The value that led Enel to buy Demand Energy

 

Demand Energy's installations are impressive... but it's the invisible software controlling them that is the real attraction. Pic: Demand Energy.

Demand Energy’s installations are impressive… but it’s the invisible software controlling them that is the real attraction. Pic: Demand Energy.

By Jason Deign

Enel’s buyout of US project developer Demand Energy last week was largely down to a secret ingredient that has been cooking for several years.

While Washington State-based Demand Energy has a decent portfolio of projects in New York and closed last year with a microgrid deal in Costa Rica, the real lure for Enel is understood to have been its software platform, DEN.OS.

DEN.OS, which stands for ‘Distributed Energy Network Optimization System’, is a cloud-based platform for integrating energy storage and distributed generation that Demand Energy has perfected over the last eight years.

A critical early challenge facing the company was how to adapt its software to work in New York, a market characterised by longer-duration storage applications.

The market was of interest because the state’s Reforming the Energy Vision plan was creating new opportunities for storage to complement distributed generation in reducing demand, shifting load and adding resiliency. 

Cloud-based storage aggregation

This led Demand Energy to create one of the first cloud-based storage aggregation systems that could operate flexibly and stack value streams on a single asset.

A further benefit of the system is that it can automatically learn how to deal with any billing scheme or battery profile, greatly reducing setup and rollout costs and timescales.

In New York, the value of this approach has paid off with a number of projects that can adapt to changing market dynamics and rate structures, and deliver benefits for asset owners via systems with more than four hours of storage.

Last month, for example, Demand Energy announced that it won a deal to design and deliver a lithium-ion battery system as part of the first microgrid to be deployed under Con Edison’s Brooklyn-Queens Neighborhood Program.

The multi- resource microgrid will be implemented at the 625-unit Marcus Garvey Apartments in Brooklyn, owned by L+M Development Partners, a large owner/developer of affordable housing. 

Optimising how resources interact

The microgrid comprises a 400kW solar PV system and 400kW fuel cell, supported by a 300kW, 1.2GWh lithium-ion battery system and controlled by DEN.OS, which optimises how these resources interact and perform.

The setup demonstrates how Demand Energy, via DEN.OS, is able to integrate and support complex systems with a wide array of hardware assets.

But the flexibility of DEN.OS has also been demonstrated through its deployment in very different energy markets, such as Costa Rica.

There the developer teamed up with Latin America microgrid pioneer Rio Grande Renewables to commission a battery storage-plus-solar-PV microgrid at Establishment Labs, a Costa Rican medical manufacturing plant.

The microgrid is said to be the largest in Central America and includes a 500kW, 1MWh lithium-ion battery connected to 276kW of solar PV.

On-site and grid assisting services

The system is designed to provide multiple on-site and grid-assisting services, including peak demand reduction, solar variability smoothing and backup power for critical loads in the event of an outage.

The value of DEN.OS to Enel is clear from the language used in the press release announcing the acquisition last Wednesday.

Enel referred to Demand Energy as “an intelligent control software provider, project developer and operator specialising in battery storage optimisation.”

It appears that Demand Energy’s ability to tackle complicated projects with a sophisticated software platform was a core selling point for Enel.

What is clear is that the kinds of projects being handled by Demand Energy, with detailed modelling and business case development, and the integration of multiple components, were different from those being seen elsewhere. 

Expanding the use of DEN.OS

Following the purchase, “Enel will work with Demand Energy to expand the use of the company’s DEN.OS energy management software, which enables real-time optimisation of storage systems,” it said.

“Through this transaction we will be able to greatly strengthen our position in the growing battery storage market with a complementary partner and innovator,” said Francesco Venturini, Enel’s head of global renewable energies.

“By combining our global presence and expertise in systems integration with Demand Energy’s software and established product offering, we will expand the development of renewables and storage both in the US and globally,” he said.

Demand Energy, which has carried out 24 projects since its creation, totalling 3MW/9MWh of installed capacity in the US and Latin America, was bought through Enel’s Enel Green Power North America renewable energy subsidiary.

The purchase confirms the growing importance of software for energy storage systems and follows a spree of US start-up buyouts and investments by major European power companies. 

Acquisition by Enel

“Our acquisition by Enel underscores the strategic intersection of renewable energy production, energy storage and an intelligent software controls platform,” said Gregg Patterson, Demand Energy’s president and CEO.

