Energy storage is booming — and flexing its political muscle

The folks storing clean power are flush with cash and winning in Washington.

Canary Media's Julian Spector (center) in a media panel discussion at the Energy Storage Association's December 2021 conference in Phoenix, Arizona, along with reporters Andy Blye (left) and Darrell Proctor (right). (ESA)
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Hi Canaries, it’s Julian. I just got back to unusually foggy Los Angeles from sunny Phoenix, Arizona, where I mingled with real humans at the first in-person clean energy conference I’ve been to in nearly two years. 

My journey from hotel to convention center to Cartel Coffee and back doesn’t make for a travelogue on par with, say, traversing Oahu’s energy landscape. But I did get a finger on the pulse of the energy storage industry, which plays an absolutely vital role in shifting the power sector in a cleaner and more modern direction. I’ve got some takeaways for you on where things stand on the quest for a carbon-free grid.

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It was also my first face-to-face encounter with masses of Canary Media fans. Having incubated our newsroom in virtual isolation over the last eight months, it’s really energizing to see y’all up close and hear how jazzed you are about our daily dose of energy-transition news. We couldn’t do what we do without you there to read, listen and watch. The experience left me amped up to tell more stories and keep earning your enthusiasm.

Speaking of enthusiasm, I can’t speak highly enough of the pillowy, freshly made flour tortillas at Carolina’s, a spare restaurant on a sparse block between the airport and downtown Phoenix. They’ve been going strong since the 60s, and you can instantly taste why. 

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The folks working on popularizing clean energy storage don’t seem daunted by nearly two years of a pandemic and general economic malaise. When the industry gathered in Phoenix last week, business clearly had never been better.

Companies that, in years past, had to scramble for another shot of VC cash arrived at the Energy Storage Association conference as publicly traded entities with hundreds of millions of dollars in their pockets, if not billions of dollars in market cap. 

Nobody needed to make the case that battery storage was going to be a big part of the solution to clean up the grid and reduce carbon emissions. That once-contentious proposition became a bygone conclusion with head-spinning speed. Even the more speculative technologies purporting to store power for many hours or even days showed up with sizable projects to complement their artist’s renderings.

And ESA had real policy wins to celebrate, with the recently signed infrastructure bill spending literally billions of dollars on getting storage built. The pending Build Back Better Act could still deliver the ultimate prize for grid battery advocates: a stand-alone tax credit for energy storage. 

Just months ago, the storage industry joined forces with the ascendant American Clean Power Association to lobby for its priorities like never before. The consolidated clean energy industry is flexing muscle in Washington, where its priorities largely intersect with those of the Biden administration.

Actual policy wins

When I started on the storage beat in 2016, there wasn’t much actually getting built. Power market rules written before the advent of grid batteries often prevented the technology from getting paid for doing valuable things. The messaging efforts tended to converge on Please recognize our value!”

The lobbying agenda has moved on to a more bullish stance: We’re valuable, so give us money. And it’s working.

The infrastructure bill that President Biden signed into law directs billions of dollars to this up-and-coming industry. ESA leader Jason Burwen pointed me to some choice line items for storage in particular.

If you look at our December 2020 recommendations to Congress, I get to do a lot of checkmarks,” Burwen said. 

  • Energy storage operators can qualify for a $5 billion bucket of federal resilience grants, which could bring it to places threatened by grid outages from extreme weather.
  • The new law fully funds storage demonstration provisions passed in the December 2020 Energy Act.
  • It creates and funds a new Office of Clean Energy Demonstrations within the Department of Energy. 
  • It authorizes $6 billion to expand the domestic battery supply chain, including manufacturing and recycling as well as minerals processing.
  • Storage could qualify for larger grants for grid flexibility and clean energy development on former mine lands.

Now the action moves to Build Back Better, the Democrats’ reconciliation bill, which currently contains a 30 percent stand-alone tax credit for energy storage. The Investment Tax Credit proved pivotal to the rise of solar as a cost-competitive power plant. But storage was only eligible to access this benefit if it was attached to solar, which limits it to a subset of potential storage facilities. 

The bill would also give an extra 10 percent tax credit boost to projects located near retired coal mines or power plants, Burwen noted. 

To push for that, and all the other decarbonization policies in Build Back Better, the clean energy industry is acting more like all the other big industries that try to shape legislation to their liking.

American Clean Power recently launched its first targeted multimillion-dollar ad campaign to build support for the clean energy bills, ACP CEO Heather Zichal told me.

