STORAGE MARKET UPDATE

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28 APRIL 2016Twickenham Stadium, London

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‘Exciting’ new business models could offer workable alternative to utility power

German storage association: ‘Fair market conditions’ more important for support than cash

COP 21: UK policy versus UK ambition

GTM: 2015 is ‘biggest year ever’ for US energy storage market

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CONTENTS

Anesco helps community energy group secure revenues with solar storage project 3

UK authorities prime storage push after Budget backing 4

2016: ‘Bullet proof’ investments, favourable exits for software start-ups and the Internet of Energy 5

Clean army: Britain’s installers prepare for storage wars 7

Dutch grid operator TenneT: Batteries offer ‘excellent alternative’ to conventional power plants 9

ABB, Saft using regenerative brakes on trains add 8.75MW resource to PJM frequency regulation market 10

‘Exciting’ new business models could offer workable alternative to utility power 11

UK distribution network signs ‘fully-wrapped’ deal for project to commercialise solar-plus-storage 12

COP 21: UK policy versus UK ambition 13

UK leaves energy storage out of solar FiT review 14

Secrets of the trade: Insights into Sonnen’s PV-plus-storage energy trading platform 15

First Solar among investors in Younicos’ US$50 million energy storage ‘land grab’ 17

GTM: 2015 is ‘biggest year ever’ for US energy storage market 19

German storage association: ‘Fair market conditions’ more important for support than cash 20

DBL: Picking storage plays for positive social impact and positive returns 22

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Anesco helps community energy group secure revenues with solar storage project

Anesco has completed construction of a new solar farm and storage project in partnership with a community ener-

gy group which will see local charities benefit from funding over the next 40 years.

The new 4.189MW development at Oxcroft near Chesterfield has been built on land for-merly used for coal stocking and is already generating electricity. The park is eligible for a 1.3 ROC rate, with surplus profits from the sale of power to be fed into a commu-nity fund operated by Chesterfield Community Energy (CCE).

CCE has also negotiated a power pur-chase agreement (PPA) with utility Limejump to deliver a competitive energy price for the exported energy at Chesterfield Solar Array. A variable price PPA has been entered into for two years when CCE will re-negotiate the agreement to maintain the best rate in the market.

The completed project will also see a 1MW / 1.2 MWh Energy Storage System (ESS) installed on the site, which Anesco says will be one of just two units installed at commu-nity energy projects in the UK.

Storing the electricity and then releasing it at a time and rate to support peak demand allows the network operators to balance the grid network and offers another financial ben-efit to CCE. The ESS provides two further income streams through the Transmission System use of Network, or TRIADs, and Firm

Frequency Response (FFR).TRIADs are rewarded for power released

during the highest demand periods between November and February. At the end of each winter, the UK energy market will retro-spectively identify the three peak 30 minute periods of highest demand over the last four months. Large consumers of energy are then retrospectively charged a premium for the power used during these times periods, whilst generators are rewarded for the power released to the grid.

FFR is a scheme developed by National Grid to support its network by maintaining stable frequency levels. At times when the network is affected by large variations in gen-eration or demand, such as a power station going offline unexpectedly in order to maintain frequency of the grid, a remote signal is sent to locations with energy storage, such as bat-teries.

Having received the signal, the battery will fully discharge over a 30 minute period and by doing so, stabilises the grid. Rather than being paid for the amount of energy released to the network, the site is paid for its avail-ability.

These funds will be used to directly benefit a range of local charity groups, with £15,000 to be given annually for the 40 year lifetime of the scheme.

Delvin Lane, commercial director at Anesco, said: “It’s been incredibly rewarding

supporting a project that’s not only benefitting the environment but also the local community. The groups CCE has chosen to support are doing fantastic work and we know they will put the funding to very good use.

“It’s also rewarding to know that the site, which was formerly used for coal stocking, is now in the business of green energy, helping to drive down carbon emissions and create a better future for everyone.”

According to Anesco, which will also oper-ate and maintain the site over the next 40 years, the Chesterfield project is the compa-ny’s 11th installation of this storage system in the past few years.

CCE is funding the Chesterfield Solar Array through the sale of £3.2m of bonds, which can be purchased by the public, and its debt partner, Close Brothers. The offer will remain open until the maximum sum has been reached, or until 31 May 2016.

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The storage unit from Anesco will help CCE secure additional revenues to the ROCs and PPA agreement over the lifetime of the Chesterfield project. Image:

Anesco.

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UK authorities prime storage push after Budget backing

The UK remains on track for a big push on energy storage with the latest bud-get backing changes proposed in a key

report and an imminent consultation looking to shake-up the role of network operators.

Last week, chancellor George Osborne’s budget confirmed backing for energy storage with a £50 million (US$71 million) allocation for R&D and a pledge to back the findings of the National Infrastructure Commission’s (NIC’s) Smart Power report. The NIC is a new cross-party agency set up with a reported budget of £100 billion across all sectors and its Smart Power study suggested incentivis-ing Distribution Network Operators (DNOs) to deploy energy storage. At present, DNOs are not allowed to invest in or own generation assets.

A spokesman for the government Department of Energy and Climate Change (DECC) could not give specifics but reiterated the department’s commitment to energy stor-age.

“Our priority is providing clean, secure ener-gy at the lowest possible price for families and businesses. We recognise the potential for storage technologies to help us use energy flexibly,” they said.

Any changes in the treatment of DNOs or Distribution Service Operators (DSOs) would be regulated by Ofgem. It told Energy Storage News that the imminent consultation on ener-gy storage would look to address several barriers in the UK together.

“We recognise that the status of storage in the energy market rulebook does need to be addressed,” a spokesman said in reference to the absence of a dedicated definition of where storage sits in the electricity market.

“We’ll be setting out our thinking and calling for evidence on these issues so that we can tackle it all together and come up with a set of proposals that will really make the electricity

system more flexible in the future.In addition, Ofgem said it would be looking

to ensure DNOs participated but it was too early to say whether that would involve estab-lishing incentives as the NIC report suggested.

“At the moment the distribution networks really just take power off the national grid itself and transfer it to homes and businesses but in future they are going to have to actually do more system operation and that means they take more control of managing flows on their actual grids,” he added.

Responding to a government consultation can take the form of a detailed analysis of the issues at stake or a simple statement of your preferences that can be drafted and sent in minutes. Lessons from the solar industry show that wide participation in a consultation can boost stakeholder’s say in the end result.

In January, a DECC representative stated that the department would be holding its own Call For Evidence, run on similar lines to a consultation, during this year and welcomed input from the industry, which was reiterated

during DECC’s participation at a Solar Media-hosted round table in London in February.

Ghost of Christmas futureSimon Daniel, CEO of UK energy storage manufacturer Moixa said lessons from other markets could inform how the UK grid devel-ops.

“To understand the future grid you should look at Germany, it’s the Ghost of Christmas Future for the UK grid,” he said. “It shows what happens when a lot of renewables are put on a traditional grid infrastructure. The consequences are significant problems for traditional utility and network operators in recovering their costs during the day when solar is generating a lot of the intra-day power. As a consequence peak prices have risen considerably to 29 euro cents (US$0.33) per kwh.”

This reinforces the economic case for storage both by absorbing some of that gen-eration and offering a route for customers to avoid exposure to peak pricing, Daniel said.

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A UK grid storage trial in Leighton Buzzard. Source: S&C Electric.

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2016: ‘Bullet proof’ investments, favourable exits for software start-ups and the Internet of Energy

In the simplest terms, if 2014 was the year of test deployments and proving storage can work, 2015 was a year of getting things

done. But what are the big trends likely to drive the space on in 2016? Lux Research closely tracks the energy storage industry, in combination with solar, in terms of its synergy with EVs and in its own right. Andy Colthorpe spoke with Lux analyst Cosmin Laslau to get his views and predictions on what we can ex-pect to see this year.

What do you think 2016 will bring for solar-plus-storage?On the solar side, we’re seeing a tremen-dous amount of activity, from players within energy storage becoming interested in pairing their batteries with solar. So there’s a couple of key players that stand out here, there’s Tesla and SolarCity, Sonnenbatterie (now rebranded as Sonnen) and Sungevity, [‘intelli-gent’ commercial storage provider] Stem and SunPower. So these kinds of partnerships that are emerging are tremendously important to track.

