Source: AES Corp.
The coronavirus pandemic has created bumps on the road to battery storage for renewable power generation in the U.S., but the technology has gathered enough momentum that any difficulties are only expected to delay, not block, eventual widespread adoption.
"I think, in the short term, there's not going to be as much of an impact," said Andy Klump, founder and CEO of Clean Energy Associates LLC, noting that while there may be some delays, many storage projects under development are slated for 2021 operation dates. "While a lot of them are being permitted and developed as we speak, it was really for next year, so some of those may also slide into 2022," he said.
While the coronavirus will have a short-term impact on the financing and construction of battery storage projects, Klump believes the market will be quick to rebound from any lag.
"I still think the segment's very robust, it's still going to go through a hockey stick-like growth the next two to three years," said Klump. "That hockey stick may be pushed off by three to six months because of this."
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Jesse Grossman, co-founder, chairman and CEO of Soltage LLC, said his company has been able to push ahead developing storage assets, but adjustments have been necessary. "Our storage development, similar to other development, is still proceeding, but we've had to institute some different ways to communicate with permitting authorities and other departments that need to be involved, Grossman said."
The growing U.S. market could diversify a market dominated thus far by a handful of developers like Tesla Inc., said Klump. New players could include Chinese manufacturers seeking to establish their brand in the U.S.
"A lot of projects in the pipeline are really solar-plus-storage," said Klump. "We will see more and more storage adoption within the U.S. and I think that's going to accelerate cost reductions and allow more folks to participate in the U.S."
The pandemic has not stopped a few major deals from being inked, including one project that promises to be among the world's largest solar-plus-storage facilities. On May 11, the U.S. Department of the Interior announced it had approved Quinbrook Infrastructure Partners LLC's 690-MW power generation and 380-MW storage Gemini Solar + Battery Storage Project, which is being developed by Arevia Power.
Southern California Edison Co. is also adding storage, announcing May 1 that it has signed seven long-term contracts for 770 MW of battery storage resources, mostly from solar-plus-storage facilities. Meanwhile, Innergex Renewable Energy Inc. is in final negotiations with Hawaiian Electric Industries Inc. subsidiary Hawaiian Electric Co. Inc. to develop 35 MW of solar-plus-battery power projects in Hawaii.
The increasing presence of storage components at solar facilities strongly suggests the technology is already entering the mainstream.
"There's been a lot of progress in terms of co-location of things like wind, solar and storage," Amy Farrell, senior vice president for government and public affairs at AWEA, said on an April 23 Infocast call. "We do expect that the fundamentals of renewables will continue to be strong as we look to the future."
In the near-term, however, developers of storage projects, like those of power generation assets, are navigating issues ranging from how closures have impacted construction to how supply chains may be disrupted.
"Battery storage developers are facing some of the same issues with COVID with respect to labor issues, supply chain issues," said Mona Dajani, partner and co-head of the energy and infrastructure projects team at Pillsbury Winthrop Shaw Pittman LLP. "It's definitely impacting financing and construction."
Demand for battery storage is still strong, said Dajani,adding that while some planned projects may not go forward, at least in the short-term, the disruptive nature of the pandemic makes a case for having battery storage reserves. "I think that COVID is really highlighting, ironically, some of the issues that are making energy storage so important," she said.
Klump noted that previous crises have spurred consumer interest in solar-plus-storage on a residential level. "When Houston got hit with [Hurricane Harvey], immediately, all the residential solar players were getting calls the next day and looking for solar-plus-storage," he said, also pointing to similar demand in Puerto Rico after Hurricane Maria.
The pandemic could also make solar-plus-storage residential systems more desirable for survivalists, or "Preppers," Klump said. "There is that mentality, I think, that's strong within the U.S., to say 'I'd rather be self-reliant.'"