markets for energy storage were among the challenges the sector already faced at that stage, he said at the time. 

Since then, the raw material pricing issue, driven largely by the huge demand for lithium batteries from the electric vehicle (EV) industry, has come to dominate the agenda. Increases in shipping and other costs stemming largely from the pandemic are having an impact too, although these are being felt in a broad number of other industries too. 

It’s too early to say what the impact will be, with prices having gone up so quickly and so dramatically, while a lot of the larger battery energy storage system (BESS) developers will have tried to lock in their battery order volumes 12 months to 18 months in advance.

Walters said this means that with batteries already purchased, projects scheduled for completion this year might not be affected. But with suppliers “substantially raising their prices,” it’s likely we will see impacts “very soon for projects with 2023 and 2024 completion dates”. 

His colleague at Stoel Rives, Morten Lund, works further downstream in the industry, engaging with developers. Lund said that the unprecedented volatility of pricing is making it “difficult for developers to try [and] convince a bank not to worry”.

“A little bit of variability is okay, but the more variability we have, the more difficult it is for us to convince banks,” Lund said. 

That said, the impact is likely to be strongest on the solar-plus-storage market, according to Morten Lund. Standalone energy storage projects are mostly financed from the balance sheet and not through project financing, making it a risk that the developer can take on. 

On the other hand many solar-plus-storage projects are project financed. In those cases, a big increase in the volatility of the energy storage costs — which present a significant portion of the total project costs — could affect ability to get financing, Lund said. 

At the Energy Storage Summit 2022, hosted in London by our publisher Solar Media in February, Giuseppe Artizzu, CEO for energy storage at storage and emobility solutions provider NHOA said the rise in lithium carbonate pricing has even closed the price differential between lithium iron phosphate (LFP) and nickel manganese cobalt (NMC) cells. 

However, Artizzu said that while supply chain challenges were perhaps added to by energy storage markets around the world taking off faster than expected, the situation “represents an opportunity to grow”.

“The supply chain will come out stronger because of it,” Artizzu said.

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The coal power plant in Pego, Abrantes, which stopped producing electricity in November 2021. Image: Endesa.

Endesa Generación Portugal, part of Enel Group, has been award the connection rights to develop a renewable energy project combining solar, wind, green hydrogen and a 168.6MW battery energy storage system (BESS) to replace the country’s last coal power station.

Endesa has been awarded connection rights of 224 MVA to install 365MWp of solar energy, 264MW of wind energy, with integrated BESS of 168.6MW. The project in the Abrantes region will also include a 500kW electrolyser which will produce green hydrogen.

The project, the winning applicant in a tender to convert a coal power plant in the parish of Pego, will require a total investment of €600 million (US$600 million). The investment is not subject to external financial aid as it is economically sustainable, the press release said.

The BESS will inject the stored renewable energy into the Public Service Electricity Grid (RESP) in, it added, a “dynamic and optimised way, reducing energy losses and optimising its use.”

The green hydrogen electrolyser will manage the surpluses that exceed the BESS’ storage capabilities. Portugal’s deputy minister and secretary of state for energy João Galamba, a regular speaker at events produced by Energy-storage.news‘ parent company Solar Media, has made the case for green hydrogen in the past.

However, the 500kW electrolyser appears relatively small in comparison with other renewables generation-plus-storage developments like the Horizeo project in France which will have a 10MW electrolyser. Though it should be said that that project, launched by Multinational utility Engie and renewables developer Neoen, has a much smaller BESS at 40MW.

The 628MW Pego coal power plant was the last in the country and stopped producing electricity with coal in November last year, marking the end of Portugal’s era of coal use. Endesa says it has formulated a training plan which can accommodate more than 2,000 people. The plant was managed by a joint venture between Endesa and Trustenergy (itself a joint venture between another energy giant Engie and Japanese conglomerate Marubeni).

Enel Green Power is Enel’s main renewable energy subsidiary – the largest renewable energy group in the world, it claims – and has been busy in Spain recently, ordering both vanadium redox flow and iron flow batteries for customer sites.

Portugal is meanwhile also one of the few countries in Europe with large pumped hydro projects coming online soon, too, with a 880MW plant in the north set to be fully operational in the middle of 2022.

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Northvolt might be best known as a cell manufacturer for the automotive industry, but it’s also a producer of whole battery systems for two distinct market segments: Industrial and Grid. Image: Northvolt.

By now, everyone’s heard of Northvolt, the Sweden-headquartered startup founded by former Tesla exec Peter Carlsson, building 150GWh of lithium-ion battery factories in Europe.

But while investments and off-take deals from the automotive industry have rightly been a major focus of attention, its stationary energy storage division Northvolt Systems has a story to tell too.

By Emad Zand, president of Northvolt Systems.

This is an extract of an article which appeared in Vol.30 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.

At Northvolt Systems we’re working for a clean energy future by contributing to the establishing of a new industrial base for lithium-ion battery solutions in Europe.

Just as we’ve seen with developing a renewable energy industry, fostering a domestic battery energy storage industry not only represents a significant economic opportunity for Europe, but security of supply for a technology that is a linchpin in the transition towards clean energy.

Establishing this new industry isn’t straightforward and there are certainly challenges in developing the necessary components for a world-leading, sustainable supply chain, but we’re further along than people might think.

From our perspective, Europe holds all the right ingredients to become a global leader in battery energy storage solutions and it has every reason to embrace this opportunity.

The evolving European landscape for ESS

It’s fair to begin with acknowledging that while battery energy storage remains a young industry within Europe, it is one full of promise and potential.

