Report from the GTM Energy Storage Summit 2018: Enthusiasm Couched in Cautious Optimism

By on December 19, 2018

SAN FRANCISCO — The energy storage industry is excited about the growth prospects for 2019 and even more bullish about what lies ahead in 2021 and beyond, if the sentiment at the recent GTM Energy Storage Summit is any indication. But that optimism is somewhat couched in caution. For the desired outcome of evolving the storage sector into a gigawatt-scale, multibillion-dollar industry to occur, the price of batteries and storage systems must continue to fall, the hardware, software and balance of systems solutions must keep improving, and the creation of regional and federal market mechanisms must accelerate. Here are a few takeaways from this year’s event.

Solar-Plus-Storage Is A Winning Combination. After a record 2018, the forecast for 2019 is even better, according to Wood Mackenzie Power & Renewables storage practice lead, Ravi Manghani. He believes that the levelized cost of energy (LCOE) of solar-plus-storage projects will be competitive with natural gas and other mainstream generation sources by the early 2020s. WoodMac predicts that by 2023, one out of every three megawatts of front-of-meter storage will be paired with solar—representing a massive opportunity.

In this slide, Ravi Manghani from WoodMac demonstrates the ever-decreasing cost/watt of solar plus storage. 

He added that corporates are pushing for longer-duration solar-plus-storage solutions as these big businesses attempt to synergize their demand needs with their renewables assets through the use of storage. This call for longer-duration storage brought a smile to my face, since NEXTracker’s integrated DC-coupled solar-plus-storage NX FlowTM system offers one of the few current deployable options for these kind of applications. All and all, there seemed to be consensus that many of the best current business applications for storage focus on solar-plus-storage use cases.  

DC-Coupled Solar-Plus-Storage Offers Many Advantages. Speaking of DC-coupled systems, one of the more interesting case studies shared at the storage summit came from Duke Energy and Dynapower. They presented field results from a microgrid project at Duke’s R&D facility, which has been retrofitted with a solar-plus-storage system featuring a 240-KW battery and DC-DC converter. Early results show material gains in energy harvest from the use of the DC-coupled system, with benefits including capacity firming, energy time shifting, clipping loss recapture (the main source of additional harvest), curtailment recapture, low-voltage harvest (the next biggest advantage), and ramp-rate control.

I thought Duke Energy’s slide was exemplary to show the multiple benefits of DC coupling.

Duke’s Jason Handley noted that from a utility perspective, the greater operational flexibility of the DC-coupled approach compared to an AC-coupled scheme was a key differentiator. Dynapower’s Apurva Somani also cited revenue advantages of DC-coupled systems, based on modeling for the Massachusetts SMART program, where additional annual income from a DC-coupled solar-plus-storage installation could reach hundreds of thousands of dollars compared to a PV-only system. 

Systems Integration Issues Are Not Insignificant. The DC-coupled case study was not alone in stressing the importance of seamless integration (in that case, of the DC power converter-controller with the PV inverter-controller). Time and time again, the challenges of building and operating a fully integrated, reliable, grid-friendly, cost-effective storage or solar-plus-storage system were part of the discussions. Although there are parallels with solar and many wheels that do not need to be reinvented, one of the key differences between the two technologies is that solar PV is passive (photons in, electrons out) while energy storage is active (AKA dispatchable). At the heart of many of these examples is storage software, which has made great strides but still leaves utilities and other stakeholders uneasy as to how it will help make the grid more flexible and secure. There is some low-hanging fruit, such as frequency control and voltage regulation that smart storage is already helping with. But as demand management, load shifting and other applications come into play, the amount of interoperability, APIs and sheer networking required for storage to play a pivotal role in achieving a carbon-free grid (the end of gas peakers!) is huge and presents an extremely complicated software challenge.  

FERC Order 841: The Policy Elephant in the Room Has (Almost) Left the Building. This year has been marked by holdups in the Federal Regulatory Energy Commission’s (FERC) Order 841 process. As noted in Jeff St. John’s report on Greentech Media: “Order 841 broadly directs grid operators to create market mechanisms that accommodate batteries’ unique abilities to both charge and discharge from the grid, and ramp up and down at speeds that traditional generators can’t match.” But grid operators have finally been able to submit their compliance plans with FERC, “so the energy storage industry now has a much more complete picture of how each grid operator is planning to move forward… Opening up Order 841-mandated market changes this year is still expected to open a massive new set of opportunities to serve in wholesale energy and ancillary services markets.” This policy development could very well lead to opening the floodgate to gigawatts of new storage projects in the U.S. over the next few years.

Parting Thoughts. This year’s storage summit was my first, and I was duly impressed and energized by the amount of information, stimulating discussion and positive attitude at the event. The technology is rapidly maturing, the use cases are multiplying, the financial community is getting on board, and the utilities, ISOs and IPPs are really beginning to “get” it. I’ve barely scratched the surface with my handful of takeaways. Everyone involved is aware of the challenges ahead (more market participation, please!), but just as cognizant of the profound economic and climate change solution opportunities that widespread deployment of energy storage provides. Finally, for those who’d like to watch the live-streamed videos from the GTM Energy Storage Summit, you can access the links herealthough you need to be a member of GTM Squared.