Tesla Energy and utility scale projects

[EinSV]

The software/AI side of the storage business is getting some attention.

AMS has reported that its AI managing trades for the Tesla Hornsdale battery out performed the best human traders by a factor of five. As the batteries themselves are capable of performing multiple tasks (frequency regulation, demand management, emergency backup, voltage support, etc.), with more complexity added by managing networks of batteries as part of virtual power plants or microgrids, there should be an opportunity for Tesla to use its software/AI chops to enhance its offerings and increase margins.

Tesla big battery paves way for artificial intelligence to dominate energy trades | RenewEconomy

 

[EinSV]

Wood Mackenzie summarizes why utility scale (front of the meter) battery storage projects lag so badly in Europe:

“Europe’s government auctions call for either wind and/or solar buildout in accordance with European Union carbon targets, but do not value dispatchable solar generation. Solar developers, eager to ink government contracts, know that adding storage to their bids would take them out of the running.“
​

I guess I can see why not getting paid would be a hurdle.

As more wind and solar comes online this is likely to change, although it sounds like Europe will continue to lag Australia, the US, China and South Korea for a while.

For now, Europe is barely noticeable in the world-wide market.



Is There a Place for Europe in the Growing Utility Solar-Plus-Storage Market?

 

[TheTalkingMule]

Germany will have to go full-steam into storage as they rapidly wind down nuclear and coal. Keep in mind, somewhere around half of all solar installs in Germany have been sourced alongside battery storage since like 2015/16. They have a ton of storage, just behind the meter.

My assumption is they'll continue to simply incentivize pushing electricity to the grid and shift from a static feed-in-tariff to something demand-based. Why build out centralized storage when the distributed marketplace can do it for you more efficiently? That's how they've operated til now and it's worked better than great.

 

[adiggs]

Decided on this thread - could be over in Shorting Oil too I think.

Couple of articles on reneweconomy about, my interpretation, changing attitudes around renewable energy.

Today:
The 10GW solar vision that could turn Northern Territory into economic powerhouse | RenewEconomy
A report / vision for how a state in Australia, can go heavily into renewables to take advantage of their particularly good solar resource. Energy for export - energy for industrial hydrogen (hydrogen for export), as well as lower grid prices for electricity and energy through heavy renewables investment. New industry for mining and downstream processing.


Yesterday:
Miners see 50% renewables as standard, but are aiming for 100% | RenewEconomy
This one's about a industry segment that is historically associated with anti-renewables - at a recent conference, all of the miners are talking about how to take their off-grid mining operations to at least 50% energy from solar / wind, with some starting to think about how to get to 100% renewables (turn off the diesel generators entirely).

Also has miners talking about how, with radically low self-generated electricity, they can expand the mining operation to also smelt onsite, and maybe build additional industry around the cheap energy. Many numbers in the article - the clearest comparison is 38 cents/kwh using diesel generators, to 23 cents/kwh by building the mine's own renewable energy source (maybe including batteries - maybe including onsite hydrogen generation for onsite use).


I believe that where the renewable energy economy will happen fastest, is where it collides with business interests rather than consumer interests. Consumers care about the bottom line, but there's a lot of other stuff that can influence decisions - style, performance, whatever.

On the business side, if the numbers pencil out strongly in favor of 1 technology over another, then the business' self interest will force it to decide in favor of the better technology. Even if that means making adaptations to the new technology - when the gap is big enough, you've got no choice but to change. I see this happening in the two articles above - miners are seeing the ability to significant lower their energy costs (which are a big component to their operations) AND in doing so, they can easily extend their business further into the value stream - they can earn the smelting markup, instead of selling ore to somebody else that does the smelting.

On the vehicle front, once we have electric work vehicles in the market, as businesses realize the operational savings available, the business self-interest will drive the conversion to electrics.

 

[Rarity]

Big batteries are coming to California

Two projects with combined 2.14 GWh of battery storage coming to California.

It is important to keep in mind just how quickly the cost of (stand alone) battery storage is falling. BNEF says a decline of 76% since 2012 and 35% in the last year alone. The trend is declining 21%/y, which is comparable to changes in EV pack costs too. As this trend continues a few more years, I think we'll see some big changes in the utility space.
View attachment 391780

That article mentions the LADWP project. A follow-on article mentions that LADWP has approved a contract with 8Minute Solar Energy for 1.2 GWh of that. 25-year PPA at 3.962 cents/KWh for combined solar/storage.