That’s already been happening over the past year or two, they’re picking up momen-tum. More and more battery developers are looking to find solar partners, but one of the biggest questions looking to 2016 and beyond is the amount of vertical integration and cost curve savings that these guys can pull off. Is it sufficient just to have two large companies collaborating with each other? Or is somebody going to have to bring an acqui-sition and effectively bring one half of the equation in-house? So a solar player could buy a battery developer, or vice versa and offer a fully-integrated product that shaves a lot of costs off.

So what will the dynamics of this year’s activity really look like, broadly speaking?When we look at the use cases for storage, the things that stood out for our analysis is that in most cases, if you look at most geog-raphies or most use cases, there’s not a killer application, there’s not a single thing to justify solar-plus-batteries with a single use

case. This is where benefit stacking between multiple services [i.e. configuring systems to provide more than one service] is tremen-dously important.

That kind of points to a couple of things, one of them is the importance of clever soft-ware, so in 2016 and beyond, we expect even more activity to be driven in terms of investment into start-ups, developing soft-ware for solar-plus-storage integration and use case management as well as potentially some acquisitions in this space or some seri-ous internal R&D by the larger corporations in this space targeting software for solar-plus-storage.

In terms of software, another analyst [Sam Wilkinson at IHS] recently told me he didn’t expect standalone software provid-ers really thrive going forward into the long term. However, at present we are seeing some big deals, like European utility E.On investing in storage system provider and software company Greensmith. What’s your take?It’s a good point. What is a five or 10 person company really going to do long term in a field that’s crowded with the likes of GE, Tesla and Siemens?

It’s a very hard space to compete in. So really long term the best bet for these com-panies is to sign a couple of high profile deals, prove their technical ability and then be acquired by somebody who might be looking to bolster their internal know-how and IP in this space. Long term, small companies are probably going to struggle in the energy soft-ware space, but that doesn’t mean that they’ll have unfavourable exits. They’re still doing some valuable work, they just at some point in time will probably be acquired by a much larger company.

There’s a lot of companies out there, large corporations that do need help, so there’s no shortage of potential purchasers of these companies.

How might cost reduction proceed across the whole energy storage space over the

next year?We’re not seeing any major breakthroughs coming up in the near term that will rock the industry in terms of cost reductions for energy storage, probably the much more important thing will be financing arrangements and real-ising that in certain geographies, you want to deploy as many batteries as possible with financing because these are projects that can make sense for everybody involved in that deal and start to generate some pretty good revenues. So although things like the Tesla Gigafactory are going to do great things for cells and packs and then we’ve got some balance of system (BoS) and installation costs that are also going to be more on the soft cost type things see some reductions, what’s really going to drive the bulk of activity in get-ting to the next level of deployment is going to be financing and new business models.

So it’s borrowing money or attracting investment contingent on making returns, say, over 20 years and finding an inves-

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Looking ahead, the industry appears to be adding both scale and expertise to take it forward, Cosmin Laslau of Lux says. Image: NEC ES.

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tor who believes in it?Yeah, and it kind of brings us back to the importance of analytics [and software] which is: can you really pinpoint what is the geogra-phy, what is the customer profile, what is their utility – does it make financial sense? Can you put that argument together and approach someone who can finance it and say “this is a pretty bullet-proofed investment for you”?

Do you think we will start seeing that this year? And could it be as transformative as the third-party owned, rooftop leasing model has been for PV in the US?What we’re seeing are handful of companies like Stem and Green Charge Networks that are focused on some pretty specific applica-tions at the start that make a lot of sense in terms of payback. You might be limited to California, you might be limited to a commer-cial customer of a certain size, so that means that you’re probably talking about a couple of hundred million dollars in terms of financing.

So this is shifting gears a little bit but another example is United Wind, lined up about US$200 million in financing to target sites where small wind does make sense to have that deployed with very long financ-ing periods. So we’re starting to see this, 2015 and 2016 was really the start of it and I wouldn’t be surprised to see the activity pick up in 2016 and 2017.

The next level, if we’re talking an order of magnitude large investment – when are we going to see billions of energy storage financ-ing be available and be taken up? Then we probably need to start thinking about resi-dential, will a company like SolarCity start to deploy massive amounts of solar-plus-stor-age for its customers, financed, when is that going to happen? It might not be 2016, we might need to see some cost reduction, we might need to see some more expansion of scale and some more track record but there’s a definite point in the future when that will be achieved.

I’ve heard an expectation that more aggre-gated or connected smaller platforms are coming but it might not be happening at scale in 2016 and might take longer than that? It seems like a pretty cool idea.It does, I would agree. As we go more towards distributed storage, connecting these is definitely one of the most important things to develop. Developing the protocols, the software, the ability and just the sheer base of deployment to enable that. At the moment, we’re seeing tremendous amounts of development in the Internet of Energy if you will.

Finally, another thing we’re interested in is the interest from utilities in laying the ground-work for virtual power plants. [For example] California utility San Diego Gas & Electric (SDG&E) want to pay behind the meter cus-tomers for access to their batteries when they’re not using them. They want to aggre-gate the batteries in concert for grid needs.

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Clean army: Britain’s installers prepare for storage wars

Ironically, the week in July last year that it became apparent solar feed-in tariffs (FiTs) in the UK were about to be targeted for a

fundamental overhaul, Solar Media held its first round table on residential energy storage. Attended by manufacturers, installers, dis-tributors and trade associations, everyone in the room was clear that batteries are no longer just the theoretical next step to making solar a mainstream technology. They are happen-ing now.

The costs are falling quickly and the aver-age man on the street is finally waking up to its potential - largely thanks to the high pro-file efforts of Tesla in launching Powerwall last year. They’re not quite yet at the sweet spot in price to revolutionise solar’s value proposi-tion post-FiT, but 750,000-plus homes with solar already will see it as a viable option. Early adopters will definitely exist, want-ing to be among the first to have them and independence from the Big Six utilities that dominate Britain’s energy landscape is an attractive lifestyle and environmental choice for consumers that the success of greener energy providers like Ecotricity and Good Energy is already evidence of. And ever lower prices, synergy with the rapidly elec-trifying vehicle industry and clever ways of using storage, like connecting up dozens of customer-sited systems into one bigger grid resource look like altering the landscape even more significantly in future.

Unfortunately the FiT review forced the hands of many, especially smaller install-ers, who have been forced out of business already. Others are now seeing that energy storage, particularly when added to an exist-ing PV system, could be a way for solar and its related industries to both diversify their offerings to survive and to really offer up a progressive, smart product that looks only more likely to take centre stage as smart meters give us a better window into energy use on the nationwide network than ever before. David Hunt of Hyperion Executive Search, a specialist recruitment compa-ny, recently asked “How many solar jobs in Britain will be saved by energy storage?’ in a

guest blog for Energy Storage News and our UK site Solar Power Portal.

Getting it right and hitting the ground run-ningWhile none of us at last year’s round table could have foreseen what was to follow with the FiT review - indeed, I have to say that one or two that I won’t name here were danger-ously flippant in their attitude - everyone in the room was already preparing for storage to really change the way we look at solar (and energy in general), before we knew solar FiTs would be decimated. Perhaps also we are lucky that the government, so far in words if not deeds at least, appears to acknowledge the benefits that storage could confer and the potential to add flexibility and help decarbon-ise our energy use without breaking the bank.

The other takeaway that really stood out from that round table was that not only does the industry need to move fast, it needs to move responsibly and with confidence in its own expertise. UK industry stalwarts like Martin Cotterell (formerly of Sundog Energy,

now with Tesla) and Renewable Energy Association advisor Ray Noble have been saying that it is critical that we get both the sales pitch and the technical discussions with householders right.

Solar PV happened quickly and caught many by surprise, but this time around the industry is proactively seeking to establish its codes of best practise and a common language for the market as early on as pos-sible. As Cotterell explained previously in an Energy Storage News guest blog last year and a recent video interview, installers have to understand the capabilities of their stor-age systems and explain them as clearly and honestly as possible to end customers. It is not enough to let customers think that because it is a battery it will always be reli-able backup in the event of a power cut, for example, which won’t be the case if the stor-age system hasn’t been set up to do that in the first place!

It looks as though manufacturers and dis-tributors realised this very early on and this year we are seeing many different forms of

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What is thought to be the UK's first Tesla Powerwall, installed at a private home in Cardiff, Wales. Image: Solar Plants.