We’re business voices, which was critically important against a lot of the naysayers on Build Back Better,” Zichal said. Half the Cabinet calls on a regular basis to say how much they appreciate what we’ve done.”

Long-duration storage: Actually building things

The lithium-ion batteries that now constitute conventional energy storage help the grid for a few seconds up to a few hours. But turning the fluctuations of renewables into a stable, 24/7 power system requires much longer-range forms of storage.

Now people are actually building things to do that much tougher job. 

Great domes of gas!

In one of the more rapid ramp-ups I’ve seen in this space, an Italian startup called Energy Dome launched in 2019 and now has a deal with the second-biggest Italian utility to build a 100-megawatt-hour storage plant starting next year.

The dome in the company’s name refers to an inflatable vessel for carbon dioxide, which is liquefied to store energy, and then returned to a gaseous state to release it. 

The compressors and expanders that achieve this are purchased from established equipment suppliers with performance guarantees, which makes Energy Dome’s founders confident that they can deliver 75 percent round-trip efficiency. That means much less electricity gets lost in the conversion process compared to many of the other long-duration storage contenders. 

There’s energy in them thar caverns

Canadian company Hydrostor, which compresses air into water-logged caverns, applied last week to build a 500-megawatt/4,000-megawatt-hour storage plant in California’s Central Valley. That’s bigger than the biggest battery in the world and capable of pumping out its full power level for twice as long. 

That follows another application to build a 400-megawatt/3,200-megawatt-hour facility in San Luis Obispo County, near where Californians plan to shut down their largest carbon-free power source, the Diablo Canyon nuclear plant.

The larger Hydrostor plant would cost nearly a billion dollars, with ample job creation in the region during the four-year construction phase. Both storage plants are targeting California’s official request for long-duration storage in the 20262028 timeframe. 

They’re hot and they’re cold

Malta, the spinoff from X (the far-out moonshot factory nestled within Alphabet/​Google), is working with Canadian utility NB Power on a whopper of a project, clocking in at 100 megawatts and 1,000 megawatt-hours. That’s aiming for completion in 2024

This will be a milestone for the technology, which uses both hot and cold thermal storage to hold onto energy before converting it back to electricity.

Flow never goes away

The scale and speed of deployment exhibited by these technologies haven’t dimmed some people’s hopes for flow batteries, a perenially up-and-coming way to store energy for long periods of time by pumping liquid electrolytes. 

In Phoenix, Lockheed Martin rolled out its scale model of a flow system that’s been about to launch for several years now. I don’t know the round-trip efficiency of the technology, but the diorama has logged considerable round-trip mileage to and from trade shows over the years. 

I’m told that Lockheed hasn’t released the product yet because it’s been conducting rigorous internal pilot operations over three consecutive versions of the technology. As an aerospace and defense contractor with a reputation to uphold, Lockheed wants to iron out any kinks before shipping product; that’s a contrast to flow startups that ship and iterate. But 2022 may be the year we hear that someone has actually bought one.

Industrial conglomerate Honeywell unveiled a flow battery of its own in October, based on decades of experience with chemicals and membranes. That product is headed for real-world testing at utility Duke Energy’s Mount Holly facility, where potentially groundbreaking energy storage technologies go to be tested for years and sometimes are heard from again.

Largo owns its own vanadium mine in Brazil, but it is pivoting from run-of-the-mill mining to the higher-value market opportunity” known as vanadium redox flow batteries.

Largo bought the patents from flow battery startup Vionx in November 2020. The company noted at the time that $150 million had been invested in optimizing the technology over the years. By that standard, Largo nabbed a great deal by acquiring the assets for less than $4 million out of an assignment for the benefit of creditors (the American Bar Association defines that mechanism as an alternative to bankruptcy for insolvent debtors).

Vanadium flow batteries have suffered from volatility in the prices of its key active ingredient, but having a captive mineral source buffers against such volatility. 

And that’s just a selection of new and ongoing interest in the flow space. Years of underwhelming market performance haven’t scared investors away from this category. Perhaps the many startups that went bankrupt commercializing this tech simply hit it a little too early, and the next decade is where the jackpot lies. 

News broke during the ESA conference that investors had plowed $1.8 billion into Commonwealth Fusion Systems. If fusion, an even more speculative technology many years away from commercial deployment, attracts that kind of money, what isn’t possible?

Julian Spector is senior reporter at Canary Media.