Utilities Are Catching On To The Energy Storage Revolution (At Least If Growth Is An Indication)

By Frank Andorka, Senior Correspondent

It’s easy to lose sight in today’s electricity market that energy storage isn’t only happening on an individual homeowner level. In fact, a recent study showed that utilities increased their battery storage capacity 68% to 1.3 GWh in 2017.

That number comes from a utility survey conducted by the Smart Electric Power Alliance, an utility-focused trade organization. The survey itself is behind a paywall, but pv magazine has the goods. For example:

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The use of longer-duration batteries, able to discharge for several hours, has enabled balancing of solar with widespread storage, as in California and Hawaii, and with co-located solar + storage installations, as in Hawaii and Florida.

Also:

California utilities remained far in the lead in storage energy capacity, in response to state storage policies that support renewable goals. California added 75 percent of the nation’s incremental battery energy capacity in 2017, and was home to nearly 60 percent of the cumulative energy capacity.

The looming question is whether what you’re seeing in the utility-scale battery market is the same phenomenon you saw with solar power back in that industry’s infancy, to wit: Utilities, with their economies of scale, tried to eliminate competition with residential distributed generation. It’s a fight they’re still waging (see our report on Kansas from earlier today) and, while they may not be winning any enormous victories, it’s a drain on the overall industry potential.

pv magazine also flags this juicy piece of information regarding what will drive further economically advantageous storage options at the utility level:

FERC Order 841 directs RTOs/ISOs (regional transmission organizations and independent system operators) to allow a storage resource to sell into the wholesale market all capacity, energy, and ancillary services that the resource is technically capable of providing.

According to the report, this order alone would add up to 50 GW of energy storage capacity, if all the benefits from storage were realized.

Go read the whole article – it’s a fascinating discussion of where we are in the energy-storage market, at least from the standpoint of the utilities.

More:

US grid-connected battery energy capacity grew 68% last year

Proposed Kansas Demand Fees Could Bring Solar Installations To A Screeching Halt

By Frank Andorka, Senior Correspondent

Solar observers in Kansas are watching closely as two demand-charge proposals wend their way through the Kansas Corporation Commission. A decision on whether the fees will go into effect is expected on September 27.

It’s always interesting to watch lesser solar states work out their solar policies, despite the fact they often fall into some of the same traps earlier states have. Kansas appears to be no exception.

The state’s two largest utilities – Westar Energy and Kansas City Power & Light – currently have proposals before commission, which solar advocates say could bring the industry to a screeching halt, according to Midwest Energy News.

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One solar installer named Mark Horst is quoted in the article discussing one particular customer that he put together an estimate on how the demand charge would affect her bill. This is what he found:

The demand fee is high enough that it would actually offset all of the energy savings provided by smaller solar arrays, according to Horst. He analyzed the finances of one customer’s 2.32-kilowatt array, and determined that her average monthly savings of $35 would be more than negated by an average monthly demand charge of $45.

The upshot: “She would have to pay $10 a month for the luxury of having solar panels,” Horst said, adding that he would have to advise her for financial reasons to remove the panels.

As Midwest Energy News correctly points out, the demand charge is a longstanding method that utilities use to try to recover the revenues they lose when people discover what a good deal solar is for them and generate their own electricity.

What is heartening, at least for Kansas consumers, is that most utility regulators are loathe to allow demand charges because of their confusing nature. Most regulatory bodies aren’t willing to make it harder for customers to understand their bills.

That’s not to say Kansas won’t be the exception to the rule. But it should give solar installers like Hurst and solar consumers like the one he discussed some hope that the Kansas Corporation Commission won’t allow these usurious and confusing charges to make their way on to those bills. We’ll all find out together later this month.

More:

Kansas utilities’ proposed new fees could wipe out savings for some solar customers

Paying A Price: Wholesalers Face Defections If They Move Too Slowly On Renewables

By Frank Andorka, Senior Correspondent

One Colorado co-op has set the stage to defect from one wholesaler because they don’t believe it’s moving fast enough to incorporate renewables into its portfolio – and the long-term implications are potentially startling.

