Q & A – Webinar: One Size Does Not Fit All – Complexities, Use Cases, & Trends in Energy Storage

To watch the webinar, click here.  To download the webinar slides directly, please click here. 

Held: 2/6/18 

For those who submitted questions during the webinar, thank you. We’ve compiled your questions and answered them below:

Q: What are the hurdles that are hindering the US to adopt more storage compared to other regions (e.g. Europe)?  

A: In the past year, the U.S. storage market has been driven by policies that are increasingly more storage-friendly. In California alone, there is a 1.3 GW procurement target. There are many drivers for adoption. To name a few: demand charges, resiliency, PV generation shifting, energy arbitrage, demand response, etc. We feel like storage applications for demand charges perform best with solar, so strong alliances between solar and storage providers will be key to unlocking this market opportunity.

Q: CA has done a lot in clean energy field. What are the remaining barriers and key activities CA must do to fully unlock the potentials of clean renewable resources? 

A: California is undeniably the leader in adopting energy storage policies. Here are a few recommendations from Nextracker’s point of view:

1) Adopt energy storage friendly policies that enable more solar PV to interconnect with the grid.

2) Simplfiy the development cycle by framing key decision points

3) Enhance the value chain with alliances that focus on maximizing total project value rather than intersupply chain competition. Utility companies are challenged to address the problem, either on their own, or with the PV/storage industry. Policy goes through the CPUC, and this can take some time, generally speaking. Net-net, the costs of solar plus storage must compete with base load prices, which may require policy driven incentives.

Q: What is the sweet-spot for discharge duration for energy storage system in typical dense urban areas in CA such as LA?

A: The sweet spot for storage today is 2-4 hours. In the not-too-distant future, Nextracker believes it could be up to 6-8 hours. Our NX Flow ESS actually can handle eight hours now. See our spec sheet for more details.

Q: Do you see storage more in the long duration (>4h duration) or also in smaller durations (<1h duration)? Where do you see use-cases in the low-duration storage systems?

A: Nextracker views both long and short duration storage applications as important, but long-duration is far more prevalent and ubiquitous, so it’s a significantly larger market. Low-duration storage is used in power applications like frequency regulation, black-start, power factor correction, var control, etc. Some demand charge scenarios, typically from industrial facilities, also have tall and narrow demand spikes, which can be managed with short duration storage.

Q: What function does Avalon VFB battery provide in your NX Flow system? 

A: At the core of the NX Flow system lies an advanced vanadium flow battery (VFB), which is DC-coupled with the photovoltaic (PV) array, thereby dramatically improving round-trip inverter efficiency versus typical AC-coupled battery systems. Energy that had been traditionally “clipped” and lost can now be captured and is available to generate additional kilowatt-hours and revenue. NX Flow’s advanced vanadium flow battery (VFB) also exhibits little to no degradation, even under extreme duty cycles. This has been validated by DNV-GL, a respected independent engineering firm. NX Flow’s pairing of VFB technology with ground-mounted solar power offers a bankable long-duration storage option for asset owners to store energy effiiciently, cleanly, safely and forever.

Q: Is NX Flow and its vanadium battery more reliable as a long term solution for utility-scale projects rather than lithium-ion solutions, and therefore in theory, more attractive to finance?

A: Yes, NX Flow’s vanadium flow battery is less vulnerable to degradation and is generally more durable from a maintenance and replacement perspective. Testing on the NX Flow system after ten years of battery cycling had measured virtually no storage degradation (<1%), and has the longest lifespan without battery replacement, 30+ years. Independent engineer firm DNV-GL recently reported in a bankability study: “Flow batteries exhibit far greater capacity retention and less performance degradation over time than lithium ion batteries, and [NX Flow] has quantitatively proven that.”

Q: What are the synergies (and challenges) do you foresee in regards to storage when building a hybrid system (plant), compromising utility-scale solar and wind? 

A: The synergy of storage when building a hybrid system is simple: pairing affordable, renewable energy like solar and wind with storage applications to provide clean energy 24/7, all through the night. Challenges surrounding these hybrid plants are integration, productization, and government policies. Unfortunately, wind leverages less advantages with storage coupling due to the structure of the Production Tax Credit or PTC.

Q: Do you think most customers are receiving full value of peak shaving capability from their BESS? Are demand thresholds being optimized month-by-month to ensure max savings achieved?

A: Unfortunately, no. Some customers are not receiving the full value of peak shaving capability from their BESS due to a lack of software and future-proofing in the design of their systems. We suggest working with a bankable company with a large balance sheet and best-in-class solutions.

Q: What is the average payback period of an investment to avoid high demand charges?

A: The art is finding the right opportunities and optimizing the solutions – batteries are amazing when they are optimized and designed appropriately into battery energy storage systems. Two to seven years is typical, but we have also seen a few six-month paybacks. Email storagesales@nextracker.com.

