Navigant Research Blog

Drones Paving the Way for Next Generation Advanced Batteries

— July 17, 2018

Unmanned vehicles (UVs), or drones, are becoming increasingly mainstream in several industries, but the underlying issue they face is determining what the ideal power-to-weight ratio should be for drones. The power-to-weight ratio is the metric that determines the amount of time the drone can operate on a single charge. For example, aerial drones typically have flight times of 10 to 30 minutes. Compounded with key functionalities like traction controls, guidance systems, sensors, cameras, data acquisition, data analysis, and cataloging, energy can be drawn from the battery quickly.

Advanced batteries provide inroads to solve this problem, and Navigant Research expects this market to reach $224.9 million in 2026 alone. Historically, the drone industry used nickel-cadmium batteries, but lithium ion (Li-ion) batteries immediately improved the performance of the vehicle because of their lighter weight and higher power/energy density. Still, current Li-ion batteries may not be ideal in high temperature, elevated pressure, or extreme weather environments. These batteries operate best within a 0º F to 45º F temperature range at atmospheric pressure. Any deviation from this could result in catastrophic failure.

As battery manufacturers are looking to bring their next generation technologies to market, particularly in the transportation sector, drones are looking to be an important early market. This is because they can be used in similar use cases (i.e., for traction and propulsion) at a smaller, less capital-intensive scale. They can also be engineered for use in extreme environments. This is an important consideration when developing vehicles used underwater or in aerospace applications.

Aerial Drones: The Ideal Market for Battery Cells?

SolidEnergy Systems, a Massachusetts-based company, manufactures a semi-solid lithium metal cell. The company reports that this is the lightest rechargeable battery cell in the world. With the ultimate goal of entering the EV market at scale, the company has determined that aerial drones are an ideal niche market to test the performance and scalability of its technology. SolidEnergy states that—compared to current Li-ion batteries—its battery can increase flight times to over an hour and that this is steadily improving. The company closed on a funding round of $34 million in late January. These funds will be used to help spur the current low volume sales and increase manufacturing capacity to further drive down the battery’s current $500/kWh costs.

UK battery manufacturer Oxis Energy also sees aerial, aerospace, and underwater drones as early markets for its lithium sulfur (LiS) batteries. Though the company is continuing to mitigate the characteristic polysulfide shuttle problem endured by LiS batteries, it has seen interest from several UV companies to develop its technology and eventually deploy in the coming months. Oxis notably secured a grant to develop a 425 Wh/kg cell for aerial drone technology for aerospace applications.

Oxis Energy LiS Cell Diagram

(Source: Oxis Energy)

Niche markets like drone technology will be vital in ensuring that improved advanced batteries are meeting their technology roadmaps and that these batteries are on track to help tackle the impending EV and energy storage system boom. Ensuring that the batteries improve the power-to-weight ratio, meet performance requirements, and are safe in extreme environments will be critical to their mass deployment. As these are proven, economies of scale will develop and rapidly drive down system costs, paving the way for inroads into new, highly profitable market opportunities.


Motivation to Build, Partner, and Buy in the Intelligent Buildings Market

— July 17, 2018

Intelligent building technologies have the potential to redefine the commercial facility as a business asset. Connectivity, automation, remote control, and analytics-driven insights help building owners and managers optimize their building systems to save energy. This optimization delivers clear cost-savings ROI, but really it is about much more. The implementation of intelligent building solutions translates to the digital transformation of commercial buildings. The infrastructure, analytics, and services at the foundation of the intelligent buildings market deliver insight into space and characterize systems performance, which can deliver improved comfort, operational efficiency, and streamlined productivity. The argument is that comfortable and healthy workspaces make workers and students more focused, and staff more efficient in maintenance and repairs. These non-energy benefits align with the top priorities of the executive suite.

The C-suite is driven by the bottom line, and each organizational leader may have a different set of metrics to measure business success. Intelligent building technologies are becoming vital tools. Occupant apps can be the nexus for corporate leadership. These technologies are becoming a measure of the corporate brand. Today’s employees choose where they land based on mission, work-life balance, and sustainability—these are the measures of the corporate brand.