Los Angeles says “Yes” to the cheapest solar plus storage in the USA

Seems likely that this will be Tesla.

 

[jhm]

That article mentions the LADWP project. A follow-on article mentions that LADWP has approved a contract with 8Minute Solar Energy for 1.2 GWh of that. 25-year PPA at 3.962 cents/KWh for combined solar/storage.

Los Angeles says “Yes” to the cheapest solar plus storage in the USA

Seems likely that this will be Tesla.

Wow, they are going for the bigger battery offer. 400WM PV is expected deliver about 2.3MWh AC on an average day and upto 1.2MWh can be stored. They say this has a 60% capacity factor, which implies a maximum inverter capacity of about 160MWac.

So think of this as comparable to baseload generator with 160MW max capacity that can dial back solar production released to the grid to something less than 100MW (400MW solar minus 300MW battery) without curtailment. It can offer peak power at 160MW in after sundown or before sun up. It can ramp the battery net generation up or down instantaneously. This is more flexible than a 100 MW CC baseload gas plant plus 100MW gas peaker. It substantially solves the duck curve problem with zero emissions and at a price of $40/MWh, which does not fluctuate with the price of natural gas.

This is a breathtakingly great value.

 

[SageBrush]

Wow, they are going for the bigger battery offer. 400WM PV is expected deliver about 2.3MWh AC on an average day and upto 1.2MWh can be stored. They say this has a 60% capacity factor, which implies a maximum inverter capacity of about 160MWac.

So think of this as comparable to baseload generator with 160MW max capacity that can dial back solar production released to the grid to something less than 100MW (400MW solar minus 300MW battery) without curtailment. It can offer peak power at 160MW in after sundown or before sun up. It can ramp the battery net generation up or down instantaneously. This is more flexible than a 100 MW CC baseload gas plant plus 100MW gas peaker. It substantially solves the duck curve problem with zero emissions and at a price of $40/MWh, which does not fluctuate with the price of natural gas.

This is a breathtakingly great value.

I wrote just about those words earlier in the day.

A somewhat related way to think about this in terms of utility scale pricing is that clean energy consumed at the time of production is ~ 2 cents a kWh while energy use deferred to the same 24 hour window is 4 cents a kWh

 

[jhm]

I wrote just about those words earlier in the day.

A somewhat related way to think about this in terms of utility scale pricing is that clean energy consumed at the time of production is ~ 2 cents a kWh while energy use deferred to the same 24 hour window is 4 cents a kWh

Roughly half will be stored. So may 2c/kWh for direct solar and 6c/kWh for stored solar. The average of the two is 4c/kWh.

I forgot to mention. Seasonally speaking, most of the unstoreded solar happens May thru September, when LA is cranking up the A/C. 4 cent solar is quite a deal in the summer.

 

[jhm]

Ultimate five-year plan: 24 hour solar+storage power plants, in design pipeline now
More from 8minutenergy.

In the past, every time a solar panel got cheaper, my PPA went down in price. It was roughly a 1-to-1 correlation. That is no longer true, however. Today the solar panel is quite a bit less than half my power plant, the rest is land, trackers, cable and copper prices, land costs, interconnection, substations, transformers and labor. Labor and all of these technologies are conventional, and many of their costs have gone up.

There is no low hanging fruit anymore. Plenty of substations had space, that’s not true today. Today you have to accept quite a bit higher costs in order to interconnect to the grid. It’s very hard to find good, and inexpensive land close to those substations. However, we still have technology costs coming down, and that’s why you’ve seen a flattening.

Now storage is another story, it is at an earlier stage. Probably where solar was in 2013-2014. The combination of solar+storage is where you’re going to see more cost declines.

So it is the high interconnection costs that is driving high DC to AC ratios. In the LA project, they've got 400 MW DC to 160 MW AC. That is a 2.5X ratio, and this is what determines the 60% capacity factor. In July, CF probably reaches 80% and falls to 40% in January. So going much above 2.5X or 60% CF gets to a place where in summer, you can generate more power than can be transmitted in a 24-hour cycle. Yet, 8minutenergy is developing plants over next five years that go to 3X and above.

We are moving to truly baseload solar. It is being mediated by batteries. As battery costs decline relative to interconnection and inverter costs, we will see more of flattening out of solar.

