Are you ready for the Energy Storage Grand Challenge?
It was announced in January by U.S. Secretary of Energy Dan Brouillette and is a comprehensive program to accelerate the development of next-generation energy storage technologies that would position the U.S. as a global leader.
The goal of the program is to “create and sustain global leadership in energy storage utilization and exports, with a secure domestic manufacturing supply chain that is independent of foreign sources of critical materials, by 2030,” according to the department.
An example of what is envisioned by the program can be found in the Nevada desert, where the Quinbrook Infrastructure Partners’ $1 billion Gemini Solar project – a 690 megawatt solar-plus-battery project, just got approval from regulators. It will capture and store solar energy during the day from solar panels on 7,100 acres for use throughout Nevada in the early evenings. Gemini is believed to be one of the largest projects of its kind globally.
Battery storage up until 2020 was considered the future of energy. But in the last months of 2019 alone, eight major US battery storage projects advanced or signed contracts to sell energy from their facilities to major utilities signalling that the future of battery storage might be closer than originally expected.
According to the U.S. Energy Information Agency, utility-scale battery energy storage capacity in the U.S. could more than double by 2022.
Lior Handelsman, founder of SolarEdge Technologies, a Israel-based energy storage and solar company, recently told Inframation that interest in commercial storage has increased tenfold in just a year.
“This growth is being driven by increasing electricity prices and grid instability,” he said. “Commercial business owners who are looking to improve their bottom lines are doing so by generating and storing their own energy.”
Strong advancements in the battery storage sector have attracted the interest of private equity infrastructure funds.
Energy Capital Partners, a New Jersey-based private equity infrastructure investment firm, reached financial close on its Fund IV at $3.3 billion with two main investments in the energy storage sector in Convergent Energy and Gopher Resource. Similarly, New York-based investor and asset management firm JLC Infrastructure acquired and rebranded Greenskies Renewable Energy, reflecting the target’s added focus on battery storage and emerging technologies.
Utilities are also expected to make their mark as the year progresses and the market matures, As the year progresses and the market matures utilities are also expected to make their mark as they increase their involvement in the development and funding phases of the projects.
“Utility players that are linked to energy retailers, such as ENGIE, understand how the energy industry works and have a customer channel,” Handelsman said. “These companies will have a good way to offer alternative solutions which is why we see such companies as large players in the field.”
Fortune 500 energy companies such as AES and NextEra are moving forward as well. NextEra Energy, which is the world’s largest utility company, indicated during a recent investor presentation that it expected to add 450 megawatts of energy storage in the near term.