Leadership Support for Advancing Intelligent Buildings Tech

During the Day 1 keynote at IBCON in early June, Bob Sulentic, CEO of CBRE, characterized how the intelligent buildings market has entered the “Age of Acceleration,” an inflection point for commercial real estate (CRE). He explained that a step-change in CRE is underway: defined first by complex transactions, and second by the emergence of space as a service. Intelligent building technologies are the enabler, and CRE’s capacity to shift the thinking and use of technology will have a “huge impact on talent acquisition.” This message is relevant beyond CRE as executives across sectors recognize that their human capital determines their top and bottom line.

Smartphone Apps Grow Steadily More Popular

There is a notable uptick in market activity around occupant engagement technologies as the world of smartphone apps for comfort, convenience, and productivity begin to permeate the commercial buildings market. For many years the facilities management industry addressed occupant engagement as a process of managing hot and cold calls. Today, in the era of the intelligent building, the approach is changing and occupant engagement is a priority that extends far beyond the boiler room and into the executive suite.

What Is the Market Response?

The market is reacting to these demand-side dynamics with notable investment in occupant apps. Major market incumbents are building, buying, and partnering to introduce new analytics solutions. In mid-June, Honeywell introduced Vector Space Sense, and at the end of the month Siemens announced the acquisition of Comfy.

Other notable moves this spring underscore the value of analytics for optimizing the occupant experience, such as Acuity’s acquisition of Lucid. These are not the first acquisitions of their kind in the building technologies market. Integrating nimble, innovative startups into legacy corporate cultures can be hard, so the integration strategy is important, but the scale of growth has the potential to be market changing. Whether the incumbents buy, build, or partner, the activity validates the argument that the buildings industry is changing. Experience, satisfaction, and productivity are becoming metrics of businesses’ bottom line health.

Read more about Navigant Research analysis of the evolving world of the Internet of Things and analytics in commercial buildings in the Intelligent Buildings Market Overview report.


New York State Energy Roadmap: The Future of Energy Storage in New York

— July 17, 2018

In June 2018, the New York State Energy Research Development Authority (NYSERDA) and the Department of Public Service (DPS) unveiled an energy storage roadmap. The roadmap clarifies the state’s approach to achieving a nation-leading energy storage target of 1,500 MW by 2025. It recommends a range of actions including market acceleration incentives, wholesale market plays, price signal adjustments, and other tools that encourage competition among energy storage technology solutions.

The roadmap outlines a plan to increase energy storage installations in three areas that are projected to contribute 500 MW toward the 2025 goal:

  • Bulk system: Large-scale storage with renewables, standalone storage, and hybridizing peaker plants with onsite storage
  • Distribution system: Expanded non-wire alternatives, community distributed generation, and regenerative energy storage systems (ESSs)
  • Customer sited: Grid-tied and standalone ESSs, which are solar plus storage systems, microgrids, and vehicle-grid integration

Market Acceleration Incentives

The roadmap recommends establishing a $350 million bridge incentive, funded by existing revenue sources, to help the market drive down energy storage costs. This includes a storage adder within NY-Sun for solar plus storage scheduled to begin this fall, followed by a program designed for standalone storage, which will be developed later through the DPS proceeding in Case 18-E-0130. It is also recommended that NYSERDA expand the value stacking demonstration program (PON 3541) to support the future deployment of commercial scale ESS projects in New York State.

This incentive is expected to support a significant amount of customer sited and distribution/bulk sited storage while accelerating cost declines, deploying over 500 MW between 2021 and 2022. If approved, the incentive is projected to decrease soft costs by around $50/kWh for a distribution/bulk sited system and around $150/kWh for a commercial site.

Five Key Strategy Recommendations to Address Soft Costs and Likely Implications 

  • The state should use commercial property assessed clean energy (PACE) financing to reduce the cost of capital (CoC) by increasing the portion of debt financing available for a project. This would result in a CoC that could reach 6%-7% or less. New York City is likely to introduce commercial PACE financing legislation later this year.
  • Utilities should provide developers and operators with hourly load data (actual and forecast) for substations connecting the distribution and bulk systems (e.g., transmission nodes). This will inform distributed energy resource development and optimize utility peak shaving that could lower utilities’ installed capacity tags and increase ESSs deployment.
  • NYSERDA and utilities must coordinate to develop, implement, and maintain a searchable data platform containing aggregated, customer-related data. This will invariably help developers better pinpoint candidates for energy storage. A beta version of the platform is scheduled for testing by summer 2021.
  • NYSERDA should build a skilled talent pipeline through workforce development to ensure the governor’s directive grows the energy storage sector to 30,000 jobs by 2030.
  • DPS and NYSERDA should prepare an annual state of storage report, led by DPS, that tracks storage deployments, progress in meeting the 2025 and 2030 storage targets, impediments, and recommended solutions.