I wish the journalist had asked about electrolyzers. Above 3X DC to AC, I suspect that electrolyzers start to make sense. Of course, we need cost declines in the electrolyzers and other hydrogen hardware to keep moving down the experience curve.

 

[Doggydogworld]

So it is the high interconnection costs that is driving high DC to AC ratios. In the LA project, they've got 400 MW DC to 160 MW AC. That is a 2.5X ratio, and this is what determines the 60% capacity factor.

Where did you see 400 MW DC and 160 MW AC? The article clearly says 400 MW AC. Also, 160 MW at 60% CF is 840,960 MWh/year, basically what the table shows for Eland 2 alone.

The Eland 2 table is 2345 MWh/day in year 1, so both phases combined deliver 4690. That's 700+ MW DC of panels. Feed 450 MW DC into the inverter for 400 MW AC output and ~250 MW DC into the BESS. 6 hours at ~250 MW gives you 1200 MWh net dispatchable electricity out of the BESS.

Up to 1200 MWh of the total 4690 come from the BESS. That's a ~25% ratio at a cost of $19.65 applied to all MWhs. The incremental cost of storage is thus close to $80/MWh and total cost is almost $100/MWh. That's an improvement from other projects, but no threat to baseload.

In July, CF probably reaches 80% and falls to 40% in January.

That's too extreme. This site shows tilt-at-latitude producing 35% more in summer than in December (7.58 vs. 5.61 hours). The 8Minute project uses single axis trackers so raw numbers will be different, but the 35% ratio should be in the ballpark.

Average midsummer highs are 96+ there, so panel output will degrade. Maybe in summer the array feeds the batteries ~200 MW for 8 hours instead of my 250 MW/6h. There's probably a bit of summer clipping, too.

 

[jhm]

Where did you see 400 MW DC and 160 MW AC? The article clearly says 400 MW AC. Also, 160 MW at 60% CF is 840,960 MWh/year, basically what the table shows for Eland 2 alone.

The Eland 2 table is 2345 MWh/day in year 1, so both phases combined deliver 4690. That's 700+ MW DC of panels. Feed 450 MW DC into the inverter for 400 MW AC output and ~250 MW DC into the BESS. 6 hours at ~250 MW gives you 1200 MWh net dispatchable electricity out of the BESS.

Up to 1200 MWh of the total 4690 come from the BESS. That's a ~25% ratio at a cost of $19.65 applied to all MWhs. The incremental cost of storage is thus close to $80/MWh and total cost is almost $100/MWh. That's an improvement from other projects, but no threat to baseload.

That's too extreme. This site shows tilt-at-latitude producing 35% more in summer than in December (7.58 vs. 5.61 hours). The 8Minute project uses single axis trackers so raw numbers will be different, but the 35% ratio should be in the ballpark.

Average midsummer highs are 96+ there, so panel output will degrade. Maybe in summer the array feeds the batteries ~200 MW for 8 hours instead of my 250 MW/6h. There's probably a bit of summer clipping, too.

Here's what's approved:

The LADWP portion of the 25 year PPA is for 375 MWac of solar power coupled with 385.5 MW / 1,150 MWh of energy storage, while Glendale Water and Power took the other 25 MWac of solar plus 12.5 MW / 50 MWh of energy – totaling 400 MWac of solar plus plus 300 MW / 1.2 GWh of energy storage. LADWP will pay about $1.1 billion over the 25-year contract.

So you are correct about 400MWac. Let's check this. If you have Eland 2 with 200 MWac PV producing (initially) 865,094 MWh per year expected, this works out to 49% CF just for direct output. If you were to pair that with half of the 1.2GWh battery charged from the solar power inexcess of the 200MWac that could give you as much as 600MWh per day. If this limited by a 200MWac inverter, that would add another 3 hours or 12.5% to the CF. So total CF would be a little less than 61.5%, which would be in line with 60% CF as stated. This would also imply that about 1/5 of the total system output is stored.

So do this align with your understanding of the project? Thanks for helping me think about this more carefully.

Having 3 dispatchable hours seem about right for targeting peak prices. It handles duck curve peaks, but does not provide overnight baseload.

 

[SageBrush]

In the LA project, they've got 400 MW DC to 160 MW AC. That is a 2.5X ratio, and this is what determines the 60% capacity factor.

In conjunction with the battery, I presume.