“Our DEN.OS energy management system, based on patent-pending controls and economic optimisation technology, facilitates the design, integration and operation of energy assets and services on both sides of the utility meter.

“We’re very pleased to become part of Enel, which will lead to expanded product and service offerings and global market opportunities.”

Our most-read stories of 2016

Last year's hottest stories in Energy Storage Report. Pics: Electro Power Systems, Aquion, Kreisel, Capacitor Sciences, SunPower and  Concept by US.

Last year’s hottest stories in Energy Storage Report. Pics: Electro Power Systems, Aquion, Kreisel, Capacitor Sciences, SunPower and Concept by US.

By Jason Deign

The year 2016 will probably be remembered as the point at which energy storage began to take off in earnest.

Projects came thick and fast as interest in storage extended quickly beyond early hotspots such as California and Germany.

We saw grid-scale storage playing a starring role in the UK’s frequency response market, while battery makers jostled for position in an increasingly buoyant Australian consumer market. And that was just a couple of examples.

Almost every major energy market in Asia, Europe and North America had a storage story to tell. But which were the ones that caught your eye? Here’s a rundown of our most popular headlines from 2016. 

The year of energy storage software?

Around this time last year we asked whether 2016 would be the year of energy storage software.

It certainly looked that way after E.ON and American Electric Power invested in Greensmith, and AutoGrid Systems joined forces with hydrogen storage developer Electro Power Systems to build software-defined power plants.

“The last year has seen energy storage project developers increasingly moving away from connecting hardware and towards creating intelligent software that can control distributed batteries and other assets,” we reported.

A year on, there’s no doubt that storage systems rely more heavily on software capabilities than ever. What has changed, perhaps, is that software is no longer a valuable add-on to storage. Instead, it’s become an essential component. 

Aquion cuts cost reduction target

Saltwater battery maker Aquion Energy is frequently cited as one of energy storage’s ‘ones to watch’.

And it certainly proved worthy of attention in October, when it revealed a cut in projected costs that was pretty remarkable even by our industry’s hyperbole-laden standards.

“The company now hopes to halve the cost of its products in as little as 48 months, instead of the decade it had estimated in June this year,” we noted.

The cut could take the price of Aquion batteries down to about USD$200 per kWh. With no rare earth elements or heavy metals in its manufacturing, Aquion remains a favoured challenger to lithium-ion products in the battery market.

Kreisel puts Tesla through its paces

For all Aquion’s promise, lithium-ion is still the firm favourite for dominance in the battery market. And the technology isn’t standing still, as Austrian manufacturer Kreisel Electric proved in June.

Similar to Aquion, Kreisel is targeting a price point in the €200 ($210) per kWh range once it achieves volume production of around 1,000 of its Mavero batteries a year.

The company also claimed a number of advantages over battery-maker-to-beat Tesla, such as 300kW charge and discharging and balance-free cells yielding a capacity of up to 95%.

When discharging, “we can suck out 15% more than Tesla, from the same cell, due to the [lower] inner resistance,” said Christian Schlögl, head of business development at Kreisel. 

Another company to beat Tesla

Tesla was definitely the company to everyone wanted to topple last year.

And claiming to do even better on costs than not just Tesla, but also upstarts such as Aquion and Kreisel, was Capacitor Sciences, a California start-up that reckoned it could get storage costs down to $100 per kWh.

The Menlo Park firm is hoping to use nano-structured crystalline thin films as the dielectric material for capacitors with up to 10 times the energy density and 100 times the power density of lithium-ion batteries.

The catch is that other capacitor makers, such as EEStor, have failed to make a go of the technology. Capacitor Sciences thinks it may have struck gold by using organic materials, but we’re still waiting to see the proof. 

Distributed storage is going to take over

September saw a clutch of analyst reports that, by our reckoning, added up to the most significant finding to emerge from the energy storage market in the whole of 2016.

Bloomberg New Energy Finance’s Global Energy Storage Forecast was akin to most other energy storage reports in predicting massive growth for the industry.

But what caught our eye was a forecast trend towards distributed storage, with behind-the-meter applications scheduled to overtake utility-scale projects between 2020 and 2021.

Shortly before, another Bloomberg New Energy Finance report hinted at large price reductions to come from second-life electric vehicle battery sales, within a similar timeframe.

If correct, the predictions add up to a massive influx of low-cost lithium-ion batteries leading an irresistible rise in domestic, commercial and industrial-scale storage systems.