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training in energy storage installation for resi-dential and small commercial level popping up all over the country.

Training daysJust taking a quick look at what’s avail-able, names as diverse and well known as inverter makers SMA, Fronius and SolaX, domestic storage manufacturer and energy management specialist Wattstor, distributors like Krannich, Waxman, PV Kits Direct and Wind & Sun have all been offering or will offer dedicated training events in battery storage installation this year.

Some are holding them at their own dedi-cated training facilities, like Waxman and Krannich, while others like Wattstor are hitting the road to go and meet installers around the country.

It’s worth noting that, as you might expect, some of the training sessions are manufactur-er specific - for example Wattstor is training people to use its own storage systems, while distributor Solfex is offering training for working with Samsung SDI battery-based systems. Inverter maker SMA and power optimiser and inverter company SolarEdge are among those offering product-specific training and education days.

Energy Storage News briefly attended the launch of distributor Rexel’s Innovation Centre at the BRE buildings in Watford yes-terday afternoon. Installers were assembled to hear about SMA’s storage-ready invert-ers inlcuding the Sunny Boy Storage and the attentive crowd of about 50 installers filled out the room.

Installers were eager to ask about battery cycling and depth of discharge, the advan-tages of lithium ion over lead acid and vice versa and whether web connectivity is really essential to the system’s running (not essen-tial, but recommended apparently).

At the moment in the UK, part of the trick - and the difficulty - is to match the right products, in the right sizing, in the right con-figuration. This can change greatly from project to project, from the type of battery used, to the functionality of the inverter. In the case of the inverter manufacturers, there will be certain compatibility questions over what battery types it can use, whether it can feed into the grid as well as draw out (bi-direction-al).

Some of these questions won’t even mat-ter for most customers yet, but will become more important as regulations around what batteries can do once connected to the grid

start to catch up with the clever stuff batter-ies can do, for example, how smart metering could change the way we price electricity at different times of day might one day impact your desire to solar load shift. At the moment, it probably won’t.

Going forward, more standardised approaches will become important. As the industry scales up, as Tesla and rival battery and storage system makers like Panasonic, LG Chem or Samsung SDI reach many more gigawatts of stationary storage manufacturing capacity, it will get cheaper and cheaper to think about some kind of off-the-shelf solu-tions.

In the meantime however, carefully config-uring the kit required will make an enormous impact on the cost and functionality of a sys-tem - how many appliances do you want to run from it, how long do you want it to run for without grid power, how much of your own solar can you use with it? In the absence of remuneration by FiT, it has to be a ques-tion of making savings on energy bills and grid consumption by clever design and effi-cient installation, as well as giving customers a truly desirable, futuristic and environmen-tally-friendly addition to their household or business.

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Dutch grid operator TenneT: Batteries offer ‘excellent alternative’ to conventional power plants

Holland’s national grid operator has said that batteries will be an “excellent alter-native” to conventional power plants

in providing balancing services, especially as a complement to increased solar and wind de-ployment.

Gineke van Dijk of TenneT, which serves 41 million end users in the Netherlands and Germany as a transmission system oper-ator (TSO), was speaking at the official unveiling of the AES Netherlands Advancion Energy Storage Array, in Vlissingen in the south west of Holland.

The 10MW array has been grid-connected since mid-January, adding an effective 20MW of flexibility resource to the network, as it can absorb as well as feed power in to the grid. The system will match supply and demand on the local grid by using power stored in its batteries to respond quickly to grid imbalances.

This means that it can be used to smooth out the variability of renewable energy output as it goes onto TenneT’s high voltage transmis-sion network and make existing conventional generation sources dispatchable while provid-ing more grid-specific ancillary services such as primary control reserve (PCR) which require fast response times. The facility will compete in the market for the right to provide these services in Holland, Germany, Switzerland and Austria.

“This AES investment fits perfectly into TenneT’s vision that grid stability should be less dependent on large conventional power plants in the future,” van Dijk, who is TenneT’s senior manager for customers and markets, said at the launch.

“If wind and solar energy continue to increase, batteries will be an excellent alternative to take over this role of power plants.”

In related news, Dutch electricity and gas supplier Eneco launched a software-defined power plant in the country last November, which can integrate up to 100MW of distributed generation resources into the network, including CHP and industrial demand side response.

European Commission also welcomes en-ergy storage ‘breakthrough’The launch yesterday was also attended by the

European Commission’s head of unit for new energy technologies, innovation and clean coal, Andreea Strachinescu. Strachinescu was sim-ilarly enthusiastic and emphasised the role of such projects in developing appropriate markets for energy storage and other flexibility resources and proving the systems’ effectiveness.

“An ever growing number of renewable ener-gy sources in Europe will require breakthrough technologies for grid stabilisation and balanc-ing. Electrical energy storage can play a key role in the enhanced use of renewable energy and development of smart grids in Europe,” Strachinescu said.

“Emerging market models such as AES’ will be pivotal for large-scale deployment of electri-cal energy storage in Europe.”

The AES system, which is built on the Advancion 4 energy storage platform sold by AES, utilises more than 45,000 Samsung SDI lithium ion batteries, inverters from Parker

Hannifin and balance of plant components from DELTA Infra and its suppliers.

Today, AES held another launch, this time for its array in Kilroot, Northern Ireland, in the UK, also a 10MW Advancion-based system.

AES’ Steve Corwell has previously blogged for Energy Storage News on the direct com-petitive comparison between battery-based energy storage and pumped hydro. Meanwhile the CEO of Fortune 200 renewable energy sup-plier NextEra Energy, which has over 45GW of resources in operation said last year that he was seeing tremendous growth in the grid-scale energy storage market and foresaw batteries completely replacing gas peaker plants, which traditionally provide grid-balancing services in the US and elsewhere.

Similarly, a whitepaper produced by Energy Strategies Group (ESG) in 2015 pitted flow bat-teries by ViZn Energy against peaker plants and found them to be a “viable substitute”.

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AES, its partners and guests including TenneT and the European Commission attended yesterday's ribbon-cutting official launch ceremony. Image: AES Energy Storage.

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ABB, Saft using regenerative brakes on trains add 8.75MW resource to PJM frequency regulation market

Swiss-headquartered power and au-tomation specialist ABB has been awarded a contract by Baltimore-based

utility Constellation, to manufacture seven EN-VILINE energy storage systems that store train braking energy using lithium-ion batteries from battery manufacturer Saft America.

The storage systems will harness ener-gy from braking trains on the Southeastern Pennsylvania Transportat ion Authority (SEPTA) train network. When a train brakes, its kinetic energy is converted to electric-ity and returned to the traction power line, however, an ENVILINE storage system can recover this surplus energy for reuse during acceleration. This can help lower energy use by up to 30% and reduce peak power con-sumption for the train operator. Furthermore it can stabilise the voltage to improve accelera-tion as well as providing emergency traction power.

When combined, the ABB systems will also be able to provide 8.75MW of frequency reg-ulation capabilities, to be used on the PJM Interconnection grid in the eastern US.

The PJM grid particularly has been cited as a strong example of where frequency reg-ulation services provided by energy storage systems have been used to great effect in the US. Frequency regulation is used to match the generation of electricity with its con-sumption. Under pay-for-performance rules, providers of frequency regulation are reward-ed for providing fast, precise, and accurate power to the system operator for balancing generation and load.

An ABB statement said that its energy storage systems can come with either super capacitors for short-term storage and recov-ery of the braking energy or with batteries to provide grid support services for local distri-bution companies.

The project wi l l be f inanced v ia a 20-year battery services agreement with Constellation, which is a subsidiary of major US energy provider Exelon.

The storage systems will be designed and manufactured in North America and the units are scheduled for delivery before the end of this year.

Saft, which is providing the batteries, was also selected in 2011 by Viridity Energy to provide its lithium-ion batteries for a similar project with SEPTA.

Derek Monk, general manager, DMPC,

ABB in Canada, said: “Transit authori-ties across North America are faced with increased energy costs and pressure to achieve sustainability objectives. ABB’s ENVILINE energy storage systems for DC rail transportation is an effective and economi-cal solution that addresses these issues. ABB has a long and successful presence in DC traction power and is proud to be a leader in the transformation and modernisation of train networks such as that of SEPTA.”

ABB now has 15MW of operational train braking recovery systems.

