Renewable Energy Storage Takes Off in Europe

Just weeks after the 12th International Renewable Energy Storage Conference (IRES2018) concluded in Di1/4sseldorf, Germany, newly announced figures from Bloomberg New Energy Finance (BNEF) confirmed that battery storage technologies coupled with rapidly expanding renewables are blunting new fossil fuel investments. BNEF's 2017 figures show that over $330 billion was invested in renewables with comparative costs worldwide showing an 18% improvement in the competitiveness of onshore wind and solar as well as a rapidly developing role for batteries.

As a result of falling barriers to installation, the levelized cost of electricity (LCOE) for all the leading technologies is decreasing. This is causing fossil fuel power to face an unprecedented challenge in all three roles it performs in the energy mix: the supply of bulk generation, the supply of dispatchable generation, and the provision of flexibility. With capital costs for renewables falling and both generation limits and efficiencies rising, when coupled with the plummeting costs of storage-given its inherent ability to smooth output, and if necessary, shift the timing of supply-fossil fuel power stations are simply being fenced in.

"Our team has looked closely at the impact of the 79% decrease seen in lithium-ion battery costs since 2010 on the economics of this storage technology in different parts of the electricity system. The conclusions are chilling for the fossil fuel sector," said Elena Giannakopoulou, head of energy economics at BNEF. "Some existing coal and gas power stations, with sunk capital costs, will continue to have a role for many years, doing a combination of bulk generation and balancing, as wind and solar penetration increase. But the economic case for building new coal and gas capacity is crumbling, as batteries start to encroach on the flexibility and peaking revenues enjoyed by fossil fuel plants."

Lower Costs, Larger Energy Storage Installations

Battery units in the 10 MW to 20 MW range already online in Europe are being eclipsed by new 50-MW facilities now being built. And with new investments by Tesla and others taking batteries to 100 MW (at the moment limited to Australia, but watch for other announcements soon), the combined synergy is gaining steam and attracting major players.

"Competitive auctions for new renewable energy capacity have forced developers, equipment providers and financiers to bear down on all the different costs of establishing wind and solar projects," said Seb Henbest, head of Europe, Middle East, and Africa for BNEF.

Additionally, since 2009, BNEF has seen the LCOE for solar photovoltaic without tracking tumble by 77% and that for onshore wind by 38%. Significantly, BNEF's lithium-ion battery price index shows a decrease from $1,000/kWh in 2010 to $209/kWh in 2017. However, during this same period, LCOEs and input prices for older established sources such as coal, gas, nuclear, and large hydro have seen only very modest reductions at best. Worse, in some countries, they have actually increased.

Adding fuel to the fire, in late March EDF-the French state-owned energy company-announced plans to invest a8 billion ($10 billion) to develop or acquire more than 10 GW of energy storage beginning this year through 2035, including at least 6 GW of large, industrial-sized storage such as pumped storage and batteries. This announcement should be viewed in tandem with the French government's plans to invest heavily in offshore wind and other renewables while phasing out a large portion of its nuclear fleet. Of course, EDF is a global corporation, and investments like this will have global implications as EDF expands its renewable fleets worldwide.

"Electricity storage technologies have a potential to radically change the energy sector. EDF's Electricity Storage Plan is based on the expertise coming from all entities within our group and 25 years of investment in [research and development]," said Jean-Bernard Li(C)vy, EDF's chief executive and chairman. "The new limit the group is setting is a 100% carbon-free power system by 2050. By its scale, the Electricity Storage Plan, like the Solar Plan, confirms EDF's ability to enable a competitive ecosystem in order to make our carbon-free future a reality."

Energy Storage Projects Abound

Energy storage has shown increasing promise in Europe over the past year with at least 140 MW installed in 2017 in the UK and another 75 MW in Germany, according to Renews' 2018 Energy Storage Report. Well over 1.1 GW are in the pipeline for 2018 in those two markets alone. In the UK, more than 160 MW was slated to come online before March 1 to meet National Grid contract dates. Within this figure, EDF Energy Renewables has one of the largest single projects now online, the 49-MW West Burton B in Nottinghamshire that relies on 20 lithium-ion battery containers and power electronics supplied by Nidec ASI. It's backed by a 15-year capacity market contract.

The UK's National Grid is calling for all this storage to help meet the demands of expanding offshore wind and other renewables. Quantitative analysis manager at the National Grid, Leon Walker, commented that "using battery storage is a significant development for managing the national grid. It's an ultra-fast way of keeping electricity supply and demand balanced."