Start-up claims first integrated system

Perhaps surprisingly, given all the high-profile announcements that went out last year, our top headline concerned a company almost nobody has heard of: Concept by US.

In April the Florida, USA-based start-up came out with what it claimed was the industry’s first truly plug-and-play system for residential solar energy storage: in other words, the first to come with an integrated inverter.

Throwing an inverter into the pack no doubt gave Concept by US a brief lead in the market.

But as we observed: “It remains to be seen how this concept will stack up against companies that are already moving towards all-in-one solar-plus-storage packages for residential customers.”

The rise of electric vehicles: what can it lead to?

GUEST POST by Rhys Walker, cost estimator, Glenmore Investments

According to the latest predictions, the cost for electric vehicles is likely to be the same as of their internal-combustion counterparts by 2022, while by 2040 this price is predicted to become even lower.

Skeptics would say that predictions should not be taken too seriously as they are always to some extent based on merely subjective opinions. This is absolutely right, just like is the fact that electric car sales continue to increase.

Statistics say that global sales increased by approximately 80% in 2015 compared to 2014, from 315,519 to 565,668, while by the end of 2016 the number of electric cars on the world’s roads is expected to exceed 2 million.

By 2040, for instance, electric vehicles would account for 35% of all new vehicle sales. What this implies is that even if some years or numbers in such sort of predictions may be inaccurate, the tendency of sales growth is definitely strong and cannot be doubted.

What economic impact may it have? One of the most obvious consequences of the rise of electric cars is that oil demand and therefore price may noticeably drop in a certain amount of time.

What is more, this tendency may become indeed devastating in the longer term. In order to understand what it means it is necessary to take into consideration the role of oil in global economy.

This is definitely one of today’s most important raw materials, while most countries are significantly affected by changes in the oil market, no matter whether they producers, customers, or both.

What it means is that in case the oil price drops, oil-rich countries and billionaire oil barons will suffer significant losses, while certain economies, particularly those of the European Unions (EU) and the US, will considerably benefit.

Looking at the EU, it was calculated that oil costs its members (including Great Britain) approximately €525 million in cash each day, which is about €200 billion per year and 1-1.5% of European gross domestic product.

Of course, it does not mean that Europeans will pay less even if they switch to electric transport – after all, they would need to pay for electricity.

At the same time, it should be take into account that electricity may be generated locally or regionally, which means that the consumers’ money could theoretically be spent on national or regional needs, enhancement of infrastructure, and various social issues.

For obvious reasons this is better than simply paying to Russia, Saudi Arabia, Nigeria, and other oil suppliers. When it comes to the US, the daily cost for imported oil is approximately $425 million, even despite the amount of oil it exports.

In total, this is about $155 billion a year and almost 1% of American GDP, which means that the situation resembles the one in Europe.

Apart from this, by the way, the US spends about $75 billion a year on the military to ensure access to foreign oil sources and keeps the supply routes open.

It should also be taken into account that overreliance on oil-based fuels is one of the main causes of air pollution, which, in turn, costs Organisation for Economic Co-operation and Development countries approximately $1 trillion a year in negative health effects.

Finally, car emissions greatly contribute to climate change and global warming, which may have catastrophic consequences for global economy.

Switching to electric transport, in turn, could become one of the steps to reduce spending and improve the environment. Finally, an interesting question is what would happen to some of world currencies if the price for oil once dropped.

Naturally, this would be a bad news for countries that heavily depend on oil exports. This, for instance, would substantially affect rouble as Russia currently produces approximately 12% of the world’s crude oil supply.

Canadian dollar is likely to weaken too as oil comprises 14% of all Canadian exports. The same situation is likely to happen to Norwegian krone as petroleum sector is this country’s most important industry.

Colombian peso and Brazilian real are likely to be affected too: 45% of all exports in Colombia depend on oil and gas products, while Brazil, even though this country is by far not one of world’s biggest oil suppliers, is likely to suffer losses because of the lack of economic diversity.

Changes in the value of the world’s currencies, in turn, open a variety of opportunities for business investors, beginning from venture capitalists to small-scale investors dealing with Forex or HF trading.

In such a way, the decrease in oil prices would definitely become a clear economic signal, which would be unwise to ignore. Of course, electric vehicles will not kill off oil demand in the nearest future.