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ABB's ENVILINE system: Credit: ABB

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‘Exciting’ new business models could offer workable alternative to utility power

Workable alternatives to utility power involving energy storage are be-ginning to emerge with new and

innovative business models, according to an investment advisor who worked on Younicos’ recent US$50 million “land grab”.

The grid-scale storage specialists raised the sum towards the end of last year, with investors including First Solar and sustain-able investment group Grupo ECOS. Gerard Reid of Alexa Capital explained that his firm had seen the opportunity to gain ground in the emerging sector for grid storage.

Speaking to Energy Storage News about a number of storage-related topics, Reid said he was “really excited” by emerging business models for energy storage at the smaller scale, including Sonnen’s recently launched SonnenCommunity concept for households.

SonnenCommunity allows PV system owners to use the grid to “trade” surplus energy from their PV systems, in a busi-ness model that the company said had been developed to further improve the competi-tiveness of storage in the expectation that existing support schemes for the technology would be removed this year. The company said that as the subsidy scheme looks like-ly to be renewed this year, their customers could reap greater economic benefit from the new service than Sonnen had originally expected.

According to Reid, this and another busi-ness model which was launched in late 2014 represent something of a paradigm shift. He said that BEEGY Energy, a joint venture by heating manufacturer Glen Dimplex and four other companies, had also launched a “really exciting” offering. BEEGY is being marketed to commercial customers as well as resi-dences.

“They’re looking at it as much beyond just storage and electricity. They’re looking at it as a whole package to allow you to go off-grid and they provide all the equipment to you, finance it over 25 years and you sign a kind of power purchase agreement. They’re looking at heat as well as electricity and the idea is that it’s at a flat rate per month, the

same every month and you can use as much heat and power as you want.”

Reid said that having been in the sector for 10 years, only two years ago he and his colleagues were considering a change of industries, when it became clear that “there was a revolution going on”.

“I live in Berlin and it’s the capital of European internet and I thought it might be easier for me to get back into internet finance… [but we] decided we didn’t want to do that, it’s clear there was a revolution going on.”

The rapid pace of change became appar-ent about a year and a half ago, Reid said, driven partly by the huge success of solar in the US which was stirring up excitement globally. The other big factor is that European utilities are looking to new business mod-els themselves to counter threats to their revenues, represented by solar and other distributed energy technologies.

Reid said that while it is early days for either Sonnen or BEEGY’s business mod-els, with Sonnen’s idea only just about to pass regulatory hurdles – although wide-

ly expected to do so – and an expectation that Germany’s consumers might be more keen to invest than save money through the BEEGY offering, what was clear is that they are fast emerging as serious alternatives to utility power and energy.

“I can’t say which one of them will win at this point in time, what I can say is that there’s a lot of exciting stuff out there. I’m not a marketer but what I do know is, it’s very clear for me is that one or other is going to be the way to go, going forward,” Reid said.

“If these guys can actually provide financ-ing solutions, that’s really interesting and suddenly you really do have a competitive alternative to buying all or part of your power from a utility…what you’re seeing is a lot of interesting business models come up like Sonnen and BEEGY, that’s what’s driving it and you’re also seeing entrepreneurship and innovation. Go to the US and look at Tesla and so on. As someone advising a lot of these companies on financing, what I’m clear of is that the sector is getting quite excited again and there are real, interesting busi-nesses coming along”.

Jan 26, 2016

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Samsung SDI batteries in a Younicos energy storage project. Image: Younicos.

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UK distribution network signs ‘fully-wrapped’ deal for project to commercialise solar-plus-storage

A UK electricity distribution network operator has signed a contract with Renewable Energy Systems (RES) to

deliver an energy storage system co-located with large-scale solar, which will be used to develop ways to commercialise services to the grid.

Announced on Thursday, a 300kVA/640kWh battery storage system will be installed at a 1.5MW solar farm site in the west of England near Glastonbury, site of the famous annual rock music festival. The solar farm is on the 11kV network of Western Power Distribution (WPD), one of the UK’s distribution network operators (DNOs) charged with maintaining stability and security of electrical grid infrastruc-ture.

Although headquartered in Britain, RES has over 77MW/47MWh of operational or con-struction phase energy storage projects in the US and Canada in addition to 10,000MW of renewable energy projects constructed world-wide including large-scale solar and wind.

RES’ UK energy storage manager John Prendergast told Energy Storage News in an interview that the trial could be notable for a number of reasons. It is thought to be the most ambitious project yet in the UK to demonstrate the network services solar-plus-storage can provide behind-the-meter to the owner and operator of the solar farm, which in this case is British Solar Renewables, and to DNOs. The project will be able to provide nine different net-work services and how to commercialise them.

“The project will do multiple applications, extracting the value of solar in multiple differ-ent ways. The control system delivering that is our own in-house REsolve control system,” Prendergast said.

“Behind the meter, the first benefit to the developer is selling power at higher prices by shifting it to times of day when it is valued more highly in the wholesale market. The will become especially important as high solar production in the middle of the day depresses prices.”

On the other side of the meter, as has been stated before by commentators and experts including Rocky Mountain Institute, storage can provide “stacked”, or multiple, benefits.

Prendergast said that the project will aim to show how commercial mechanisms could be developed for DNOs to procure grid services from storage, which at present in the UK and many other territories is so new a concept that it has not been put into the regulatory frame-works of energy markets.

Prendergast said the company was pleased to be demonstrating many of these applica-tions at a co-located storage and solar facility, with the company’s work in storage in the US so far having concentrated on the frequency regulation and transmission and distribution upgrade deferral applications of storage in front of the meter.

“So say, the DNO wants to lop the net demand behind a substation that’s reaching a constraint it can buy a peak-lopping service from a storage asset sitting behind the con-straint,” Prendergast said.

It will also assess how DNOs could buy volt-age services to mitigate power quality issues from storage co-located with solar. In two or three years’ time, when the project has begun reporting back with data, it will aim to “have worked out the commercial arrangements” for procuring these types of flexible assets.

‘Fully-wrapped’ EPC and warranty ar-rangementsRES believes the project could be, if not the first, then among the earliest UK storage pro-jects to be delivered to the customer as a fully-wrapped engineering, procurement and construction (EPC) package.

Batteries will be procured from Chinese-American manufacturer BYD, while RES is building the plant. It is also offering a “warran-ty-wrapped solution to WPD”, according to Prendergast.

“They are looking to us and to nobody else [for warranties] and we think that’s fairly unusu-al because often people tend to pass through manufacturer warranties and then the clients ends up looking to multiple people for warran-ties around different parts of the installations. We’re providing a fully-wrapped warranty because we’re confident with storage technol-ogy.”

Edging into the financial mainstreamPrendergast said that likewise, while it is still early days, financial institutions are starting to also become more comfortable with the idea of financing storage. In the US, financing for two projects by the company, the Jake and Ellwood large-scale storage systems in Chicago came from Prudential, for example, showed that “mainstream institutions” are becoming “quite comfortable with the technology, and not see-ing it as a risky technology”.

He hoped that in parallel with the pro-ject’s two to three year demonstration period, activities by the UK government and network operators to look at storage and how it can provide flexibility to the network will combine to open up a viable market for storage in the UK at commercial and utility-scale. The project will be supported by the UK’s regulator Ofgem, in its Network Innovation Allowance programme and in addition to British Solar Renewables, the UK’s National Solar Centre will also collaborate on the project.

“The results of all of this work will hopeful-ly combine to open up the market for storage and for flexibility solutions within the electricity system which are a really important part of how we move to a decarbonised electricity system at least cost to the consumer,” Prendergast said.

“I guess a lot of people in the UK market will see storage as something just really coming out of the R&D phase. We’re very much of the view that it’s proven technology and it’s ready to get into the market.”

Jan 07, 2016

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RES containerised battery storage system. Image: RES.

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COP 21: UK policy versus UK ambition

During the discussions at the Confer-ence of the Parties 21 (COP 21), in Paris 2015, the UK Government had a

strongly stated position of delivering an interna-tional agreement that kept global temperature rise to below 2°C. The “Paris Agreement” has settled on limiting temperature rise to less than 2°C by 2100 (so a success), with a preferred position of limiting temperature rise to 1.5°C, to limit the impact of sea level rise on small island nations. The UK’s Secretary of State for Energy and Climate Change, Amber Rudd, has said that the Agreement is a compromise and as such is not “a perfect deal” and the rea-son for the lack of perfection is that while 195 nations have signed up to the “Paris Agree-ment”, cutting emissions of greenhouse gases is not legally binding. However in order to de-liver limited temperature rise emissions must come down and come down very soon.

