Vestas has reported revenue of €14.5bn for 2022, which was at the lower end of its forecasts, and losses of almost €1.2bn. The Danish firm said this was due to high inflation and lower wind installations, which would also affect its 2023 results. Read more
GE Renewable Energy plans to build offshore wind blade and nacelle factories in New York if it wins enough orders following the US state's upcoming up-to-4.6GW offshore wind solicitation. Read more
Glennmont Partners has bought the 27.6MW Vasberget and 19.8MW Langmarken wind farms in Sweden from Eolus and Mirova. These are the first acquisitions for Glennmont's €700m brownfield European renewable infrastructure fund. Read more
Mingyang and CSSC Haizhuang announced 18MW turbines last month. We look at what it means for the global market.
Wind's tectonic plates have shifted this year as Chinese firms have overtaken western rivals in the race to develop the world’s largest offshore wind turbines.
On 13th January, Mingyang Smart Energy unveiled its MySE 18.X-28X offshore turbine platform, which has headline capacity of 18MW and gives Mingyang the potential to go “beyond 18MW”. MingYang said it is as tall as a 70-storey skyscraper and could handle extreme offshore conditions, including level-17 typhoons.
This news came a week after fellow Chinese company CSSC Haizhuang announced its own 18MW turbine, the H260-18MW, at an event at Dongying City Offshore Wind Power Industrial Park in Shangdong Province.
These machines also mean Mingyang and CSSC Haizhuang have overtaken Dongfang Electric and Goldwind, which announced their own 16MW turbine platforms last July and November respectively. Goldwind developed its super-sized machine with China Three Gorges, and Three Gorges chairman Lei Mingshan said it showed that China is now leading the global offshore turbine race rather than following western rivals.
Western firms have giant turbines of their own, of course: Vestas, Siemens Gamesa and GE Renewable Energy have turbines with headline capacity of 15MW, 14MW and 14MW respectively. These machines are all proving attractive to offshore wind developers: RWE last month picked Siemens Gamesa to supply its flagship SG14-236DD machines for the 1GW Thor offshore wind farm in Denmark.
Yet the emergence of the largest offshore wind turbines in China must give that trio pause for thought after a difficult results season. Publicly, though, they are sanguine.
Henrik Andersen, CEO at Vestas, said in an interview last month that wind turbines are big enough for now and that the greatest challenge for manufacturers in the next decade is by increasing output, including by making turbines more efficient. We understand the argument, although increasing the size of the turbine remains one of the best ways to increase their output. It is also only two years since Andersen was himself unveiling a 15MW offshore turbine that was then the world’s largest.
European firms are desperately hoping for more help from the EU for the wind supply chain as it seeks to respond to the US Inflation Reduction Act.
The emergence of four of the largest offshore wind turbine platforms in China reflects a few facts that western manufacturers cannot afford to ignore.
First, Chinese wind turbine makers are operating with larger profit margins than their western rivals, which means they can invest more in the research and development that is crucial to developing bigger and better and machines. We looked at this trend in this piece from September 2022, based on analysis from the Institute for Energy Economics & Financial Analysis, and how it could affect global markets.
Second, Chinese firms can also learn lessons from the huge amount of offshore wind capacity that is being installed at home. The Asian superpower now has almost half of global installed offshore wind capacity, with 12.7GW installed in 2021 and a further 6.8GW in the first six months of 2022. This gives Chinese manufacturers an enviable project pipeline that they know they can dominate, and insights into how their machines are performing so that they can make improvements that further boost headline capacity.
And third, the combination of investment in research and a fast-growing market gives them the ability to be more ambitious about their plans. We will need to see how their machines work in practice, but that is true for those of western manufacturers too. It currently feels inevitable that the first 20MW offshore turbine will come from China.
Some of this will not unduly worry western manufacturers. They know Chinese firms will dominate installations in China, because it’s how it has been in many sectors including onshore wind. Western manufacturers have also been able to focus efforts on winning deals in Europe and the US, as well as new Asian markets.
But the most interesting aspect is how the emergence of 18MW Chinese turbines will affect the dynamics of installations in Asia-Pacific, including new markets opening up in southeast Asia, Australia, New Zealand and India; and the potential of those firms to make inroads if countries in the Middle East and North Africa look to use offshore wind farms to run power-to-X operations. These are the battlegrounds where we will get to see Chinese and western turbine makers go head-to-head with giant turbines.
Some countries will have reservations about handing vital infrastructure contracts to Chinese companies – but that will not stifle those firms’ international ambitions.
The aviation industry has a battle on its hands to retain customers and it has recognised that one of the best way of fighting this battle is by boosting its green credentials. However, the sector doesn’t have a lot of options when it comes to increasing sustainability, but energy storage is offering a solution.
Aviation is one of the most polluting industries in the world – it’s estimated that the global aviation industry produces around 2.1 per cent of all human-induced carbon dioxide emissions.
Meanwhile, the aviation sector is responsible for 12 per cent of emissions from all transport sources (compared to 74 per cent from road transport).
As a result, many people have found it increasingly difficult to justify taking flights. In one study conducted in Sweden, the number of people choosing to travel by train rather than plane where possible, jumped from 20 per cent to 37 per cent in just one year.
And that was before the pandemic hit. Covid-19 had a devastating impact on aviation – in the year 2020, global aviation passenger numbers dropped by a massive 2.7 billion compared to the previous year, which represented a drop of around 60 per cent.
