Category: News

Sunrun solar-plus-battery systems to hasten the demise of California gas peaker plant

Power once derived from a dirty power plant in Oakland, California will soon be partially replaced by a virtual power plant (VPP) – a bundle of more than 500 residential solar-plus-battery storage systems installed on low-income homes.

Local electricity company East Bay Community Energy (EBCE) has hired San Francisco-based solar giant Sunrun to install several MWs of solar and more than two MWh of batteries on 500 low-income housing units in the area before 2022. The plan is to deliver 500KWs of grid reliability capacity over 10 years.

The project is necessary to replace the roughly 40-year old Oakland Power Plant, which burns jet fuel for electricity during peak demand and contributes to poor air quality in some of the most polluted parts of the Bay Area.

Nick Chaset, EBCE’s chief executive officer said the project “sets a precedent for how distributed energy resources, such as solar and storage, can offer financial and environmental benefits within our community.”

Chaset went further on Twitter and said that he was: “super duper excited about our Sunrun virtual power plant deal. Aggregating solar + storage on low income customer rooftops to reduce our need to buy from peakers. YES PLEASE”.

Lynn Jurich, Sunrun co-founder and CEO, said the company “is built on the foundation that solar energy should be accessible to everyone, particularly those communities most impacted by pollution and which today lack access to clean energy. Shifting from an aging, dirty fossil fuel power plant to energy provided by home solar and batteries will ensure that West Oakland residents are at the centre of the clean energy transition.”

The contract will allow Sunrun to work towards its goal of developing a minimum of 100MW of solar on affordable housing in areas where more than three quarters of tenants fall below 60% of the median income. In a late 2017 quote, Jurich had said that grid services using solar and batteries “could [soon] be extremely valuable in certain targeted way”, while the company more recently joined another virtual power plant undertaking in New England, where capacity contracts were awarded this February for Sunrun’s solar-plus-storage systems in ordinary households to provide 20MW of energy capacity.

There has been increasing interest, and now development, in using solar and energy storage for the replacement of combined cycle gas turbines (CCGT) to provide peaking power on the US grid, a phenomenon we looked at in depth in the recent feature article ‘Peak time to take action’, first published in our journal, PV Tech Power. Peaker plants may actually only run for a small fraction of their operating lifetime, but are at their most polluting during their ramp up period. 

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German fund partners with ReNew Petra to develop annual 100MW of US solar

German clean energy fund Hep Kapitalverwaltung AG has entered the US distributed solar market with an investment in regional developer ReNew Petra.

The German fund will invest $50 million to $80 million annually in the North Carolina-based developer, according to figures reported by Bloomberg on Wednesday,

The partnership will allow the renewable energy construction and management company to develop 100MW of distributed solar annually and expand its reach beyond the south-eastern US.

The partnership marks a new chapter for Hep, which has developed and constructed €450 million (US$505 million) worth of solar projects worldwide. “Our partnership with ReNew Petra launches Hep’s new strategic endeavor in the US distributed solar market,” company founder Christian Hamann said in a news release on Wednesday. “We are excited about this new chapter for our investors.”

The new development entity will operate as Emerald Hills Holdings.

California-based advisory firm Zorya Energy Advisors advised Hep on the purchase.

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BlackRock buys majority stake in GE’s solar and storage business

General Electric (GE) has sold a majority investment in its seven-year-old distributed solar and storage business to global asset manager BlackRock.

BlackRock took an 80% stake in the new company, Distributed Solar Development (DSD). GE will retain a 20% stake. The financial terms of the deal were not disclosed.

The giant global asset manager’s backing is a positive sign for the solar segment, which has become increasingly attractive to big investors. “This investment will deepen our clients’ access to the tremendous growth potential in the US solar industry,” David Giordano, BlackRock’s global head of renewable power, said in a news release on Wednesday. “DSD offers end-to-end in-house capabilities and a strong team of experts from across the commercial and industrial value chain.”

