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Released November 14, 2017 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Electricity storage projects come in all shapes and sizes, from pumped-storage hydroelectric projects as large as 1,000 megawatts (MW) to battery-storage projects of well under 1 MW, speakers told the 4th Annual Western Power Summit in late October. While big-ticket pumped- storage projects traditionally have drawn a lot of attention, a growing focus is on smaller-scale battery-storage projects that can defer capital outlays on a utility's transmission & distribution (T&D) system, reshape customer electric demand and help electric utilities keep the lights on during emergencies or operational challenges.
The Western Power Summit, held October 23-24 in Denver, Colorado, drew about 120 attendees. It was sponsored by Access Intelligence (New York, New York), publishers of POWER magazine.
"Electric storage is the Swiss army knife of energy," Matt Owens, director of business development for Stem Incorporated (Millbrae, California), told the conference. He said more than 100 companies in California alone are in the electric-storage business.
"Costs have declined by 70% over the last three years, and we expect they will fall even farther," Owens said. Falling costs was one result of a decision by California utility regulators that shareholder-owned electric utilities in the state deploy about 1,300 MW of cost-effective electricity storage by 2020. For more information on how electric storage could upend the Electric Power industry, see Industrial Info's May 15, 2017, article - Energy Storage: Dynamic Business That Could Transform the Power Industry and August 24, 2017, article - Southern California Repowering Project Includes 100 Megawatts of Electricity Storage.
Following a 2014 resource solicitation for 1,800 MW of electric resources issued by Southern California Edison (SCE) (Rosemead, California), a unit of Edison International (NYSE:EIX) (Rosemead, California), the utility received 1,000 bids--half of which were for electricity storage, Owens told conference attendees. The utility's request for proposal (RFP) did not include a set-aside for electricity storage. Eventually, SCE accepted bids for 260 MW of electricity storage--half of which would be sited on the customer's side of the meter, Owens said.
His own company's electricity- storage units range in size from 18 kilowatts (kW), which he said would fit in a gym locker, to 1.3 MW. STEM has deployed storage units at 33 sites to-date, and the company expects to have units deployed at 100 sites by the end of this year.
"Storage is a firm, dispatchable resource," Owens said. "It helped SCE get through this summer's historic heat wave."
It also helped the utility keep the lights on after SCE decided to retire the two-unit San Onofre Nuclear Generating Station, and when it was coping with the need to close its once-through cooling systems at its coastal gas-fired generators. Those two events removed 4,709 MW of generation from SCE's resource mix.
"Storage creates a lot of optionality for utilities, and that can have a lot of value," Owens said. "Rather than make a 40-year commitment to a $1 billion central-station power plant, utilities are choosing storage as a lower-cost, quickly deployed and more targeted resource."
"As battery technology moved from generation 1 to generation 2, it experienced a 40% gain in energy density and a 20% reduction in costs," the Stem executive said. "Storage is approaching cost parity with other, more traditional, forms of electric generation. In the near-future, the competition will not be between natural gas generation and renewable generation. Instead, it will pit natural gas generation versus distributed-energy resources like electricity storage."
Though not explicitly mentioned at the conference, a recent report from IHS Markit Ltd. (NASDAQ:INFO) (London, England) predicted lithium-ion battery- storage costs will fall below $200 per kilowatt-hour by 2019. That decline is expected to lead to a surge in deployments. The report indicated that global storage capacity will grow from roughly 4,000 MW currently to as much as 52,000 MW by 2025. The study further predicted annual deployments would shoot up from about 1,300 MW in 2016 to 4,700 MW by 2020 and to 8,800 MW by 2025. The battery-storage industry is expected to see its revenue rise from approximately $1.5 billion last year to $7 billion in 2025.
Attendees at the Western Power Summit also heard about a more traditional form of electricity storage--pumped hydro--from Carl Borgquist, president and chief executive of Absaroka Energy LLC (Bozeman, Montana). Absaroka is developing the $1 billion, 400-MW Gordon Butte Hydro Pumped Storage project in Montana.
That project received its license from the Federal Energy Regulatory Commission (FERC) (Washington, D.C.) in December 2016. The development is fully permitted, and Borgquist is seeking counter-parties willing to contract for the project's capacity and energy. Once contracts are in place and the project has achieved financial closure, Borgquist told Industrial Info, the company will schedule a construction kick-off date. He said it would take about three and one-half years to build the Gordon Butte project.