Neither will they ever displace internal combustion engine cars completely. After all, electric vehicles have a series of disadvantages and may sometimes be quite impractical.

Their limited range and the need for frequent and especially unexpected charging often frightens away potential customers, even though many psychologists believe this is nothing more than a psychological barrier.

Another argument against electric cars is that their price is quite high at the moment. However, even in view of this, it would be unwise to assume that tomorrow’s electric cars would not become better and cheaper than today’s.

In such a way, it’s all about time. Don’t miss the moment!

Demand Energy ends year with Costa Rica deal

Demand Energy's battery systems will go towards helping Costa Rica maintain its pristine environment. Pic: Pixabay.

Demand Energy’s battery systems will go towards helping Costa Rica maintain its pristine environment. Pic: Pixabay.

By Jason Deign

Energy storage systems developer Demand Energy and Latin America microgrid pioneer Rio Grande Renewables this week announced a record-breaking project in Costa Rica.

The two companies have commissioned a battery storage-plus-solar-PV microgrid at Establishment Labs, a Costa Rican medical manufacturing plant, said Demand Energy in a press release.

The microgrid is said to be the largest in Central America and includes a 500kW, 1MWh lithium-ion battery connected to 276kW of solar PV.

The system is designed to provide multiple on-site and grid-assisting services, including peak demand reduction, solar variability smoothing and backup power for critical loads in the event of an outage.

It is controlled by Demand Energy’s Distributed Energy Network Operating System (DEN.OS™), which optimises how energy storage, distributed generation and other distributed energy resources interact and perform. 

Smoothly integrating intermittent solar

Under normal conditions, the system will smoothly integrate intermittent solar PV for on-site self-consumption. When an outage occurs, the microgrid will island itself off from the grid and continue operating in a standalone mode.

“Like most sensitive manufacturing and laboratory operations, the Establishment Labs facility must receive a continuous flow of quality power,” said Shane Johnson, vice president of operations for Demand Energy.

“This DEN.OS-controlled intelligent microgrid offers a rapid payback thanks to significant savings from peak power reduction, and it will deliver instantaneous back-up power to support clean-room operations when needed.”

This, in turn, will prevent Establishment Labs from suffering production losses during outages.

The system also eliminates the stranded costs of traditional diesel generators while offering a healthy return on investment through optimising renewable solar generation, according to Johnson. 

Renewable energy optimisation potential

The renewable energy optimisation potential is particularly relevant given Costa Rica’s goal to be the world’s first carbon-neutral country, in 2021, he said.

Establishment Labs’ chief operating officer, Salvador Dada, said: “We are committed to long-term environmental sustainability and green manufacturing, and value our partnership with Rio Grande Renewables and Demand Energy.

“They were instrumental in helping us finance and construct the first state-of-the-art storage-plus-solar PV microgrid in Costa Rica.

“This investment will not only provide critical back-up power capability, it will also make our manufacturing plant more energy efficient and help us obtain Carbon Neutral and LEED Gold certifications.”

Dada said Establishment Labs would “consider this type of technology in all our future plant designs.” 

Demand for microgrids set to grow

And Brian Schmidly, president of Rio Grande Renewables, said: “We expect to see demand for microgrids grow as customer awareness increases and the benefits are clearly demonstrated.

“We applaud Establishment Labs for taking a leadership position on environmentally responsible manufacturing and for being the first in the region to deploy this technology to help save money and compete internationally.”

The Costa Rica deal comes hot on the heels of another significant win for Demand Energy, which to date has been the most successful developer of behind-the-meter energy storage projects in New York State, USA.

Earlier this month Demand Energy said it would design and deliver a lithium-ion battery system as part of the first microgrid to be deployed under Con Edison’s Brooklyn-Queens Neighborhood Program (BQNP) in New York.

The multi-resource microgrid will be implemented at the 625-unit Marcus Garvey Apartments in Brooklyn, owned by L+M Development Partners, a large owner and developer of affordable housing. 

Battery arrays controlled by DEN.OS

The microgrid will be made up of a 400kW solar PV system and 400kW fuel cell, supported by a 300kW, 1.2MWh lithium-ion battery array controlled by DEN.OS.

The system will manage the generation and storage of renewable energy to save money through demand-charge reduction.

It will also provide resiliency during an outage, lower operational costs, deliver essential load relief for Con Edison and help reduce greenhouse gas emissions, Demand Energy said in a press note.