Carbon dioxide reached global levels of greater than 400 ppm this year – a level that many climate scientists, myself included, said would lead to significant global change. Furthermore, the rate that we humans are putting carbon dioxide into the atmosphere is increasing, rather than decreasing, and at current rates levels will be close to 580 ppm in 2100 and would result in a temperature increase double that signed up to in Paris.

Now the UK, unlike many other countries, has a binding self-set target to reduce carbon emissions. We are on track to meet the third carbon budget, but meeting the targets of the fourth and fifth carbon budgets will be chal-lenging. The good news is that Amber Rudd has announced the closure of all coal-fired power stations by 2020. This is important as electricity generation is the UK’s biggest emitter of greenhouse gases, but against this clearly laudable decision sits the decision to promote exploration for shale gas, the hoped for construction of gas-fired power stations and the ending of incentives for renewable generation.

Let’s accept that the increasing construc-tion of diesel generator farms to provide security of supply in winter is an unintended consequence of earlier policies that Amber Rudd inherited and we can hope that steps

will be taken to halt the development of these farms. If Amber Rudd doesn’t halt them, then local communities appear unwilling to support the arrival of dirty polluting and noisy genera-tors in their midst and are successfully using the planning process to stop developments.

Let’s also accept that the assertion that renewable generation, particularly solar PV, doesn’t need support anymore since there are plenty of projects already in the pipe-line and costs have come down sufficiently such that projects will “just happen” anyway. But our electricity networks are struggling to find the space to connect more renew-able generation anyway and without proper thought about how to efficiently deliver the low carbon energy system, we run the risk of cutting costs now to meet Chancellor George Osborne’s exacting fiscal targets, but spend-ing more in the long run.

The Government have cancelled carbon capture and storage (CCS) projects, which is a wise decision since the electricity from gas power stations fitted with carbon capture and storage would be four times more expensive than electricity from unmodified gas power stations! But the development of industries and power stations that depend on the burn-ing of fossil fuels, such as gas and shale gas, result in carbon dioxide in the atmosphere.

How do these policies help to deliver either the UK’s carbon budgets or indeed the “Paris Agreement”? There appears to be a huge gap between policy and ambition and the missing piece of information is how all of these recent policy decisions will halt climate change.

Flexibility is the key, both in policy and in the energy system. Electricity storage hasn’t received any incentives and heat storage is the unloved cousin of electricity storage. There is already a potential 30GWh of flex-ibility installed on the UK electricity system in the form of electrically heated hot water tanks – all they need is a “smart widget” that would allow that flexibility to be accessed by the system, earning a little money for house-holders and creating a new business in the process. The government are very good at supporting innovation and there have been

a number of exciting electricity storage pro-jects delivered by its Department of Energy and Climate Change (DECC), but we need deployment support as flexibility is badly needed on the system today.

Prime minister David Cameron recently said: “…we are spending the money on inno-vation, on energy storage, on small nuclear reactors, and on other things such as energy heat systems for local communities that will make a difference. To govern is to choose, and we made the right choice.”

There is no doubt that there is a lot of orig-inal thinking around energy in Government, but have they made the right choice with shale gas and gas, to ensure that we have an energy system that is secure, low cost and that addresses carbon emissions? If the wrong choice has been made then the neg-ative consequences are significant and we should remember that we are a small island nation and that being in the North Atlantic, rather than the South Pacific, is no protection against sea level rise. Events of the past few weeks, which have seen northern England flooded and billions of pounds worth of dam-age done to homes and businesses, as well as the distress and disruption caused, are a stark reminder of the pressing need to adapt to our changing climate. Those that work in the UK’s corridors of power in Westminster should be more concerned than most about getting their feet wet.

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How the Palace of Westminster, seat of UK govern-ment, would look following a further 2°C rise in temperature, with the lower floors of the iconic Houses of Parliament submerged by the swelling River Thames. Image: Courtesy of Climate Central.

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UK leaves energy storage out of solar FiT review

A document setting out new policy di-rections on solar support says the UK government has recognised the

potential of energy storage but has decided the feed-in tariff would not be an appropriate mechanism to incentivise uptake.

A long-awaited consultation on the UK’s support schemes for solar was officially released today, with PV Tech Storage’s sis-ter site Solar Power Portal reporting on the announcement and reactions from in and around the industry on an ongoing basis from early this morning.

The solar FiT was expected to be cut very heavily but in the event initial reaction appears to be that a domestic tariff rate of 4.39p/kWh for systems up to 10kW ranging up to 0.87p/kWh for large-scale. Cuts to domestic of around 87% had been expected but instead the figure was closer to around 64%.

Initial reactions appeared to display a measure of relief from the UK industry that cuts were not as bad as expected, with the government modelling the revised support levels to aim to allow a return on investment of around 4.8%. However, other factors including a recent ruling to remove sales tax exempt status from PV products mean the cuts are still likely to impact deployment.

The UK government has repeatedly said it has been looking into energy storage for some time, including the recent formation of a dedicated office in the Department of Energy and Climate Change (DECC) to look at the issues. However, while the govern-ment recognised the ability of storage to aid both integration of renewables and benefit the electricity network, it would not introduce a FiT to stimulate deployment.

“Government is supportive of cost effec-tive energy storage at all scales and using all technologies,” the consultation said.

“Government recognises the poten-

tial system benefits of storage deployed in combination with intermittent renewables. However, it does not consider that FITs is the appropriate mechanism for providing sup-port for energy storage. DECC is currently engaging closely with [regulator] Ofgem and stakeholders to identify barriers to the deploy-ment of storage and are considering potential remedial actions.”

Although it will not be included in the FiT, the document stated that the govern-ment “plans to consult on this work in spring 2016”, which some have interpreted to mean that interim measures could be enacted.

Similarly, PV Tech Storage has learned that National Grid and other stakeholders in the network including the UK’s distribu-tion network operators (DNOs) are working on removing regulatory barriers to grid-scale

storage. However, it could be a lengthy pro-cess to revise the necessary codes and to determine an asset class for storage, and according to some sources, there could also be interim measures implemented to stimulate activity in areas including a still-in-development market for frequency regulation of the grid.

Subsidies for energy storage have not been widely expected in the UK solar or storage industries, with the government unlikely to favour putting any further burden on the pub-lic purse. Furthermore, as with Germany and other territories, the energy storage industry has confidently stated that it needs market redesign to fairly recognise the value of stor-age and the value it can add to PV and other renewables, rather than ‘artificially’ stimulating growth through handouts and subsidies.

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The FiT was not considered an appropriate mechanism to incentivise energy storage. Pictured is minister Amber Rudd at utility-scale storage demonstration project, the Big Battery in southern England. Image: Younicos.

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Secrets of the trade: Insights into Sonnen’s PV-plus-storage energy trading platform

PV Tech Storage attended the late No-vember launch of sonnenCommunity, a new energy trading platform launched

on a limited basis in Germany based on Son-nen’s residential energy storage systems.

S o n n e n , f o r m e r l y k n o w n a s Sonnenbatterie, is one of the leading four providers of storage systems in Germany. The company appropriately enough unveiled the service at a disused fossil fuel power station in Berlin, which has since been converted to an event space.

PV Tech Storage managed to catch up with two key members of the Sonnen team at the event, CEO Christoph Ostermann and sales director Philip Schröder – who was famously previously headhunted to join Tesla in Europe and earlier this year returned to his former employers in Germany.

Christoph Ostermann, CEO, SonnenWe have followed Sonnenbatterie/Sonnen from a while back, including some of the trials you have done of aggregated stor-age systems in Germany with 100% renewable utility Lichtblick, providing fre-quency response to the grid from pooled small-scale storage systems in a ‘virtual power plant’. The launch of sonnenCom-munity today seems a little different, but does it build on the learnings of those tri-als?Absolutely. The main difference with our pro-ject with Lichtblick is that in this case we are not talking about a virtual power plant, because the purpose of a virtual power plant is to balance energy, take it out of the grid if there’s an overload or feed in if there’s a shortage.

For regulatory reasons, in Germany we are not allowed to feed electricity back into the grid. We can only take power out of the grid and store it. So at the moment, we can only provide negative balance energy to the grid. Everything else is not allowed, it’s a regula-tory thing.