"We see our competition as gas-fired generation," Borgquist told conference attendees. "Rather than build a gas plant, why not go cheaper and faster with our storage project?"
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle TM, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com
The Western Power Summit, held October 23-24 in Denver, Colorado, drew about 120 attendees. It was sponsored by Access Intelligence (New York, New York), publishers of POWER magazine.
"Electric storage is the Swiss army knife of energy," Matt Owens, director of business development for Stem Incorporated (Millbrae, California), told the conference. He said more than 100 companies in California alone are in the electric-storage business.
"Costs have declined by 70% over the last three years, and we expect they will fall even farther," Owens said. Falling costs was one result of a decision by California utility regulators that shareholder-owned electric utilities in the state deploy about 1,300 MW of cost-effective electricity storage by 2020. For more information on how electric storage could upend the Electric Power industry, see Industrial Info's May 15, 2017, article - Energy Storage: Dynamic Business That Could Transform the Power Industry and August 24, 2017, article - Southern California Repowering Project Includes 100 Megawatts of Electricity Storage.
Following a 2014 resource solicitation for 1,800 MW of electric resources issued by Southern California Edison (SCE) (Rosemead, California), a unit of Edison International (NYSE:EIX) (Rosemead, California), the utility received 1,000 bids--half of which were for electricity storage, Owens told conference attendees. The utility's request for proposal (RFP) did not include a set-aside for electricity storage. Eventually, SCE accepted bids for 260 MW of electricity storage--half of which would be sited on the customer's side of the meter, Owens said.
His own company's electricity- storage units range in size from 18 kilowatts (kW), which he said would fit in a gym locker, to 1.3 MW. STEM has deployed storage units at 33 sites to-date, and the company expects to have units deployed at 100 sites by the end of this year.
"Storage is a firm, dispatchable resource," Owens said. "It helped SCE get through this summer's historic heat wave."
It also helped the utility keep the lights on after SCE decided to retire the two-unit San Onofre Nuclear Generating Station, and when it was coping with the need to close its once-through cooling systems at its coastal gas-fired generators. Those two events removed 4,709 MW of generation from SCE's resource mix.
"Storage creates a lot of optionality for utilities, and that can have a lot of value," Owens said. "Rather than make a 40-year commitment to a $1 billion central-station power plant, utilities are choosing storage as a lower-cost, quickly deployed and more targeted resource."
"As battery technology moved from generation 1 to generation 2, it experienced a 40% gain in energy density and a 20% reduction in costs," the Stem executive said. "Storage is approaching cost parity with other, more traditional, forms of electric generation. In the near-future, the competition will not be between natural gas generation and renewable generation. Instead, it will pit natural gas generation versus distributed-energy resources like electricity storage."
Though not explicitly mentioned at the conference, a recent report from IHS Markit Ltd. (NASDAQ:INFO) (London, England) predicted lithium-ion battery- storage costs will fall below $200 per kilowatt-hour by 2019. That decline is expected to lead to a surge in deployments. The report indicated that global storage capacity will grow from roughly 4,000 MW currently to as much as 52,000 MW by 2025. The study further predicted annual deployments would shoot up from about 1,300 MW in 2016 to 4,700 MW by 2020 and to 8,800 MW by 2025. The battery-storage industry is expected to see its revenue rise from approximately $1.5 billion last year to $7 billion in 2025.
Attendees at the Western Power Summit also heard about a more traditional form of electricity storage--pumped hydro--from Carl Borgquist, president and chief executive of Absaroka Energy LLC (Bozeman, Montana). Absaroka is developing the $1 billion, 400-MW Gordon Butte Hydro Pumped Storage project in Montana.
That project received its license from the Federal Energy Regulatory Commission (FERC) (Washington, D.C.) in December 2016. The development is fully permitted, and Borgquist is seeking counter-parties willing to contract for the project's capacity and energy. Once contracts are in place and the project has achieved financial closure, Borgquist told Industrial Info, the company will schedule a construction kick-off date. He said it would take about three and one-half years to build the Gordon Butte project.
"We see our competition as gas-fired generation," Borgquist told conference attendees. "Rather than build a gas plant, why not go cheaper and faster with our storage project?"
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle TM, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com