The new business will design, build, own and operate distributed solar and storage solutions for industrial, commercial and public-service customers. With BlackRock’s help, DSD wants to quadruple the capacity of GE’s solar portfolio from 100MW to 400MW over the next five years.

It’s not the first time BlackRock has endorsed distributed solar. In April, BlackRock invested in small-scale solar specialist CleanCapital.

Erik Schiemann, who founded GE Solar’s business in 2012 and is now CEO of DSD, said that operating as standalone company will streamline operations. “Separating ourselves from GE in this fashion means I can now do things more simply, with lower costs of capital, lower transaction costs, (greater) speed to execution and kind of that one-throat-to-choke from our customers’ perspective,” he said.

BlackRock has invested US$5 billion into wind and solar utility-scale renewables, with 250 wind and solar projects with a total generation capacity of 5.2GW. It is the world’s largest asset manager and GE’s biggest investor.

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Close to 1,000 solar companies push for extension of US ITC

Close to 1,000 companies from across the US solar industry supply chain sent a letter to Congress this week calling for the extension of the Section 48 and Section 25D solar investment tax credits (ITC).

The ITC was passed by a Republican-controlled Congress in the 2005 Energy Policy Act and enacted by George W. Bush. It was extended in 2015 with bipartisan support.

Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), said: “If you want to show a commitment to addressing climate change, you extend the solar ITC. Supporting this proven policy is the first clear victory that lawmakers can deliver to Americans on climate change. As we debate long-term solutions, now is not the time to abandon the single most successful policy on the books to deploy clean energy in the near-term.”

The ITC is currently scheduled to start falling at the end of 2019, going from 30% for projects which started development/construction at the end of 2019 to 26% in 2020, 22% in 2021 and 10% in 2022. 

Since its initial passage, the ITC has generated more than 200,000 American jobs, added US$140 billion in private sector investment, and grown solar deployment by 10,000%. Since 2015, PV installations in the US have doubled, with more than 2,000,000 installations located across the country. 

Lynn Jurich, co-founder and chief executive officer of Sunrun, said: “Nearly 1,000 solar companies, big and small, are supporting an ITC extension because it continues to create hundreds of thousands of jobs, is driving innovation, and expanding solar access for Americans. Sunrun is an example of how smart policy like the ITC can work, employing over 4,000 people nationwide, installing solar on more than 240,000 homes, and constantly innovating with new technology and services that benefit all energy consumers.”

George Hershman, president of Swinerton Renewable Energy, added: “The ITC extension will help maintain a stable market for continued solar development in the utility sector. This directly translates into investments in our nation’s rural communities by supporting more jobs across the solar value chain, providing long-term energy solutions at a lower cost to rate payers, and increasing the state and local tax base. The solar ITC is a win for workers, ratepayers and for America’s energy future.”

The letter to Congress, which was signed by companies working in every state across a vast majority of red, blue and purple congressional districts, stands as the start of a multi-pronged advocacy campaign lead by SEIA and its partners.

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Approved: Georgia Power’s plan to own and operate 80MW of battery energy storage

Georgia Power is set to boost its state’s battery energy storage sector, with the company’s plan to own and operate 80MW of battery energy storage now approved by the Georgia Public Service Commission (PSC).

Georgia Power’s 2019 Integrated Resource Plan (IRP) has been approved by the Georgia Public Service Commission (PSC), in a unanimous decision. The plan includes energy storage, 72% more renewable generation by 2024, and approval of the company’s environmental compliance strategy.

Allen Reaves, Georgia Power’s senior vice president and senior production officer, said: “Working with the Georgia PSC, we are positioning Georgia as a leader in the Southeast in battery energy storage, which is critical to growing and maximizing the value of renewable energy for customers as we increase our renewable generation by 72% by 2024.

“Through the IRP process, Georgia Power will continue to invest in a diverse energy portfolio including the development of renewable resources in a way that benefits all customers to deliver clean, safe, reliable energy at rates that are well below the national average.”

Under the approved IRP, Georgia Power will both own and operate the 80MW of new battery energy storage, add 2,260MW of new renewable generation to the company’s energy mix and retire five coal-fired units across the state. 

