Highlights from the Energy Storage Summit 2022

In this episode of The Top 3 by E3, Ginger Elbaum, host of the podcast, and Chris Wright, E3's Energy Storage Executive Director, discuss highlights from the Energy Storage Summit held in Austin, Texas on March 23-24, 2022.  E3 Consulting was proud to be a sponsor of the event and honored that Chris participated in two of the Summit's panels. 

Transcript

The Top 3 by E3
Highlights from the Energy Storage Summit 2022
Published: 4/7/2022
9m


DESCRIPTIONTRANSCRIPT
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Speakers
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Ginger Elbaum 
00:00:08

Welcome to The Top Three by E3, a podcast about the intersection between engineering energy and project finance. My name is Ginger Elbaum, managing director at E3. And I'll be your host. Today is an interview with Energy Storage Leader, Chris Wright, who recently moderated two panels and attended the 2022 Energy Storage Summit. We wanted to give a recap on some of the interesting outcomes from the conference. Welcome Chris. So Chris, just tell us a little bit about the Energy Storage Summit held in Austin mid-March.

Chris Wright 
00:00:41
Oh, absolutely. Well, Ginger, the event lasted two full days, as you mentioned, it was in Austin and there were surprisingly, I think, close to 400 people, or maybe even exceeded that, a lot of breakout panels, breakout sessions, and had a small exhibition hall with a lot of networking opportunities. And of course E3 was a sponsor for the event. So it was like, this is the first time we've sponsored an energy storage event in our entire 23 year history.

Ginger Elbaum 
00:01:09
Yeah, it sure was. So that was an exciting milestone for us. And thank you for, for participating and moderating. So tell us a little bit about the panels. How, how were the panel discussions?

Chris Wright 
00:01:21
They were really good at any point in time. They typically might have two going on at the same time, one in the large room and one in the small room.  Jim Langel (Executive Director, Solar Practice) was there too and I was able to attend most of them. A lot of great content and some really great participants and a lot of really good frank discussions. As you mentioned, I was fortunate enough to moderate two of them - the Renaissance of Merchant Panels and the Energy Storage Developments in Nevada.

Ginger Elbaum 
00:01:50
Good. So, well, tell us why don't we talk about the panels. So tell us a little more about the merchant panel. Are contracted assets still the cream of the crop?

Chris Wright 
00:02:01
Well, funny you say that, on the merchant panel, there was a lot of great discussion there. You know, all three panelists that were on the panel had experience in merchant energy storage, project development and financing, and along the lines of what you ask actually contracted assets still are probably the cream of the crop. But there were a lot of great perspectives provided by the panelists for the upsides of merchant energy storage projects. A few thoughts from panels included the idea behind that energy storage, a merchant operated energy storage asset has a lot of flexibility, especially if you're in a changing market. So, you know, you can do software configuration, you can change the energy capacity by augmentation, and you can do a lot of things to actually modify the asset's optimization, modify the asset's interactions with the ISO or with the merchant market.

Chris Wright 
00:02:54
And that gives you a lot of flexibility, to some extent, to future proof your revenue streams. And I'm also, you know, a lot of times, if you're a merchant market participant, if you're in the real time markets, a lot of times, there's not really a lot of liquidated damages, you know, and contract assets always have liquidated damages for performance, shortfalls and availability and things like that. But they're really, if you're operating in real time merchant markets and you're not a contracted asset, a lot of times you can participate in the market or you can decide to pull your asset out if you need to. So there's a lot less downside risk when it comes to liquidated damages and things like that.

Chris Wright 
00:03:37
You know? So again, you know, the merchant play for energy storage is alive and well, we heard a lot about that during the panel.

Ginger Elbaum 
00:03:44
Yeah, that's interesting. So, Chris, what was the subject of the second panel?

Chris Wright 
00:03:49
Well, the second panel was focused on Nevada, which entered storage development there, and it was talking about the influence of the PUC and the public utility commission in Nevada. They released a ruling that had established biennial energy storage, procurement goals, starting it by the end of 2020 and increasing to one gigawatt by 2030. The rules adopted like March 12th, 2020. And I think it's order number 44671. And it's a target, it's not a mandate, but it's going to affect the IOUs and the state, although we would expect most co-ops and municipals to try to follow some of the PUC rulings in sales.