I'm not sure that the arithmetic is done this way, but I estimated generation as the equivalent of 6 hours of STC a day at 0.4 GW = 2.4 GWh a day generation. 100% capacity of the inverter (AC) would be 0.16 GW * 24 hours = 3.84 GWh

2.4/3.84 = 62.5% capacity factor (AC).

As an aside, it is quite astonishing that these systems have become the kings of dispatchability. Not too shabby from PV being the unwanted step-child just a few years ago.

 

[jhm]

In conjunction with the battery, I presume.

I'm not sure that the arithmetic is done this way, but I estimated generation as the equivalent of 6 hours of STC a day at 0.4 GW = 2.4 GWh a day generation. 100% capacity of the inverter (AC) would be 0.16 GW * 24 hours = 3.84 GWh

2.4/3.84 = 62.5% capacity factor (AC).

As an aside, it is quite astonishing that these systems have become the kings of dispatchability. Not too shabby from PV being the unwanted step-child just a few years ago.

Did you see my latest post? I tried to correct this per Dog's criticism.

 

[SageBrush]

Did you see my latest post? I tried to correct this per Dog's criticism.

I did now -- thanks.

If the '60% CF' is based on AC inverter output of 400 MW then 60% CF implies (before losses) 400*24*0.6 = 5760 MWh = 5.7 GWh a day. The system would require ~ 1 GW of DC panels to produce that amount

So no matter how it is sliced, the DC:AC is ~ 2.5:1,
And BESS sized to sop up the excess

Very, very cool. I still cannot get over a PPA of 4 cents a kWh. I'm beginning to wonder if any and all kWh are 4 cents.

 

[jhm]

I did now -- thanks.

If the '60% CF' is based on AC inverter output of 400 MW then 60% CF implies (before losses) 400*24*0.6 = 5760 MWh = 5.7 GWh a day. The system would require ~ 1 GW of DC panels to produce that amount

So no matter how it is sliced, the DC:AC is ~ 2.5:1,
And BESS sized to sop up the excess

Very, very cool. I still cannot get over a PPA of 4 cents a kWh. I'm beginning to wonder if any and all kWh are 4 cents.

Dog was suggesting that it was more than 700MWdc. So 1.75 to 2 DC:AC. Still pretty substantial.

At this point I don't see why you'd want a bigger CF than 60%. Combined cycle gas runs at about 60% CF which suggests that only about 60% of operating hours are marginally profitable for such a generator. If you added more storage to this hybrid system you'd have to discharge more stored power at below peak prices. The marginal pricing implied in the PPA is about $120/MWh (Note average $40 = 80%×$20 + 20%×$120.) So that fourth hour of stored power is probably not reliably worth $120/MWh in the current market. The cool thing here is that through a combination of overpaneling DC:AC and adding battery capacity, you can optimize the system to maximize value added to the grid while keeping the PPA price low. So this is competitive with gas generators in terms of getting a good fit for current needs of the grid. Also suggests that solar alone is not the best fit at this time. So without hybridization adding that much solar might not have been in the cards. A 3-hour stand alone battery peaker also might not have been in the card. The hybrid is able to shave off cost by having battery and PV share the same interconnection and inverter as well as soaking up surplus PV power. So the hybrid is cheaper than two stand alone resources. This is very promising for putting more solar and batteries into the mix. I hope this means we will see solar installation rates increase.

 

[SageBrush]

The marginal pricing implied in the PPA is about $120/MWh (Note average $40 = 80%×$20 + 20%×$120.)

I'm not sure I am following here. Are you back-calculating presuming $20/MWh for naked PV and system output 20% via the BESS to arrive at $120/MWh output for the BESS ? If so, it agrees with my other attempts to figure out the cost of utility size BESS. Amazingly enough, that price is not much different than residential energy storage from Tesla.

I agree with the rest of your post

 

[jhm]

I'm not sure I am following here. Are you back-calculating presuming $20/MWh for naked PV and system output 20% via the BESS to arrive at $120/MWh output for the BESS ? If so, it agrees with my other attempts to figure out the cost of utility size BESS. Amazingly enough, that price is not much different than residential energy storage from Tesla.