A key technical aspect of the project is the ability of Demand Energy’s DEN.OS to ensure that the housing development self-consumes any energy it generates, without exporting to the grid.

This capability is in line with Con Edison’s BQNP requirements, which facilitated the interconnection and permitting process. 

Needing load relief in peak summer periods

New York City needs electric load relief during peak summer periods to avoid over-taxing existing substation resources, which can lead to power interruptions and cutbacks.

L+M has made significant investment in Marcus Garvey Apartments, a 625-unit low-income complex in the heart of Brownsville, which is the primary substation strained by summer operations.

The operational savings will enable L+M to place additional funding toward programmes that enhance quality of life for tenants.

“L+M is excited to integrate this intelligently controlled, energy storage-based microgrid system at Marcus Garvey Apartments,” said Josh Weisstuch, project manager at L+M Development Partners.

“This installation is an important part of a portfolio-wide effort to use renewable energy to enhance property sustainability and residents’ quality of life in line with our double bottom line approach to development.”

“A flagship system for New York City”

Doug Staker, vice president of global sales for Demand Energy, called the project “a flagship system for New York City and for the partners involved.”

He said: “The project is impressive for many reasons: it will save money, reduce load, ensure reliability, integrate renewables and decrease emissions.

“It’s also being financed through non-recourse debt, which is standard in the solar industry but to our knowledge has not yet been utilised for energy storage projects.”

The New York City Energy Efficiency Corporation, a non-profit finance company that offers loans and alternative financing solutions for energy efficiency and clean energy projects, provided a 10-year project loan.

L+M and Demand Energy have agreed on a “shared savings” operating model to cover debt service and share in revenue generated, allowing both to collaborate to produce the greatest return possible.

Study unveils secrets of long-duration storage

About 30% of energy storage procurement decision makers interviewed for the ESS study Beyond Four Hours said long-duration storage was “very important” for their business already. Image: ESS.

About 30% of storage procurement decision makers interviewed for the ESS study Beyond Four Hours said long-duration storage was “very important” for their business already. Image: ESS.

By Jason Deign

More than half of upcoming energy storage projects could require assets with a discharge duration of around four hours or more, according to new research.

About 30% of energy storage procurement decision makers interviewed for the ESS study Beyond Four Hours said long-duration storage was “very important” for their business already.

Another 30% said they were currently considering long-duration storage projects, 20% said it would be important in future and 10% considered it as part of a broader portfolio. Only 10% said it was not applicable to their business.

The research, carried out among energy storage procurers and project developers in association with Energy Storage Report, revealed a wide range of definitions for what constitutes a ‘long-duration’ asset.

But six out of 10 respondents claimed a requirement of more than four hours, which is generally considered beyond the cost-effective range of lithium-ion batteries commonly used for shorter-duration electricity storage. 

Potential long-duration storage contenders

This points to an upcoming battle for supremacy among potential long-duration storage (LDS) technology contenders, as currently there is no established leader in this field.

Study respondents cited a number of very different technologies, including thermal, cryogenic, liquid air and compressed air energy storage, as being of interest for long-duration applications.

However, said the study, for electrical storage “flow battery systems are undoubtedly the technology most would consider using for LDS deployments at the moment.”

For long-duration discharge times, flow batteries can offer a better levelised cost of energy than lithium-ion chemistries because of the number of megawatt hours and frequent cycling required, notes the research.

“A flow battery does not fade [in capacity or efficiency] with frequent cycling and over time, so it offers a highly competitive price per MWh in four-hour-plus applications,” it says. 

Advantages of the technology

Other advantages of the technology include low operations and maintenance costs and fast response times, allowing a single battery to be used for energy and power applications.

Also, flow battery variants that do not use exotic or toxic materials, such as the all-iron chemistry commercialised by ESS, have the potential for very significant long-term cost reduction and are environmentally benign, says the report.

Ultimately, cost reduction could be a crucial factor in deciding long-duration storage winners since, as with short-duration applications, economics are the most important deciding factor for project owners and developers.

With long-duration storage, capital cost emerged as the most important single procurement criterion. “This is understandable since availability of capital can be a limiting factor for energy storage projects,” the report notes.

Alongside capital cost, energy storage procurers valued the financial strength of the vendor. Other criteria that were found to have significant impacts on decision making included:

  • The safety of the technology.
  • The levelised cost of storage in specific applications.
  • An asset’s ability to be used flexibly and to provide short-duration storage.
  • Its energy density or footprint.
  • Its loss of capacity or power over the project’s life. 

