The 45X Advanced Manufacturing Production Credit is one of several new ones brought in as part of the Inflation Reduction Act (IRA) at the start of 2023. However, unlike most others, 45X is paid directly to companies by the government rather than monetised by reducing an entity’s tax liability.

This makes manufacturing lithium-ion batteries immediately US$35 cheaper per kWh produced – the value of the tax credit for batteries. One company, Freyr, recently said this had completed “shifted the market” for battery production from Europe to the US, when discussing why it was pivoting its focus across the Atlantic (Premium access). Lithium-ion batteries generally cost around US$100 per kWh to produce.

The new Notice defines battery components as either electrode active materials, battery cells or battery modules, and provides a detailed breakdown within each of these of how to qualify.

The Notice has also clarified that there will be phase-out percentages starting from 2030, when it will fall to 75% of its original value, to 50% in 2031 and 25% in 2032 before being phased out entirely in 2033.

Additionally, it clarified that batteries cannot have a discharge duration in hours, or MWh-capacity-to-MW-power ratio, of more than 100. The longest-duration grid-scale battery energy storage system (BESS) projects that are being built currently are those from iron-air battery tech firm Form Energy, at exactly 100.

The 45X tax credit is separate to the domestic content adder to the investment tax credit (ITC) for clean energy project including energy storage. That gives a 10% uplift to the ITC if the technology – BESS or otherwise – is majority-manufactured in the US, though there are questions over how this will work in practice.

Industry stakeholders have until 13 February 2024 to provide comments on the new guidance.

See the full Notice on the Federal Register here and here for our sister site PV Tech’s coverage of the Notice as it pertains to solar.

Energy-Storage.news’ publisher Solar Media will host the 5th Energy Storage Summit USA, 19-20 March 2024 in Austin, Texas. Featuring a packed programme of panels, presentations and fireside chats from industry leaders focusing on accelerating the market for energy storage across the country. For more information, go to the website.

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However, as Energy-Storage.news wrote last week in a Premium article, Li-Cycle is facing serious issues after the costs for its hydrometallurgical recycling plant in Rochester, New York, nearly doubled to up to US$1 billion.

The hydrometallurgical process, or hydromet, of separating black mass into the critical metals needed for batteries, namely lithium, cobalt and nickel, is the tech opted for by most in the industry, but other processes exist.

Aqua Metals, a US company with a novel lithium-ion battery recycling technology, claims its process is cheaper and more sustainable to commercialise than conventional methods.

In this Q&A, the company’s VP of commercial David Regan discusses this as well as its work with the ESS market and the challenge of fluctuating prices amongst the metal commodities from which it will generate its revenue. Some of these comments were included in our piece on Li-Cycle and Aqua Metals last week.

Can you briefly summarise how AquaMetals’ process has such lower carbon emissions than conventional hydrometallurgy?

The largest source of carbon dioxide equivalent or CO2e for a standard hydrometallurgical LIB recycling operation is the carbon footprint of each trainload of chemicals required for operations, particularly sulfuric acid, hydrogen peroxide, and sodium carbonate.

Standard hydromet is a chemical intensive process, leveraging a series of chemical reactions and pH adjustments to separate valuable metals, typically as battery metal salts. Each of these steps consumes chemicals and produces a byproduct that must be treated, stored, and ultimately shipped to landfill.  This solid waste management adds an additional cost and carbon footprint as well as the potential for acidification and ecotoxicity. 

Aqua Metals’ AquaRefining process receives the same shredded, recycled battery waste (called “black mass” in the industry) as a standard hydrometallurgy process, but instead of introducing one-time-use chemicals, we use electrons as sustainable reagents via electroplating to extract the valuable metals using electricity. This means eliminating the reactions that require a constant supply of chemicals and produce landfill waste as a byproduct. 

The scope of the carbon footprint for AquaRefining is primarily driven by the electricity we are able to source ourselves or from the electric grid. The ability to use low-carbon and carbon-free electricity sources means we have a clear pathway to net-zero lithium battery recycling. The decarbonisation of one building’s electricity supply is far simpler than the combined chemical and transportation sectors. 

Do you foresee receiving many volumes from the ESS market?