Q: What market signals or other guidance do you recommend to determine where storage is most needed and highest value? Is most needed/highest value correlated through market pricing?

A: Policy enhancements and market prices function as key leading indicators for where storage is necessary and lends the highest value. Look for high demand charges and large spreads in time of use charges – the market Nextracker’s Energy Storage Solutions directly targets and solves for. Read a blog from Nextracker’s CEO, Dan Shugar on what how renewables are playing out with energy storage systems on behind and in front of meter applications.

Q: For the battery side of the system, what are the typical warranties?

A: For lithium-ion, warranties can get complex. Lithium-ion warranties depend on average SOC, DOD per cycle, operating temperature range, and calendar life. Flow batteries are a bit simpler, since their warranties are just a flat 98% capacity guarantee and 98% availability guarantee. Please contact us directly at storagesales@nextracker.com to discuss our warranties in detail under NDA.

Q: How is TCO measured? There needs to be a power component, a duration component, a recharge component and a lifetime component. For example, 100 kW for 2 hours, 365 days a year with a 30 year system life with no more than 5% degradation in performance.

A: Here’s our way of looking at it:
CAPEX = Total cost to install the system and place in-service
OPEX = Total cost to maintain the system’s availability and throughout its design life

Q: How is your system guaranteed to hit the peak using a 2-hour discharge? Isn’t there some uncertainty to the peak hours in the GA market?

A: With NX Flow, we are able to provide a guarantee on savings for plant owners and operators by using advanced machine learning software algorithms that predict and forecast load. The longer duration the battery, the better the savings, generally speaking, but 2-hour batteries can work quite well for many customers that have peaky loads like EV chargers, HVAC, processing facilities, motors, and pumps, just to name a few.

Q: Does the kW to kWh sizing of a battery affect its cost and if so, how does it impact the cost of the battery?

A: The short answer is yes. The kW to kWh battery ratio is a direct driver of cost. However, depending on the application, different ratios will play well from a total lifecycle cost perspective. C-rate is flexible and will help. Email storagesales@nextracker.com and we can go deeper on this question.

Q: Is vanadium flow applicable in residential and commercial applications? How much capacity is installed with this storage type, and how come it isn’t used more?

A: Yes, vanadium flow batteries can be used for both residential and commercial applications. Each NX Flow unit comes in 30 kWh, and they can be stacked to handle as much capacity as you need (e.g., 10 MWh). Most people who buy cell phones and laptops have heard of lithium batteries, so lithium has a wider market acceptance at this point in the industry’s evolution. While vanadium flow is far less popular and understood, a recent survey of 500 energy professionals at GTM’s Energy Storage Summit 2017 showed that 46% of participants felt that flow batteries were the technology with the best chance of supplanting lithium-ion as the dominant utility-scale advanced storage technology.

Q: What are the key technical differentiators among ~1MW battery storage systems? Is differentiation created primarily by how storage is integrated with an “energy system” including other resources, EE and DSM?

A: Some of the key technical differentiators are degradation rates, round-trip efficiency, availability, integration, controllers, and EMS, which all cover key decision points in the development process. NERC-CIP compliance is also an important consideration (differentiator), and top of mind for Nextracker. Read the recap and Q&A from a recent cybersecurity webinar with Solarplaza where we chat about building security into product design, evolving best-practice approaches to secure bi-directional data connectivity, demand and trends for NERC-CIP compliance with top tier developers and owners and methods for developing and implementing products with security as a foremost concern.

Q: What is the metric used for measuring the success for duck decapitation?

A: Our metric for measuring the success for duck decapitation is the degree of “flatness” that we can create – the flatter, the better. When we get 100% of our base load met with PV + storage applications, we can generate clean, sustainable energy production.

Q: Is NX Flow a DC-coupled storage system?

A: Yes, NX Flow is a DC-coupled storage system for high round-trip efficiency. View the diagram below.

Q: What are the revenue streams shown in your Bakersfield, California ESS case study example in the presentation? 

A: The revenue streams from the Bakersfield, California battery system are demand charge reduction, distribution deferral, and PV generation shifting.

Q: Which of the Nextracker storage solutions can operate off-grid?

A:  NX Flow can operate off-grid.

Q: Can Nextracker provide scheduled operations and maintenance, or is that done by the construction company who installed the system

A: Yes, Nextracker can conduct scheduled (and unscheduled) operations and maintenance. It’s contract dependent.

Q: Do energy storage systems/projects pay for themselves as standalone projects? What is their IRR yield?

A: Yes, energy storage systems often pay for themselves as standalone projects. We have seen anywhere from 12% to 40% IRR for stand-alone energy storage systems, and system paybacks within 6 months.

Q: When a gas plant is retired early due to extreme weather concerns, how resilient is storage, what are risks to storage with extreme weather? 

A: Storage is very resilient, especially when it’s designed and engineered correctly for its operating environment.

If you have additional questions, please email storagesales@Nextracker.com.