It’s true that aviation passenger numbers increased in 2022, but provisional figures suggest that they are still significantly down on the pre-pandemic totals. According to estimates from the International Civil Aviation Organization, 2022 international passenger traffic was down by around 660 million passengers, or 36 per cent, compared to 2019 levels. This equates to a $124 billion decrease in the gross operating revenues of airlines.
Perhaps equally damaging for the aviation industry was the fact that, during the pandemic, people firstly got used to not flying, and secondly began to increasingly question whether they could justify flying from an environmental perspective. Indeed, a majority of people in some of the largest countries in the world say they are planning to reduce the number of flights they take. For example, data from Statista has shown that 80 per cent of people in China, 70 per cent of people in the US, 67 per cent of people in the UK, and 76 per cent of people in Germany are “aiming to take fewer flights in the future to fight climate change”.
The aviation industry has a battle on its hands to retain customers and it has recognised that one of the best way of fighting this battle is by boosting its green credentials. However, the sector doesn’t have a lot of options when it comes to increasing sustainability, but energy storage is offering a solution.
Last week it was announced that long-duration energy storage system manufacturer ESS is to provide an iron flow battery solution to Amsterdam Airport Schiphol – the second largest airport in mainland Europe – in the first quarter of this year. ESS’ ‘Energy Warehouse’ system – which has a storage capacity of 400KWh, a 25-year design life and the ability to be configured to provide storage durations of six to 12 hours – will recharge Electric Ground Power Units (E-GPU). E-GPUs are batteries which will replace the diesel ground power units currently used to supply electrical power to aircraft when parked at the airport.
The ESS link-up with Schiphol demonstrated that the Dutch airport was “leading the way” on the decarbonisation of air travel, claimed ESS’ Europe director Alan Greenshields. Meanwhile, Oscar Maan, Royal Schiphol Group manager of innovation, highlighted that if the pilot was successful it would be a “double win” as it would both reduce the airport’s carbon footprint and reduce air pollution. The pilot will run as part of TULIPS, a consortium funded by the EU – as part of the European Green Deal – that aims to speed up the rollout of sustainable technologies in aviation. TULIPS' objectives are to significantly contribute towards zero emissions and zero waste at the EU’s more than 300 airports by 2030 and bring about “climate-neutral aviation” by 2050.
Other aviation companies have taken their commitment to energy storage a step further.
In November last year, it was announced that United Airlines had made a strategic equity investment in Natron Energy, a battery manufacturer whose sodium-ion batteries, United said, have the potential to “help United electrify its airport ground equipment like pushback tractors and operations at the gate”. United added that, while it had made substantial investments in companies developing technology to reduce aircraft emissions, Natron was the first that has the potential to “reduce the greenhouse gas footprint from United’s ground operations”.
What was particularly notable was that, in addition to charging electric ground equipment, allowing airport operations to manage electricity demand, and improving resiliency related to inclement weather, United said Natron’s batteries could also be used to charge “anticipated future electric aircraft such as electric air taxis”.
Indeed, batteries could have a significant disruptive effect on the aviation industry in the longer term given the potential for them to be used to power air taxis. A number of companies in the US are currently working on developing air taxis – for example, in October last year, Delta Air Lines became the latest airline to back an electric vehicle start-up with a $60 million investment in Joby Aviation, a company developing electric vertical takeoff and landing aircraft (eVTOLs), which are intended to operate as an air taxi service.
There is considerable confidence that air taxis are going to become a viable form of transport and that, specifically in the US, the Federal Aviation Administration will work to facilitate this type of technology. It’s proposed that eVTOLs will land on rooftops and that will require major construction work and the development of significant charging infrastructure.
Energy storage will constitute a key part of this infrastructure - consequently, the storage sector is set to have a key role in driving the forthcoming aviation industry revolution.
Germany has identified 36.5GW of offshore wind sites to help it meet its 2030 target, but can it overcome key obstacles?
Germany wants to kickstart growth in offshore wind. The industry grew fast in the 2010s, to total capacity of 7.6GW in 2019, but there has been little of note completed since.
Development has not totally stopped. RWE commissioned the first turbines at its 342MW Kaskasi project in the German North Sea in 2022 and is set to fully commission it in 2023; Parkwind is due to complete its 247MW Arcadis Ost 1 in the German Baltic Sea this year too; and Vattenfall last year exercised its step-in rights to develop 980MW after RWE won the N-7.2 tender in September.
But that isn't enough for the industry to reach the German government’s goals of 30GW installed offshore wind by 2030 and 50GW by 2035. The targets were set last year in a bid to boost energy security after Russia’s invasion of Ukraine – but the government has needed a plan to get there. It finally got this plan last week.
On Friday, the Federal Maritime & Hydrographic Agency published its development plan for the expansion of offshore wind in the North and Baltic Seas. It sees the plan as a key element to achieving the 2030 goal and laying down a strong foundation for 2035.
This includes details of proposed sites and tenders for the next decade, and should give developers, investors and manufacturers the certainty that they have been sorely lacking. But will it be enough to reinvigorate a stalled sector?
It will take a major effort for Germany to quadruple its installed offshore wind capacity in the 2,896 days we have left until 31st December 2030.
Robert Habeck, German vice-chancellor, said the plan showed it was “serious about planning acceleration” of offshore wind. The plan follows the revised targets that were announced by the German government last November; which won approval from the European Commission in December; and came into law on 1st January 2023.
