Singapore Battery Consortium: 2020 Q1 Lux Newsletter

Amsterdam begins electrifying canal boats in preparation for 2025 diesel ban

admin — Wed, 09 Sep 2020 04:36:48 +0000

Amsterdam begins electrifying canal boats in preparation for 2025 diesel ban admin Wed, 09/09/2020 - 12:36

Importance Level

Interest Area

Ahead of a citywide policy banning diesel engines in Amsterdam's canals by 2025, companies that operate commercial vessels are converting their fleets to electric power. Rederij Kooij, a company that offers boat tours, said that replacing diesel with electric power costs $56,000, while building an all-new electric boat would cost $1.1 million. At smaller scales, a newly built hybrid survey ship is conducting seabed scans in France, and Stockholm Transport is using a retrofitted hybrid boat. Clients should expect this trend to continue for short-range vessels, especially motor conversions of existing fleets.

Ganfeng Lithium takes majority ownership of Cauchari-Olaroz operation from Lithium Americas

admin — Wed, 09 Sep 2020 04:31:25 +0000

Ganfeng Lithium takes majority ownership of Cauchari-Olaroz operation from Lithium Americas admin Wed, 09/09/2020 - 12:31

Importance Level

Interest Area

Energy Storage

Ganfeng will take 51% ownership in jointly owned Minera Exar, a jointly owned company operating the lithium project, and Lithium Americas will receive $40 million in interest-free loans and 49% ownership. The Cauchari-Olaroz project is projected to begin in 2021 with an annual production capacity of 40,000 tons per annum using conventional brine evaporation pools. The extra cash will likely help Lithium Americas in its $400 million clay mining operation at Thacker Pass, Nevada. Ganfeng's majority ownership will open opportunities of state support from China and further enhance its global lithium portfolio.

STATIONARY ENERGY STORAGE

adminastar — Wed, 29 Apr 2020 09:53:26 +0000

STATIONARY ENERGY STORAGE adminastar Wed, 04/29/2020 - 17:53

Importance Level

Interest Area

Energy Storage

Exclusive Analysis & Commentary

The Nuts and Bolts of Application Stacking

Application stacking has long been a goal of the energy storage industry, as it helps address the single largest concern about stationary storage: it is too expense. Application stacking inverts the problem, not by reducing costs, but by securing multiple streams of revenue through various services stationary storage can provide. Once multiple value streams can be tapped, the economics tip in favor of stationary storage.

LUX TAKE

On paper, application stacking typically pencils out economically, but regulations and business case development have presented challenges. Understanding the specific needs of different utility markets and quantifying grid service revenue will help build value stacking business opportunities today.

Energy storage can provide a wide range of services

The local on- or off-grid greatly influences the value and use case for energy storage systems. There are three grid domains where an energy storage system can be sited – transmissions, distribution, and behind-the-meter.

Transmission:
Transportation of electricity from centralize plants to local substation at high voltage. Transmission connected systems are typically much larger in format (>10 MW), and as such the system is likely to be communicated with grid operator and utility.
Distribution:
Delivery of electricity from substations to end substations to end customers at low to medium voltage. Distributed connected systems are likely between 10MW and 100 kW in scale, and are likely to be controlled by the grid operator or utility.
Behind-the-meter:
Device connected to a home or business, which is located on the customer side of the electricity meter. Behind-the-meter systems are smaller than 1MW and are likely to be controlled by the customer or a third-party operator through a software platform.

The implementation of application has not been smooth, thanks to inconsistent rulemaking and market regulation

Regulation has long been a barrier, due to two primary factors:

Degree of electricity market deregulation and availability of revenue streams
Business model challenge of transferring value across different stakeholders

This has forced energy storage developers to cobble together viable projects through a variety of partners, much like the solar industry had to do years ago. Each stakeholder may gain some value from an energy storage asset, but not enough in isolation to merit the installation of that asset. Bundling those values together through an agreement or contract where revenue is commensurate with risk for each stakeholder has been the challenge and barrier to scale.

ven in a complicated regulatory landscape, stationary storage is expected to grow significantly

Not every region has access to these market-based models: most of the world still operates in a fully regulated environment. It will take years for countries to revamped their electricity markets to adopt market-based electricity pricing models, but that hasn’t stopped countries from deploying energy storage and distributed resources already. Indeed, most countries have installed energy storage that provides multiple services without deregulating their power sector. Typically, these are infrastructure deferral or upgrade projects. The global stationary energy storage market is set to grow 15-fold through 2035, with 214 GWh of demand that equates to approximately $112 billion in annual revenue. Regions such as China, Europe, North America, Japan, and Korea is expected to lead the charge globally.

