INDUSTRY I ANALYSIS
representing 90 percent of new capacity additions in 2011. By contrast, coal’s contribution to new capacity in Europe was just five percent. Globally in 2011, investments in clean-energy projects reached an all-time record of $260 billion, according to Bloomberg New Energy Finance.
But the industry at large, and the nations pursuing cleaner electrons, will need significantly more funding in the coming decade to reach established deployment targets. This build out will require new and innovative financing tools. We believe the development of new tools that have worked in the past for fossil- fuel infrastructure and real estate will work for renewable energy and will level the playing field by making such tools available for renewables. In the U.S. such vehicles as master limited partnerships (MLPs) and real-estate investment trusts (REITs) offer up two of the best examples. Relatively simple tax code changes could enable renewables and efficiency measures to leverage the same tools that have enabled the aggressive expansion of oil and gas exploration development in the U.S.
The next few years, we believe, will be clearly defined by those nations that provide the infrastructure for the deployment of innovative and effective financing tools. Just like Google and Warren Buffett, retail investors should be able to tap the relatively steady, reliable, and secure returns that can be offered by these types of clean-energy project investments.
New Energy Storage Embolden the Grid The case for grid energy storage is easy to make. Storing megawatts worth of electricity for several hours at a time strengthens the grid’s ability to absorb supply interruptions, which can cost billions when they result in cascading outages. It allows for mass deployment of intermittent renewables, even with some cloudy days and windless nights. And it diminishes the need for peak power generation, as electrons could be shifted from inexpensive night hours to times of high demand.
But high technology costs and risk-averse utilities have, until now, kept energy storage from having much of an impact. Existing grid storage is a one-horse race, with pumped hydro facilities – pumping water into elevated reservoirs to be released
later to run generators – accounting for 99 percent of the 128 GW of grid storage capacity installed worldwide, according to the Electric Power Research Institute. Recently, however, several high-profile projects and innovative applications have begun to usher in a hopeful new era of grid energy storage.
On the utility side of the meter, the pairing of renewable projects with storage is growing more popular. In China, where an underdeveloped transmission grid makes storage even more important, diversified technology manufacturer BYD and the State Grid Corporation of China have constructed an ironphosphate battery facility that couples 36 megawatt-hours of available storage capacity with 40 MW peak capacity from nearby wind and solar farms. Project developer AES is pursuing similar systems in the U.S. and abroad, and in late 2011 inaugurated a facility in West Virginia that uses lithium-ion batteries from A123 Systems to provide 32 MW of peak discharge capacity to complement an adjacent 98 MW wind farm. These two projects represent the largest efforts to date that use batteries for grid energy storage. Advanced batteries’ quick response times and ease of scalability make a good fit for storing grid electricity, but proven operation in the field is still needed for these technologies to truly establish themselves. At this early stage, setbacks can have major implications – as was seen when a September 2011 fire at a sulfur-sodium battery installation in Joso City, Japan caused Japanese manufacturer NGK Insulators to halt production of its battery systems.
An expanding pipeline of concentrating solar power (CSP) projects in the works gives molten salt storage the chance to make a significant impact in coming years. By diverting CSP steam generation to heat molten salt, plant operators can store energy as heat and create power after the sun has gone down. Most CSP projects planned today don’t intend to incorporate storage, but success at installations like SolarReserve’s 110 MW Crescent Dunes Solar Energy Project, which could soon power the neon lights of Las Vegas through the night with daytime Nevada sun (at a projected 13.5 cents/kWh), could hasten the adoption of CSP and molten salt storage as an industry standard partnership.
On the customer side of the meter, distributed storage applications can shift the grid’s energy load. One of the more creative ideas is Ice Energy’s approach to commercial air conditioning. The Windsor, Colorado-based company’s Ice Bear Energy Storage System draws power from the grid at night, when electricity is cheapest, to make ice. Stored ice is then used during the next day’s peak hours of demand to chill refrigerant in the existing HVAC system and deliver cool air to the building. Considering that at least 30 percent of California’s peak summer electricity load comes from air conditioning, for example, Ice Energy’s approach to energy storage could become a key asset for peak demand management. Energy storage project costs vary greatly depending on a number of factors like technology type, project size, and characteristics of use.
Table 3 Total PV installed and global average cost 20
www.solar-international.net I Issue III 2012
Military Leads Clean-Energy Deployment No one knows the costs of fossil-fuel dependence better than members of the armed forces. While securing access to oil in some of the world’s most dangerous regions, their missions carry the risk and expense of convoys transporting fuel for their own use. So it makes sense that the U.S. military has emerged as one of the world’s biggest champions and funders of clean energy, even if “grunts” and “greens” are rarely thought of
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