Chris Wright 
00:04:31
So we were really expecting to see, you know, to really further incentivize energy storage development there in Nevada, it'll definitely affect hybrid projects, meaning a solar plus storage project. And it may even affect existing solar projects that don't have storage. The ruling is technology agnostic, but you know, most panelists were still leaning toward batteries being the predominant technology used in Nevada. And we also talked a little bit about some of the challenges with project development in Nevada, a couple of things, or one thing I didn't really realize is that a significant amount of land in Nevada is publicly owned. So this definitely provides challenges to gaining site control.

Chris Wright 
00:05:12
You'd have one of the four legs of development, and then also kind of can extend the project timing if you're having to deal with certain governmental entities while hybrid projects are being developed there. Now we would expect this ruling to hopefully provide more contracted energy storage opportunities in the bottom.

Ginger Elbaum 
00:05:33
So Chris, you know, it sounds like it was a well attended conference. You know, you want to talk a little bit about the networking and just kind of what was the buzz?

Chris Wright 
00:05:42
Yeah, sure, sure. Networking was great, lots of opportunities. The event was in the hotel and most people that I saw stayed in the hotel again, you know, the last day I think the event organizers estimated there was about 400 people in and then the Nevada panel was actually the very last panel on the last day. And it was very well attended and there were lots of questions from that panel. And judging by a couple more, we've been through earlier this year, you know, I really get the feeling that everyone is looking forward to these in-person events. And I think we're going to see high levels of attendance going forward. And a lot of these in-person events, one thing though, we heard a lot about supply chain issues and how they're affecting energy storage projects, solar too.

Chris Wright 
00:06:28
But, you know, really kind of just talk about energy storage today. You know, everything from cost increases, delivery delays, and even unavailable supplies - i.e., availability of batteries. It is really hurting a lot of projects. There were discussions about lithium-ion battery pricing. You know, pricing increases ranging from 10% to 30%, you know, kind of unexpected being handed to project developers and even integrators that had existing contracts. So, you know the pricing world is very dynamic. So, with everything that happens, there's opportunity. So, you know, these, these real issues are providing your market opportunities for lithium ion battery manufacturers that want to enter the space.

Chris Wright 
00:07:09
You know, there's always, I let them out and battery manufacturer that might not be in the stationary storage space and maybe they're not in the eBay space and they want to enter this space. And so there are definitely opportunities there because you're starting to see a shortage of enough batteries to supply the market, you know, and then, you know, really seeing, again, you know, there, this opportunity is providing for alternative battery storage technologies, you know, alternative battery chemistries, you know, alternative storage technologies, whether it be mechanical in nature. There there's really another opportunity here. You know, the lithium pricing itself is just really detrimentally affecting developers and they have greater margins. And I think a lot of people will be looking for an alternative if they can find it.

Ginger Elbaum 
00:07:52
Yeah, that's interesting. Well, so Chris, this is The Top 3 by E3 podcasts. So, what three takeaways would you like for our listeners to walk away with today?

Chris Wright 
00:08:05
Excellent. Well, two of them will come from the event. Definitely. I believe the market merchant Renaissance was here for energy storage and the flexibility of a merchant asset may be a strength versus a typical contract and access, especially as market rules evolve. Number two, the Nevada PUC ruling may incentivize the contracts with energy storage projects, if so, that will definitely increase bankability and hopefully speed up deployment. And Nevada. And third, supply chains - like a lot of industries now - supply chain issues are hurting the market, but it seems like everybody's working through it together. You know, lithium price spikes are the big elephant in the room for most parties.

Chris Wright 
00:08:48
And people are trying to understand how to work through that. But supply chain issues are hurting us, but at the same time, everyone seems to be working together to resolve.

Ginger Elbaum 
00:08:59
Right? Yeah. So they're creating opportunities as well. Well, Chris, this has been great information. Thank you so much for attending the conference and, you know, representing E3 by moderating the panels and putting this podcast together and for our listeners. Thanks for joining our discussion and recapping the 2022 Energy Storage Summit. If you have any questions for Chris regarding energy storage or any suggested topics for our podcasts, please reach out to us at e3@e3co.com. Chris, thanks again. And thanks again to our listeners for listening.