40 Tesla Megapack units will be used at the Bouldercombe site. Image: Tesla.

Genex Power has received credit approvals on a AU$35 million (US$25.26 million) debt finance facility for its 50MW/100MWh Bouldercombe battery energy storage system (BESS) project in Queensland, Australia. 

The renewables and energy storage developer said in an announcement to the Australian Securities Exchange (ASX) that it has agreed the financing deal with Infradebt, a specialist project finance fund management and financing company focusing on the energy transition space. 

The debt finance will allow Genex to “retain upside exposure to the attractive economics of energy storage and maximise the economic returns of the project,” the company’s CEO James Harding said. 

Genex said it will now negotiate final terms with Infradebt and take the project to its financial close. 

Bouldercombe Battery Project (BBP) will be one of Queensland’s first large-scale standalone BESS facilities. Scheduled to come online in the second half of 2023, the 12-year term of the Infradebt loan kicks in once commercial operations commence. 

Genex selected technology provider Tesla to supply the full integrated battery storage solution to BBP, in the form of 40 of the US-headquartered company’s Megapack BESS units which have also been used at Australia’s biggest battery project to date, the 300MW/450MWh Victorian Big Battery, which power producer Neoen recently brought online in the state of Victoria. 

Tesla’s Autobidder machine learning algorithm-based bidding system will also operate the BESS’ dispatch and trading activities. Genex and Tesla signed an eight-year off-take deal for that, which after the deal expires is expected to be renegotiated as a licensing deal. 

In addition to the AU$35 million debt finance, Infradebt has signed a Cooperation Agreement with Genex to continue working on financing other merchant BESS projects in Australia. The financial leverage that agreement will enable means Genex will retain upside from battery storage market economics, the company said.  

Genex is also currently building Australia’s first new pumped hydro energy storage (PHES) project in nearly 40 years, the 250MW/2,000MWh Kidston Stage 2 Pumped Hydro Project, also in Queensland. 

On Friday, Energy-Storage.news reported that Australian energy retailer Origin Energy plans to exit coal earlier than originally planned, given the competition the fossil fuel faces from renewables and energy storage.

Origin said it wanted to bring forward the retirement date of its 2,880MW Eraring coal power station from 2032 to 2025 and build a 700MW BESS at the site. The evolution of the National Electricity Market (NEM) is making it harder for baseload coal to keep up, with fast-responding batteries in particular able to capitalise on changing market structures.    

According to quarterly data from the Australian Energy Market Operator (AEMO), market revenues battery storage systems earn for frequency control ancillary services (FCAS) is rising, batteries are suppressing negative pricing events and the introduction of five-minute settlement (5MS) to replace 30-minute settlement in the NEM are among factors creating that upside Genex referred to. 

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Avista, through a request for proposal (RFP), is seeking power generation and demand management proposals from bidders to meet its clean energy goals and projected resource needs. The 2021 Electric Integrated Resource Plan (IRP), filed on April 1, 2021, reflected a need for new resources to meet requirements of the Clean Energy Transformation Act (CETA) and future customer peak demand. The IRP is a 20-year forecast of potential generation and energy efficiency resources to meet customer capacity and energy needs for both Idaho and Washington.

“Avista is looking to obtain energy that meets our system capacity needs and brings us closer to our goal of serving customers with 100 percent clean electricity by 2045 and 100 percent carbon neutral resources by 2027,” says Jason Thackston, Avista’s senior vice president of energy resources. “We are more than halfway there with our mix of renewable hydropower, biomass, wind and solar. This is one more step to ensure affordable, reliable and clean energy for years to come.”

The all-source RFP seeks generation and demand management resources to meet capacity and energy shortfalls between 2026 and 2030. In addition to renewable energy needs, Avista seeks approximately 196 MW of winter capacity and 190 MW of summer capacity by 2030 for reliability. As part of this RFP, Avista may bid repowering resources and/or Avista self-builds into the RFP. Avista will utilize an independent evaluator to participate in the design and assist in evaluating proposals.