New energy efficiency programs for customers, including both an income-qualified program and aniIncome-qualified energy efficiency pilot program, were also approved in this plan. 

Georgia Power filed requests with the PSC to both raise residential rates and seek approval for its IRP earlier this month, while elsewhere in the US, utilities in New Mexico and Tennessee have also filed major new plans that include significant mention of energy storage.

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Cubico reaches financial close for 100MW solar PV project in South Carolina

Renewable energy investor Cubico Sustainable Investments has reached financial close for a 100MW solar PV project in Orangeburg County, South Carolina.

The Huntley solar PV project is one of a five-project portfolio spanning South Carolina, North Carolina and Texas that the London-based investment firm acquired from US-based solar developer Cypress Creek Renewables in January. Huntley is the third project from that package to achieve financial close.

Tax equity was provided by US Bank and project finance debt was provided by HSBC, Rabobank and Nord/LB. The same banks financed Cubico’s other utility-scale solar project in Orangeburg County, Palmetto, which started construction in December 2018.

The Huntley project is under construction and is set to become operational in the summer of 2020.

Ricardo Díaz, head of Americas at Cubico, said that it was “pleasing to see the build-out of our USA business continuing at pace. We are now one of the largest owners of utility-scale solar PV in South Carolina”.

According to the Solar Energy Industries Association, South Carolina is home to 18,133 solar power installations, producing 780.72 megawatts of energy annually and employing nearly 3,000 people.

Cubico is backed by two of Canada’s largest pension funds, PSP Investments and Ontario Teachers’ Pension Plan.

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NantEnergy, Alfen, celebrate commercial battery-plus-solar installs in US and Europe received information last week on a handful of successful battery installations at commercial customer sites, from NantEnergy in the US and from Alfen in Europe.

The Netherlands-headquartered system integrator and technology provider Alfen has supplied a 2.5MWh battery energy storage system to the headquarters of Smappee, the energy management technology company which recently struck a deal to roll out its EV smart charging solutions globally.

Smappee, which claims to have already deployed over 70,000 EV charge units, is building a cleantech hub at its headquarters in Harelbeke, Belgium, dubbed ‘Snowball’. It includes an energy laboratory, housing a cleantech accelerator programme and flexible office space for cleantech companies including startups. The offices and facilities will be powered by a combination of different renewable and energy-efficient solutions.

Alfen’s energy storage system will enable Snowball to effectively self-consume solar energy generated onsite and to balance the load – including electric vehicle charging and grid-balancing services. At a future date, off-grid or islanding capabilities could be added, Smappee CEO Stefan Grosjean said. Alfen also created a new 5MVA grid connection at the Smappee site to connect with the local distribution grid, as well as delivering complete, integrated storage solution.

Energy costs savings, backup capabilities drive value for US customers

From the US meanwhile, NantEnergy, which towards the end of 2018 acquired the energy systems and services business of Japanese technology provider Sharp, has touted a recent track record of successfully executed projects for C&I customers in the US states of California and New Mexico.

Sharp’s SmartStorage platform, which NantEnergy acquired, has been used in a few high profile commercial projects in the US, with Jigar Shah’s Generate Capital among the developers and financiers to use them to deliver energy costs savings – and sometimes backup power – to customers.

NantEnergy claims around 25% savings on demand charges can be made on average. Demand charges in the US are levied on commercial and industrial energy users and ensure that they pay a premium for energy drawn from the electrical grid at peak times each month. Overall, these charges can amount to as much 50% of a business’ total energy costs. In California alone, demand charges have gone up as much as 64% in the past five years.

Typically paired with solar panels, NantEnergy said that in addition to giving customers a “reliable, independent source of clean energy”, often a reduction in peak demand over time will mean that C&I customers can become eligible for paying lower rates from the utility directly, increasing the value of savings from the “storage systems and advanced battery technology” the company said it offers.

