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U.S. renewable energy developers have delayed or canceled several major battery projects aimed at storing electrical energy on the grid in recent months, planning to replace fossil fuels with energy wind and solar energy.
At least a dozen storage projects aimed at supporting a growing supply of renewable energy have been postponed, canceled or renegotiated due to labor and transportation bottlenecks, soaring mineral prices and competition. Competition from the electric vehicle industry reduces supply.
A previously unreported dispute over a delayed storage project in California has even gone to court.
A slowdown in utility-scale battery installation threatens the pace of the U.S. transition away from fossil fuels as the Biden administration seeks to decarbonize the grid by 2035. Delays could pose a threat threaten the reliability of electricity in states that are already heavily dependent on renewable energy, such as California.
Energy storage is considered crucial to the expansion of solar and wind energy as it allows electricity generated when the sun is shining or the wind is blowing to be used later in the day when people Consumers need it most.
The delay spans states including California, Hawaii and Georgia, with battery suppliers including Tesla and Fluency warning of supply disruptions, according to a review of regulatory documents, company statements and interviews with project developers and power suppliers.
As Reuters reports, delays, some of which have not been previously reported, range from several months to a year.
“I have not seen a nascent industry that is so challenging on multiple fronts,” said Jamal Burki, president of IHI Terrasun Solutions, the energy storage division of the Japanese heavy equipment maker. so. IHI Corp.
Europe’s energy storage projects are also facing delays, but that region lags the United States in grid-scale storage development, making the issue less obvious.
Ben Guest, fund manager at Gresham House Energy Storage Fund, which invests in battery projects in the UK, said he has seen projects delayed by two to three months mainly due to lack of components and shipping challenge.
Energy reserves account for about 3% of operating clean energy capacity in the United States and are growing rapidly. According to the Clean Electric Association of America, installations increased 170% in the first quarter to 758 megawatts, almost enough capacity to power 144,000 homes.
But the pace is falling below forecasts. Energy research firm Wood Mackenzie told Reuters it may revise down its current outlook for US storage installations of 5.9 GW this year because of growing evidence of disruptions. market segment, after 2021, the number of installations will reach about 2/3 of the original plan.
Prices for lithium-ion batteries, three-quarters of which are made in China, have increased by as much as 20% since last year due to rising lithium and nickel costs, the Covid-19 lockdown disrupting production and Shipping restrictions slow down shipments.
Strong demand from electric vehicle manufacturers for batteries is also a headwind, industry players told Reuters. Battery manufacturers are favoring the EV market because their orders are more predictable than local project orders from power storage developers.
“When the pullback hits, the storage industry feels worse than the electric vehicle industry,” said Andy Tang, vice president of storage and energy optimization at a storage developer. Wartsila. “We are a difficult customer.”
Recent turmoil in the solar industry, caused by uncertainty over potential tariffs on Asian imports, has also affected storage growth. Building storage alongside solar allows facilities to claim a federal tax credit that doesn’t exist for standalone batteries. The Biden administration this week announced it would waive tariffs for two years on panels from countries affected by the Commerce Department’s investigation, an effort to revive solar installations.
Crispy summer
These setbacks have raised questions about the fate of a growing US stockpile of 14.7 gigawatt batteries, which some state authorities had hoped would be on hand to prevent power outages. as early as this summer.
Among the recent delays are 535 MW of storage Ameresco is developing for Southern California Edison, one of the state’s largest utilities. It hopes only part of the project – about 300 MW – will be operational by next August.
Ameresco did not respond to a request for comment.
Central Coast Community Energy, which buys electricity on behalf of 430,000 customers in five California counties, is also facing delays on six clean energy projects, including capacity, according to spokeswoman Catherine Stedman. 122 MW of storage, needed to meet state-required clean energy requirements, according to spokeswoman Catherine Stedman.
The developers of the projects, originally meant to go online this year and next, have warned of delays of six to 12 months, Stedman said.
Meanwhile, the CCCE and the Silicon Valley Clean Energy Authority, their partners on several projects, have sued developer EDF Renewables over the termination of the Big Solar and Storage project. Beau started generating electricity last year.
In March, EDF asked to raise the price for the project’s still-unfinished energy storage division to $76.8 million — a 233% increase, according to a complaint filed May 9 in state court. California in Santa Clara County.
EDF did not respond to a request for comment.
The disruption has worried state officials, already dealing with prolonged power shortages during the peak summer of demand. Governor Gavin Newsom said in April that the state was counting on new battery storage projects, many of which were procured after the August 2020 power outage, to enhance summer reliability.
“Delays in the online timing of these projects are a real concern,” said California Public Utilities Commission spokeswoman Terrie Prosper.
Open-ended problem
With massive demand for batteries from the surging electric vehicle market, global supply for utility storage projects is not expected to be able to meet demand in the medium-term, said energy research firm Rystad. term.
That’s a problem, the International Energy Agency says. Battery capacity needs to reach 585 GW by 2030 to decarbonize the global power sector, a 35-fold increase from 2020.
“If you can’t reliably manufacture and distribute batteries at falling prices… Ad Hoc team,” said Jim Kapsis, founder of climate technology consulting.
In Hawaii, utility company Hawaiian Electric is seeing delays in solar and storage projects it has contracted to help replace the state’s only coal-fired power plant, which is expected to Retired in September. Developer of four projects, Canada Innergex Renewable Energyrevealed on a conference call last month that it was looking to renegotiate the terms of the deal – including price and duration – after receiving a force majeure notice from the battery supplier, Tesla.
Hawaiian Electric spokeswoman Sharon Higa said the utility is expected to have only 39 MW of its 378.5 MW of solar and the storage it procures will be operational before AES coal plant stopped working.
Innergex and Tesla did not respond to requests for comment.
Tesla CEO Elon Musk admitted earlier this year on a conference call that the company has prioritized offering EV batteries over static storage.
Meanwhile, Fluence said on a conference call last month that it had given force majeure notices on three contracts because its battery suppliers in China were unable to meet their obligations. It said it has also increased the price of new contracts by 15% to 25% and will price futures contracts based on raw material indexes to hedge against volatility.