The RFP is open to parties who currently own, propose to develop, or hold rights to resources meeting Avista’s requirements for energy and capacity. Parties who offer demand management solutions to lower customer demand during peak winter and summer events will be equally considered. Bidders must also demonstrate an ability to meet the minimum requirements for eligibility as listed in the RFP.

Proposals must satisfy the requirements of the RFP; Avista expects generation proposals from both new and existing fuel sources, such as wind, solar, biomass, hydroelectric, natural gas, renewable natural gas, and hydrogen. It also expects energy management solutions from pumped storage, batteries, and demand response.

Avista will consider hybrid proposals including combinations of clean energy, capacity and/or storage. Avista will not accept proposals for Renewable Energy Certificates (REC) only. RFP responses are due by March 25, 2022. The RFP and bid instructions are available here.

Image: “Solar panel” by OregonDOT is licensed under CC BY 2.0

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Priscilla Sims Brown

Renewable energy platform Almika Renewable Finance is launching a new suite of financial services focusing on the residential solar and energy storage market with the financial backing of Amalgamated Bank.

Almika offers customers who install solar and storage systems a single platform that integrates utility billing, clean energy financing and demand response capabilities. Its partnership with Amalgamated Bank will allow it to strengthen its platform offering in the energy market, while simultaneously helping the bank achieve its net-zero targets by 2045.

“Almika and Amalgamated share the same goal of reducing greenhouse gas emissions,” says Priscilla Sims Brown, president and CEO of Amalgamated Bank. “By making a strategic investment in clean solar energy, Amalgamated will tap into a growing market and accelerate our efforts to mitigate climate change.”

“Almika’s technology with Amalgamated’s partnership delivers the best possible experience to our partners, customers and those considering renewable energy home improvements,” states Celestine Vettical, CEO and co-founder of Almika. “This not only adds to the full suite of service offerings in our platform but unlocks the true scalability and value that we aspire to deliver to the environment, our current grid structures, and the customers we serve.”

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Davis Hill Development’s solar project at Ludlowe High School in Fairfield, Conn.

FirstLight Power has partnered with Davis Hill Development (DHD) to develop a suite of solar, energy storage and hybrid assets in Connecticut to operate both independently and in coordination with FirstLight’s existing fleet of hydropower assets. The partnership will bring a new generation of hybrid renewable energy resources to serve New England’s grid.

FirstLight Power already operates the largest portfolio of renewable energy generation projects in Connecticut; with this partnership, the company seeks to deliver even greater clean energy impact towards the state’s goal of achieving a 100% zero carbon electric sector by 2040. The new development partnership between FirstLight and DHD will focus on delivering clean assets in a way that centers reliability, affordability and equity.

“I am excited to be expanding FirstLight’s clean energy footprint in Connecticut and furthering both the state’s ambitious clean energy goals, and our company’s mission of creating an electric grid that is clean, affordable, reliable and equitable,” says Alicia Barton, president and CEO of FirstLight. “We are proud to be partnering with DHD, a proven developer of innovative renewable projects, to deliver a new generation of hybrid and storage-integrated clean energy resources to power the Nutmeg State.”

FirstLight anticipates that the venture will deliver more than 25 MW of solar and battery storage projects across eight of FirstLight’s existing Connecticut properties along the Housatonic, Shetucket and Quinebaug Rivers. The new storage and solar assets will bring flexibility to FirstLight’s existing hydropower portfolio in Connecticut, allowing renewable energy to be stored when demand is low and provided back to the grid when the power is needed most.

“FirstLight Power has truly been a premier, best-in-class partner for us from the start, and we are excited to be building on this relationship and bringing to life a suite of clean energy assets that Connecticut requires to meet the state’s climate action goals,” comments Jared Alvord, VP of strategic development of Davis Hill Development. “Davis Hill Development has developed, built and financed over 50 clean energy projects in the state of Connecticut to date, and we are excited to expand that work with a transformational clean energy company such as FirstLight.”

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Solar-plus-storage accounted for the majority of hybrid resources. Image: PG&E.

Utility-scale battery energy storage system (BESS) installations in the US grew 196% to 2.6GW in 2021 but overall clean power installations fell 3%, according to the latest annual figures from the trade body American Clean Power Association (ACP). 