The plan announced last week goes beyond those targets. It sets out offshore wind sites that could accommodate 36.5GW by 2030; defines the necessary network links; and sets out plans to kick off 1GW of green hydrogen in German waters.
The plan for new capacity includes:
This is in addition to 1.9GW of sites tendered in 2021 and 2022, where the projects are due to complete in 2026 and 2027.
Overall, the government sees the potential to tender 34.7GW of sites in the 2020s, with a further 10.8GW after that. It is seeking 9.5GW completions in 2030 and 4GW annually until 2035, with potential for total capacity of 70GW by 2045 if the area is fully used, including with power-to-X. But what does this mean beyond the numbers?
Companies throughout the value chain will no doubt feel grateful they are getting some clarity and that the government looks set to make good on its offshore promises.
The German offshore wind association BWO called the development plan an “important milestone” for the sector, and said it could help reverse problems caused by a “lack of necessary production capabilities and skilled workers” in the industry.
Yet the government has also come in for criticism from BWO and WindEurope for its plan to introduce negative bidding with no price caps in upcoming tenders. That could expose developers and consumers to additional costs, and hamper projects.
This is a significant concern given that companies worldwide are facing extra pressures and costs to secure raw materials and components to build projects profitably; and any profit concerns could also harm investments in ports, vessels and factories.
There are challenges in German offshore wind that cannot be fixed overnight, and these will hang over any plan. With almost 9GW of offshore wind tenders planned in Germany in 2023, we will soon get a clear view over how this is affecting investor appetite. But the window to tender projects for 2030 is closing soon. Germany has no time for missteps.
Saudi developer ACWA Power has plans for green hydrogen and green ammonia facilities in Uzbekistan, which will be the country’s first. The government views hydrogen as an important tool in decarbonising the country’s chemical industry. Read more.
Fuel cell manufacturer Ballard is working with Indian multinational Adani to develop a hydrogen fuel cell truck for mining operations. Read more.
Grid operators Gascade and Fluxys are progressing plans for a 400km offshore hydrogen pipeline in the North Sea with an application to the European Commission for Project of Common Interest status. Read more.
Germany is set to join H2MED, a hydrogen pipeline project that will supply green hydrogen to Europe from the Iberian Peninsula. The project, initially established between Portugal, Spain and France, is intended to shore up Europe’s energy future. Read more.
Green hydrogen developer P2X Solutions has begun construction of an industrial-scale green hydrogen facility in Finland, the country’s first. Read more.
Green hydrogen can play a key role in helping the world reach net-zero emissions by 2050.
Green hydrogen can play a key role in helping the world reach net-zero emissions by 2050. Demand for hydrogen is growing, from around 87million metric tonnes (MT) in 2020 to around 180million MT in 2030 and up to 680million MT in 2050, according to the International Energy Agency. That represents huge potential.
However, green hydrogen still makes up a tiny percentage of that: the IEA has said that less than 1% of hydrogen production globally can be classed as ‘green’.
That is no great surprise. In the US, it cost around $5/kg to produce green hydrogen in 2021 according to the US Energy Department, compared to $1.50/kg for hydrogen created using fossil fuels (or ‘grey hydrogen’). Analysis from Bloomberg New Energy Finance said it would cost $4.91/kg to produce green hydrogen in Germany in 2025. Grey hydrogen had a head start, and green hydrogen must cut costs to hit back.
This focus on cost-cutting could push developers towards Chinese manufacturers. There are two major up-front costs for green hydrogen projects – the electrolyser and the electricity to power it – and Chinese machines could be attractive options.
China’s playbook for green hydrogen is well-known. In the 2010s, it used low prices to corner the solar panel production market, with the result that today it makes 80% of the solar panels used globally and has driven out most of its western rivals. We are now seeing the same happen in hydrogen electrolysers: BNEF reported in 2022 that Chinese-made electrolysers are a quarter of the price of western machines.
On that basis, isn’t the case for Chinese machines obvious? Well, no.
The downfall of many Chinese electrolysers is efficiency, as the China Hydrogen Energy & Fuel Cells Industry Innovation Strategic Alliance reported in 2021. It said Chinese electrolysers are far less efficient and reliable than machines produced in Europe or the US. This is vital for developers making decisions right now.
But this will not last forever. BNEF said it expects Chinese electrolysers to account for 30% of hydrogen electrolyser sales in the US and Europe before 2025, but that demand will grow after that. This means policy-makers in the US and Europe have a vital window to bring in policies to help their own suppliers, which is happening with the US Inflation Reduction Act and, to a lesser extent, the REPowerEU plan.
The IEA has also reported this month that electrolyser innovation is not dominated at present by any single country. It said global manufacturing of hydrogen electrolysers is set to grow from around 10GW a year now to 100GW a year in 2030; and said in an analysis, called ‘Hydrogen patents for a clean energy future’, that companies in the EU and US are still currently at the forefront of electrolyser innovations.
Overall, it said 80% of patent applications related to hydrogen in 2020 focused on low-carbon applications of production rather than more carbon-intensive methods. Innovations like this should help green hydrogen close the gap with grey hydrogen.
It also highlighted that 28% of hydrogen patents that year came from the EU – led by Germany, France and the Netherlands – and with 24% in Japan. The US accounted for 20%, with China and South Korea also in a strong position; and countries such as the UK, Canada and Switzerland just outside the top five.
