Navigant Research Blog

Three Innovative Energy Storage Projects Announced in 1Q 2017

— April 7, 2017

The energy storage industry is heating up in 2017 because of several new projects. Navigant Research’s Energy Storage Tracker 1Q17 report provides a comprehensive list of global energy storage projects and identifies new and emerging market leaders in the industry. This blog discusses some of the most notable new projects that show how these systems don’t necessarily provide just one type of service. Energy storage systems can come in several different flavors and provide multiple benefits.  

ENGIE Deutschland Kraftwerksgruppe Pfreimd Storage Plant

ENGIE Deutschland currently owns and operates a pumped hydro station in Kraftwerksgruppe Pfreimd, Germany, but the company sought to profit more effectively from the load leveling and peak shifting market. To do so, ENGIE awarded a contract to Siemens AG to install its SEISTORAGE Li-ion battery technology, power electronics, and battery management system. Rated at 12.5 MW and over 13 MWh, the battery system works in conjunction with existing pumped hydro resources and will enable the plant to provide all levels of reserve capacity—from short duration frequency regulation services to long duration bulk storage. ENGIE believes that this hybrid energy storage system illuminates the vision of its future energy storage business predicated on how to balance the volatility of renewable energy generation while providing multiple grid services. This project is set to come online in late 2017.

Vattenfall Wind Farm Battery Energy Storage System Installation

State-owned Swedish utility Vattenfall plans to install up to 1,000 Li-ion batteries to address the intermittency issues of several of its wind farms. The batteries, supplied by automaker BMW Group, are the same as the batteries used in the BMW i3 electric car, effectively providing an additional revenue stream for BMW’s existing business. Vattenfall plans to build the first a battery energy storage system (rated at 3.2 MW) at its Princess Alexia wind farm near Amsterdam. A larger 22 MW installation will be constructed at the company’s Pyn y Cymoedd wind farm in South Wales on a later date. This project is a part of National Grid’s Enhanced Frequency Response (EFR) tender issued in 2016. 

E.ON Texas Waves Wind Farm Installation

Multinational energy company E.ON looks to become one of the premier industrial energy storage businesses in the world. E.ON recently announced it will colocate short duration energy storage systems at its Pyron and Inadale wind farms in the western part of Texas. Dubbed Texas Waves, the project will collectively utilize 18.8 MW of Li-ion battery technology from Samsung SDI. The system will provide multiple ancillary services to the Electric Reliability Council of Texas market, namely wind ramping and smoothing, load leveling, and Volt/VAR support. Energy storage software provider Greensmith will provide the battery management system to each of the installations to help ensure the stacked revenue streams of the system.

The Improving Landscape of Energy Storage

Storage is shifting to become an essential component of new energy systems to ensure projects can reach maximum profitability. To match this growing popularity, companies like Tesla and Alevo are expanding internal resources to ensure they have the best and brightest minds to capitalize on new technology and opportunity in the market. Overall, the global energy storage industry is poised to continue growing quickly over the next several years. Energy storage industry stakeholders should explore new and seemingly unconventional methods to become involved in new projects. Doing so could help develop untapped markets, create new technology, and spur innovation in the industry for years to come.

 

Inexpensive Offerings Driving Deeper Penetration of Efficiency Technologies

— March 22, 2017

Technological development is evolving quickly in all areas of the energy efficient buildings market. From HVAC systems with advanced controls to building energy management systems (BEMSs) that can drive deep efficiency gains, it is possible for commercial buildings to reduce energy consumption by up to 50% or more in a well-conceived project. Software has become a ubiquitous and necessary piece of almost every building component.

Most connected, intelligent devices of all types were devised to accomplish a defined purpose while gathering volumes of data along the way. But according to IBM Research’s Global Technology Outlook 2015, 90% of the data collected in the 10 years prior to 2015 was abandoned. Additionally, 60% of sensory data collected at the edge of intelligent systems loses its value in milliseconds. Like the parable about the tree falling in a forest, if these advanced digital tools collect data but nobody uses it, does it really add value? It may … eventually.

Early Adopter Phase

A large segment of the overall building stock is still managed using older technologies, with little or no digital data to support efficient operations. Some building owners and operators have the necessary sophistication and resources to proficiently understand and utilize more advanced digital toolsets, while many others do not. It is still the early adopter stage for much of the sophisticated new technologies. This dynamic, however, is feeding other emerging trends on the energy efficient buildings landscape.

So many buildings operate inefficiently that even the most basic forays into gathering data and understanding operational efficiency can lead to significant savings. Many of the initial efficiency activities can also be done at low or no cost by simply understanding operational setpoints and other characteristics. This simple understanding can lead to energy savings from 5% to 25% or more and provide enough information to lead to more significant projects and savings over time. This trend has been identified as a valid business model in its own right, and it serves what has been recognized as a valid market need.

Innovative Business Models

EnergyAI is an example of a company that offers a no touch analysis of a building’s performance at a very low price point—approximately $25 per report. EnergyAI utilizes a company’s utility interval data and produces a comprehensive report on the buildings energy consumption patterns with a simple, itemized list of suggestions for improvement. Gridium is another company with a similar utility data approach, but with more of an ongoing presence in the building. Eco-Energy works with larger clients and annual energy spending (+$10 million) and utilizes a sophisticated software package, but it sells energy savings, not the software itself.