Economics behind energy storage projects

Energy storage projects today are highly complex, involving developers, utilities, technology providers, and site owners, all of whom have to agree on a business model that allocates value and risk adequately across multiple shareholders. Often those shareholders are reluctant to share details of project finances, but Lux Research interviewed multiples shareholders with each project and conducted its own analysis to reverse engineer specific financial operations.

Marcus Garvey Apartments:
A microgrid project featuring a 1.2 MWh battery for a 625-unit affordable housing complex in Brooklyn, New York
Glassenbury:
A 40 MW distribution-level storage asset in Glassenbury, UK that provides both grid and customer services.
sonnenCommunity:
A 22 MW virtual power plant comprising 6,000 solar- and storage-equipped homes throughout Germany.

Glassenbury: A need for fast frequency response in the UK

In July 2016, National Grid opened a tender for 200 MW of enhanced frequency response (EFR) to manage sub-second fluctuations in frequency. VLC Energy big a 40 MW/27.65 MWh system provided by NEC Energy Solutions. Altogether, VLC Energy won a contract to provide three services at fixed cost: EFR, capacity, and triad peak shaving. Total lifetime revenue is expected to be $20.8 million with EFR providing 61% of lifetime revenue for the system with peak shaving and capacity providing 20% and 19%, respectively. The Glassenbury installation cost $16.3 million, and with $20.8 million in present-value revenue, the project realizes a 28% return on investment with just the first four-year EFR/triad contract. Should that be renewed, even at much lower rates, the ROI would improve still.

Marcus Garvey Apartments: A dire need for reducing demand in Brooklyn

In July 2017, the Marcus Garvey Apartments microgrid was brought online. The project included a 400 kW solar array, a 400 kW fuel cell, and a 300 kW/1,200 kWh energy storage system. Each component was financed separately by project owner L+M, Bloom Energy, NYC Energy Efficiency Corporation, and Enel X. The project participated in Con Edison’s demand management program. Total lifetime revenue is expected to be $1.4 million with demand response providing 50% of lifetime revenue for the system with distribution deferral and peak shaving providing 38% and 12%, respectively. The total cost of the project was $1.32 million and yields an ROI of 7% over the 10-year financing round. Even with significantly higher demand response prices, high costs from permitting and installation in NYC make it difficult to justify a energy storage system in this case.

sonnenCommunity: A retail model for virtual power plants

sonnenCommunity is a Germany-wide virtual power plant established by Sonnen (acquired by Shell). Approximately 6,000 residential solar-plus-storage systems enable homeowners to provide grid services or shift energy regionally through coordinated charging and discharging. Instead of selling electricity to the grid via feed-in-tariffs, homeowners pay Sonnen a monthly fee of $34/month to manage its battery systems. In return, Sonnen uses the battery to provide frequency regulation at $2,780/MW-week. Sonnen provides value to two stakeholders: the homeowner and Sonnen. The consumer battery cost is $5,948 and yields an ROI of 5%. Sonnen’s cost of covering the homeowners electricity bill is $5,624 and yields an ROI of 40% from its service charge and frequency regulation with the grid.

By design, there are few shared characteristics among the storage projects, but two key commonalities emerged

The energy storage projects selected vary by position along the electricity value chain, by battery chemistry type, and even by revenue source. Despite these differences, two important features were share across all projects.

Regulation:
All projects take place in deregulated markets. Identifying separate value streams and building business cases is much easier where generation, T&D, and grid services are all decoupled from one another. Projects can and indeed do take place in regulated markets, but it’s more difficult to identify revenue streams.
Share of main revenue source:
The main revenue source constitutes at least 50% of total revenue. Developers identified a primary revenue source in each market and then built a business case out of complementary value streams depending on project specifics.