As Western Energy News reports:

The Delta-Montrose Electric Association will vote in October on rule changes that would allow another power supplier to help finance its exit from a contract with Tri-State Generation and Transmission.

The association is among Tri-State’s largest customers, and its defection could heighten the risk of a mass exodus as others are forced to cover a larger share of costs for operating the wholesaler’s infrastructure, including its coal-fired power plants.

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The problem, at least according to Delta’s CEO, is the arbitrary cap Tri-States puts on local generation. That significantly limits the amount of renewable energy the co-op can have in its own portfolio. From Western Energy News:

Several co-ops have been stymied by Tri-State’s 5 percent cap on local generation, and Tri-State and Delta-Montrose continue to wait on a rehearing from the Federal Energy Regulatory Commission on the matter.

“We’ve been stifled from our ability to have flexibility to develop those resources and make them economical for our membership under the confines of our current contract,” [Delta CEO Jansen] Bronec said.

While Delta’s defection would have an immediate impact on Tri-State, the decision to move away from coal-generated electricity could have implications far beyond Colorado’s borders. It should send the message to wholesalers like Tri-State that arbitrarily clinging to outdated fossil-fuel generation is a way to lose members at an alarming rate. As prices continue to drop for solar and wind production, co-ops are not going to sit idly by and pay higher prices just because the wholesaler doesn’t want to change.

The Solar Revolution is happening, and smaller entities like Delta are starting to catch on. Once they realize the power is in their hands, look for more wholesalers to bend to the will of their members – and look for more renewable energy to come online as they do so.

More:

Colorado co-op vote sets table for defection from coal power wholesaler

European Union Removes Trade Sanctions On Chinese Solar Modules

By Frank Andorka, Senior Correspondent

While the United States seems hellbent on starting new trade wars with countries around the world, the European Union (EU) has determined that its own sanctions on Chinese solar modules should come to an end, according to reporting by Reuters.

As Reuters reports:

The EU first imposed anti-dumping and anti-subsidy measures for Chinese solar panels, wafers and cells in 2013 and extended them by 18 months in March 2017, signaling that they should then end.

Chinese manufacturers have been allowed to sell solar products in Europe free of duties if they do so at or above a progressively declining minimum price. If sold for less than that price, they are subject to duties of up to 64.9 percent.

The trade measures will be allowed to expire on Monday.

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The reasons for the expiration mirror the same debate going on over tariffs in the United States, to wit: the EU is trying to strike a balance between EU module manufacturers (who believe the measures should stay in place) and installers (who want the measures to go away so less expensive modules can keep coming to the market and allowing installations to flourish). In the end, the European Commission, which coordinates economic policy for the EU, decided to let the measures expire.

Which, of course, set off a panic in some quarters surrounding what was referred to as a ‘flood’ of modules being dumped on European markets at below-market prices, thereby depressing prices on modules throughout the supply chain. Again from Reuters:

EU ProSun, the grouping of EU producers that launched the initial complaint in 2012 and wanted a further extension of measures, had said that European manufacturers would be devastated if the measures ended.

Beijing’s decision to limit installations in China meant producers there had some 30 gigawatts of excess capacity to shift with few markets to sell into after tariffs imposed by the United States and planned by India, the second and third largest markets behind China. The total EU market is some 7 gigawatts.

It’s long been our contention that tariffs don’t really help anyone, and that inexpensive modules help spread the use of solar throughout the world. It’s why we’ve argued so vociferously against Trump’s tariffs here in the United States.

But this European issue isn’t over yet – Reuters reports ProSun said it might launch a legal challenge to the expiration of the duties. This story is something to keep an eye on moving forward – it could reshape the global solar industry for years to come.

More:

EU ends trade controls on Chinese solar panels raising fears of cheap imports