This bodes well for the market generally. Research and development work is vital if the industry is to deliver green hydrogen cheaply; and developers have to consider efficiency alongside cost when making decisions on technology. It is not a foregone conclusion that China will corner the green electrolyser market, but governments in the US, EU and elsewhere will need to work very hard to hold it back.
The lack of state-wide mechanisms for supporting energy storage in the US has long been a frustration for storage professionals. But now, in a major breakthrough, the US state of New York has developed a storage credit that could prove to be a model for all US states.
The lack of state-wide mechanisms for supporting energy storage in the US has long been a frustration for storage professionals.
In what has been a major oversight on the part of renewable energy policymakers, energy storage in the US has not benefitted from a renewable energy standard (RES) in the same way that the wind and solar sectors have.
How does a RES work? In simple terms, it requires utility companies to source a certain amount of the energy they generate or sell from renewable sources such as wind and solar.
In addition, storage has, up to now, not been supported by a system of renewable energy certificates [RECs]. Such certificates certify that the bearer owns one megawatt-hour of electricity generated from a renewable energy source. When the power provider has fed the energy into the grid, they are then able to sell the REC they receive on the open market as an energy commodity. For example, an REC earned may be sold to other polluting entities as a carbon credit to offset their emissions.
But now, in a major breakthrough for the storage sector, the US state of New York has developed a REC-like instrument that could prove to be a game changer and the model for all US states that are serious about fostering the wider deployment of grid-scale storage.
Three weeks ago, New York state governor Kathy Hochul announced a new framework for the state to achieve what it described as a “nation-leading” six gigawatts of energy storage by 2030.
The part of the framework that has really captured the imagination of the wider storage sector is the inclusion of an index storage credit (ISC) mechanism, which the New York State Energy Research and Development Authority (NYSERDA) says is “anticipated to provide long-term certainty to projects while maximising savings for consumers”.
How would the ISC work? NYSERDA said it was important to incentivise discharge “when it is most needed rather than to reward as much discharge as possible”. On this basis, NYSERDA and staff from New York State's Department of Public Service have proposed that each ISC should represent one MWh of energy storage capacity that is operational on a given day. This means that each day a storage project is operational, it would be credited with and compensated for a number of ISCs equal to the MWh of storage discharge capacity of the unit. “ISCs would be credited only for days when the project is operational and available for dispatch” and not, for example, during days of outage or maintenance, NYSERDA said.
Under this approach, projects would generate ISCs on operational days regardless of whether and how much they discharge. In other words, there would be no performance, discharge, throughput, or operational requirements under the ISC contract. “This should not lead to the conclusion that the performance-based element that underpins the Index REC programs for renewable electricity is lost in an ISC structure,” NYSERDA said. “Under the ISC structure, NYSERDA’s payments for ISCs would be calculated as the Strike Price minus the Reference Price. Projects therefore would remain exposed to price signals from the commodity markets – if they do not discharge when it makes sense given market prices, they will not generate market revenue.”
Meanwhile, the ISC also includes measures to address the issue of contract terms. NYSREDA said the duration of the ISC support payments offered to storage projects will have an impact on the overall cost of bulk storage projects and the effectiveness of the commodity revenue hedge. “If the term is too short, the project will carry additional risks in the later years of the project’s operational life that are not covered under the contracted revenue mechanism – conversely, terms of excessive lengths may result in uncertainty both for the project (which may discount such future support payments in the very distant future) and in bid evaluation”, NYSERDA explained. In this context, NYSERDA recommends a contract term of 15 years.
New York’s ISC has impressed the US storage community. Storage policy experts have said the state has “cracked the code” and developed an REC-like instrument for energy storage.
Furthermore, there is a belief that New York’s innovative approach – which was developed in partnership with organisations such as storage owner and operator Key Capture Energy – has, in effect, produced the template for all US states seeking to provide a framework for wider storage deployment.
The implementation of the New York ISC will be watched with interest by many in the US storage sector. The framework – of which the ISC is a feature – is currently available for public comment on the New York State’s Department of Public Service website and a decision is expected later this year.
Energy storage is on the verge of a seismic shift in the way in which its development is facilitated by policymakers in the US. As William Acker, executive director of NY-BEST [The New York Battery and Energy Storage Technology Consortium] put it, the proposed framework, including the ISC, will have the effect of “reinforcing New York's position as a global leader in energy storage”.
Italian giant Eni is calling for stronger links between Italy and African countries. Could this be the answer to Europe's energy challenges?
Germany, Sweden and Finland led the European Union for wind installations in 2022, WindEurope has said. But should Europe look south for answers to the energy crisis?
The EU faces a host of energy challenges this year. It needs to ensure sufficient gas supplies for the next 12-18 months following the decline in Russian imports; unlock investment in wind and solar to help Europe become greener; and grapple with big questions over where it will source affordable gas in the long-term.
None of these three has an easy answer – or do they? Last week, Italian oil giant Eni renewed calls for stronger links between Europe and Africa that could solve all three. Prime Minister Giorgia Meloni has made similar calls since her accession in October.
In Italy, this is called a ‘Mattei plan’. Enrico Mattei was a political influential industrial leader in 1950s Italy, who played an important role in re-building the country after the Second World War. He led the restructuring of the oil group Agip, which became Eni in 1953, and promoted a plan to form stronger energy links between Europe and Africa. Mattei said this would help both and boost the strategic role of the Mediterranean.