The potential stems from the idea that Europe holds all the right competences to support a complete, globally competitive battery storage supply chain. By embracing the opportunities of this new industry and driving them to their full economic potential, Europe could very well become the leading global supplier of battery energy storage to a global market forecasted to attract some US$262 billion in investment out to 2030.

Many in the energy industry recall how 15 years ago Europe was tipped for leading the solar PV industry. But for reasons including lack of engagement from industry, as well as from governments and the EU to create favourable conditions, the opportunity was lost. It is precisely this which we must avoid with the battery industry.

To the promise, we need look no further than case studies of deployed energy storage systems (ESSs) for evidence of what the technology can do to quicken the adoption of clean energy and enable the transition away from fossil fuels. And indeed, there are even pioneering European ESS companies operating within this landscape – albeit with cells and batteries sourced from Asia, the long-standing home of the lithium-ion battery industry.

The relative immaturity of the ESS industry can be understood for two core reasons. First, since the region has historically lacked upstream cell production, it has not been in an ideal position to foster either battery competence or synergies in battery solutions.

Second, while theoretical need for energy storage has been recognised for some time, the realisable market demand has lagged behind. Clear market structures and reliable revenue streams for the operation of ESS are a prerequisite for business-case viable projects, but they also serve to encourage investment in components of industry itself, including components suppliers and developers.

To both points – the location of cell manufacturing and the viability of ESS – we see change that leaves Europe not only well-positioned and motivated to mature its ESS supply chain, but to lead it.

Europe is well underway in scaling up its cell production capacity: long-time champion of the European battery chain, European Commission Vice-President Maroš Šefčovič, has stated that by 2025 Europe will be the second largest producer of batteries in the world and supplying almost 90% of its domestic battery production needs.

In parallel, markets have become more favourable for energy storage deployments. To be sure, some markets are further ahead than others, certainly the UK and Germany can be highlighted in this respect; but broadly we have the right foundations which are strengthened by EU commitments to decarbonisation.

There are of course still challenges for the European supply chain, but above all there is opportunity. It is telling that in acknowledging the need for its own proactivity towards batteries, the US government has recognised the approach of Europe towards fostering a domestic battery supply chain.

The acknowledgement is well-earned. The EU has a proven track-record for nurturing its battery industry – focussing on cell manufacturing, upstream materials preparation and recycling.

Embedded within the EU’s approach is a particular focus on calls for sustainability within the battery industry. This is prudent – positioning the new industry to leverage what can become a differentiating factor for European products. On this front, new legislation currently under development in Brussels, namely the Battery Directive, is key.

Notable highlights include mandating of carbon footprint labelling, new procedures to ensure ethical sourcing of raw materials and ambitions for battery recycling. Stakeholders to the emerging European battery landscape should embrace sustainability from the outset.

BloombergNEF forecasts installations in the order of 1TWh of energy storage by 2030, with much allocated for Europe. Beyond the value of directly enabling these European deployments, the real opportunity is for Europe to become home to leading ESS developers supplying the global market, much as we see with wind power and energy efficiency technology.

With the right approach, in time what we could come to see in the European battery energy storage industry is a textbook example of the environmental, societal and economic gains to be secured in repositioning industrial might in manner aligned with demands of a world facing a climate emergency.

Northvolt’s first grid-connected battery system, Västerås, Sweden. Image: Northvolt

Build to cost, build to scale

For the European ESS industry to scale towards global leadership, it’s critical to design both manufacturing and product technologies to enable competitive pricing.

For this, one insight we’ve had is the importance of modularity. That is to say, designing a base module for integration into packs and systems that can easily be scaled with minimal additional design requirements or components.

The aim to design products for scalability extends to how we deliver new manufacturing capacity. Here too, we can be smart in how we establish factories. A balance must be found between CAPEX and OPEX. There is an unavoidable sizeable upfront cost to deliver assembly lines, but we can be smart in selecting machinery and tools, which when paired with well-designed products, is future-proofed for future battery systems products.

Especially on the mechanical and assembly sides, leveraging large-scale manufacturing techniques and methods – which Europe has considerable experience of from other sectors – is invariable rewarded with lower unit costs.

Reflecting what the European battery systems industry can and should become, we can highlight Northvolt Systems Dwa – the battery systems assembly facility under development in Gdansk, Poland. The facility will feature highly automated assembly lines for high-volume production of modules and module-to-pack integration. A port city with excellent road access to the continent, the facility is well-positioned for both inbound volumes of cells from Northvolt Ett and components and for outbound product flows.

Northvolt will invest US$200 million to build this new battery systems factory and it will become the largest of its kind in Europe. Development is already underway and production is scheduled to begin in 2022 with an initial annual capacity of 5GWh and a potential future capacity of 12GWh.

Batteries are rapidly becoming a cornerstone technology of energy, mobility and societal functioning at large. For Europe to transition effectively to net-zero, it requires battery systems of its own. But the opportunity is much greater. We missed our chance with solar PV, let’s not make the same mistake with batteries.

This is an extract of an article from Volume 30 of PV Tech Power, our quarterly journal. You can buy individual issues digitally or in print, as well as subscribe to get every volume as soon as it comes out. PV Tech Power subscriptions are also included in some packages for our new PV Tech Premium service.

About the Author

Emad Zand is the President of the Systems division at Northvolt. He joined the company in 2017 as partof the early team.

Prior to joining Northvolt, Emad was active as an angel investor and board professional after leaving his role as CEO of a medical device company, where he completed a successful turnaround and sale. Emad has a Master’s degree in Economics from Stockholm School of Economics and started his career at McKinsey & Co.

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