Measured in energy, utility-scale BESS capacity quadrupled to 10.8 GWh over the course of the year. It now accounts for 2% of the country’s total clean power capacity of 200GW, about double 2020’s proportion.

Over 1GW of large-scale BESS was brought online in that last quarter alone, the first time that landmark has been reached in a single three-month period according to the ACP.

Note that Wood & Mackenzie Power & Renewables said that a gigawatt of deployements were achieved in Q3, as reported by Energy-storage.news, but Wood Mackenzie’s market research spans all scales from front-of-the-meter utility-scale storage to residential, commercial & industrial (C&I) and community storage while ACP focuses on utility-scale segments of the clean energy market.

Overall, ACP data shows the year and particularly fourth quarter may be seen as disappointing for the clean power sector’s progress with BESS outperforming the other technologies by some distance. Annual clean power installations fell 3% to 27.7GW and Q4 was down 34%, to 10.5GW. 

Some 11.4GW of capacity expected to come online in 2021 had completion dates pushed back beyond the year. The main cause of this was wind, for which installations fell 25% while solar increased 19%. 

“Supply chain constraints continue to impede project timelines, rising costs pressure project economics, and long, slow interconnection queues slow progress. For solar, a so far elusive resolution to the Withhold Release Order (WRO) threatens to further delay projects or even lead to their cancellation,” the ACP commented. 

In reference to the poor Q4, it added: “Several projects simply pushed timelines and are expected online in early 2022. Others continue to battle supply chain constraints, trade barriers, rising costs, and other challenges”.

The ACP notes 187 projects in the 12.5GW pipeline for battery storage – of which 48 are stand-alone with 139 hybrid (paired with a renewable power source).

It says the capacity weighted average duration for installations reached 3 hours in 2021, trending consistently upwards since 2016 when it was around 1.5 hours. (Duration varied wildly from 2008 to 2015, a period which saw far fewer projects).

Hybrid resources led by solar-plus-storage, states led by California

Total operating hybrid capacity (defined as a combination of at least two types of clean power together) more than doubled last year to 8.7GW. Of this, 96% is storage paired with a renewable power source – solar-plus-storage the largest at 68% – with only the 4% that is solar-plus-wind not involving storage. 

Hybrid capacity growth of 132% last year is impressive considering it only grew by an average CAGR of 26% from 2009-2020 and a CAGR of just 11% in 2019 and 2020. 

The leading states for clean power capacity are Texas with 45.1GW, California with 22.9GW followed by Iowa with 12.3GW. Texas and California also rank number one and two for clean power capacity pipeline with 11.5GW and 3.4GW respectively, while Wyoming is third with 3GW. 

The proportion of Texas’ pipeline which is BESS mirrors the national figure of c10%, while for California storage it is a massive 35-40% of its pipeline. Its 5.1GW storage pipeline is much higher than the next-nearest, Nevada with 1.6GW, followed by Arizona and Hawaii with 1.2GW and 0.6GW respectively. 

Of today’s 200GW capacity, land-based wind is the bulk at 67% while solar is 30%. BESS’ proportion of 2% is likely to double again over time as it makes up 9% of the 7GW pipeline that started construction in Q4 and 10% of the total 120GW pipeline.

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Schneider Electric has purchased a controlling stake in EnergySage. In addition to rapidly growing its rooftop solar and community solar marketplace solutions for residential and commercial customers, EnergySage will build new solutions for high-efficiency HVAC, smart home devices, and other clean energy products and services, and will scale its business globally.

“This is an enormous milestone in EnergySage’s history and a huge testament to our team, platform, and all of our industry partners,” says Vikram Aggarwal, founder and CEO of EnergySage. “We’re thrilled to have the support and resources of a company that has been recognized as one of the most sustainable companies on the planet, while maintaining the entrepreneurial, consumer-first spirit that’s propelled us as industry leaders.”

“The future of energy is decarbonized, decentralized and digital” comments Nadege Petit, chief innovation officer at Schneider Electric. “We are excited to accelerate EnergySage’s growth and enable more energy consumers to make the transition to renewable energy”.