Claiming to have executed more than 12 projects in California and New Mexico, which could save those businesses a combined US$3.6 million on their energy bills over 10 years, the company provided quick case study details on three such projects:

New Mexico: A herbal supplement supplier in Albuquerque will save US$50,000 in the first year of operation of a 120kW / 162kWh SmartStorage system, combined with 264kW of solar PV. The customer’s overall utility bill reduction will be about 27%, NantEnergy claims.

California: A speciality mushroom grower installed a 1.04MW rooftop PV system through developer Revel Energy, paired with NantEnergy’s SmartStorage (300kW / 405kWh) at a facility in San Marcos, California. The mushroom processing plant could save more than US$200,000 a year on energy bills as a result.

California: Providing a different kind value, a municipal installation for the Californian City of Del Mar of a 30kW / 121.5kWh energy storage system will be a source of backup power and provide resiliency to the local community in case of grid outages. Also coupled with a solar PV installation, the project will also serve the purpose of reducing demand charges at the site.

Interest in energy storage for the C&I sector begins to grow, with the likes of Aggreko offering rented energy storage systems as a service, and developer Convergent Energy + Power bought up last week by Energy Capital Partners.

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Tough to build a software-only ESS business, battery system integrators argue

While software has been described by many as the single most important aspect of how an energy network integrates, manages and then uses energy storage, two industry heavyweights have said that selling software licensing alone was not a viable business model for them.

Rolling out the controls and management software by itself is a perilous business proposition, according to Karim Wazni, MD of Aggreko Microgrids and Storage (formerly Younicos until it was bought out and became part of rental energy solutions group Aggreko).

Having deployed 220MW of battery storage projects worldwide to date across nearly 50 projects, many of which it worked on as a full system integrator including hardware and software provision, Aggreko M&SS-Younicos had found that the value of the software alone could not be divorced from the overall aims of the project.

“It’s [software is] only valuable if you can package it in a system that delivers benefits that the customer can measure. I think it’s been challenging to prove a profitable business model based on software licensing,” Wazni said.

“So, it’s through the realisation of these benefits in a service model that we actually leverage the value of this software, so we’ve ported, we’ve included the software coming from Younicos and we’ve integrated [it] into our overall power management system, so we can then realise the benefits of the combination of thermal, storage and solar.”

Karim Wazni’s comments are taken from the video feature interview, below. 

Value is in the integrated offering

Andy Tang of the executive team at Greensmith Energy, also the target of a recent successful takeover bid by Wärtsilä, told that he and his team also did not believe “that in this industry, there’s a strong case for a software-only business model”.

“As Greensmith we’ve tried that multiple times and I think the biggest challenge you run into as a software-only business is that the solution the customer is looking at is a system: it’s the total thing that’s working.”

A software problem, that’s on the software vendor. A hardware problem shouldn’t be, but because it’s viewed as a [total] system, the hardware problem becomes the responsibility of the software vendor. You don’t really have control over having specified the equipment and if you don’t have control over having the commercial relationship with the hardware equipment provider, you have no leverage to help fix the situation.”

In other words, it is not that the margins for selling software are too low, at least for these two companies. Andy Tang said it is “very much” a technical and practical decision to have dropped standalone software suite sales and licensing from its business model. Others in the space, such as the UK’s Moixa, have sought export opportunities for their behind-the-meter residential aggregation platforms to Japan, for example, with Moixa CTO Chris Wright recently claiming that the company’s Japanese hardware and system installation partners are delivering 10MWh of systems into the market every month.

That ‘virtual power plant’ effort uses Moixa’s GridShare software platform. Nonetheless, Greensmith’s customers which Andy Tang said include utilities and independent power producers (IPPs) in the US, demand not just reliability, but also “the so-called one throat to choke” if something goes wrong.

That makes it “really hard to separate out the software and just sell the software”. 