In 2016, the National Grid auctioned off the rights to develop 200 MW of new battery projects. One of the lucky winners was EDF. Additionally, the low impact of storage solutions, especially the so-called "batteries in a box," are ideal for brownfield projects worldwide-especially at old industrial or former energy generation sites that already have strong, established grid connections. That's helping grease the skids and curry favor with regulators and local communities impacted by the switch away from fossil fuels toward renewables.

Another big step forward is happening in Germany where the new coalition government has pledged to untangle some of the regulatory hurdles involved with grid storage, specifically the double grid charges incurred when importing and then exporting the stored energy. This has been a major stumbling block for the young industry so far. Nonetheless, Renews has tallied more than 180 MW of projects slated to come online in Germany this year.

An example is the 48-MW EnspireME facility scheduled for activation in May. Developed jointly by Eneco and Mitsubishi, it uses batteries supplied by NEC Energy solutions. Linked to a nearby wind farm, power will be stored when prices drop and dispatched to the grid when they are higher. Ironically, it will take advantage of the same intermittencies that many had once decried as an inherent weakness of renewables. Additionally, as more decentralized storage comes online, developers are stitching together virtual centralized power pools, allowing operators to better control energy flows and smooth out peaks and valleys.

Other novel projects in Germany's pipeline include a 30-MW energy storage system now under construction by Siemens Gamesa at the Trimet SE aluminum smelter in Hamburg that will use some 1,000 metric tons of rock fill. There, excess renewable energy will be converted into heat, stored in the rocks, and a steam turbine will convert that heat back into electricity when needed. The project is slated to come online next year. Also, just breaking ground is a 102-MW thermal storage project by Vattenfall that is intended to replace some capacity lost by a now-closed coal fired power plant. This a100 million project is scheduled to come online in 2020.

Also scheduled to come online later this year is a 49-MW Centrica-operated stacked lithium-ion battery storage facility being built in Cumbria, England, on the site of the former Roosecote coal-fired plant. Centrica selected Younicos-a storage provider-to engineer, design, procure, and construct the system, which will be able to respond to fluctuations in energy demand in less than a second. Project stakeholders say it will provide grid services including enhanced and firm frequency response; bring resilience to the grid via the capacity market; and create revenue by navigating the complex grid charging regimes of transmission and distribution fees with location-specific and time of use elements.

Batteries in a Box Break Out at IRES2018

"The application possibilities for energy storage technologies are manifold: from industry to the heating market to mobility. Today, decentralized short-term storage is already widely used in combination with photovoltaic systems-and their price continues to fall. First battery storages in the megawatt scale stabilize the grids. The power-to-gas technology allows to transport and reuse energy in a large scale-independent of energy supply and demand," Dr. Simone Peter, German Renewable Energy Federation and former head of the German Green Party, said during the IRES2018 keynote presentation.

Going forward, utilizing battery-in-a-box concepts, Younicos announced the launch of energy storage "as a service." A "truly mobile offer," according to the company, it is based around renting assets to clients over two- to four-year contracts. Founded in Germany, the company has since developed a growing U.S. presence, with corporate offices in Austin, Texas. Last year, it was acquired by temporary power solutions company Aggreko.

Now available as a global service, customers pay Younicos a rental fee for the battery, as well as commissioning and decommissioning fees. "The only thing we ask is that once you end the contract, we can keep it on the site for six months because we don't necessarily want to rotate it back into a warehouse but to redeploy it," Younicos spokesman Phil Hiersemenzel told Energy Storage News.

Why the special request? After years of experience, Younicos said it knows many companies are unwilling to bet long on storage because it's still an evolving sector, but the components the company sells are designed to have a long asset lifetime. Constructed with a built-in mobility and flexibility, Younicos believes the systems will have a long secondary market lifetime, as the boxes can be shipped potentially from site to site. Thus, by leveraging demand charge management, and building energy storage systems that can also be aggregated to provide other functions such as grid services, Younicos has found a novel method of helping grow an incipient but increasingly vital technological tool.

Once customers begin to integrate storage, they are also likely to use and expand the services, especially as renewables continue to flood the system. "Our service offering is really rental," Hiersemenzel said. The company will actually own and operate the entire asset, "bring it to a client's site and basically cover that client's storage needs, whatever that may be." Coupled with software, the system can help balance out loads across the system.

Younicos is hardly alone in providing batteries in a box. Other companies are rapidly developing similar systems and working with additional battery types, while proving out other scalable solutions as storage systems continue to gain traction.

-Lee Buchsbaum (www.lmbphotography.com), a former editor and contributor to Coal Age, Mining, and EnergyBiz, has covered coal and other industrial subjects for nearly 20 years and is a seasoned industrial photographer.

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