“Renewables like solar and wind are now cheaper than conventional electricity sources,” adds Aggarwal. “Policy decisions aimed at curbing climate change are being made across all levels of government, and consumers are increasingly turning to clean energy as a way to not only reduce their carbon footprint, but to increase their resilience to climate change and, of course, save money. EnergySage is uniquely positioned within the industry, and we look forward to working with Schneider to accelerate our mission of making renewable energy accessible and affordable for all.”

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President Biden succeeded in passing the bipartisan Infrastructure Investment and Jobs Act, but has had less success so far with Build Back Better. Image: @POTUS via Twitter.

Energy storage industry executives have urged US legislators to swiftly reach a consensus on the Build Back Better Act, with a strong emphasis on introducing the investment tax credit (ITC) for standalone storage. 

Two letters have been sent, one addressed to the White House and the other to Congressional leaders, from a long list of CEOs, presidents and other executives representing manufacturers, developers, financiers and system integrators. 

They described the legislation as being “essential for growing American manufacturing jobs, ensuring the health and well-being of American families, strengthening our nation’s infrastructure and transportation systems, and for meeting our energy and climate goals”.

The reconciliation bill that Congress is currently shaping offers a once-in-a-generation opportunity to address issues like consumer affordability, access to energy and the security and reliability of energy, the letters argued.

The ITC has supercharged the US solar PV market in the past few years, lowering the cost of capital by around a third and making it a significantly more investable technology. For energy storage however, the ITC only applies if solar and storage are installed together simultaneously and the storage system is charged directly from the solar generation onsite. This has been a powerful imperative for solar-plus-storage in the US, but could lead to a distortive impact on the country’s grid getting the right resources where it needs them.

A standalone energy storage ITC has long been advocated for. Analysis from Wood Mackenzie Power & Renewables has forecast it could lead to a 20% uplift in deployments. It has been included in Build Back Better, along with a direct-pay option which makes it quicker and easier to realise the tax benefits.

However, as has long been documented, despite the legislation enjoying rare bipartisan support among US politicians, West Virginia Senator Joe Manchin, a Democrat, has refused to give it his approval and the bill’s progress has stalled.

The Infrastructure Investment and Jobs Act (IIJA) which was passed last year with bipartisan support, was warmly welcomed by the industry for the way it could advance manufacturing and stimulate the supply side, but in doing so many pointed out that from the demand side, there would be few better stimulus policies than the direct-pay ITC.

The letter’s signees urged for the continued advancement of energy tax provisions and the associated direct pay provisions including in both the House and Senate versions of the Act. 

“The direct pay provisions are a crucial part of creating a level playing field for companies of all sizes to compete and they address capital constraints that currently exist in the Investment Tax Credit (ITC) market,” the letters said.

“Availability of these provisions directly contributes to the ability of the renewable energy sector to continue to grow, scale and meet demand.”

Executives from 70 companies including technology providers Fluence, Sungrow, Stem, Enphase, Powin Energy and Form Energy, developers, independent power producers (IPPs) and investors Arevon, 8minute Solar Energy, CleanCapital, Key Capture Energy, Lightsource bp, consultancies and other service providers signed the letters. 

Energy storage technologies are a pivotal part of the US’ “grid resiliency, grid security and net-zero goals,” they wrote, arguing that certainty in tax provisions allows companies to keep developing energy and climate solutions “at scale and to build a diverse and reliable energy portfolio to support residential, commercial, and public sector entities…”.

“…That’s why it is imperative to pass these provisions now so developers and manufacturers can scale in time to contribute to sound grid infrastructure and to help meet US climate goals for 2035 and beyond.” 

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KORE Power’s gigafactory under development in Buckeye, Arizona is a rare example of capacity buildout by a US player. Image: KORE Power.

A US government pledge of US$2.9 billion support for the country’s battery manufacturing and recycling value chain is more like a band-aid than the “major surgery” required to fix the problem. 

That’s the view of Adam Walters, a specialist renewable energy industry lawyer at Stoel Rives LLP. Energy-Storage.news reported earlier this week that the US Department of Energy (DOE) has unlocked the funding through the Infrastructure Investment and Jobs Act (IIJA), aka the Bipartisan Infrastructure Deal. 