I agree with the rest of your post

Yeah, that's what I was after. I do think we need to differentiate between PPA prices offered to the utility and the underlying cost to the developer. The margin on the $20/MWh for solar alone may be a loss leader with near 0% markup while the options to add storage could marginally have something like a 50% markup. (I'm absolutely making up numbers here for sake of illustration.) So the marginal price implied by comparing different PPA prices may be $120/MWh while the cost to developer is $60/MWh. But as this is just 20% of the power sold under the PPA. The developer has an expected profit margin of $12 on a $40 MWh of delivered energy, a nice 30% margin on the contract. Basically, the developer knows that the solar only version of the deal is really not worth much to the utility and so will want to add a few peaker hours to the deal, which is where the developer makes money. It is a bit like Tesla offering a base model of a car at painfully low margin, knowing that customers will option up to an acceptable gross margin. The loss leader in this case, basically pushes any competitor that can't muster cost effective battery tech out of the running. That is a competitor with a solar only proposal cannot match the $20/MWh offer from 8Minute (at least not on duration and reliability). So 8Minute gets the deal with profitable storage upgrades. Really $8Minute is playing in the peaker space, but happens to have cheap solar as a byproduct.

If I am correct in this interpretation, it would suggest that solar only deals will become a rarity going forward. It would be interesting to find data that tracks solar deals and notes how much battery capacity is included. My testable hypothesis is that solar only deals decline in market share.

The next thing that puzzles me is how to work an electrolyzer into such a hybrid and PPA. More later...

 

[SageBrush]

The next thing that puzzles me is how to work an electrolyzer into such a hybrid and PPA. More later...

I just read this morning a blurb about nuclear chatting up the idea of using their output for H2 production. My first reaction was to say 'ain't going to happen when naked PV is under 2 cents a kWh,' but it might turn out to an economic choice for solving the long storage problem. I don't mean only the H2, but the nuclear plant as an interim resource that can switch between H2 production and electricity delivery.

 

[ggr]

I just read this morning a blurb about nuclear chatting up the idea of using their output for H2 production. My first reaction was to say 'ain't going to happen when naked PV is under 2 cents a kWh,' but it might turn out to an economic choice for solving the long storage problem. I don't mean only the H2, but the nuclear plant as an interim resource that can switch between H2 production and electricity delivery.

There's a great, and long, discussion of nuclear power over in the environment section. The bottom line, according to others whose opinions and evidence are convincing to me, is that it isn't economical to run even an existing nuclear plant in the face of current solar and wind energy. So diverting it to producing Hydrogen is still worse than making it with renewables. The economics of nuclear power are driven by safety and regulatory costs more than anything else at the moment, at least in the US.

 

[Doggydogworld]

At this point I don't see why you'd want a bigger CF than 60%.

I agree. Daytime and the evening peak are the sweet spots in sunny areas. Especially if we switch to EVs en masse with daytime charging.

This project really shows how a little bit of storage can vastly improve solar's usefulness while keeping cost in the reasonable range.

The margin on the $20/MWh for solar alone may be a loss leader with near 0% markup while the options to add storage could marginally have something like a 50% markup.

IMHO the space is way too competitive to try this. The BESS was optional, so LADWP could have just taken the $19.97/MWh solar and bought storage from someone else at half the price.

I think we're basically in the ballpark on the numbers, but it bothers me that they don't cross-check. For example:

As you noted, 850 GWh/year through Eland 2's 200 MW AC interconnect is 49% capacity factor. That's too high for the direct solar portion, even in the desert with with tracking and a 1.75-2.0x DC:AC ratio. It seems the 850 must include the stored electricity, or more likely just the initial 100 MW/400 MWh of storage proposed for Eland 2. This leads to first year numbers for Eland2 of:

710 GWh / 40.5% CF - direct solar
146 GWh / +8.3% CF - 400 MWh storage - Total electricity delivered = 856 GWh at 48.8% CF
73 GWh / +4.2% CF - extra 200 MWh storage - Total electricity delivered = 929 GWh at 53% CF

So the panels plus 400 MWh of storage are almost 50% CF, matching what the 8Minute guy said. The additional 200 MWh only gets us to 53% vs. his 60%, though. I couldn't understand how such a small amount of additional storage would have such a big effect on capacity factor. I think he was 'rounding up'.

I also couldn't match these production numbers to the article's claim that LADWP will pay 1.1 billion over the 25 year PPA. That's 44m/year, or 1110 GWh/year at 39.62/MWh. That's for all of Eland 2 and 87.5% of Eland 1, which should be ~1600 GWh in year one and 1400+ by the end of the contract. I tried some different permutation but couldn't get the 1.1 billion number to line up with anything, It's probably just a number he pulled out of context, but loose ends always bug me.