What we are doing here is connecting cus-tomers virtually, and we are not supplying power to the grid, so no balance energy. But

we are supplying power, or a platform where our members can feed in their own power and take it out of this platform again in real time.

Let’s assume we only have two customers – which is not the case fortunately! Perhaps one has excess solar power because he lives in a part of Germany where the sun is shining, and his storage is already charged. Another customer lives elsewhere, maybe northern Germany, where it’s currently raining. We con-nect those two guys virtually with each other, so one can provide to the other his excess solar power, which the other one currently needs. So we at the end of the day are able to supply a platform where members can share their electric power and become ‘200% independent’ from utilities.

How does the trading aspect actually work?We use the grid to exchange that, therefore we pay the normal fees, for grid, for VAT, for electric power tax. Yes, of course we need

the grid because otherwise we would need to install cables from one customer to the other. So the grid is simply a platform but we have a software platform enabling this kind of exchange. Of course the hardware is the Sonnenbatterie system together with smart meters, which ensures we can close the balance cycle in real-time. Otherwise it’s impossible to use this as a community.

I also wanted to ask about the rebrand-ing of the company from Sonnenbatterie to Sonnen. Has this been done with an expectation of batteries, especially lithi-um-ion, to rapidly commoditise?Yes. This is exactly where we think the future is in our business. To provide hard-ware is nice, to provide intelligent hardware, hardware-plus-software is even nicer, but in the long run the aim is to provide intel-ligent services, to empower our customers. This is also a reason why we changed name from Sonnenbatterie to Sonnen, because Sonnenbatterie is too narrow, it focuses on

Dec 10, 2015

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CEO Christoph Ostermann takes to the stage in Berlin to launch the sonnenCommunity platform and scheme. Image: Andy Colthorpe.

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the hardware.When we started and launched in the

German market, nobody real ly knew what a storage system is. We thought Sonnenbatterie (‘Sun Battery’) is a good name because everyone would understand what it is. So in the beginning it was a perfect name, when it was something of a new tech-nology for end-customers, to explain what this device is – it stores solar power. [But] we see our destiny in the service provision.

Battery sales are commoditising more and more, already it is a commodity. Nobody knows where the whole journey is going to. What will be the right technology for storage in five years or 10 years? Maybe not even lith-ium ion! We are happy this is commoditising because we can make the technology acces-sible for more people because it’s cheaper.

So this is good news. The hardware is a necessary vehicle which we need in order to be able to offer services, but at the end of the day what we really want is to be a service provider.

Philipp Schröder, managing director of sales and marketing, SonnenHow would you describe the sonnenCom-munity and what is behind the technology that makes it work?We are enabling our customers to generate and store electricity – that’s the first step. We can give you the hardware to become inde-pendent yourself.

But also we are connecting all the mem-bers of the SonnenCommunity, from all the PV panels, the excess capacity of those pan-els and energy devices, we are pooling in a virtual pool. We know in real-time if there is excess capacity and excess demand so we don’t have to wait for a year or half a year which is the usual billing process of a util-ity. We have intelligent smart meters that are connecting these devices in real-time. Real-time allows us to do that and we are cutting out the middleman, which is the utility.

We are bringing together prosumers, people who are generating and consuming

energy themselves, and we are only making money on the hardware side and software side, we have no interest in trading electricity ourselves.

Another of Sonnen’s trial projects with a utility in Germany has focused on peer-to-peer (P2P) energy trading. At first when I heard of trials such as this, I thought com-panies participating would make their money through sales of electricity, but apparently the monetary value and the profit margins are quite low. Presumably then sonnenCommunity is a service-led offering that relies less on Sonnen raising revenues by becoming a retailer of elec-tricity?Not even, less, it doesn’t depend on it [the marginal price of electricity] at all!

We depend on, and the big advantage we have next to the software, is that we have storage implemented. So we have much more electricity within our virtual electricity pool. So we can have electricity available at night for our customers, which is one of the big issues you have if you have a pool without storage, so we are completely new kind of energy platform, we are connecting in a digi-tal way, online, people who produce energy. All we are doing is enabling people to do so – we are not making money on the energy itself.

What sort of scale do you need to achieve before this becomes economical?We don’t need to scale. The kilowatt-hour of any one of our producers has a cer-tain price when it enters our virtual pool and that price will remain the same, so the only question is, how many residential custom-ers can we include that don’t have PV? The pool itself would work already with a couple of thousand people. The price would not be lower with more people – we just need more to integrate people who don’t have PV pro-duction. So for example, people who live in an apartment [can] subscribe to the service without owning a system. So the bottleneck

is not the scale, because it’s a digital software process. What we need is a certain size for the pool so that other people can also benefit from it.

Being able to match electricity prices, consumption and generation habits – is that based on software and other techno-logical capabilities Sonnen has developed through its recent trial projects?Most of all there are two trends behind it: the first is decentralisation, so that you are decentralising energy producton via solar and all of that. Number two: the internet and digi-talisation, we have smart meters available that enable this. This would have been impossible 10 years ago – even five years ago it would also have been an issue.

Decentralised clean energy, affordable energy and on the other hand an amazing learning curve software-wise. This will push this business concept quite rapidly.

[The idea is also] enabled by the regulation and we are ahead of the regulation. The regu-lator wants to go there. In order to manage a lot of renewables, and fluctuating energy in the future you need a flexible grid, real-time balancing and you need storage. We are already the future grid as we see it.

Sonnen's residential energy storage system. Based on lithium-ion batteries, driven by the company's own soft-ware and energy management platforms. Image: Sonnen.

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First Solar among investors in Younicos’ US$50 million energy storage ‘land grab’

Thin-film PV manufacturer and project developer First Solar is among the inves-tors in a US$50 million funding round for

grid-scale storage specialist Younicos, with the money raised set to fuel the latter’s expansion.

First Solar develops utility-scale PV plants using its own thin-film solar modules. Thus far, the only public expression of interest in the growing energy storage space by the Arizona-headquartered company has been a collaboration with heavy duty engineering and machinery provider Caterpillar on micro grids that combine a variety of power and energy sources such as diesel gensets, batteries and solar.

An unnamed strategic lead investor joined First Solar in the consortium, along with Grupo ECOS, a private equity fund target-ing sustainable investments. Grupo ECOS holds interests in a number of utility-scale generation assets, including PV projects in Latin American countries including Brazil, Peru, Guatemala, Panama, Chile and Mexico. London-based investment firm Alexa Capital advised Younicos on the deal.

In a statement announcing the US$50 mill ion investment today, Grupo ECOS investment manager Ramon Candia said his company’s Latin American portfolio offered Younicos “an attractive business opportunity” for its services.

“We see energy storage as a key market driver for renewables and an important and fast emerging asset class,” Candia said.

“Younicos is a leading and exciting invest-ment opportunity in this sector.”

Business model based on ‘stacked’ rev-enue streamsYounicos develops energy storage projects as well as offering a consultancy business, and has offices in Germany and the US. In a recent presentation given at a closed-doors round table event in London for the Energy Storage division of PV Tech’s pub-lisher Solar Media, Younicos spokesman Phil Hiersemenzel explained how the Berlin-headquartered company’s business model for grid storage works.

Echoing views from industry experts includ-ing sustainability group Rocky Mountain Institute and engineer and occasional PV Tech Storage blogger Melissa Lott, Younicos sees the “stacking” of applications for storage as the best way to maximise revenue streams. Energy storage can serve a number of func-tions for individual systems such as solar smoothing, but can also provide grid ser-vices such as frequency regulation. In some instances, batteries can be employed to pro-vide a number of these services, sometimes simultaneously.

According to Hiersemenzel, energy storage projects should be developed on a case-by-case basis and where possible the stacking of these various revenue streams should be applied. While the company can work with a variety of storage technologies, Hiersemenzel said the ability of Younicos’ “intelligent battery-based” systems to combine these revenue streams not only meant a better ROI, but the software behind that intelligence also helped to convince leading manufacturers including battery provide Samsung SDI to add 20-year warranties for its hardware when supplied to the German company.

Speaking to PV Tech, Gerard Reid of invest-ment advisor Alexa Capital said this aspect of Younicos’ business strategy was “excep-tionally important” in making the company an attractive target for investment.