Keen to evaluate long-duration storage

Overall, survey respondents seemed keen to evaluate long-duration storage on a range of measures.

“A critical question when evaluating any storage technology is not just ‘how much does it cost?’ but also ‘what value can it deliver?’” said one.

The research comes amid growing interest in new storage applications that extend beyond the classic short-term ancillary services use cases that have proved most profitable for grid-scale battery systems until now.

As the study points out, island communities, mining operations and community-scale micro-grids are increasingly looking to self-consume renewable energy on an almost continuous basis.

In most cases this can only be achieved with long-duration storage or a complex combination of intermittent renewables with non-intermittent sources such as mini-hydro or biogas. 

Requirement likely to grow

Furthermore, the requirement for long-duration storage is likely to grow in established energy markets as the penetration of intermittent renewable generation grows.

Bloomberg New Energy Finance’s Global Energy Storage Forecast, 2016-24, for example, predicts that by 2024 renewable energy will have reached 29% grid penetration in Germany to 39% in California.

Writing in the Foreword to the report, Michael Niggli, current ESS board member and former president and chief operating officer of San Diego Gas & Electric, says: “We’re still just scratching the surface.

“Our battery arrays today can help us for seconds, minutes, maybe a couple of hours. But what will happen as our renewable penetration grows and our fossil-fuel plants close down?

“The current duration levels of storage will no longer do. That is why I think we need to start looking at the next frontier for electricity storage: that which can take us to at least four hours and beyond.”

Finland sees growing role for energy storage

The largest battery system so far in the Nordics will be helping to stabilise the electricity supply in Helsinki, Finland.  Pic: Pixabay.

The largest battery system so far in the Nordics will be helping to stabilise the electricity supply in Helsinki, Finland. Pic: Pixabay.

By Jason Deign

Finland’s nascent grid-scale battery market is set to expand rapidly in the coming years, according to Landis+Gyr’s Northern Europe CEO Ari Tolonen.

He told Energy Storage Report his company was pursuing four other energy storage projects in Finland after completing the largest battery plant in the Nordic countries earlier this year.

Up to 4MW of battery storage could be installed across the country “very soon,” he said. “I believe we will see three or four cases a year. I expect to see this kind of system everywhere.”

In August, Landis+Gyr commissioned a 1.2MW, 600kWh battery system for Helen Electricity, a distribution system operator covering the Helsinki area of Finland.

The €2m Helen storage facility was built alongside Finland’s largest solar plant, a 340kW array in Suvilahti, and will also serve an 850kW PV project being built at nearby Kivikko.   

Made in Italy by Toshiba

The battery system is being used for frequency response and other ancillary services, and contains 560 SCiB lithium titanium oxide modules made in Italy by the Japanese technology giant Toshiba, which owns 60% of Landis+Gyr.

Tolonen said the battery technology was compact, capable of 12,000 cycles and “operates in low temperatures, which is important in Finland.”

He did not provide details of upcoming projects, although it is understood Finland is likely to need increasing levels of storage to deal with renewable energy build-outs.

Finland has a strong industrial base, which is leading to increasing demand for energy, said Tolonen. “It’s double the amount of energy consumed per person in Denmark, and we have roughly the same population,” he said

At the same time, Finland is planning to become the first country in the world to completely phase out coal, by 2030. 

Electricity from non-carbon sources

That should not be a problem, in theory, since the country already gets much of its electricity from non-carbon sources. In 2015, Finland’s nuclear fleet, which comprises four reactors, supplied around 27% of total electricity demand.

A further 25% came from combined heat and power plants, and 20% each came from hydro and energy imports, the latter mostly via the Nord Pool Nordic electricity market.

In 2005, Finland placed a big bet on nuclear to take care of its future energy needs. The power company Teollisuuden Voima (TVO) ordered a 1.6GW reactor from Areva and Siemens, with operation slated to commence in 2009.

The deal has since turned into one of the biggest commercial botches in nuclear energy history, with sole remaining contractor Areva locked in arbitration with TVO and commissioning not likely until 2018 at the earliest.

With Areva planning to sell its nuclear engineering arm to EDF, and problems emerging with similar reactor models elsewhere, Finnish policymakers are likely shifting their gaze to alternative energy sources for Finland’s future needs. 