The winning formula for stationary storage

In the right markets and with the right applications, stationary energy storage is hardly a losing proposition. The analysis shows that application stacking is crucial to making energy storage economics work out favorably. These projects identified a value stream necessary in each market and bundled together additional services to bolster finances. Different regions and utility markets will have different needs, but it will be some combination of grid services, infrastructure deferral, and energy cost reduction that will add up to successful energy storage deployment. Application stacking presents both near- and long-term opportunities and challenges that technology innovation must address. In the near-term success relies on software, and a large market means software and data providers could benefit beyond just offering intelligent controls and optimization, but also the data behind it. In the long-term success depend on cheaper battery systems as grid services prices fall.

BMW targets urban emissions reductions by gamifying PHEV operations

admin — Fri, 20 Mar 2020 04:37:33 +0000

BMW targets urban emissions reductions by gamifying PHEV operations admin Fri, 03/20/2020 - 12:37

Importance Level

Interest Area

Energy for Mobility

BMW's eDrive system operates similar to Ford's PHEV system, which allows for automatic switching to pure electric driving modes in certain cities with low emission zones. Unlike Ford, which is aiming to communicate this information with local officials, BMW is introducing a points system in which drivers are rewarded for driving more electric miles, which can be redeemed on services like EV charging. Clients should note this approach will become more popular as more cities enact low-emission zones – or introduce reduced congestion charges for low-emission vehicles – although BMW's program cannot currently communicate which drive mode the vehicle is in to local authorities, which the Ford program is explicitly focused on.

Rolls-Royce expects 100-passenger hybrid-electric planes to be flying by 2029

admin — Thu, 12 Mar 2020 04:36:02 +0000

Rolls-Royce expects 100-passenger hybrid-electric planes to be flying by 2029 admin Thu, 03/12/2020 - 12:36

Importance Level

Interest Area

Energy for Mobility

The key issue is not the existence of hybrid-electric commercial airliners but the level of hybridization and the length of the flight. In these regards, Rolls-Royce failed to add any specifics, saying only that the routes would be restricted to regional flights and that fully electric planes carrying 150 to 200 passengers would not be possible before 2030. These views are well-aligned with Lux's expectations for the electric aviation market. Today, even mild hybridization is inhibited by the size and weight of the required power electronics systems. Clients should expect that the hybrid-electric planes of 2030 will use lighter, smaller power converters and solid-state batteries for improved safety.

Norway’s Civil Aviation Authority electrified aircrafts to be in the air by 2030

admin — Thu, 12 Mar 2020 04:34:57 +0000

Norway’s Civil Aviation Authority electrified aircrafts to be in the air by 2030 admin Thu, 03/12/2020 - 12:34

Importance Level

Interest Area

Energy for Mobility

Norway has long been a proponent of electric transportation: It has consistently topped the charts with plug-in electric vehicle sales and has the world's highest penetration rate of plug-in electric vehicles. It now looks to do the same for aircraft, aiming for all domestic flights to be electrified by 2040. The new report by Avinor, the country's state company operating most airports, and the Norwegian Civil Aviation Authority identifies a network of 16 airports inside the Arctic Circle as ideal first candidates for hosting these electric planes; these airports have daily commercial scheduled flights within a 350 km range. Clients should view Ampaire and Eviation as the best-positioned companies to take advantage of this market.

10 MW of battery storage to be used for novel reactive power market in UK

admin — Mon, 09 Mar 2020 04:34:00 +0000

10 MW of battery storage to be used for novel reactive power market in UK admin Mon, 03/09/2020 - 12:34

Importance Level

Interest Area

Stationary Storage

U.K.-based Zenobe Energy will provide reactive power services to National Grid ESO. Reactive power is necessary for voltage stability, and National Grid's Power Potential project aims to create a reactive power market for distributed energy resources (DERs). In 2019, Lightsource BP took part in the program by using solar inverters to provide reactive power overnight. National Grid also has a tender open for additional reactive power. As traditional grid balancing markets reach saturation, energy storage developers need to look to new markets. Clients should realize that batteries will continue to be the technology of choice to provide grid services.

