According to SNL Energy, the economic value of energy storage at maximum market potential in the U.S. is $228.4 billion over a 10-year period.

Integrating Energy Storage Systems

Bryan Urban | Leclanché

 

Can you describe the different ways that battery energy storage providers like Leclanché are providing systems that enhance the use of alternative energy?

Leclanché designs, develops and manufactures customized energy storage solutions primarily for electricity generation and transmission, mass transportation, heavy industrial machines and specialty battery systems. 

Battery energy storage systems are now being used in a wide range of commercial, industrial, transportation and consumer applications.  Many individual energy storage projects augment electrical grids by capturing excess electrical energy during periods of low demand and storing it in other forms until needed on an electrical grid.  The energy is later converted back to its electrical form and returned to the grid as needed.

Energy storage systems are also being used in combination with wind and solar power to store and manage the distribution of these source of alternative energy.  Wind power is uncontrolled and may be generating at a time when no additional power is needed. Solar power varies with cloud cover and at best is only available during daylight hours, while demand often peaks after sunset.  There has been growing Interest in storing power from these intermittent sources as the renewable energy industry begins to generate a larger fraction of overall energy consumption.

There are at least four ways that battery energy storage can enhance the use and value of alternative energy:

  • Energy Arbitrage - Store energy in times of lower demand (off-peak) and discharge during times periods of higher demand (on-peak).  This is particularly relevant to wind power that is produced during the night when demand and prices are low  
  • Peak Shifting - Store solar power generation during the day and discharge at peak hours in the early evening (6pm – 9pm) when peak demand is still high, but the sun is setting and the solar power production rapidly declines.
  • Ramp-rate Control – Battery storage systems can absorb the rapid fluctuation in PV solar power output caused by intermittent cloud cover.  The battery can smooth the rapid decline or increase from solar facilities and reduce the stress on the grid or other generation assets.
  • Grid Ancillary Services – With the increasing supply of wind and solar generation with intermittent or fluctuating production, there is a need for more frequency regulation and voltage control on the transmission systems.  Battery energy systems can provide many grid stabilization services that help maintain the safety and efficiency of the electric grid and allow for further integration of renewable power.  

Energy storage is also transforming the transportation industry with the growing utilization of battery powered, electric vehicles and increased application for mass transportation including busses, ferries and rail.  This allows for the cleaner and more expansive use of renewable energy generation.  

According to SNL Energy, the economic value of energy storage at maximum market potential in the U.S. is $228.4 billion over a 10-year period.
 

Will energy storage grid applications be the primary growth focus for Leclanché in North America and why?

It will be one of the key areas of growth.  As America’s utility and transmission industry grapples with the enormous challenge of upgrading plant and facilities to meet the growing energy demand coupled with the move to distributed power, energy storage grid applications are critical components for meeting these challenges.  

 

Please describe the features and process of a typical energy storage project? Who are the players and how does it all fit together?

There are really few typical energy storage projects since most battery systems are customized to address the specific requirements of the application. Each project has core battery storage modules which are the building blocks for the entire system.  Because the batteries come in modular units, they can be configured and scaled to address varying sizes and applications.  The total project also encompasses sophisticated software, system integration, design, construction, grid interconnection and ongoing management and maintenance.  All these are critical factors for project success and their configuration depends on the specific type of storage application needed.

The key players in the storage process are the battery supplier, the systems integrator, software supplier, the utility, the investors and other technology suppliers.  
 

Are investors more receptive to financing energy storage projects for the grid today than in the past?

Yes, most definitely.  We are seeing an increasing number of financial institutions and investors participating in energy storage projects including investment banks, utilities themselves and transmission companies.  Many storage contracts to date in the U.S. and Canada had rarely exceeded three years, but now utilities are signing agreements for three to seven years, and sometimes as long at 10 year.  This provides a stronger revenue base for longer-term infrastructure finance.  

Leclanché has a preferred partnership arrangement with Swiss Green Electricity Management Group (SGEM), an independent owner & operator of energy storage assets.  This provides a unique financing vehicle and facilitates additional investments into utility-scale energy storage projects initiated by Leclanché, such as the Marengo Energy Storage Plant in the U.S.

 

What are some typical budget and payback considerations for a typical project?

Projects budgets and paybacks can range widely depending on the size of the project and the agreements entered into by all the parties.   Because the “use case” for each system can be different, the battery system configuration and components can vary.  Overall battery system costs are declining with increased adoption and expansion.  Payback periods vary by applications lasting typically 5-8 years.  

 

What are the advantages for Leclanché in becoming an integrated provider of energy storage systems as opposed to manufacturing just the batteries that are used in these systems?

With the redefinition of the role of utilities, this has led to the demand for a new business model which can facilitate the shift to smart, cloud-based and decentralized energy markets. Leclanché sees storage as the “missing glue or enabler” allowing distributed energy generation and consumption in a similar vein to how IP networking encouraged distributed and mobile computing.  Understanding these trends, management has transformed Leclanchéé, through in-house investments and acquisitions, from a provider of battery energy systems to becoming a fully functional, vertically integrated organization to competitively deliver cutting-edge energy storage solutions including battery systems, power conversion systems and energy management software.  By becoming the totally integrated systems provider between the point of generation and distribution, Leclanché can ensure the quality and manage the overall costs more effectively.  Utilities and transmission providers prefer dealing with a single entity for the planning and development of energy storage projects rather than dealing with multiple parties.

 

Will Leclanché be marketing its mobile energy storage systems in North America?  

Yes, as the market really starts to materialize for eTransport in North America, we will leverage our strong experience in Europe in ferry and bus battery technologies to respond to the growing market opportunities for those and other types of electrified industrial vehicles.

  

Are there other future markets or technologies that you would like to touch on here?

Leclanché envisions a smart deployment of ESSs in a ‘clustered clouds’ architecture which will be designed and engineered to deliver blended energy and power, encompassing both stationary and mobile systems.  Leclanché is also developing various types of battery-driven EV charging stations that will be deployed along highways and city streets for electric cars and busses.

 

 

About Bryan Urban

Bryan Urban has nearly 25 years of energy development, finance, operational and restructuring experience covering a broad array of power generation and energy infrastructure in the Americas and Asia/Pacific. He has been instrumental in the development of over 9,000 MW of power generation, has led over $6 billion in project and corporate financings in both conventional and alternative energy sectors and has been involved in numerous energy infrastructure projects on a strategic and deal execution basis.

Urban is currently the executive vice president for Leclanché North America and leads the company’s expansion in the region after serving on the Board of Directors for over three years. While on the board, he was also the Managing Partner at Silveron Capital Partners, a boutique investment banking and advisory firm he founded, which specializes in new project development and financing, M&A transactions and corporate restructurings for power and alternative energy companies.  

 

 


Comments (1)

The energy storage industry has proven itself to have improved lives of individuals as well as the corporate sectors. This known fact acts as an influential factor that drives investors to come forward and entrust their finances within this area of expertise. Investors are always looking for opportunities that have guaranteed returns. This is also how an increasing trend is occurring with more people using self storage as an investment. The business concept is similar and investors are always within reach whenever returns are promising.

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