Wind offers the best hope

Currently wind, which receives government support, offers the best hope to increase carbon-free generation capacity cost effectively.

According to the Global Wind Energy Council, in 2015 Finland added 380MW of wind capacity to its system, bringing its total to just over a gigawatt, or around 3% of total electricity needs.

But by May 2014, 11GW of wind projects had already been announced in Finland, along with 2.2GW of offshore plants.

Solar power currently makes an almost negligible contribution to the energy system, but its use is also expected to grow, particularly at community level.

This increasing level of intermittent generation is expected to increase Finnish interest in energy storage for tasks such as frequency regulation and load shifting. 

An entirely new energy system

In 2014, Finland launched an initiative called Neo-Carbon Energy to create “an entirely new energy system based on solar and wind alongside other renewables such as hydro power, geothermal and sustainable biomass.”

The project was vaunted as targeting storage although it is unclear what specific measures have so far been achieved on this front.

Meanwhile the Finnish energy company Fortum earlier this year announced a storage project that would trump the Helen Electricity plant as the biggest battery system in the Nordics.

“For the project, Saft’s Li-ion containerised battery system with a nominal output of 2MW and 1MWh of energy capacity will be installed at Fortum’s Suomenoja power plant in Finland,” said the company in a press release in April.

The battery system was due to enter operation in September although no further news has been issued on the project. Even so, it seems further word of Finnish energy storage projects will not be long in coming.

Also in this week’s newsletter headlines: Apple, Tesla, EEStor and more. Get your free copy now.

Skeleton’s crew expands with German focus

Skeleton pitched to investors at The Business Booster in Barcelona (pic: InnoEnergy).

Skeleton pitched to investors at The Business Booster in Barcelona (pic: InnoEnergy).

By Jason Deign

Skeleton Technologies is expanding its top team and contemplating further cash injections as its sets its sights on a precious German market.

The Estonian ultracapacitor maker, which has so far raised €26.7m in funding, is looking for a vice president of global sales as it expands manufacturing into Germany, which is expected to account for a fifth of its global market.

The company was also showing off to potential investors and customers at a showcase event called The Business Booster (TBB), in Barcelona, Spain, last Thursday.

Having closed its round C funding, for €13m, this summer, programme director Egert Valmra appealed to TBB’s audience for a round D injection in support of UCGEN3, a ‘next-generation’ ultracapacitor programme led by Skeleton.

In the meantime, however, Skeleton is focusing attention on scaling up production in Estonia and building a presence in Germany, where it opened a factory this year. 

Assembling complete systems

In the last 12 months, Skeleton has gone from making ultracapacitor cells to assembling complete systems for applications such as uninterruptible power supplies or kinetic energy recovery systems (KERS).

“Scaling up our manufacturing capabilities and moving up the value chain have been our two guiding themes,” said Oliver Ahlberg, co-founder and chief operating officer.

“We’ve finalised our scale-up here in Viimsi, Estonia, which was a huge milestone for us,” he said.

“We’re now able to offer mass-scale cylindrical ultracapacitors that still have market-beating performance: four times higher power density, 60% higher energy density than competitors.”

Skeleton’s €3.5m Estonian factory is designed to produce around half a million cells a year and is “a month or two” off being able to operate at that scale, Ahlberg told Energy Storage Report. 

Current levels of production

He would not divulge current levels of production. The company is also finalising scale-up of its manufacturing capacity in Großröhrsdorf, eastern Germany.

The factory there, which could produce up to 2m 750-farad cells per year, is slated to come online in February. The German plant will focus on final assembly and quality control.

“Germany is currently a large part of the global market,” said Ahlberg. “It’s predicted to achieve about 20% [of total global ultracapacitor demand] and there aren’t any local producers in Germany… or Europe as a whole.

“We see the European market, and the German market in particular, as our home market. We’re just moving closer to our customers with this German plant.”

The vice president of global sales, along with a regional sales manager for Germany, Austria and Switzerland, will lead efforts to tap into opportunities within Europe’s ultracapacitor-hungry industrial and energy sectors. 

Utility market and industrial players

Skeleton’s sales are presently split between the utility market, for ancillary services, and industrial players, for applications such as KERS, where Skeleton works alongside Adgero, a French motor technology firm.

Other notable customers include the European Space Agency, which is expecting to put a Skeleton ultracapacitor into space in 2018, and Flying Whales, a French startup developing a new generation of blimps.