The DOE’s Office of Energy Efficiency and Renewable Energy will support battery materials refining and production facilities, as well as battery cell and pack manufacturing and recycling. 

The administration has correctly identified the problems facing US industries, which currently import nearly all of their battery materials, components and often finished products too from abroad, and largely from China, Walters said.

However according to the lawyer, the funding, in the form of loans, doesn’t solve those problems by addressing their root causes, nor is it enough in dollar terms. 

From starting out working with utility-scale solar companies in 2008, Walters has increasingly focused on the battery energy storage space. Last year he contributed to an article for our quarterly journal, PV Tech Power, on the inherent financial risks that battery storage companies face in their supply chains. 

“While the administration has identified the right problems when it comes to the need to spur both battery supply chain manufacturing and raw materials mining in the US, the problem with US manufacturing has always been, and still is, high labour costs relative to Asia,” Walters said in comments sent to Energy-Storage.news yesterday. 

“Under US$3 billion in short-term government loans is not going to change that either, when in industry terms, this is a small amount of money — basically enough to build two or three moderate sized manufacturing facilities.”

‘Proper solution remains to be realised’

In his PV Tech Power article, published last August, Walters had said that in the solar PV industry, Chinese government subsidies had blown European and American manufacturers “out of the water” from around 2011 onwards, with “very few survivors of that”.

The dynamics aren’t quite the same for batteries, he said, but US competitiveness versus the Chinese battery value chain is nonetheless facing an uphill battle.

“Unfair Chinese subsidies play a role, as they did with the solar PV industry a decade ago, but it isn’t to the same magnitude and tariffs aren’t the solution either; the proper solution remains to be realised,” he said yesterday. 

In the shorter term, the COVID-19 pandemic is creating current high shipping costs and delays for internationally sourced products, which would make US-made products more competitive. However, Walters said, this is unlikely to have more than a couple more years’ impact. 

“By the time new government-subsidised plants are up and running, global shipping costs will be back down to near pre-pandemic levels.”

In the rush to bring battery manufacturing, materials processing and recycling onshore, the lawyer also said there is a possibility that companies applying for loans might be affiliates of Chinese, South Korean and Japanese top tier players seeking to add manufacturing in the US, rather than US companies. 

While in Europe, literally hundreds of gigawatt-hours of battery manufacturing capacity have been committed to — from a combination of domestically and overseas-headquartered companies — the majority of new large-scale manufacturing plants in the US are in construction by the likes of South Korea’s SK Innovation and LG Energy Solution, although US startup KORE Power is building a gigafactory in Buckeye, Arizona. 

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The Victorian Big Battery which recently went online is a good example of how battery storage is playing its part in “reshaping” Australia’s energy sector. Image: Victoria State government.

Australian energy retailer Origin Energy intends to build a 700MW battery storage system on the site of a coal power plant for which it has brought forward a planned retirement date by seven years. 

The economics of operating coal generation are rapidly diminishing as solar, wind and storage are outcompeting the fossil fuel in the National Electricity Market (NEM) and company intends to exit coal entirely with the retirement of its 2,880MW Eraring coal plant in New South Wales (NSW). 

Origin Energy has submitted notice to the Australian Energy Market Operator (AEMO) that it wants to close Eraring down by August 2025, not 2032 as originally planned. Three and a half years’ notice are required and the company has triggered that process.

The exit from coal-fired generation is a reflection of the “continuing, rapid transition of the NEM as we move to cleaner sources of energy,” Origin CEO Frank Calabria said yesterday. 

“Australia’s energy market today is very different to the one when Eraring was brought online in the early 1980s, and the reality is the economics of coal-fired power stations are being put under increasing, unsustainable pressure by cleaner and lower cost generation, including solar, wind and batteries,” Calabria said. 

Wholesale energy pricing is being impacted by the growth of wind and solar, as renewables and batteries become more competitive. This is making Origin’s cost of energy likely to be more economical through a combination of renewables, battery storage and peaker power plants. 