Younicos also claims to be fiercely com-mitted to decarbonisation and to renewable energy – visitors to its offices in Berlin are greeted with a sign that says “You are now leaving the CO2 producing sector of the world” (see picture below). CEO James P McDougall recently wrote a guest blog for PV Tech Storage on the possibility of establish-ing solar as a significant portion of so-called “baseload” energy. A perception that fos-sil fuels and nuclear will remain the more reliable sources of baseload is often cited by opponents of renewable energy as one of its drawbacks.

First Solar chief technology officer Raffi Garabedian reinforced the view that the utility-scale storage Younicos specialised in could assist greater deployment of renewables, especially in areas where grid congestion is causing hold ups.

“Utility-scale storage is an exciting new frontier for grid flexibil ity and mod-

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First Solar CTO Raffi Garabedian called utility-scale storage an “exciting new frontier” for PV. Image: First Solar.

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ernisation that can help to facilitate high penetration of renewables in certain circum-stances,” Garabedian said.

“As the promise of storage continues to evolve, we are eager to understand how it will broaden our own power plant offerings. This is an important investment in continuing and potentially accelerating the shift of our energy landscape to renewables.”

Investment advisor explains ‘land grab’ dealOn the motivation behind the deal, Alexa Capital’s Gerard Reid said there were two major aspects.

“When we were engaged by Younicos, we came to the conclusion there was a land-grab opportunity in storage. We decided that we would find the best partners for Younicos to help them take as much of the market in this land grab as possible.

“The second thing is, we believe the future of energy is solar and storage, because stor-age makes solar dispatchable. Hence we looked around the world for the biggest and best partners for Younicos. We thought we could not possibly get a better company than First Solar, they are the biggest in utility-scale [PV] and they are really technology focused.”

Reid confirmed that Grupo ECOS was a

“very good choice of partner” to gain traction in solar markets in South America and else-where.

“The opportunity is so big, but because of that you need the right partners to get in to these markets, to execute and to do it very quickly. As I said, it’s a land-grab opportunity.”

Younicos CEO James P McDougall hailed the investment as an indicator of big things to come for energy storage. Investment in stor-age for utility-scale PV has moved relatively slowly globally, with the exception of policy-driven markets such as Japan, Canada and California.

“We welcome our new investors and partners. Their investment and strategic coop-eration commitment is the strongest possible testament to both the enormous potential of the energy storage market and the unique leadership position Younicos maintains with-in it. The signing of this investment round ignites the second stage of our growth plan,” McDougall said.

Spokesman Philip Hiersemenzel said it was “simply too early to comment on specifics” of the deal and what the funding will be used for, but confirmed that “we’ll be cooperating closely with all our partners globally, while also staying technologically open”. Hiersemenzel added that along with serving the company’s existing business models and customers, Younicos is seeking new markets and wants to develop more new products.

Younicos and its investment advisors Alexa Capital both see the future of energy being centred around dispatchable solar. Image: Younicos.

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GTM: 2015 is ‘biggest year ever’ for US energy storage market

Energy storage installations in the US this year are expected to be treble what they were in 2014, making it the “big-

gest year ever” for storage, according to the latest forecasting by GTM Research.

GTM has just published the latest instal-ment of its US Energy Storage Monitor in association with the national Energy Storage Association. The report, which tracks quarterly deployments of ener-gy storage capaci ty, found that the utility-scale, front-of-the-meter and cus-tomer-sited, behind-the-meter segments deployed a combined total of 60.3MW capacity and 53.1MWh duration of storage in the third quarter of this year.

Front-of-the-meter dominated that scene, installing 46.6MW (25MWh), followed by 13.7MW (28.1MWh) of customer-sited sys-tems. The much higher level of duration in residential and small commercial behind-the-meter storage is due to the fact that the majority of applications in front of meter are still for grid-balancing, including frequency regulation, which necessitates short bursts of power. Behind-the-meter, storage is typi-cally used for longer duration roles such as backup power and solar time-shifting. Commercial deployments, including peak demand shaving, actually dominated the behind-the-meter segment, taking up 88% of all that segment’s deployments for the quar-ter. One reason for the relatively slow uptake at residential level is thought to be the fact that net metering policies for feeding power back into the grid make storage less eco-nomically attractive by comparison.

Biggest year ever as 100MW ceiling smashed in just nine monthsThis marks the first time since GTM began putting together Energy Storage Monitor in 2008 that total deployments for any calendar year have surpassed 100MW, with 108MW (94MWh) already installed by the end of Q3.

What has therefore already been the “biggest year ever” for US energy storage, GTM said, could finish with 192MW of new

deployments. This was roughly treble 2014’s total, a year which had been called one in which storage, after years of promise and trial deployments, had been expected to “put up or shut up”. After successfully “putting up”, driven by developments including the AB2514 mandate in California, it appears, 2015 is the “breakout year” some had pre-dicted would follow.

The report also indicates that the spread of deployment is moving outwards from early adopter markets driven by policy and market mechanisms, such as PJM’s feted frequency regulation market, which have dominated the overall picture to date. GTM’s Ravi Manghani cited the contribution of utility-scale pro-curements in regions such as Vermont and Georgia in recent months as evidence.

“As expected, 2015 is turning out to be a breakout year for US energy storage market. Even though we’ve seen PJM market domi-nating megawatts of deployments so far, third quarter of 2015 had utility-scale deploy-ments in states like Georgia and Vermont,”

Manghani said.“Energy storage has started to appear in

different utility request for proposals (RFPs) and grid planning across states, another indication that utilities and policymakers are getting comfortable with the technology and multiple values it can provide.”

EU PD Research’s Europe installer reportAlso launched today was the “European PV InstallerMonitor” by another firm, Germany-headquartered EU PD Research. The report focuses on Germany, the UK, Italy, France, Austria, Holland, Switzerland and - appar-ently in recognition of its high potential as a market despite its geographical incongru-ence - Australia.

Looking more at energy storage at domes-tic scale and framed through the lens of the installation, EU PD found that it is now the norm for solar installers to offer energy stor-age with new PV systems, with over three quarters of those surveyed confirming that this was the case.

Dec 03, 2015

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20MW energy storage project deployed in PJM interconnection area. Image: Greensmith.

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German storage association: ‘Fair market conditions’ more important for support than cash

A trade association representing some of Germany’s energy storage indus-try has welcomed the renewal of a

support scheme for batteries, but says that establishing “fair market conditions” for stor-age would be more important.

At present, Germany’s federal govern-ment offers around €600 per ki lowatt (US$634) of new PV installations, or slightly more for retrofits, coordinated by the min-istry of economics and technology (BMWi), applicable to l ithium-ion battery-based energy storage systems.

The scheme had been due to expire at the end of 2015, but last week it appeared there was a reprieve, with Green Party poli-tician Julia Verlinden revealing that energy and economy minister Sigmar Gabriel had confirmed there would be a U-turn and that the policy would stay in place next year. There is an expectation however that the rules governing it could be adjusted and details of what is likely to change and what will remain the same have not yet been decided or made public.

Speaking with PV Tech Storage this morning, Miriam Hegner of the German energy storage association, BVES, said it was good news that the subsidy would be extended – perhaps not so much from a financial perspective as from the perspec-tive that politicians were starting to publicly recognise the extended role in the network and in the economy that energy storage could play.

“For us, its’ the right signal on the part of the politics to say they will continue with this programme,” Hegner said.

“…But we don’t focus on incentives. We say that energy storage is really ready for the market and it’s also ready for the mar-ket regarding competitiveness. So what we wold like to focus on is more to have a fair market entrance for energy storage.”

It has been said by commentators in numerous markets besides Germany, including the US and UK, that they would rather see the services and value energy storage can offer being recognised in com-

petitive market conditions than to be paid for with public money. Among the most common problems is that the definition of how storage, as a relatively new resource from a network point of view, sits on the grid.

‘Right market conditions will make in-centives unnecessary’Last year, in an interview with PV Tech Power, Solar Media’s downstream solar industry journal, Chris Edgette of the California Energy Storage Alliance explained that regulatory definitions that pre-date storage cannot really be applied comfort-ably to modern scenarios.

“Storage can be at various times gen-eration, load and it can help transmission and distribution. And those areas of the grid are very ‘siloed’ in the US system. In some cases there’s a firm regulatory wall. So when you have a resource that can help with all four of those things, you end

up with policy and regulatory challenges,” Edgette said.

Miriam Hegner, who deals with technolo-gies and standards issues for BVES, said it was a similar situation in Germany today.