We can see the influence of his approach in Eni’s gas deals today: in 2022, Algeria overtook Russia as Eni’s main supplier of natural gas. Meloni said a new Mattei plan would be “non-predatory and collaborative”, and establish Italy as an ‘energy bridge’ between the two continents. This would cover oil and gas, but also help the EU tap into the enviable renewable potential of countries in north and sub-Saharan Africa, including by importing electricity from wind and solar developments.
Claudio Descalzi, CEO at Eni, said a new ‘north-south axis’ would connect abundant renewables resources in Africa with energy-hungry markets in Europe. Eni is looking to increase investments in countries including Angola, Nigeria, Mozambique and the Republic of the Congo. Morocco, Egypt, Tunisia and Libya have great potential too.
An EU-wide ‘Mattei plan’ could help the EU to diversify Europe’s energy mix. Indeed, it is already taking steps to do so, such as with the ‘green partnership’ the EU signed with Morocco last October to boost cooperation on renewables.
However, the EU will only be able to do this if it can grow its renewables capacity too.
The European Investment Bank has said there is great potential for Europe and Africa to collaborate on energy. It said Europe needs Africa as a partner if it is to achieve climate neutrality by 2050. But it added that the EU must show countries in Africa that it has the technological and business solutions to unlock their potential in wind and solar. Asian countries including China see great potential in Africa too.
And how can Europe do this? According to the EIB, by showing it is a “pioneer in the rapid expansion of renewable energies” and providing it can go green “while remaining economically prosperous”. That means solving some of the challenges for renewables that WindEurope reiterated in its announcement of 2022 wind installations last week.
WindEurope said 15GW of onshore wind was built in EU countries in 2022, which was up by one-third compared to the figure in 2021. But it also said the EU is set to fall well short of its long-term renewables targets because of ongoing challenges with permitting, which it said are getting better; supply chain bottlenecks; and rule changes in electricity markets that are dissuading investors from backing EU wind farms.
The EU aims to make some progress on this in 2023, including with new rules for the electricity market that are due in March, but it still has a long way to go. The EU must show it has a strong, profitable renewables sector if it is to strengthen links with Africa.
A ‘Mattei plan’ could be mutually beneficial, but the EU must how that it has the capacity to execute on the plan too. Success at home is an essential foundation.
Which energy storage companies are best-placed to substantially grow their share of the market in the next 12 months? Energy Storage Report gives you a run-down of the ten companies to watch in the coming year.
Which energy storage companies are best-placed to substantially grow their share of the market in the next 12 months?
Energy Storage Report gives you a run-down of the ‘Ten Energy Storage Companies To Watch In 2023’.
Why have these companies made the list? Each of these businesses meet at least one of the following criteria – they have either recently received significant injections of investment (from the private sector or from the public purse), they have recently been taken over by new owners who have made clear their intention to take the company to new heights, they have embarked on ambitious international expansion plans, or they are being driven-forward by widely respected leadership teams that have proven themselves to be not only highly innovative, but also in possession of significant business acumen.
Some of the companies featured here have developed storage technologies, while others are project developers that are set to build-out significant pipelines in the near future.
The one trait all these companies share is that they are expected to greatly enhance their reputations in the storage sector in the coming year.
Have any feedback on our list? We’re always happy to hear your views. Get in touch at: esr@tamarindo.global
Here are the 'Ten Energy Storage Companies To Watch In 2023’:
1. Powin
Led by: Geoff Brown
Backstory: In July last year, Powin announced a $135 million growth equity investment led by GIC, Singapore’s sovereign wealth fund, with participation from existing lead investors Trilantic Energy Partners North America and Energy Impact Partners. Despite supply chain restrictions, regulatory uncertainty, and the rising cost of capital, Powin has grown quickly and built out a 10GWh energy storage business. Powin and Australian battery storage developer Akaysha Energy have also signed a partnership framework agreement under which Powin will deploy more than 1.7GWh of energy storage systems over a two-year period. Akaysha lauded Powin as “one of the few companies best positioned to meet the Australian grid operators’ high standards of performance”.
What to look out for: The ultra-resilient Powin clearly has the potential to establish itself as one of the major global storage players, but will this potential be fulfilled?
2. Jupiter Power
Led by: Andrew Bowman, CEO
Backstory: Two months ago, EnCap Investments sold US utility scale battery storage developer Jupiter Power to a fund managed by BlackRock Alternatives’ diversified Infrastructure business. At the time of the acquisition, Jupiter’s team included 70 professionals and the company had a US storage development pipeline totalling more than 11GW. Jupiter owns and operates a 655MWh storage fleet in Texas and currently has 340 MWh of new projects in, or near, construction, including its first project in California. Earlier in the year, prior to the Blackrock deal, Jupiter closed a $174.6 million portfolio debt financing for six battery energy storage projects in the ERCOT market in Texas.
What to look out for: The company is well-placed to play a key role in the wider deployment of storage in the US, but how will it adapt to the change of ownership and will the takeover have a significant impact on the speed with which it delivers its pipeline?