Yes, stationary energy storage systems will play a not-insignificant role in lithium battery recycling, but they will be exceeded by the flood of EV batteries for two reasons. First, there are vastly more EVs expected than stationary ESS by weight, and the typical EV battery is three to four times larger than a comparable home battery. Second, EV batteries will wear out much faster than stationary systems, due to higher power loads and more aggressive charging of EV batteries. 

However, manufacturing scrap will be a primary source of recyclable materials for the foreseeable future, and that includes sourcing stationary ESS materials. Cell manufacturers produce a large amount of scrap material – whether EV batteries or stationary ESS – and that material will be first to enter the circular recycling supply chain. 

Are ESS project owners organising recycling deals significantly in advance of the batteries actually reaching the end of their life?

We have spoken to many system owners and large operators looking to establish long-term offtake agreements. For example, a global data center operator that has been using lithium batteries for years is now looking to recoup some value and get the battery system removed when it reaches its end of life.

Those types of large system operators are looking for a solution, often with a mix of some in-hand and soon-to-be-retired batteries available for recycling. 

How do you hedge against fluctuating prices for the metal commodities that you will be generating revenue from?

Battery recycling has a fascinating aspect that’s often overlooked: the potential for price arbitrage due to the rapid fluctuations in the value of critical minerals. We base our payment terms on a range of factors, notably including current spot prices from sources like the London Metals Exchange (LME) or FastMarkets.

Our approach to acquiring black mass hinges on the metal content. When we buy the black mass to recycle, it costs a percentage of the LME value of its composite metals. So, both our feedstock and product pricing will fluctuate with the values of the metals we receive and deliver. 

How much will your commercial-scale facility cost and will additional project-level financing be needed for it?

Our Sierra ARC recycling campus is projected to cost roughly US$100 million in total CAPEX to build 10,000 tonnes of annual black mass recycling capacity (around 100,000 EV battery packs).

Aqua Metals has raised funding to advance the first phase of this project (3,000 tonnes per year) and will be seeking additional funds to complete the campus by 2026. This could include a combination of government loans or grants, traditional debt financing, and other financial instruments. 

How does the cost compare to conventional hydrometallurgy?

Based on recently-updated projections from hydromet recycler Li-Cycle, it costs upwards of $1 billion to build a 35,000 tonnes-per-year facility (US$28,000 per tonne of capacity). Aqua Metals is currently on schedule and on budget with the first phase of our 10,000 tonnes-per-year campus outside Reno, Nevada, with a projected cost of US$100 million (US$10,000 per tonne of capacity), 60% less in upfront capital expenditures. 

It is difficult to compare apples-to-apples for operating costs, as only a couple of recyclers are operational at meaningful scale in North America. There are no commercial hydrometallurgical facilities producing battery grade products in the Western hemisphere today.

The operating costs of AquaRefining are projected to be much lower because chemical supply and storage costs are minimised and replaced with stable and predictable utility electricity pricing. These cost savings translate directly into margin for each tonne of material recycled using AquaRefining. 

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Ben Lipari

Alliant Energy has completed its Wautoma Solar Project, a 99 MW solar array in the Waushara County town of Dakota and city of Wautoma, spanning 624 acres and consisting of nearly 240,000 solar panels. 

“The completion of this project is a major accomplishment that will deliver safe, reliable, cost-effective energy to our customers for decades,” says Alliant’s Ben Lipari.

“This project has been, and will continue to be, a collaborative effort with our participating landowners, local officials and the broader Waushara County community. A unique aspect of our project design included the repurposing of land at the Wautoma airport, which allowed us to diversify the project layout and maximize the value of underutilized land. Our development and construction of this project demonstrated our core values to ‘Act for tomorrow’ and ‘Make things better.’”

Construction on the project began in July 2022 and employed nearly 150 carpenters, electricians, operating engineers and laborers. 

“Alliant Energy’s use of local contractors and the skilled craftsmanship of workers hired through local union halls ensured this project was completed safely, cost effectively and on time,” says Ted Gumieny, executive director of Northeastern Wisconsin Building Trades.

“Logging over 210,000 hours work without a single lost-time accident speaks to the importance of safety and the skill that local union workers contributed to this project. The Wautoma Solar Project is a high-quality site that Alliant Energy’s customers and the community can all be proud of.”

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Mateo Jaramillo

The California Energy Commission (CEC) has voted to award Form Energy a $30 million grant to support deployment of a 5 MW multi-day energy storage system in the state. 