“We are happy that politicians say ‘we want storage and we support storage’ [by extending this scheme] but overall we see that it’s important that we get in the energy law a fair definition and a fair treatment of energy storage plans, so they are not pro-sumers, they are not consumers, they are storage. We would like to have them han-dled as storage and not to make them pay consumer fees and conditions but to say they have their own place,” Hegner said.

“We would like to see the right market conditions and then incentives will not be necessary further on.”

Hegner said BVES welcomed the launch of new business models such as renewa-ble energy utility Lichtblick’s ‘Swarm’ which aggregates small-scale storage into a

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Germany’s scheme pays around €600 per kilowatt of new PV installations, or slightly more for retrofits. Image: ASD

Sonnenspeicher/Weberhaus.

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larger grid resource, Sonnenbatterie’s son-nenCommunity, launched last week, the ‘Energy Neighbour’, a project in Bavaria which uses storage to reduce transmission line losses of power and increase network efficiency and ‘Strombank’, a communi-ty energy trading trial run by a university. These proved that it was possible to “make storage work economically,” Hegner said, but clearer definition and fair market con-ditions would enable more progress, she added.

‘Rules for frequency regulation need clarification’For larger-scale storage, BVES felt the conditions to pre-qualify storage devices to participate in grid-balancing frequency regulation markets in Germany also needed

clarification. Utility-scale batteries can be far quicker and more efficient in responding to signals to ramp up or power down than combined cycle gas turbines, which are tra-ditionally used for the vital role.

Hegner said many of the rules are cur-rent ly ambiguous. The most pressing concern was that a condition could be introduced which would require systems delivering frequency response – known in Germany as primary control reserve – to prove they could make power available to the grid for two 30-minute periods. At pre-sent the requirement is to make the power available for 15 minutes.

For technologies such as li-ion batteries, which are suited to pushing out high power for short duration, this could make the mar-ket prohibitively expensive, Hegner said.

Furthermore, the long time it took to pre-qualify devices was causing a bottleneck of projects that developers were trying to get off the ground, she claimed.

Earlier this year Belectric celebrated the pre-qualification of one of its projects for that market. Hegner said this made it one of the lucky ones and hoped there would be more to come.

“We hope so. It was really difficult in the market because these rules weren’t so clear. Many projects were just waiting and waiting and waiting and didn’t get this pre-qualification, and we hope that now when we have clearer rules that it will be much faster to get new projects in the market.”

Belectric’s Energy Buffer Unit at Alt Daber solar farm pre-qualified for the grid-balancing market earlier this year. Image: Belectric.

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DBL: Picking storage plays for positive social impact and positive returns

In a recent report on quarterly VC funding and M&A activities in energy storage from Mercom Capital, two names stood out in a

chart of top five deals over the third quarter of this year. One was Arnold Schwarzeneg-ger, the all-action former ‘Green Republican’ governor of California, and now an action movie star once again. ‘Arnold’ invested in Advanced Microgrid Solutions for the sec-ond successive quarter (more on that later).

The other big name was venture capi-tal (VC) firm DBL Partners, which invested in two of those top deals, contributing to expansion plays by flow battery maker Pr imus Power and, again, Advanced Microgrid Solutions. DBL is led by found-ers Nancy Pfund and Ihra Ehrenpreis and has become well known for seeking not just a healthy return on investment but also delivering a positive social impact, creating the ‘double bottom line’ that DBL is named after.

Pfund and Ehrenpreis are also two of the earliest backers of Tesla before it float-ed and have invested in numerous solar and related companies, including install-er SolarCity and PV tracker company NEXtracker, sold recently for US$330 mil-lion.

Formerly at JP Morgan, from where DBL was spun off, Nancy Pfund spoke to PV Tech Storage about what it means to be an investor in energy storage and why it can be a “very, very, tricky field” in which to make the right call.

What ’s the best way to p ick out successful technologies to help com-mercialise in energy storage?Some things are quick and some take long-er. In a portfolio you can have both, you wouldn’t want all your companies to take forever to exit but sometimes the big wins do take longer or do require technology. So, lithium ion is here and now and doing great, but there are flow batteries, fuel cells, storage is not going to have just one solution and so there are a lot of compa-nies people have invested in for four or five

years now that are actually becoming com-mercial, at a time when the customers really need a solution.

[For example] you look at all of these tech companies that are going 100% renew-able (including Google and Apple), well, they’ve got to have storage in the design, and lithium-ion is not the universal solu-tion. It’s a very powerful solution, but there’s going to be needs for other modalities and we’re seeing that now, we’re seeing some of these younger companies, like we have Primus Power coming out with a flow bat-tery, we’re demonstrating it in the field and that’s generating a new class of interest from commercial and government kinds of customers. And Primus is not alone – there are a lot of companies out there.

That’s a part of the investment portfo-lio that is pretty ‘heavy lifting’ in terms of technology and getting that right. It’s a very, very, tricky field. But you want to diversi-fy portfolio so you place bets across the spectrum. It’s higher risk, because not eve-rything is going to pan out, but it’s our job! It’s not our job to have every single compa-ny be successful because then they’re not

moving the needle, they’re just incremental.

Jigar Shah said a while ago that he is more comfortable funding storage than perhaps more mainstream lend-ers might be, because as someone who’s gone through the early years of solar, he’s a lot more comfortable with the cost curves and technology involved and in taking manufacturers or develop-ers’ assurances that it will work. Do you agree and will that change with time as happened with solar?Certainly, there are lots of ways to play stor-age, just as there are lots of ways to play solar. It’s kind of like 10 years behind solar but it’s exhibiting similar trends and you can do a technology play, you can do a financing play, a microgrid play – Advanced Microgrid Solutions has a 50MW contract with (US util ity) SoCal Edison to create hybrid buildings that basically combine the Tesla battery with solar, with sophisticated software for real-time demand adjustments, so that you can pull your power from the grid, the battery, the rooftop solar, or you can change your demand curve based

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Picking the right storage tech can be "very, very, tricky", according to Nancy Pfund. Image: Scott Dreger, SoCal Edison.

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on what’s cheapest or what’s best for the grid at that moment and do all of this in an extremely interdependent, interconnected way.

All of a sudden you don’t have to build as many peaker plants, you don’t have as

much transmission and distribution (T&D) expense because you’re really optimising your consumption and supply in real time.

And interestingly enough, it’s led by Susan Kennedy, who has got all of these great technologies that she’s assem-bling and improving with software, but she also knows policy. She was Governor Schwarzenegger’s chief of staff, she was assistant chief of staff to Governor Gray Davis. She’s also a former Public Utilities’ Commissioner for the state of California. I think she wrote the net metering bill reg-ulation when she was there. She can not only read 800 pages of regulations and understand [them], she has had a hand in writing them! So she’s very knowledgeable and able to translate for the utilities: “this is what the regulation means to the utilities. Here’s how you can comply with it and also help your own business as well”.

It seems that to lead these tech com-panies that have overarching goals, reducing carbon emissions and deploy-ing more f lex ib le energy network technology while creating a business you need to be a polymath and expert in

so many things. It shows you how much these issues of solar and storage impact on peoples’ lives across the board...Yeah, it’s so true and she’s assembling a team there that’s incredibly diverse, from policy to software to storage to financ-ing, there’s all kind of innovative financing approaches and that’s another thing that’s really different this time. Compared to 10 years ago, the quality of the entrepreneurs in this business, their experience, their track record, their ability to grow companies, is just getting better every day. That’s been helpful. You know, 10 years ago Susan Kennedy wasn’t starting a company, she was writing path-breaking policies that helped to create these industries, that’s just another fascinating element is the talent pool is getting better.

So many people, not just millennials but baby boomers want to do something that changes the world, they want to work in a place where they can make a good living of course, but that’s not enough. They really do want to have a social impact and we’ve seen that in our practise. Instead of it being a ‘nice to have’, entrepreneurs do see it as a fundamental part of their identity.

Star magic: Arnold Schwarzenegger invested in his former chief of staff Susan Kennedy's company, Advanced Microgrid Solutions. Image: wikimedia user:

Neon Tommy.

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This report was created with articles from the following Solar Media journalists

Andy ColthorpeDavid Pratt

John ParnellTom Kenning

COP21: UK Policy versus UK ambition - by Dr Jill Cainey, Climate scientist and energy consultant