Certainly, there is high value attached to the software, even if it’s not easy to convert that into standalone sales. Both Wärtsilä and Aggreko have said that their acquisition targets software was central to their value proposition. Similarly, Enel bought out US project developer – and crucially, software specialist, Demand Energy at the beginning of 2017 through its Enel Green Power North America subsidiary. Also that year, Navigant Research analyst Alex Eller blogged for this site about the role energy storage system software will play in building the “grid of the future”. Navigant had found that in 2016, cumulative ESS software vendor revenues were at US$202.2 million but predicted a rise to as much as US$3.4 billion by 2025.

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ESS developer Convergent Energy + Power changes hands for ‘several hundred million’ dollars

Infrastructure investment firm Energy Capital Partners has acquired prolific ‘mid-range’ energy storage project developer Convergent Energy + Power in a deal worth ‘several hundred million dollars’.

The deal was announced yesterday morning. Convergent Energy + Power CEO Johannes Ritterhausen told that unlike some of the recent mergers and acquisitions of promising energy storage companies by big players (Total acquiring Saft and then Go Electric, Wartsila-Greensmith et al), this one is a financial acquisition, not a strategic one.

“The management and the teams here are staying exactly the same, we’re just scaling up,” Ritterhausen said.

“It’s very different when you have a strategic acquisition, not a financial acquisition. This is a financial acquisition. ECP doesn’t have a storage team that they’re going to merge us with, we’re not being integrated inside of somebody else’s product line and platform. We are the platform, and we’re getting funding from them. We’re still an independent but now [also] fully-capitalised storage developer.”

Convergent has become known for executing commercial and industrial energy storage projects in the range of about 5MW to 25MW as well as other distributed storage project types to some extent. The company has been particularly prominent in the booming Ontario market, where Ritterhausen said some 50% or so of its projects have been so far. This includes 21MWh of potential projects with Shell New Energies in the Canadian Province

‘We wanted to put a lot of money into assets, they wanted to deploy a lot of money into an energy storage platform’

The overall market for energy storage remains relatively small, Ritterhausen said, pointing out that with the fairly modest 70MW of ESS it has deployed so far, Convergent is one of its biggest players in North America. Nonetheless, it is planning for huge growth in the market and wants to be poised to continue carving out market share.

“We had very supportive investors, but because of the size of our pipeline and the growth of our industry, we were looking for folks who would write larger and larger cheques, and so at the beginning of last year we started a process to identify who would be the sources of funding for our future growth. After running a comprehensive process we sort of arrived at Energy Capital Partners, which is energy targeted private equity fund that’s done US$19 billion over the past 15 years or so in the energy space in North America primarily. We wanted to put a lot of money into assets, they wanted to deploy a lot of money into an energy storage platform.”

The transaction was actually signed over in April 2019 but the two parties have held off from making the announcement until now. RItterhausen told the investment is for “several hundred million dollars”, and that as well as the Convergent name and platform, ECP also gets its full pipeline including “opportunities that are either operating, in construction or contracted to be built.”

More to follow on this story…

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Invenergy’s 23MW Illinois project lands refinancing

A solar-targeted insurance policy has helped Invenergy refinance a utility-scale plant it developed in Illinois earlier this decade.

The 23MW Grand Ridge Solar installation, some 90 miles southwest from Chicago, has been supplied fresh debt by Mitsubishi UFJ Financial Group (MUFG).

The facility, part of a solar-wind-storage complex in Illinois’ LaSalle County, was developed by Invenergy in the early 2010s.

In 2012, as the project secured its initial set of loans arranged by Union Bank, it was billed by Invenergy as the largest solar farm under construction in the US Midwest.

The installation’s refinancing this year was supported by an insurance policy from kWh Analytics, a San Francisco firm that works in solar risk management.

The so-called ‘solar revenue put’ acts, kWh Analytics explained, as a credit enhancement that protects cashflows.

On average, it helps solar portfolios reap 10% more debt when they opt to refinance, according to the firm’s estimates.

In Gran Ridge Solar’s case, the capacity of the insurance policy was provided by Swiss Re Corporate Solutions, kWh Analytics said in its statement.

The complex the solar plant is part of also features a 210MW wind farm, as well as energy storage systems of 31.5MW, 1.5MW and 3MW capacity.

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