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energy storage

FuturENERGY February 2020

Hybrid systems integrating PV and diesel generators are a solution for those sites that need cost-efficient energy, and provide significant benefits to the consumption of energy from the local grid. But these systems can provide more benefits to users when combined with energy storage systems (ESS). The German company, Qinous, a system integrator of smart plug and play ESSs and Danfoss Drives have built numerous ESS installations together around the globe. Typically, these sites are located off-grid, and their purpose is to optimise the local energy production: solar PV generation and diesel generators. This article offers two examples of this type of installation, as well as the benefits they bring users…

A new report, Global Energy Storage Market 2019, from Lux Research estimates that the three main drivers of energy storage – mobility applications, electronic devices, and stationary storage – will reach an annual combined deployment level of 3,046 GWh over the next 15 years, up from the current 164 GWh.

The energy storage industry is poised for a massive increase in annual revenue and deployment capacity as key innovative technologies, such as solid-state batteries and flow batteries, reach commercialization. Lux Research expects electric mobility applications, primarily light-duty passenger vehicles, to be the principal long-term driver of energy storage annual revenue and demand, with a total market share of 74% by annual revenue and 91% by annual deployed GWh by the year 2035.”

Growth in revenue and deployment for the energy storage market over the next three years will be markedly different from the overall 2035 projections, with plug-in light-duty vehicles remaining the largest market with a predicted $24 billion increase in revenue by the end of 2022. Medium- and heavy-duty vehicles come in next, growing from $600 million a year in 2019 to a projected $3.6 billion per year in 2022, but have the highest combined annual growth rate (CAGR) of 80%. Residential storage has a CAGR of 76% and $8 billion revenue increase over the next three years, followed by personal mobility devices with a CAGR of $49% and $4.6 billion revenue increase.

Stationary storage is expected to grow to $111.8 billion in revenue by 2035, marking a significant increase from its $9.1 billion revenue in 2019.

The falling cost of stationary storage systems, the rise of renewable energy, and the liberalization of electricity markets around the world will be transformative for energy storage over the next decade and a half. The shift of Li-ion battery manufacturing capacity toward energy-dense chemistries to support the growing electric vehicle industry means that future Li-ion battery cost reductions for stationary storage systems will be modest –2% to 4% annually –compared to historical trends of more than 10%.

The increased value proposition of energy storage in electricity markets will more than make up for a slowdown in cost reductions. Wind and solar will grow to a third of worldwide generating capacity, building opportunities for stationary storage to balance the growth of nondispatchable renewables. Electricity market reform will enable stationary storage to participate more broadly in more regions: By 2035, more than 40% of annual deployments will take place in evolving grids like China, India, Southeast Asia, and Africa.

The report identifies five major technologies that are well-positioned to drive growth in energy storage markets: battery recycling, electric aviation, flow batteries, thin-film batteries, and solid-state battery improvements.

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Los 100 MW de almacenamiento de energía para Pivot Power proporcionarán capacidad flexible y fiabilidad para soportar una mayor generación de energía renovable e infraestructura de recarga de vehículos eléctricos. Sitio en Kemsley. / 100 MW of energy storage to Pivot Power will provide flexible capacity and reliability to support increased renewable energy generation and electric vehicle charging infrastructure. Site in Kemsley

Pivot Power, an EDF Renewables company specialising in battery storage and infrastructure for electric vehicle charging, has placed an order with technology group Wärtsilä to deliver 100 MW of energy storage in the UK. Pivot Power is developing a world-first national network of grid-scale batteries and high-volume power connections to provide essential capacity for rapid electric vehicle charging. The first two projects at Cowley in Oxford and Kemsley in Kent are expected to be fully operational before the end of this year. Wärtsilä will support the projects under 10-year service agreements with flexible performance guarantees.

The two 50 MW lithium-ion batteries will be the first projects completed as part of Pivot Power’s programme to develop, own and operate up to 2 GW of grid-scale energy storage and high volume power connections which are directly connected to the UK high-voltage transmission system. The projects will provide flexible capacity and reliability to support increased renewable energy generation and electric vehicle charging infrastructure. The UK market for electric vehicles is expected to expand significantly in 2020 in what has been described as “the year of the electric car” by industry analysts.

This is the largest energy storage deal in Europe for Wärtsilä, which has set its sights on the UK as a key new market, as part of its plan to lead the global transition towards a 100% clean energy future.