3. Energy Dome
Led by: Claudio Spadacini, founder and CEO
Backstory: Recognised as one of Europe’s most innovative energy storage companies, Energy Dome was last month awarded €17.5 million in funding from the European Innovation Council (EIC), Europe’s flagship funding programme to identify, fund and scale-up breakthrough innovations in “strategic areas”, including energy storage. It was the largest award ever made by the programme, reflecting the widespread belief in the transformative potential of the company’s CO2 Battery long-duration storage system. In making the investment, the EIC Fund joined other strategic investors - including Barclays, 360 Capital, CDP Venture Capital SGR and Novum Capital Partners - that have invested a total of $25 million in the company. There is a view that there is not sufficient governmental policy support for long-duration storage, but despite these obstacles, major renewable energy players such as wind energy company Ørsted have shown faith in the Milan-based company’s offering. Last year, Ørsted entered into a memorandum of understanding with Energy Dome to run a feasibility study on the deployment of a 20 MW / 200 MWh energy storage facility using the battery technology at “one or more” Ørsted sites. Meanwhile, in April last year, Energy Dome signed a non-exclusive license agreement with power generation company Ansaldo Energia to partner on the commercialisation of long-duration energy storage facilities across the EMEA region.
What to look out for: Energy Dome anticipates seeing as many as 30 long-duration storage facilities being built over the next five years in Italy, Germany, the Middle East, and Africa. It seems an ambitious target given the aforementioned lack of policy support, what progress will Energy Dome make?
4. Eelpower
Led by: Mark Simon, chief executive
Backstory: It’s been an eventful 12 months for Eelpower, which agreed a £200m joint venture partnership with NextEnergy Solar Fund, the specialist solar and energy storage climate impact fund, in September last year. Meanwhile, in November, Renewable Power Capital – which is backed by CPP Investments – entered into a joint venture with Eelpower with a view to acquiring, building and operating utility-scale storage projects. The JV has a target of 1GW of storage, with a current pipeline of 240MW to be built over the next 24 months. Eelpower which constructs, owns and operates grid-scale batteries in the UK, is acclaimed for its strong leadership – in addition to the vast experience of the entrepreneurial chief executive Mark Simon, chief financial officer Magdalena Markiewicz is recognised as having played a key role in steering the company through choppy waters in times when the market has been particularly challenging.
What to look out for: Eelpower has geared itself up for a massive push in the UK storage market, but how successful it will be? Great Britain is the largest utility scale battery storage market in Europe with 1.7GW installed by the end of 2021. Forecasts predict that it will grow to 10GW by 2030 – in a fiercely competitive sector, can Eelpower capitalise on this potential and secure a sizeable chunk of the market?
5. East Point Energy
Led by: Andrew Foukal, CEO
Backstory: In June last year, East Point Energy was acquired by Equinor, one of the largest offshore wind developers in the US. Four months after the acquisition it was announced that East Point had sold the 15.7MW Shands Energy Storage project to Dominion Energy Virginia, one of the nation’s largest utilities. Though that was a smaller-scale deal, Charlottesville, Virginia-headquartered East Point will be hoping the Equinor takeover now sends the company into the storage stratosphere.
What to look out for: Hopes are high following the Equinor deal – it gives East Point considerable financial clout and the expectation now is that the build-out of its 4GW pipeline will be accelerated and the company will become a market-leading independent power producer. You can’t fault the ambition, but in a highly competitive market, how will East Point fare?
6. KX Power
Led by: Dr. Zhe Zhang, CEO
Backstory: London-headquartered utility-scale energy storage developer KX Power’s projects include the fully operational 35MW Mannington battery storage system near Swindon. Meanwhile, a 80MW system in Immingham, North East Lincolnshire is expected to begin operation later this year - in addition, a 95MW scheme in Scunthorpe is scheduled to be up and running in Q3 2024. KX is showing considerable promise and, last June, BlackRock decided to bet big on the company by investing £200 million to support the build-out of up to 2GWh of battery storage assets in the UK.
What to look out for: Following the BlackRock deal, hopes are high at KX Power and there is an expectation that the company will now become a “significant player” in the UK storage market, as well as making its mark in overseas territories. The pressure is now on KX to deliver on its objectives
7. Malta Inc
Led by: Ramya Swaminathan, CEO
Backstory: Last week it was announced that the Orlando Utilities Commission (OUC) – the second largest municipal utility in Florida and provider of electric and water services to around 400,000 accounts in Orlando – is to explore deployment of Malta Inc.’s long-duration energy storage power plant. Malta’s storage solution converts excess electricity into thermal energy that is stored in salt and coolant. Its utility-scale 100MW-plus system provides more hours of energy storage than lithium-ion batteries, the company claims. OUC could potentially pair Malta’s energy storage system with the commission’s growing investment in solar. The OUC announcement followed confirmation last June that commodity trading house Trafigura Group had invested in Malta. Meanwhile, last year also saw the announcement that Malta Iberia, a European affiliate of Malta Inc, has been granted an Innovation Fund Project Development Assistance Agreement by the European Commission and the European Investment Bank to pursue a 100MW energy storage facility in Spain. The company’s CEO Ramya Swaminathan – who led the spin-out of Malta from X, Alphabet’s ‘Moonshot Factory’ (formerly Google X) – is seen as one of the storage industry’s most innovative figures.
What to look out for: Long-duration storage is still looking for a major breakthrough, can Malta Inc play a key role in leading the charge not only in the US, but also potentially in Europe?
8. Arlington Energy
Led by: Matthew Clare, CEO
Backstory: London-based Arlington Energy has developed more than 170MW of storage assets in the last two years, a track record that was enough to convince major United Arab Emirates renewable energy company Masdar to acquire the company in October last year. At the time of the deal, Masdar said that, in parallel to the Arlington acquisition, it would be increasing its investment in offshore wind projects in new and existing markets, including the UK. Youthful CEO Matthew Clare (who is still only in his early 30s) has developed a reputation as a prodigious fundraiser.