Retail Customer Sited Storage Cost Components in New York City

(Source: New York State Energy Research Development Authority)

Next Steps

This roadmap acknowledges that change is coming with a price tag and responds with a definitive way forward. However, the successful execution of the suggestions will dictate whether the opportunity stays on paper, or if New York transforms into a nation-leading storage market. As a next step, the state will hold multiple technical conferences to gather public feedback on recommendations and identified approaches. Additionally, the New York Green Bank has requested input from developers on financing gaps for energy storage with plans to invest $200 million in storage-related projects. The request for proposals will be issued later this year and focus on combined solar and storage projects.



Digital Twinning in the Energy Industry

— July 17, 2018

Digitization, decentralization, and decarbonization are the key megatrends effecting the energy landscape. Advances in clean energy technologies mean that the energy landscape is increasingly decentralized and distributed. Smart and connected assets can be optimized by leveraging operational data. Asset performance and efficiency gains are the leading use cases energy generators.

An exciting trend in the energy industry is the rise of digital twins. Digital twinning enables an operator to map directly physical assets to a digital representation. The key building blocks of digitization—such as the Internet of Things, sensor technologies, virtual reality, smart platforms, and connected solutions—can synthesize extensive asset data and information.

Digital twins have a dynamic data model containing data attributes of the actual physical asset. These attributes are associated with sensors that measure multiple variables to represent real-world operating conditions and key information such as the installation date or OEM. They incorporate simulations, data analytics, and machine learning capabilities to reduce the actual development time or to optimize asset performance.

The CEO of General Electric (GE) Digital stated that the company saved $1 billion (€0.85 billion) in 2017 through productivity gains from using its Predix platform and similar artificial intelligence based applications for its factories, power plants, aircraft, and energy turbines. GE is currently piloting a digital wind farm concept, which records the configuration of each wind turbine prior to procurement and construction. Once the farm is built, each virtual turbine is fed data from its physical equivalent, and software enables power production optimization at the plant level by adjusting turbine-specific parameters, such as torque of the generator or speed of the blades. Similarly, Siemens can use digital twinning across the equipment lifecycle to simulate, predict, and optimize the product and production system of a digital representative even before investing in actual physical prototypes and assets.

Business Value of Digital Twins

  • Real-time predictive analytics: Digital twinning provides asset owners with enhanced real-time analysis and critical efficiency parameters, it also prevents downtime by extending its application to predictive maintenance and efficiency optimization. Predicting equipment failures and non-performance of assets using digital representation, asset owners can improve uptime and excessive physical repair costs especially in cases where scheduled calendar maintenance and reactive repairs increase asset downtime.
  • Demand response (DR): Distributed generation technologies come with their own set of challenges. Managing the variability and intermittency of wind and solar is important to improve asset performance and to keep the asset running at peak performance. Asset operators can optimize DR management by monitoring wind speed and forecasting demand-supply aggregation.
  • Remote asset management: Operators can now visualize an assets performance in their environments based on different virtual scenarios, thereby reducing service costs. Physical proximity is no longer necessary to get information about asset performance. Installations in remote and island locations are not always easily accessible and digital twins can provide the best solution to drive asset performance in these situations.
  • Research and innovation: Operators can build a digital representation of the equipment and simulate how it might behave under different scenarios. Digital twins can demonstrate the effect of changes in design, scenarios, environmental conditions, and other variables, eliminating the need for a physical prototype. Decoding critical interdependencies, data insights, and preproduction equipment analytics will act as additional inputs for research and innovation into newer technology and products.

Digital Twinning Boosts the Bottom Line

Most importantly, digital twinning is not limited to distributed power generation. Its application extends to conventional power generation—coal, gas, and nuclear facilities—where digital twins can unlock exciting opportunities across asset utilization, predictive maintenance, and DR. This technology can minimize the negative effect of equipment failures and downtime to save millions of dollars.


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