These business models eliminate large upfront expenditures, work within the resource and experience constraints of a typical building, and identify meaningful savings at a lower cost. They are also enabling greater penetration of efficiency initiatives in a larger portion of the global building stock. The energy efficient buildings market continues to evolve.

 

Intelligent Digital Systems Enabling New Strategic and Operational Paradigms

— March 20, 2017

Data in and of itself has little value. Dashboards and other business intelligence software are excellent at compiling and displaying collected data from a multitude of sources in a useable and understandable format. At times, however, these analytical tools do not go deep enough with intelligent calculations on that data to transform a business, increase efficiency, promote deep understanding and learning, and add the most value. In these instances, it can be a case of you don’t know what you don’t know—leaving important insights on the table.

A good yet simple example of this was outlined in an IBM white paper on facilities management. A commercial building designed to accommodate 1,800 people showed an occupancy rate (assigned space) of 66%. However, further study of the data using access card information showed that average daily occupancy was only 28%, leading to a better understanding of the actual space being used and paving the way for eliminating unnecessary costs associated with rather large and consistent underutilization of the facility.

Beware of Silos

In energy efficient buildings, care must be taken when assuming that smart components are always operating efficiently and in the best interests of whole building optimization. In a recent interview, an intelligent building component OEM stated that he has seen instances where the intelligent cooling and heating equipment each reported that they were operating at peak efficiency—but they were efficiently cooling and heating the building simultaneously. In this instance, the overlord building energy management system (BEMS) identified and resolved the issue. Intelligence systems operating in a silo can be as ineffective as data that has yet to be transformed into useful information.

Analyze the Analytics

Today, the general use case for data analytics is well understood and accepted. This acceptance arose in a similar fashion to a market dynamic that happened in the LED lighting industry. Ten years ago, questions arose when LEDs were specified for a construction or retrofit project. Today, questions arise if LEDs are not specified for a project. The same largely holds true now for BEMSs and other intelligent systems that generate analytics regarding building performance. With the variety of analytics engines available in the market—at all price points and complexity levels—it is assumed that some form of analytics will be included in any efficiency effort, no matter how deep or superficial the project is.

Open communication standards have enabled access to this disparate universe of intelligent and connected digital systems and the data they generate. The cross-pollination of information from these diverse data-driven systems opens a multitude of possibilities that reverberate across the entire organization with all key stakeholders, enabling new paradigms of strategy formulation and operational success.

 

Kauai and the Quest for More Renewable Energy

— March 13, 2017

Remote islands and microgrids have been a hotbed for renewable energy resources throughout the past several years. Historically, remote systems have relied on small diesel generators to support electricity needs, but volatile fuel prices can be high in comparison to renewable alternatives. According to a recent International Finance Committee (IFC) and Navigant Research co-sponsored white paper, more than 80% of growth in renewables and energy storage for both energy production and consumption will come from new and emerging markets by 2035. Remote islands will play a huge role in this development based on evolving grid and end-user needs, physical infrastructure, and decreasing technology costs.

Ambitious Goals

Specifically, on Kauai in Hawaii, the Kauai Island Utility Cooperative (KIUC) laid out an ambitious renewable energy goal in 2008. The strategic plan previously aimed to reach 50% renewable energy by 2023, but the cooperative now expects to hit that goal in 2018, 5 years earlier than expected. The new target is to reach 70% renewables by 2023. To put this goal in context, Kauai had just 5% renewables penetration in 2009. In 2015, the island reached 37.4% renewable generation.

One of the most notable projects in Kauai’s pipeline is a 28 MW solar array paired with a 20 MW/100 MWh lithium ion (Li-ion) battery system; this will bring the island’s renewables penetration up to 58% when it comes online in late 2018. AES Distributed Energy, Inc. and the KIUC also established a power purchase agreement of $0.11/kWh, below the cost of fossil fuel power currently used to provide baseload generation to the island. Several other renewable projects dispersed around the island are up and running, pushing the plan forward. The KIUC wants the island to reach 100% renewables by 2045.

Most of the Hawaiian islands experience peak solar generation during the day, and consequently have diesel generators ramp up during peak demand at night. Several new projects are being paired with storage to help eliminate the use of these generators. Diesel plants on islands typically operate at high variable load, resulting in high variations of demand, which often is incongruent with the large size of diesel plants. Islands generally have more fluctuating power demand than mainland areas; over a year, generation can fluctuate significantly due to seasonal variation in tourism, for example. The AES project alone is expected to reduce the KIUC’s fossil fuel usage by over 3.7 million gallons annually.

Cutting Edge

Kauai and the KIUC are committed to ensuring that customers are on the cutting edge of the energy industry. By deploying emerging technologies like solar, energy storage, and smart metering systems, the cooperative is giving its members more transparency in how they can track their own energy use and set personal goals for efficiency. Making these investments and meeting these short-term goals pushes the KIUC’s vision forward to being a leader in shaping a thriving state for future generations.

Other small island nations and areas can learn from the KIUC’s goals. By engaging customers, testing grid stability, and aggressively looking for new projects, smaller markets can drastically change their energy outlook in a short period of time. Additionally, smaller markets can change rapidly in terms of renewables or storage penetration with just one or two large projects. Every market faces its own unique challenges, so it will be important for the government and private and public sectors to engage in efforts to push for ecologically and economically sustainable futures.

 

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