What to look out for: With Masdar’s backing, Arlington now has lofty ambitions and has said it will now become the “leading platform for energy storage”. Fighting talk, but will the words be backed up with actions?
9. Sunamp
Led by: Andrew Bissell, CEO
Backstory: Sunamp designs and manufactures thermal battery systems for commercial buildings, homes and vehicles. The Scottish company was given a boost at the end of November last year when the UK Government’s Department for Business, Energy and Industrial Strategy awarded it £9.25 million to develop and trial its advanced thermal storage system across the UK. Sunamp has been recognised as being one of the UK’s fastest-growing and most resilient environmental technology companies.
What to look out for: Sunamp has made a solid start and has laid the foundations for success, the question now is can it upscale and progress to the next level?
10. RheEnergise
Led by: Stephen Crosher, CEO
Backstory: RheEnergise has developed a pumped energy storage system that uses ‘High Density Hydro’, a fluid with 2.5 times the density of water, meaning that it can be installed on small hills instead of mountains. It's a proposition that has caught the public’s, and the media’s, attention. Now, like the aforementioned Sunamp, RheEnergise is being backed by the UK government - the Department for Business, Energy and Industrial Strategy awarded the company £8.24 million to build a demonstrator project near Plymouth.
What to look out for: With lithium supplies uncertain, there is a great need to develop energy storage technologies that will act as a viable alternative to lithium-ion batteries. Has RheEnergise come up with a solution that makes sufficient commercial sense to be widely adopted?
IMAGE (clockwise from top left): Geoff Brown (Powin); Ramya Swaminathan (Malta Inc); Claudio Spadacini (Energy Dome); Andrew Bowman (Jupiter Power); Mark Simon (Eelpower); Dr. Zhe Zhang (KX Power); Andrew Bissell (Sunamp); Stephen Crosher (RheEnergise); Matthew Clare (Arlington Energy); Andrew Foukal (East Point Energy)
It was an exciting December in US offshore wind, but the sector's eyes are on affordability amid an ongoing PPA row. Plus, wind's big news.
December is always busy for US offshore wind, and last month was no exception.
On 7th December, the US Bureau of Ocean Energy Management revealed the winners of leases for five sites off the California coast, for which it gained winning bids of $757.1m. The winners were Copenhagen Infrastructure Partners, Equinor, Invenergy, Ocean Winds and RWE. US Secretary of the Interior Deb Haaland said this was “proof that industry momentum… is undeniable”.
BOEM also last month published draft environmental impact assessments for the 2.6GW Coastal Virginia, 2.6GW New England Wind (which is made up of the Park City Wind and Commonwealth Wind) and up-to-1GW Sunrise Wind projects, which is a key step for each to gain federal consent. It did likewise for the up-to-2GW Empire Wind in November. This is a far cry from the delays of 2019 and 2020.
Finally, the 2.6GW Coastal Virginia project won final regulatory consent last month, despite concerns about the cost of the project. This is important for the US offshore industry given the uncertainty around Dominion Energy’s scheme for much of 2022.
Yet while these are good stories, we cannot ignore the high-profile debate about the viability of two US offshore wind projects that keeps dominating headlines. The US offshore wind sector would be wise to adapt the business adage: tenders are vanity, regulatory approvals are sanity, but financial closes are king.
In other words, big leasing auctions are vital and it is important that projects win the support of regulators. But we will only see steel in US water if projects can achieve financial close. This question is dogging Commonwealth Wind and Mayflower Wind.
The 1.2GW Commonwealth project is being developed by Avangrid, and the 1.2GW Mayflower is being developed by Ocean Winds and Shell. These companies argue their projects are no longer viable under the terms of power purchase agreements they won from Massachusetts between 2019 and 2021. This is due to the impact of high inflation, surging interest rates and increase supply chain concerns in 2022.
Avangrid last month sought the cancellation of the Commonwealth PPA to re-submit the project in the next Massachusetts offshore wind solication, due in April. Ocean Winds and Shell did not go that far, but called for a “meaningful discussion” before they could decide on the future of Mayflower.
The saga took another turn last week when Massachusetts regulators ignored these concerns and approved the 20-year PPAs for both projects. Essentially, this means the regulators have concluded that the projects are financially viable in a reasonable timeframe. Avangrid said it is “disappointed” and is “assessing its legal options” in a statement that it shared with A Word About Wind last week.
Craig Gilvarg, spokesman at Avangrid, said the PPA would not enable it to secure the “significant financing needed to construction this critical project”.
We can see why Massachusetts would not want Commonwealth Wind to get its PPA scrapped so it can re-bid. It risks setting a precedent that developers would regularly seek to ditch PPAs in search of better deals. Nevertheless, the 2022 energy crisis is arguably an unprecedented ‘force majeure’ event that could not have been expected when the deal was signed; and Massachusetts may decide that its need to support the growth of offshore wind will trump these concerns.
The bigger point is this shows how the global economy is a challenge for the next generation of US offshore wind projects. Investors and developers in California were clearly confident enough that US offshore wind has an exciting future, as they were willing to bid large even with economic headwinds. But we expect anxiety too if the developers of Commonwealth and Mayflower cannot achieve financial viability.
This is still a new sector: the first commercial-scale offshore wind farm in US waters, the 800MW Vineyard Wind 1, is due to complete this year, but firms throughout the value chain want to know there is a steady project pipeline before investing.