The systems are based on Wärtsilä’s advanced energy management software platform GEMS, which leverages artificial intelligence and machine learning to enable the intelligent management of large-scale energy storage systems, and innovative GridSolv modular storage solution, which supports stand-alone energy storage deployments and integrated hybrids with thermal or renewable generation assets.

The contract is the first to be announced since EDF Renewables acquired Pivot Power in November 2019. It forms part of EDF Group’s Electricity Storage Plan under which it aims to be the leader in Europe with 10 GW of additional storage by 2035. It also supports EDF Electric Mobility Plan, to become the leading electric mobility company by 2022 in the UK, France, Italy and Belgium. Beyond this 2022 date, the Group’s goal is to provide power for 600,000 electric vehicles and 75,000 charging points.

Source: Wärtsilä

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FuturENERGY Dec.19 - Jan. 2020

Our vision is clear: 2020 must be the year of commitment to the energy transition and the fight against climate change, a key year in which to progress towards a zero-emissions energy model. For this we have to advance the decarbonisation of the energy mix while guaranteeing the safety and quality of the supply, for which energy storage systems will be key players… By Agustí Robirosa. Cluster Manager at AEPIBAL, the Spanish Batteries and Energy Storage Business Association.

 

Wärtsilä has been contracted to add a 10 MW/26 MWh energy storage solution to a power plant owned by Roatan Electric Company (RECO) on the Caribbean island of Roatan in Honduras. Wärtsilä’s proprietary GEMS energy management software solution will control the utility’s energy system, including earlier delivered Wärtsilä engines, and solar PV. The order was placed with Wärtsilä in December 2019.

The addition of energy storage and GEMS solution to RECO’s generation resources will provide additional flexibility to integrate renewables into the local grid and secure reliability while eliminating the need for mechanical spinning reserve. The storage system will provide virtual spinning reserve capacity needed to maintain stability of the grid – particularly important for the energy security of an island. The solution will be delivered on a fast-track basis and is expected to be operational before the end of 2020.

The system will allow more cost-effective and optimised operation of the existing thermal power plant, plus enable more renewable energy to be incorporated into the system. It’s anticipated that by the end of 2021, over 20 percent of the delivered island energy will come from renewable sources. This is made possible by an integrated energy storage solution using tertiary control from the GEMS software.
The existing 28 MW plant was delivered on an engineering, procurement and construction (EPC) contract by Wärtsilä in 2017. It operates on four Wärtsilä 34SG-LPG engines running on propane gas.
Wärtsilä’s total installed power capacity in Honduras is approximately 500 MW.

RECO is constructing 12.5 MW of solar PV energy, has a 26-turbine wind farm, and a recently completed a 6-mile underwater subsea cable to expand their distribution system to two nearby islands.

Source: Wärtislä

The power sector is witnessing significant changes. As 2019 draws to a close, GlobalData, looks at the key trends that will shape the industry in 2020, ranging from electric vehicles to corporate power purchase agreements (PPAs).

Electric vehicles

The adoption of electric vehicles (EVs) is set to continue on the steep trajectory witnessed in the last few years. The global EV fleet, which stood at over 5.1 million in 2018, is expected to reach around 130 million by 2030 as per International Energy Agency (IEA) forecasts.

Governments across the world are setting targets for deployments of EVs and these policy signals are encouraging industry stakeholders to invest across the EV supply chain. In addition, large power utilities such as EDF, E.ON and Enel in Europe have been investing in EV charging station infrastructure, and this market is witnessing consolidation – a trend that is expected to continue. Increasingly, power utilities are collaborating with EV manufacturers to boost their offerings in areas such as EV charging, vehicle-to-grid (V2G) services, energy storage and renewable energy sources. Oil majors such as Shell, BP and Total are also placing huge bets in this market through acquisitions.

Digitalization

Power utilities, which have traditionally been averse to the adoption of new technologies, are now realizing their benefits and offering heavy investment. An emerging technology trends survey conducted by GlobalData reveals that cyber security, big data, cloud computing, robotics and Internet of Things (IoT) are being seen as the top five technologies that will have the maximum impact on the sector over the next three years.

Cybersecurity is receiving the maximum attention from power companies in order to protect grids from cyber-attacks. Power utilities realize the crippling effect such attacks can have on the grid and are hence willing to invest heavily to protect against them.

With ever more data coming out of the customers’ meters, utilities are focusing on data analytics for load forecasting, generation planning, managing peaks and increasing customers’ awareness regarding energy efficiency. Big data and cloud computing are useful tools that are aiding these initiatives. Cloud models are helping utilities to lower their IT capital expenditure (capex) and offer unlimited computing and advanced analytics, while IoT is helping power companies to remotely monitor and manage their assets. Utilities are also able to conduct predictive maintenance of their assets with the assistance of IoT.