As production ramps up, though, Skeleton is expecting to reach new customer groups.

A big opportunity is in the automotive sector, where there is growing interest in using ultracapacitors either with internal combustion engines or lithium-ion batteries.

“We have a number of projects where our customers are considering going down the hybrid route or just ultracaps,” said Ahlberg. “We’re happy to work with the new ideas out there, and that’s something that sets us apart.”

Short burst of energy

Currently, many work vehicles, such as diggers or forklifts, have oversized engines to deal with situations where a short burst of energy is needed.

Ultracapacitors could take over these jobs and allow manufacturers to reduce the size of a traditional engine, for example from 14 litres down to 8 litres, said Ahlberg.

Increased production will help further reduce costs, which Ahlberg said are already around the average for the ultracapacitor market.

“We’re able to compete on costs but we think our value lies at delivering more of a high-performance product at a comparable cost level,” he said. “We’re able to get better performance out of the cells.”

Skeleton’s 160V and 170V modules are also the market’s first water-cooled off-the-shelf products, he said.

Could you help lead Skeleton’s sales efforts? If so, speak to Hyperion Executive Search now.

Why you should aim for an open business model

Delegates at next year's Energy Storage Europe Conference will hear a plea for open business models (Pic: Energy Storage Europe 2016).

Delegates at next year’s Energy Storage Europe Conference will hear a plea for open business models (Pic: Energy Storage Europe 2016).

Energy storage developers and asset owners should aim to be technologically neutral to make the most of global markets, experts will hear next year.

Florian Mayr, partner and storage expert of management consultancy Apricum, is due to make the case for technologically open business models at the Energy Storage Europe Conference 2017 in Düsseldorf, Germany.

These models can benefit most from the growth of international storage markets as flexibility becomes a key factor for success in the industry, he claims.

“Today storage markets are still comparatively small and characterised by individual, often geographically determined application cases,” he said. 

Changing markets

“They are subject to strong change and are dependent on the challenges and regulatory conditions in [each] country.”

At the same time, however, Mayr said storage is rarely being deployed at present in situations where there is no alternative.

Instead storage projects often compete with other ways of carrying out the same energy management tasks.

These tasks include grid expansion, where there is limited cable capacity, or the supply of control energy, which until recently has taken place mainly by means of fossil-fuel power plants.

Because of this, Mayr believes that while energy storage faces major opportunities its commercialisation also contains numerous uncertainties for current players. 

Currently competitive application cases

These players “need to ask themselves which of the currently competitive application cases will still exist in future, and which new ones will arise,” he said.

“There is also the question regarding with which business models one’s own company can best participate in the projected growth.”

On this basis, according to Mayr, it is not necessarily the optimal command of a certain storage technology that opens up the best market access, but rather flexibility.

“Those able to adapt quickly to many new applications cases and customers, and use suitable technologies in each case, make themselves as independent as possible from the uncertainties in a market that is still very dynamic,” he said.

“And at the same time, they can gain the best benefit from new opportunities.” 

More than 240 lectures

Mayr’s plea for open business models will be one of more than 240 lectures in the combined 6th Energy Storage Conference (ESE) and 11th International Renewable Energy Storage Conference (IRES) 2016 programmes.

The number of speakers makes Energy Storage Europe 2017 the trade fair with the world’s largest conference programme on energy storage.

The programmes will focus on economy and finance within ESE and science and social politics within IRES. Full programme details and reduced-price early tickets are being released this week on www.energy-storage-online.com.

Around 180 exhibitors are expected at the accompanying Energy Storage Europe Expo.

Two side events, the 6th OTTI-Conference Power2Gas and the 11th Storage Day, will take place in parallel at the exhibition grounds in Düsseldorf.

The international Energy Storage network is growing

Compared to the previous year, Energy Storage Europe 2016 grew approximately 60%, to more than 3,000 visitors from 54 countries. Around 140 exhibitors presented. For 2017, a further growth of more than 25% is expected.

Approximately 3,900 visitors from more than 50 countries are expected to come to IRES 2016, the ESE and the Energy Storage Europe Expo in Düsseldorf.

The international network of the Energy Storage conferences and exhibitions, of which Energy Storage Europe is a part, also grew again last year.

The overall number of visitors of Energy Storage China, Energy Storage North America, Energy Storage Japan and Energy Storage India increased by 55%.