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Joe Deely's picture
Partner, Deely Group

Involved with high-tech for last 30 years. Interested in energy.

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  • Aug 21, 2020
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Expect to see a LOT more of these projects being initiated over the coming years.

The firm is teaming up with Tenaska to develop and operate nine battery projects totaling nearly 2 gigawatts and up to 7.8 gigawatt-hours of grid storage in California. They will target the coastal hubs of San Francisco, Los Angeles and San Diego to provide the dispatchable capacity that is sorely missing right now as the state struggles with days of critical electricity scarcity.

The portfolio joins Capital Dynamics' earlier acquisition of the Eland solar-storage project, which 8Minute Solar Energy contracted to the Los Angeles Department of Water & Power. CapDyn also acquired Strata Solar's 100-megawatt/400-megawatt-hour battery near Oxnard in June, Greentech Media has learned. That system is under construction, expected online in the first quarter of 2021.

Interesting that Capital Dynamics plans to own these projects. Rather, than sell and take a small profit they are hoping to use batteries to make money on CAISO market - charge batteries when wholesales prices are cheap and discharge in early when prices rise.

Capital Dynamics will fund development and plans to own the projects after they come online in 2022 and 2023; Tenaska will have an opportunity to co-invest.

This comment is spot on...

California has shut down nuclear- and gas-fired capacity without building enough new firm capacity to meet demand after the sun goes down. Capital Dynamics' investment thesis appears tailor-made to tackle the root causes of the grid drama unfolding this week.

Note: the 8.2GWh of energy capacity mentioned in this article is equivalent to about 2.7% of the daily NG/coal generation in CA (CEC-2018).  Thirty more projects like this and CA could timeshift solar to replace most of its NG generation.

Discussions
Nathan Wilson's picture
Nathan Wilson on Aug 22, 2020

Californians no doubt think of themselves as energy leaders, but I think more and more, their energy future is diverging from that of the rest of the world (exept maybe Australia).

Batteries are a natural fit for a system rich is desert solar PV power, with the predictable nightly power outage.  But with all of the other large sustainable energy options (wind, nuclear, and hydro), batteries are the wrong answer.

As you add more of the other options, you will see more hours per year of zero-priced electricity (good for batteries), but you'll see fewer hours per year of high-priced electricity as well (very bad for batteries).

Joe Deely's picture
Joe Deely on Aug 22, 2020

Yep- solar/batteries will continue to flatten out the price curve. Decent money will be made for first few years, after that storage becomes more of a commodity.

As for being limited to California - I could easily put 50-100 links below for large storage projects outside of CA - more being announced every week.

Solar/storage will be implemented:

  - across the Western US.

NV Energy to add 1.2 GW solar, 2.3 GWh storage as large customer exit slows

Capital Dynamics starts next phase of 555-MW Nevada solar + storage project

APS Plans to Add Nearly 1GW of New Battery Storage and Solar Resources by 2025

  - TX (will likely be a bigger market for solar/storage vs CA)

Mitsubishi Hitachi and Powin Energy to build 200 MW of energy storage in Texas

Texas to get 150-MW/150-MWh of battery storage projects backed by oil and gas money

  - FL and SouthEast US

FPL unveils plans for 409-MW/900 MWh battery storage in Florida

Georgia Power signs PPA for 195-MW solar, 80-MWh energy storage project

  - really anyplace with substantial solar will have batteries.

We will also see a lot more wind/solar/battery hybrids. Projects in OR and OK coming online over the next two years.

All of the above is based on battery prices today/next year. Wait till we see the capacity ramp of gigafactories to support EV production. By 2030 battery storage will be everywhere.

I haven't even discussed storage in the home. 

  - BloombergNEF predicts that at least 50,000 California homes will install storage systems in 2020. 

Do you actually see Hydro and/or nuclear as being near-term options in the US? I'm starting to wonder if we'll see any new nuclear in US before 2030?

Nathan Wilson's picture
Nathan Wilson on Aug 23, 2020

Joe, I'm predicting the outcome based on the engineering, not simply extrapolating trends.

I'm saying that in only desert regions, you'll see substatial penetration of solar PV, and a substantial fraction of all night-time electricity supplied by batteries.

You may see lots of MW of batteries going elsewhere, but especially in windy areas, they'll have sub-one-hour duration, as their main purpose will be to allow fossil fuel power plants time to throttle up/down when the wind/insolation changes.

That's actually consistent with the new wind market report from LBNL.

Regarding US nuclear, agreed, no US new builds for a while (at least until the first SMRs break ground).  We're napping while China and Russia dominate the export market, with a resulting loss of international influence (did you hear that Saudi Arabia is making urainium yellow-cake with Chinese help?). 

Developing countries all suffer from weak grids and frequent power outages.  They understand that nukes are more grid friendly and require less sophisticated transmission systems than renewables.  The larger ones are building nukes nearly as fast as they build renewables (when corrected for capacity factor), but sill slower than new coal.

Joe Deely's picture
Joe Deely on Aug 23, 2020

Nathan,

Thanks for the LBNL link - great resource. 

I'm predicting the outcome based on the engineering, not simply extrapolating trends.

Really - do you mean "engineering economics"? Because I don't see how you can predict the outcome based on "engineering". 

I'm saying that in only desert regions, you'll see substatial penetration of solar PV, and a substantial fraction of all night-time electricity supplied by batteries.

The current state of the CAISO grid does make storage a no-brainer.  You can buy cheap and sell high - easy money. We will definitely see a flattening of the curve below and solar/storage will "eat" most of the NG generation on the grid.

You may see lots of MW of batteries going elsewhere, but especially in windy areas, they'll have sub-one-hour duration, as their main purpose will be to allow fossil fuel power plants time to throttle up/down when the wind/insolation changes.

I assume you are referring to TX here.  ERCOT currently has a pretty flat pricing curve throught the day. Solar only has a small midday share of generation and any storage would have to compete with wind in early evening/night. So yes, early adopters of storage in TX will implement storage systems with short durations. These systems will be good for peak capacity and "playing the market" - trying to capture big price spikes.

That said, once solar reaches 20-30GW in TX - ERCOT's hourly pricing will start to look more like CAISO and storage durations of projects will increase.  Economics not engineering.

Regarding US nuclear, agreed, no US new builds for a while (at least until the first SMRs break ground).  We're napping while China and Russia dominate the export market

What export market? Are you talking about the one or two projects per year that China and Russia export? 1-2GW per year? 

Here are recent China/Russia "wins".

  1. 2020  Turkey - AKKUYU-2
  2. 2019 Iran - BUSHEHR-2
  3. 2018 Turkey - AKKUYU-1
  4. 2018 Bangladesh - ROOPPUR-2

Curious - are you worried about the Chinese dominance of solar mfg? 

Joe Deely's picture
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