Grid-scale battery storage

Energy storage installation among end-users (renewable energy generators, grid operators and distributed generation) is projected to witness larger growth due to smart grid development. The battery energy storage system (BESS) market, which is estimated at 4.9 gigawatt (GW) in 2018, is forecast to reach 22.2GW by 2023.

The economies of energy storage in a wide range of applications, coupled with the falling cost of systems, will likely result in the rapid growth of battery energy storage solutions. Lithium-ion (Li-ion) batteries are emerging as crucial for energy storage, and the increasing growth of EVs has resulted in advancements in lithium-ion technologies and a steady decline in the prices of lithium-based batteries.

Several energy storage projects in the pipeline have been accelerated by incentive programs. The deployment is expected to grow, due to a large number of countries opting for storage utilization to support their power sector transformation. The US introduced several bills and policies related to energy storage, and the country has comprehensive incentive programs supporting battery utilization. In the meanwhile, India published a national energy storage mission, outlining the country’s ambition to become a market leader in the manufacture of batteries. Similarly, China and Germany are exploiting opportunities to capitalize on the growing market for batteries.

Microgrids

Microgrids will continue to make inroads in the power sector, driven by the need for resiliency, energy security and the electrification of remote areas. This year has seen a number of microgrid projects being announced by companies across the world. Utilities such as Duke Energy, EDF, Engie and AusNet have been involved in the development of microgrid projects, the scale of which has also been increasing with projects as large as the 100MW Armonia Microgrid Project in Palau being developed.

Policy developments have been encouraging. For example, Hawaii has become the first state to initiate microgrid tariffs. California is also following close behind, trying to enact legislation in this direction.

Corporate PPAs

Large corporates are increasingly signing PPAs with generators to meet their power needs. Most of these are signed with renewable energy generators, enabling them to increase the share of renewable energy in their total consumption. Companies such as Google, Amazon, Facebook and Microsoft have continued to sign PPAs during 2019 and this trend is expected to continue in the future due to the expansion of the data centers market increasing their power requirements.

Retailers such as Tesco and Walmart have also been involved in signing PPAs in 2019. The rise in corporate PPAs is fuelled by the withdrawal of feed-in-tariffs (FITs) and other incentives for wind and solar power coupled with the move towards auction mechanisms. Under these circumstances, corporate PPAs offer an opportunity for developers to sell their power profitably.

Source: GlobalData

i-DE, Iberdrola’s electricity distribution arm, has inaugurated the first electrical energy storage system with lithium-ion batteries for distribution networks in Spain. The project, which is the first in the country, is located in the Murcian municipal district of Caravaca de la Cruz and will improve the quality of the energy supply in the surrounding area, as well as the use of solar energy generated in the area.

The storage system, with a capacity of 3 MWh, can operate in isolation and, in the event of an interruption in supply, will be able provide up to five hours of electricity to the main districts in the surrounding area: Cañada de la Cruz, Inazares, Moralejo, Barranda, El Moral and Los Royos.

Adverse climate and rural environment

The special circumstances in the rural environment around Caravaca de la Cruz have determined the choice of this enclave for this innovative solution.

In recent years, the area has been recording very adverse weather conditions that cause incidents in the distribution network. Also, it is an area consisting of various small and scattered centres of consumption, so a fault can leave several villages without service. To this is added the long distances that have to be covered to reach the source of the problem, which further complicates the resolution of incidents.

The traditional solution would have been to construct 22 km of overhead power lines, crossing environmental protection areas. This is the reason why an innovative solution was chosen, based on energy storage installed at a point where overhead cables intersect, allowing several areas to be served with a single battery.

The project has shown that batteries can improve the continuity of supply in contingency situations, as well as the use of photovoltaic plants connected to the impacted grid, including in isolation using only renewable energy. The batteries, in short, constitute a complement to the conventional local operation.

Smart storage system

There are several large photovoltaic plants in Caravaca de la Cruz that upload electricity to the grid during the hours with the most intense sunlight. A battery with these characteristics is able to adjust the voltage to the appropriate values and be ready to intervene as a second source of power supply in the event of a power failure.

To achieve this, it has a smart storage system that is able to assess the situation and decide what part of the network will remain in operation from the battery, taking into account actual consumption at that time, the generation capacity of photovoltaic plants nearby and the state of charge of the battery, among other aspects.