We are still optimistic about US offshore wind. We are no longer in the mid-2010s, when one high-profile failure could set back the sector by years. But the result of this PPA spat will show how fast US offshore wind can accelerate in an ever-changing energy market.
Norway’s Blastr Green Steel has teamed up with Fortum to develop a green steel plant in Finland powered by hydrogen produced using renewables. Blastr said green steel is set to be a critical raw material for renewable technologies including wind turbines. Read more.
Energy giants Equinor and RWE have signed a memorandum of understanding to develop large-scale value chains for low-carbon hydrogen. The collaboration is intended to strengthen energy security between the two countries and within Europe. Read more.
Norwegian utility Statkraft and electrolyser manufacturer Nel have signed a contract for the delivery of 40MW of electrolyser equipment. The deal reflects Statkraft’s ambition to scale hydrogen production in Norway from its wind and hydro assets and establish a supporting supply chain. Read more.
India plans to deploy 125GW of new renewable energy by 2030 in order to meet its green hydrogen ambitions. The government has identified suitable regions for hydrogen hubs and hopes to produce five million tonnes of hydrogen annually. Read more.
Norwegian engineering firm H2Carrier and Greenland's Anori A/S have teamed up to develop a 1.5GW wind farm in Greenland, with green hydrogen and ammonia production. H2Carrier is developing a floating vessel to produce, store and export green ammonia, which it then intends to export. Read more.
What’s going to happen in green hydrogen in 2023?
What’s going to happen in green hydrogen in 2023?
This is the question we have been asked more than any other around our series of members-only Leadership Council meetings – and thankfully, due to our completely-trustworthy Tamarindo crystal ball, we have some accurate answers. Hopefully.
Here are five predictions for what we expect to happen in the green hydrogen and power-to-X sector in 2023. We’ll look back later in the year to see how we did.
Do you agree? What would you add or change? We’d love to hear.
More and more renewable energy developers are waking up to the need for storage, but many are still developing projects that let investors down by failing to fulfil their true potential.
Two weeks ago it was announced that Origis Energy, one of America’s largest solar and energy storage developers, had contracted Mitsubishi Power Americas to provide three utility-scale battery energy storage systems (BESS) that would be co-located with three photovoltaic solar facilities in the Southeast United States.
Why had Origis taken the step of acquiring the storage systems?
The explanation provided by Kenneth Kim, vice president, engineering & strategy planning at Origis Energy was simple. “By adding the BESS solution to these facilities, we increase the value of the asset,” he said.
It was a wise move by Origis. Any investment in a solar project that does not have a storage component should be given careful consideration because the lack of storage means that the asset’s value has not been maximised.
More and more renewable energy developers are waking up to the need for storage, but many are still developing projects that let investors down by failing to fulfil their true potential due to a lack of storage.
How exactly does energy storage enhance the value of solar assets? The addition of a storage system can mean increased energy production, greater end-user savings and also play a key role in helping to meet environmental, social, and governance (ESG) goals by lowering greenhouse gas emissions.
Meanwhile, standalone solar projects in major commercial and industrial solar markets have become less effective at reducing customer bills.
As NYSE-listed energy storage optimisation software provider Stem has highlighted, in the “top three markets for C&I solar”, namely California, New Jersey, and New York, peak demand charges have grown annually over a five-year period while energy charges have mostly remained flat. The problem is that, while solar reduces overall energy charges, such charges are flat to declining and therefore they are a decreasing portion of customer bills. Solar is not effective at reducing demand charges and therefore energy storage is needed to address this growing component of customer bills.
Meanwhile, a lot of US states are altering their Net Energy Metering (NEM) policies with the result that the value of exported solar generation is reduced. For example, last month the California Public Utilities Commission revised its net energy metering (NEM) programme with the result that solar owners will earn around 75 per cent less for the excess electricity they push onto the grid.
Therefore, adding storage to solar assets can help to maintain their value by storing extra solar generation, that would have otherwise been exported, and discharging it during times when energy is more valuable than the NEM compensation rate.
Linking solar with storage also increases the return on investment for projects. This is because, as the World Economic Forum has highlighted, part of the capital outlay required is reduced because “fewer panels [are] required for the same revenue”. In addition, solar coupled with storage unlocks new revenue streams – for example, it presents a “buy-low/sell-high” energy opportunity for businesses.
Solar combined with storage also enhances energy security. Solar power can be generated anywhere – and more efficiently so when paired with storage – so there is less of a reliance on energy imported from other countries, some of which may be less reliable than others. For example, Russia’s invasion of Ukraine disrupted energy supplies and thus drove up prices.
Yes, there are barriers to the wider adoption of solar-plus-storage. One of the biggest is know-how, for example ensuring that the optimal design is used, regulatory risk is taken into consideration and making sure such projects are properly managed.
However, with the right approach – and the right technology – these obstacles are not insurmountable. An investment in solar coupled with storage represents a sounder strategy than investing in standalone solar as the addition of storage means you can be sure that returns will be maximised due to new revenue streams being created.
Inflation, oil prices, power-to-X, repowering and more. We look ahead to the stories that will shape wind in 2023, and round up key news.
Every year, we use the first edition of A Word About Wind to make ten predictions about what we expect to happen in the year ahead; and, in the final edition of the year, we will look back to see what we got right and wrong. Make sense? Good.
Let’s get cracking with our ten predictions for wind in 2023:
Do you agree? What would you add? We’d love to hear.