Fastexy Exchange|Inside Clean Energy: The Energy Storage Boom Has Arrived

Just five years ago,Fastexy Exchange a 20 megawatt battery storage project was considered big.

Now a 300 megawatt project, the largest in the world, has gone online in California, and even bigger battery projects are coming in 2021.

Battery storage has entered a new phase of rapid growth, brought on by falling prices for lithium-ion batteries and rising demand for electricity sources that can fill in the gaps in a grid that is increasingly fueled by wind and solar. High demand is leading to a boom in investment in battery companies, and fevered speculation about new kinds of batteries.

Battery storage is a crucial part of the transition to clean energy because of the way it can store power from intermittent sources for use at other times, providing a cleaner and less expensive alternative to natural gas power plants.

And 2021 is shaping up to be the year in which battery storage takes a big step toward being an essential part of the grid, rather than operating at the edges.

To help make sense of it, I reached out to Eric Gimon, a policy adviser for the think tank Energy Innovation.

“I feel like we have crossed a threshold,” he said, about the completion of a new wave of big battery projects. “That’s important, a signpost that we’re moving into a new era.”

We are living, he said, in a period when batteries “have arrived.”

To understand the size of the new battery storage projects, it helps to grasp the two key measures: megawatts, which show how much power a battery storage system can produce at one moment, and megawatt-hours, which indicate a battery’s duration by showing how many units of electricity a system can produce before needing to be recharged.

Here are the two largest projects:

• Vistra Moss Landing Energy Storage in Moss Landing, California, went online last month with capacity of 300 megawatts, making it the largest battery storage system in the world. The system runs for four hours and produces up to 1,200 megawatt-hours before needing to be recharged. A second phase of 100 megawatts is under construction and will likely be complete in August, according to the developer, Vistra Energy.

• Manatee Energy Storage Center near Parrish, Florida, will have capacity of 409 megawatts, which will be the largest capacity of any facility now under construction. The system has a duration of slightly more than two hours, producing up to 900 megawatt-hours on single charge. The developer, NextEra Energy, says the project is on track to go online near the end of 2021.

So Manatee is the largest in terms of megawatts of capacity, while Vistra Moss Landing is the largest in terms of the amount of electricity it can generate before a recharge. The differences come down to design choices made by the developers, which are based on the size and duration that the local grid needs, among many other considerations.

Gimon said grid operators and regulators are still getting used to the growing presence of battery storage and figuring out how this rapid change will affect electricity prices and the way that various power producers work together.

They are going to need to work quickly, considering the pace of growth. The U.S. has gone from 0.3 gigawatts (0.7 gigawatt-hours) of new battery storage in 2019, to 1.1 gigawatts (3 gigawatt-hours) in 2020, and a projected 2.4 gigawatts (7.6 gigawatt-hours) in 2021, according to BloombergNEF.

Rapid growth is leading to innovation. Companies are working to find more efficient ways to build lithium-ion battery systems, and are working to develop batteries that use different materials. The results may be useful across a battery economy that includes energy storage and electric vehicles.

As the industry develops, many entrepreneurs are stepping into this space.

Eos Energy Services of New Jersey is attracting attention from investors with a battery that uses a zinc-based design instead of lithium-ion. The company says its battery has the advantage of using widely available components, as opposed to lithium-ion, whose components, like lithium and cobalt, are limited or may become limited. Eon also emphasizes the safety of its batteries in contrast to the flammability of lithium-ion. The company this week announced that it had received a $20 million order from a customer, the largest in the company’s history.

Form Energy of Massachusetts is developing long-duration batteries that use a sulfur-based design instead of lithium-ion, an approach that allows the battery to discharge electricity for days at a time as opposed to short bursts. Last year, the company announced a pilot project in Minnesota for a 1-megawatt battery that can run for up to 150 hours on a charge.

Quantumscape of California, which is focusing on the EV market, has seen some wild ups and downs in its share price, as investors try to get a handle on whether the company’s much-touted advancements in lithium technology will actually work. Quantumscape uses a solid material, as opposed to a liquid, to conduct electricity between electrodes. The company says its design can lead to longer battery range, quicker charging and less flammability. Volkswagen is among the major investors that see vast potential in Quantumscape’s designs.

The larger point is that we are in a highly speculative period, with scientists and corporate executives making the case for why their approach will be the next big thing.

Gimon sees parallels with the photovoltaic solar boom of the late 2000s, when many companies developed alternatives to silicon-based solar panels, but most of those businesses didn’t last. He said he doesn’t dismiss any particular battery company or technology, but he expects that the industry is entering a period when, for many of the new players, the results will not live up to the hype. 

“There is just going to be a lot of red ink,” he said. “It’s the nature of that kind of technological change.”

But let’s not end on that note, since the lithium-ion technology being used in most projects is already proven, and the boom is underway.

Instead, let’s look at the victory lap that Vistra was taking this week, with the announcement that the first phase of the Moss Landing project was now running and connected to the grid. Vistra has said it is considering future phases of this project that would lead to a total of 1,500 megawatts and 6,000 megawatt-hours.

“A battery system of this size and scale has never been built before,” said Curt Morgan, the company’s CEO, about the completion of the first phase. “As our country transitions to a clean energy future, batteries will play a pivotal role and the Vistra Moss Landing project will serve as the model for utility-scale battery storage for years to come.” 

Xcel Energy Speeds Up Plan to Close Colorado Coal-Fired Plant

Xcel Energy said this week that it is moving up the timetable for closing its coal-fired Hayden Generating Station in Colorado, saying the faster schedule is part of its emissions-cutting plan.

Environmental advocates welcomed the news, but said Xcel should close the plant even sooner.

“It really makes sense to look at whether there are additional benefits of accelerating those retirement dates even further,” said Erin Overturf, deputy director of the clean energy project at Western Resource Advocates, an environmental advocacy group.

She pointed to mounting evidence that climate change is already having damaging effects, and research showing the need to make cuts in emissions as soon as possible.

“The level of urgency is growing every day,” she said.

Xcel said it will close Unit 2 at the plant in 2027 and close Unit 1 in 2028, which would completely close the plant. The schedule is a revision from a previous plan to close the units in 2030 and 2036. By moving up the closing dates, Xcel is putting itself in a better position to meet its goal of cutting emissions by 80 percent from 2005 levels by 2030.

The 2030 goal is part of the utility’s larger plan to get to net-zero emissions by 2050. Minnesota-based Xcel was the first large U.S. utility to announce a net-zero plan in 2018, and many others have followed.

Hayden’s two units add up to 441 megawatts, making this a big, but not huge coal, plant. Once it closes Xcel will have two remaining coal plants in the state, both of which are scheduled to keep operating past 2030.

One of the complicating factors with Hayden is that two other utilities, Pacificorp and Salt River Project, are partial owners. But the decision to move up the closing date looks like an easy one considering that the plant is expensive to operate and produces substantial emissions. Pacificorp has said that the plant is one of the most expensive in the company’s six-state territory.

Xcel says nobody will lose their jobs, as the plant’s 75 employees will either retire or be trained for other jobs.

Since Xcel is a leader in implementing a net-zero plan, every step along the way has significance as an example to other companies that are a few steps behind.

“Xcel I think has an earned reputation of leadership in this space,” Overturf said. “They have been out front.”

Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to [email protected].