Form Energy will build the project at the site of a PG&E electric substation in Mendocino County. 

Expected to come online by 2025, this will be Form Energy’s first project in California and the first multi-day energy storage project in the state.

The CEC is supporting this project through its Long Duration Energy Storage program, dedicated to accelerating the implementation of non-lithium technologies. Form Energy will use the grant funds to develop and operate the project, with PG&E providing land and an interconnection point at the substation site.

“We are excited to be building our first project in California, a place that holds special significance to many Form Energy employees as their home state, and as my home state, too,” says Mateo Jaramillo, CEO and co-Founder of Form Energy. 

“Long duration, and specifically multi-day, energy storage technologies have significant potential to help California meet its decarbonization, affordability, and reliability goals. We thank the CEC for this grant and for their continued leadership, and we thank PG&E for their ongoing collaboration in helping to bring this project to fruition. We expect this will be the first of many multi-day storage projects to come in California.”

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Stan Pinegar

Duke Energy is seeking proposals for acquiring diverse power generation in order to serve its Indiana customers.

“As we continue to transition to cleaner energy, we survey the markets for a diverse range of power generation resources,” says Stan Pinegar, Duke Energy Indiana president. “This gives us an opportunity to hear from developers about what may be available. Our aim is a responsible transition to cleaner power for customers who count on us to deliver energy that is affordable and available whenever needed.” 

As part of its integrated new power generation resource plan, the company is looking for up to 2,500 MW of specifically renewable energy generation, including combinations with battery storage. It is also seeking up to 2,500 MW of non-intermittent generation, such as natural gas combustion turbines, combined cycle units and stand-alone battery storage.

Proposals may include existing generating resources or proposed resources with an in-service date no later than Dec. 31, 2032. Duke will use an independent third-party administrator, Charles River Associates, to facilitate the RFP process and ensure it is conducted in a fair and unbiased manner.

Proposals for intermittent generation are due by Feb. 9. Selected projects will be presented to the Indiana Utility Regulatory Commission for approval. Proposals for intermittent generation are due by Feb. 9 and the deadline for proposals for non-intermittent generation is Feb. 23.

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Vittoria Bellissimo

The Canadian Renewable Energy Association (CanREA) welcomes the latest national market outlook for rooftop and on-site solar, which calls for scaling-up rooftop solar by 20 to 40 times to help Canada achieve its net-zero targets.

The report from Dunsky Energy + Climate Advisors, “BTM Solar: Canadian Market Outlook: How Behind-the-Meter (BTM) solar can contribute to Canada’s net-zero future,” outlines the current status of this industry within the country and models its growth potential under different scenarios, within the context of reaching net-zero by 2050.

“CanREA commissioned this independent report to investigate the progress to date and potential market outlook for BTM solar in Canada,” says Vittoria Bellissimo, CanREA president and CEO. “BTM solar is an important part of Canada’s renewable energy sector and it has tremendous growth potential. Canadian homeowners want it, municipalities want it, local businesses want it, and Canada needs it: all affordable clean energy solutions have a part to play in getting us to net-zero.”

The report states that if Canada is to achieve net-zero, the country needs BTM solar to meet 2%  to 4% of its total annual electricity demand, or 24 to 48 TWh per year. The current adoption rate for BTM solar in Canada is just 0.2%, says CanREA.

The report also states that the most impactful way to accelerate the adoption curve is to revise building codes to mandate solar in new single-family homes. This would result in an estimated 13 GW of new capacity.

The report also states putting solar on existing homes in Canada could generate an additional 11 GW, with an additional 12 GW generated by solar systems on commercial buildings. Together, this growth would account for 36 GW by 2050.

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Greenbacker Capital Management has entered into a $92 million financing agreement with BMO through an affiliated investment vehicle. 

BMO served as both lender and the administrative agent for the deal. Wilmington Trust served as collateral agent and depositary agent. The financing package includes a construction to term loan, a tax equity bridge loan, a term loan commitment and a letter of credit facility. 

The proceeds from the construction loan and tax equity bridge loan will be used to finance the construction of the Holtville BESS, which will have an expected 30 MW power capacity and up to 120 MWh energy storage capacity. 

The project has a long-term contract in place with an investment-grade offtaker. The term loan will support the construction of a portfolio of community solar projects in the northeastern U.S. All portfolio projects are expected to enter commercial operation next year.