Battery energy storage system (BESS) assets are earning increasing revenues in the NEM from a combination of streams. According to market data estimates from the AEMO, battery storage earned AU$14 million (US$10.08 million) from delivering frequency control ancillary services (FCAS) in Q4 2021, up AU$4 million from the same quarter in the previous year. This was equivalent to about 68% of total NEM revenues for battery storage. 

In the wholesale market, battery storage, along with natural gas and liquid-fuelled generation were called up to manage rapid changes in net supply requirements in response to increased spot price volatility cause by a range of factors. 

At one point in mid-November 2021, large-scale wind and solar, hydro, biomass, distributed PV and battery storage discharges made up a combined 61.8% of total generation in the NEM, a record high. 

Taking the AEMO report as a snapshot of things to come, the energy arbitrage value of battery storage also drove increased net revenues from the energy market in South Australia. In that state the volume-weighted energy arbitrage value of battery storage jumped from AU$39/MWh in Q4 2020 to AU$138/MWh in Q4 2021. 

The 300MW/450MWh Victorian Big Battery also came online last year in Victoria, capturing a combined AU$1.3 million in revenues from FCAS and energy markets in Q4 2021 alone, as well as benefiting from a service contract to protect the state’s network from outages, called the System Integrity Protection Scheme (SIPS). 

Another factor that Origin Energy said was decimating the competitiveness of coal was the ability of battery storage to respond much more quickly to signals from the grid to provide power, in a way that coal could not. 

In October last year the AEMO introduced five-minute settlement (5MS) into the NEM, calculating energy and cap prices on a 5-minute basis, rather than every 30 minutes as before. 

While it is still early to conclusively say what the impact of 5MS will be, many had said this would be a massive boon for batteries. AEMO said that in Q4 2021 it had already stopped dispatch prices falling to its floor of -AU$1,000/MWh after high dispatch intervals. 

This had become a regular occurrence prior to 5MS’ introduction, as under 30-minute settlement loads and generation units were financially incentivised to rebid early in 30 minute intervals following price spikes. 

Battery systems in South Australia had taken AU$400,000 higher revenues under 5MS than would have happened under the 30-minute regime. 

Going forwards, AEMO recently introduced new regulations to incentivise investment in battery storage, and is also preparing to launch an ancillary services market for fast frequency response, which again, would favour the almost-instantaneous response times of batteries.

700MW BESS project would get underway in advance of closure

Origin Energy’s original 2032 retirement date for Eraring had been based on the expected technical end-of-life of the plant. That now comes forward significantly and the company said it will help it remove a significant portion of its Scope 1 greenhouse gas (GHG) emissions, in line Origin’s commitment to getting in line with the multi-lateral Paris Agreement’s 1.5°C pathway. 

“We acknowledge this news will be challenging for many of our colleagues, suppliers and the local community,” Origin CEO Frank Calabria said.

“This is only the start of the process, and we commit to consulting with our people, and supporting them, through any potential closure.”

The cost of Eraring’s closure had originally been stated at AU$240 million by the company, which said this will now be revised in light of the new proposals. The prospective 700MW BESS asset would likely be built in stages, starting well before the coal plant’s final shutdown of its four generating units. 

The influx of renewables “has changed the nature of demand for baseload power,” the CEO said. 

Calabria said Origin’s decision-making had been taken after careful consideration including “extensive consultation” with the NSW government. This includes an assessment of how the retailer’s investment can meet the aims of the state government’s Electricity Infrastructure Roadmap. 

The roadmap will likely guide the company’s investments into renewables and storage, including a possible expansion of its pumped hydro energy storage (PHES) facility at Shoalhaven.  

Our sister site PV Tech has reported over the past couple of weeks that plans by the government of NSW to create large Renewable Energy Zone (REZ) sites in the state have been met with dozens of gigawatts of proposals from clean energy developers, including wind, solar, battery storage and pumped hydro.  

It’s likely that next on the agenda after coal in Australia’s energy transition industries will be demonstrating that energy storage can effectively deliver peaking capacity in place of gas peaker plants.

There was dismay recently as plans progressed in New South Wales to build a 660MW diesel and gas peaker plant. Academics, environmental and clean energy industry groups have all stated emphatically that battery storage can be a more viable option than the polluting and often underused thermal power assets. 

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