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Student Energy attended the 2015 Energy Storage North America (ESNA) conference in San Diego last week. Representatives of more than 1000 organizations from 42 countries convened at the event in sunny California for one of the largest gatherings of policy, technology and market leaders in the North American energy storage industry.
The conference started off with featured Workshops exploring different aspects of the rapidly changing storage industry and Site Tours showing off some of Southern California’s successful energy storage projects. Our first stop of the day was a brief tour of the University of California San Diego’s campus microgrid facility which utilizes both electrical/chemical storage and thermal storage in the country’s largest microgrid experiment. The microgrid provides the UCSD campus with 85% of its necessary power using a cogeneration facility along with renewable energy and storage technologies.
After getting a sense of energy storage in action, we attended the Energy Storage 101 workshop hosted by Mark Hardin, a Senior Sales Engineer at NEC Energy Solutions. Hardin provided a great introduction to energy storage fundamentals and brought life to the subject with his enthusiasm. The workshop covered a wide range of topics explaining the difference between Power and Energy, which is a key understanding for successful energy storage systems, and going in-depth to explain how to size an energy storage system to meet your needs. The workshop concluded with an overview of battery technologies that exist today and a list of considerations for customers looking to purchase storage.
After the tours and workshops were finished the official conference kicked off in the evening with Janice Lin, the Conference Chair (and Founder and CEO of Stragen Consulting), giving a concise speech about the evolution of energy storage and its importance to the energy industry. The stage was handed over to opening keynote speaker James Avery, Chief Development Officer for San Diego Gas & Electric, who spoke about innovative ways to green the grid.
The day began with a fun dance lesson from the ever-cheerful Janice Lin who showed the crowd of more than 2,000 people how to do ‘The Grapevine.’ With the crowd in an upbeat mood, the attention turned towards the first speakers of the day. The first keynote of the day came from General Electric’s GM of Product Development and Marketing for energy storage, Pratima Rangarajan. In the wake of GE’s recent $1 billion launch into the energy services space, Ms. Rangarajan was well prepared to discuss the landscape of the energy storage market and what lies ahead. In its short lifetime, energy storage is following the same technology development curve as wind and solar, dropping more than 3x in price and showing signs of even steeper price drops to come.
Rangarajan explained that energy storage has reached a point at which it is no longer an emerging technology; it is now in the deployment stage and beginning to reach a scale that will allow for widespread adoption. However, there are still many challenges left to overcome as the industry begins to focus on the performance of technology, finding financing alternatives, increasing flexibility, and continuing its integration with renewables. The GE representative finished her speech on a high note announcing that in 2016 GE has plans to install 65 megawatt hours of energy storage, suggesting that GE will be leading the charge when it comes to bringing battery storage to scale.
In the following speech, Stuart Hemphill, Senior VP of Power Supply and Operational Services at Southern California Edison (SCE) expanded on the theme of a scaling battery storage industry. Hemphill made the important observation that energy storage is not just about providing energy but providing the services that allow for more stability and reliability on the grid. The U.S. electric grid is a $3 trillion asset to the United States but it is not being used to its greatest potential and, in addition, is not being supplied with the most efficient sources of power. In parallel to this point, Hemphill made sure to announce that SCE is seeking up to 100 MW of ‘preferred resource’ energy solutions to help strengthen the electricity supply and overcome some of the inefficiencies that exist on the grid today.
As utilities continues to evolve, companies like SCE are not just focused on generating electricity but adapting their solutions for customers as they become more connected to the source of their power. While the growth of the renewable energy industry has given customers more control over the price of electricity, storage is closing the gap on the reliability of their power. The relationship between the utility and the customer is changing and so is the relationship between the utility and the grid.
Greentech media also hosted a session on energy storage trends, with main underlying theme being significant growth in all sectors of the electricity market.
On the third and final day, the conference shifted its focus towards the business models and economics of energy storage. During one session entitled, “The Path to Bankability”, panelists spoke at length about the financial gaps that the industry needs to address in order to attract investors. Clint Wilder, Senior Editor at Clean Edge, moderated the session and took an impromptu survey of the crowd to find that, among the few investors present, only one had invested in an energy storage project. Although informal, the survey illustrated that the investor dollars for energy storage don’t quite exist yet; however, battery storage has only recently been put in the spotlight and investors are just now paying attention and starting to get their feet wet.
One major theme that was echoed throughout the final day of the conference is that energy storage has yet to become highly appealing to investors. One of the keys to attracting more investors hinges on the industry’s ability to develop a track record of investor success and on safety performances across the industry. While the storage industry continues to mature and to prove its investment value, the message for policy makers to pave the way for the growth of the industry is clear.
Susan Kennedy, CEO of Advanced Microgrid Solutions, explained to a packed audience that policy makers “getting out of the way” is a major misconception. Instead, Kennedy explains that the opposite actions are more valuable to the rapid success of the energy storage industry. As policy makers become more involved and dig into energy storage issues, there is more potential for policies created that will catalyze the industry. A minor change in policy can dictate whether a project ends up in the black or red. Meanwhile, policymakers tend to support demonstration and pilot projects for proof-of-concept instead of supporting projects that could provide examples of profitable investments for large scale businesses.
As the end of the conference approached, a clear picture of the energy storage business landscape began to emerge. Many believe that it is important for energy storage business to stay away from black box approaches of power pricing in favor of transparency. Whether by location or time of use, transparent pricing allows the market to see how energy storage can provide economic value and adopt better solutions. A more interactive grid would enable this transparency, but this is not possible without cooperation from all stakeholders including the utility, policymakers, and investors. Many stakeholders turn to California and New York for inspiration in forward thinking policies that are enabling storage technologies among other solutions. Panelist Michael Breen of Siemens jokingly suggested that California take over the United States energy policy.
The enthusiasm of the crowd at ESNA 2015 supports a feeling of building momentum in the energy storage industry. Last week we saw representation from utilities, policymakers, and business-owners alike. Energy Storage conferences are scheduled in Japan, India, China, and Europe, paving the road towards a global storage market. The message is clear that a wide variety of benefits and applications, particularly when it comes to improving the efficiency of conventional fuel sources and utilizing renewable energy, will make energy storage a big part of our future energy infrastructure.
By Daniel Howson and Janice Tran