Holtville is compliant with the Equator Principles, a voluntary framework adopted by members of the financial industry, including BMO, to responsibly evaluate the environmental and social impacts of the projects they finance.

Greenbacker was advised on the deal by Stoel Rives. Paul Hastings served as legal advisor to BMO. Wilmington Trust was advised by Bryan Cave Leighton Paisner.

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Blake Nixon

National Grid Renewables has started construction on its Unbridled solar project, located in Henderson and Webster Counties, Ky. 

At 160 MW, Unbridled is anticipated to be the largest producer of solar energy in the state once it reaches operations next year, says the company.

“We’re both proud and excited to be constructing the largest solar renewable energy project in the state of Kentucky,” says Blake Nixon, president of National Grid Renewables. “Unbridled is our first project within the state and exemplifies our commitment to the clean energy transition and the benefits it provides to rural economies in the form of new tax revenue and jobs throughout America.”

The project has a previously announced PPA with Big Rivers Electric and is partnering with Wanzek to complete the build.

“The Unbridled solar project will be a new and valuable addition to the diverse power portfolio needed to provide safe, reliable and sustainable energy to our member-owners,” adds Bob Berry, president and CEO of Big Rivers Electric. “This large-scale project also prioritizes our region with solar development that directly benefits the local economy and generates power for the people we serve.”

Unbridled Solar has also pledged to contribute $800,000 through a dedicated project charitable fund over the first 20 years of operations.

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Stefano Romanin

Westbridge Renewable Energy has closed the sale of its 230 MW Vulcan County, Alberta solar power plant project to a subsidiary of MYTILINEOS Energy & Metals, as announced in early June. 

The transaction was completed via the sale of all issued and outstanding shares of Georgetown Solar. Westbridge satisfied the conditions for the transaction, including regulatory approvals from the Alberta Utilities Commission for the construction, operation and interconnection of the project to the Alberta Interconnected Electric System and the TSX Venture Exchange. The company received C$47,564,002 at closing.  MYTILINEOS paid 3% of the estimated base purchase price at signing, with 92% of the estimated purchase price paid at closing. The balance of the purchase price is expected to be paid when the project reaches commercial operation. 

“We are delighted to announce the closing of the Georgetown Project,” says Stefano Romanin, CEO and director of Westbridge. “This marks a pivotal milestone in the progress of our company as it is the company’s first project being monetized, realizing our strategic vision.  It stands as a testament not only to our team’s dedication but to the solid business model executed over the past few years.”

“We are thrilled to announce the successful closing of the Georgetown Project, an important first step of entry into Canada,” adds MYTILINEOS’ Nikos Papapetrou. “Georgetown marks the closing of the first of five Alberta projects strategically poised for progression towards commercial energy production.”

Westbridge continues to retain ownership and is continuing to advance the projects of each of its other subsidiaries.

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The new JV will deploy up to 1.5GW of battery energy storage systems (BESS) across several projects mainly in the south of the country, Octopus said. Nexta will develop the projects while Octopus’ flexibility platform Kraken could optimise the assets’ dispatch into the energy market once operational.

It is not clear if Octopus plans to be the long-term owner and operator of the assets through its independent power producer (IPP) arm Octopus Generation. The company overall plans to invest €1 billion (US$1.1 billion) in Italy by 2030 across clean energy technologies.

Italy is one of the most exciting grid-scale energy storage markets in Europe right now. Grid operator Terna has said it needs a pinch under 9GW/72GWh of new energy storage online by 2030 to integrate a growing renewable energy, and the country was the subject of a deep-dive in a recent edition of Solar Media’s quarterly journal PV Tech Power.

Zoisa North-Bond, CEO of Octopus Energy Generation, said: “Big batteries like the ones we’re developing with this new joint venture make the most of when it’s sunny and windy by storing abundant green energy and releasing it back into the grid when it’s needed. Battery storage will play a vital role in a 100% green energy system – and exciting projects like this will help us to get there quicker than ever before.”

Energy-Storage.news’ publisher Solar Media will host the 9th annual Energy Storage Summit EU in London, 20-21 February 2024. This year it is moving to a larger venue, bringing together Europe’s leading investors, policymakers, developers, utilities, energy buyers and service providers all in one place. Visit the official site for more info.

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