The system estimates both the consumption and the potential renewable generation power of the solar plants in the area at that time and for the following hours. It can, thus, take advantage of local power generation and, in addition, absorb excess energy, in case of excess production.

The combination of this battery and the electricity produced by the photovoltaic plants in the area will significantly reduce the interruption times in the power supply during an emergency.
Storage and grids, the keys to the energy model of the future

Storage systems are key to addressing the challenges of the energy transition and are destined to become an essential element in the electrical system of the future. This is because they allow the quality of the electricity supply to be improved, ensuring the stability and reliability of the network and integrating and harnessing the energy generated by renewable sources.

Iberdrola is a leader in energy storage, with an installed pumping technology capacity of 4,400 MW, which is currently the most efficient method. It is also undertaking numerous initiatives that combine the use of batteries with renewable energy – wind and photovoltaic – projects, as well as those oriented towards improving the quality of the supply by its grids, as is the case with the installation in Caravaca de La Cruz.

Electricity distribution networks are the circulatory system in the new energy model and an essential platform in the transition toward a decarbonised economy based on competitive, renewable energy. Transforming the grids into smart infrastructure responds to the challenges of an electrified economy, with greater integration of renewables, sustainable mobility, smart cities and consumption models and distributed generation.

In this context, i-DE has allocated 2 billion euros to digitising its electricity networks, with the installation of almost 11 million digital meters, together with the infrastructure that supports them, and the adaptation of around 90,000 transformer centres in Spain, to which it has incorporated remote management, supervision and automation capabilities. It is also currently working on the digitalisation of the low voltage network and is investing in control and operation systems.

I-DE, smart electricity grids

The activities of i-DE the new name for Iberdrola’s electricity distribution arm – include the planning, construction and maintenance of power lines, substations, transformer centres and other infrastructure, as well as operating the system in a way that efficiently distributes energy among the various agents that produce and consume it.

Iberdrola operates a distribution system consisting of 270,000 km of power lines in Spain and is present in 10 Autonomous Regions serving a population of 17 million. In 2018, Iberdrola’s distribution business invested almost €500 m in Spain in projects designed to improve its procedures and customer service channels; complete the roll-out of nearly 11 million smart meters and the supervision and automation of the grid.

Iberdrola’s network business is a significant driver of the Spanish economy, generating more than 10,000 jobs in total (both direct and through its suppliers). In 2018, the company made purchases to the value of €500 m from 2,000 local companies.

Source: Iberdrola

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Este mapa muestra la tecnología con el LCOE de referencia más bajo en cada mercado, excluyendo subsidios o créditos fiscales. CCGT: turbina de gas en ciclo combinado / This map shows the technology with the lowest benchmark LCOE in each market, excluding subsidies or tax credits. CCGT: Combined-cycle gas turbine. Fuente/Source: BloombergNEF.

Every half year, BloombergNEF runs its Levelized Cost of Electricity (LCOE) Update, a worldwide assessment of the cost-competitiveness of different power generating and energy storage technologies – excluding subsidies. BNEF latest Levelized Cost of Electricity (LCOE) figures show a global benchmark LCOE for onshore wind and PV projects at $47 and $51/MWh. The numbers are down 6% and 11% respectively from six months ago, mainly owing to cheaper equipment. The offshore wind LCOE benchmark sits at $78/MWh down 32% from from last year.

These are the key, high-level results for the second half of 2019:

New solar and onshore wind power plants have now reached parity with average wholesale prices in California and parts of Europe. In China, their levelized costs are now below the average regulated coal power price, the reference price tag in the country. These technologies are winning the race as the cheapest sources of new generation with two-thirds of the global population living in countries where PV or wind are cheaper than coal and gas power plants.

BNEF’s global benchmark levelized cost figures for onshore wind and PV projects financed in the last six months are at $47 and $51/MWh, down 6% and 11% respectively compared to the first half of 2019. For wind this is mainly due the fall in the price of wind turbines, 7% lower on average globally compared to the end of 2018. In China, the world’s largest solar market, the capex of utility-scale PV plants has dropped 11% in the last six months, reaching $0.57 million per MW. Weak demand for new plants in China has left developers and engineering, procurement and construction firms eager for business, and this has put pressure on capex.

BNEF estimates that some of the cheapest PV projects financed recently will be able to achieve an LCOE of $27-36/MWh, assuming competitive returns for their equity investors. Those can be found in India, Chile and Australia. Best-in-class onshore wind farms in Brazil, India, Mexico and Texas can reach levelized costs as low as $26-31/MWh already.