GPSC announces 100 MWh battery production facility in Thailand using 24M semi-solid batteries

admin — Thu, 05 Mar 2020 04:33:21 +0000

GPSC announces 100 MWh battery production facility in Thailand using 24M semi-solid batteries admin Thu, 03/05/2020 - 12:33

Importance Level

Interest Area

Energy Storage

GPSC will begin its first 30 MWh phase of production in December 2020, then ramp up to 100 MWh by 2021. In the past, 24M's technology has been used by GPSC for stationary storage applications. 24M has previously estimated that its cells can be produced for $100/kWh at scale, likely driving the technology's adoption. Energy Absolute plans to open a battery manufacturing facility for EVs in Thailand, but GPSC will focus on stationary storage with its production capacity. Clients should note that stationary storage applications are cost-sensitive, and even the added safety of solid- and semi-solid-state batteries may not be enough for the technology to gain momentum.

Chinese scientist pleads guilty to stealing battery trade secrets from employer Phillips 66

admin — Mon, 02 Mar 2020 04:38:36 +0000

Chinese scientist pleads guilty to stealing battery trade secrets from employer Phillips 66 admin Mon, 03/02/2020 - 12:38

Importance Level

Interest Area

Energy Storage

Chinese national Hongjin Tan pleaded guilty to intentionally copying and downloading battery research materials without proper authorization. According to Reuters, the FBI also found an employment agreement from a Chinese Li-ion battery company on his laptop, yet SCMP asserts that there is no evidence that Tan actually sent any trade secrets to the company. P66 claims the IP in question is worth $1 billion; we strongly suspect this research is related to synthetic graphite production and/or use. The incident is a striking note in the ongoing trade war; clients should expect current political tensions to restrict the commercialization of U.S. battery startup technologies.

Highview Power receives $46 million investment, raising company valuation to $330 million

admin — Mon, 02 Mar 2020 04:32:02 +0000

Highview Power receives $46 million investment, raising company valuation to $330 million admin Mon, 03/02/2020 - 12:32

Importance Level

Interest Area

Energy Storage

The investment will support Highview Power as it seeks to commercialize its liquefied air energy storage system globally. Sumitomo has demonstrated a strong interest in long-duration energy storage, though its bet on cryogenic energy storage is misguided. Non-electrochemical long-duration stationary storage faces many issues that can't be fixed with big investments. It has much lower efficiency compared to batteries, and the technology is more difficult to control, making it less able to participate in value stacking. Clients interested in opportunities to get involved with stationary storage should ignore companies like Highview Power and be mindful that the value proposition of energy storage is contingent on renewables penetration.

Singapore Battery Consortium: 2020 Q1 Lux Newsletter

Amsterdam begins electrifying canal boats in preparation for 2025 diesel ban

Ganfeng Lithium takes majority ownership of Cauchari-Olaroz operation from Lithium Americas

STATIONARY ENERGY STORAGE

The Nuts and Bolts of Application Stacking

LUX TAKE

Energy storage can provide a wide range of services

Transmission:

Distribution:

Behind-the-meter:

The implementation of application has not been smooth, thanks to inconsistent rulemaking and market regulation

ven in a complicated regulatory landscape, stationary storage is expected to grow significantly

Economics behind energy storage projects

Marcus Garvey Apartments:

Glassenbury:

sonnenCommunity:

Glassenbury: A need for fast frequency response in the UK

Marcus Garvey Apartments: A dire need for reducing demand in Brooklyn

sonnenCommunity: A retail model for virtual power plants

By design, there are few shared characteristics among the storage projects, but two key commonalities emerged

Regulation:

Share of main revenue source:

The winning formula for stationary storage

BMW targets urban emissions reductions by gamifying PHEV operations

Rolls-Royce expects 100-passenger hybrid-electric planes to be flying by 2029

Norway’s Civil Aviation Authority electrified aircrafts to be in the air by 2030

10 MW of battery storage to be used for novel reactive power market in UK

GPSC announces 100 MWh battery production facility in Thailand using 24M semi-solid batteries

Chinese scientist pleads guilty to stealing battery trade secrets from employer Phillips 66

Highview Power receives $46 million investment, raising company valuation to $330 million