Offshore wind has seen the fastest cost declines, down 32% from just a year ago and 12% compared to the first half of 2019. BNEF’s current global benchmark LCOE estimate is $78/MWh. New offshore wind projects throughout Europe now deploy turbines with power ratings up to 10 MW, unlocking capex and opex savings. In Denmark and the Netherlands, we expect the most recent projects financed to achieve $53-64/MWh excluding transmission.

Source: BNEF

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Instalaciones globales de almacenamiento de energía / Global cumulative energy storage installations

Energy storage installations, including stationary batteries used in eight applications but excluding pumped hydro storage, around the world will multiply exponentially, from a modest 9 GW/17 GWh deployed as of 2018 to 1,095 GW/2,850 GWh by 2040, according to the latest forecast from research company BloombergNEF (BNEF).

This 122-fold boom of stationary energy storage over the next two decades will require $662 billion of investment, according to BNEF estimates. It will be made possible by further sharp declines in the cost of lithium-ion batteries, on top of an 85% reduction in the 2010-18 period.

BNEF’s Energy Storage Outlook 2019, predicts a further halving of lithium-ion battery costs per kilowatt-hour by 2030, as demand takes off in two different markets – stationary storage and electric vehicles. The report goes on to model the impact of this on a global electricity system increasingly penetrated by low-cost wind and solar.

Two big changes in the report are that BNEF has raised its estimate of the investment that will go into energy storage by 2040 by more than $40 billion, and that BNEF now thinks the majority of new capacity will be utility-scale, rather than behind-the-meter at homes and businesses.

BNEF’s analysis suggests that cheaper batteries can be used in more and more applications. These include energy shifting (moving in time the dispatch of electricity to the grid, often from times of excess solar and wind generation), peaking in the bulk power system (to deal with demand spikes), as well as for customers looking to save on their energy bills by buying electricity at cheap hours and using it later.

In the near term, renewables-plus-storage, especially solar-plus-storage, has become a major driver for battery build. This is a new era of dispatchable renewables, based on new contract structures between developer and grid.

Just 10 countries are on course to represent almost three quarters of the global market in gigawatt terms, according to BNEF’s forecast. South Korea is the lead market in 2019, but will soon cede that position, with China and the U.S. far in front by 2040. The remaining significant markets include India, Germany, Latin America, Southeast Asia, France, Australia and the U.K.

There is a fundamental transition developing in the power system and transportation sector. Falling wind, solar and battery costs mean wind and solar are set to make up almost 40% of world electricity in 2040, up from 7% today. Meanwhile passenger electric vehicles could become a third of the global passenger vehicle fleet by 2040, up from less than half a percent today, adding huge scale to the battery manufacturing sector.

Demand for storage will increase to balance the higher proportion of variable, renewable generation in the electricity system. Batteries will increasingly be chosen to manage this dynamic supply and demand mix.

The report finds that energy storage will become a practical alternative to new-build electricity generation or network reinforcement. Behind-the-meter storage will also increasingly be used to provide system services on top of customer applications.

The total demand for batteries from the stationary storage and electric transport sectors is forecast to be 4,584 GWh by 2040, providing a major opportunity for battery makers and miners of component metals such as lithium, cobalt and nickel.

Source: BNEF

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Wärtsilä has signed an EPC contract for a 100 MW/100 MWh total capacity energy storage project in South East Asia. The energy storage system facility, including the Greensmith GEMS advanced software platform and GridSolv, will be used for grid support purposes.

Wärtsilä is enabling the transition towards 100% renewable energy around the world by designing and building flexible systems that integrate renewables, traditional thermal assets and energy storage.

In 2018, the Association of Southeast Asian Nations (ASEAN) committed to meeting 23 percent of its primary energy needs from renewables by 2025. The region is aiming to leverage its abundant wind and solar resources and reduce its reliance on fossil fuels, especially as grid systems develop and economies grow. Wärtsilä’s 100 MW/100 MWh energy storage project will help provide some part of the reliability necessary to support South East Asia’s transition to carbon-free resources.

The Greensmith GEMS platform has the ability to react near-instantly to smooth the integration of renewables, enabling the grid to emerge more stable and responsive. Grid support applications of GEMS include voltage & frequency regulation, reactive power support, spinning reserve, ramp rate optimization, renewable energy output smoothing and energy arbitrage. GEMS will make it possible for grid operators to rely on renewables as baseload power.

Source: Wärtsilä

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