Hope for the BESS: An energy storage evangelist surveys the industry’s next charge

Jacqueline DeRosa is a self-proclaimed energy storage evangelist.

“Since the beginning,” she attests.

“I helped author the Massachusetts State of Charge report back in the day when that was one of the first reports advocating for the benefit-to-cost ratio of energy storage being greater than one.”

DeRosa cheerily rattles off accolades as we introduce ourselves on a video call, occasionally interrupting herself to sneak another bonafide in.

“I’ve been on executive boards for the Energy Storage Association,” she recalls. “I also had two terms on the Board of the American Clean Power Association.”

“I gotta write this stuff down,” she jokes.

DeRosa rounds out her resume by saying she plays volleyball, a perk of perpetual California sunshine. She lovingly points out her two dogs asleep in the corner of the room. They’re mainstays in the background of her video calls.

“It takes the edge off, you know?”

DeRosa is the vice president of energy storage systems at Ameresco, where she’s negotiated large energy storage contracts with the likes of Southern California Edison, Silicon Valley Power, and Middle River Power. “Mostly stuff in the West”, as she puts it. The battery business is booming in the United States, and a lot of the recent action is happening in her territory.

If DeRosa was a type of energy storage, she would unquestionably be long duration.

“I’ve been (with Ameresco) for about 6 years, but I’ve been in the industry for longer than I like to say,” she smiles. “Which I should be proud of!”

In that span, “Jackie” has learned more about the BESS market than she’s needed to write down, and she’s also formed an opinion or two about where it’s headed.

Bigger and better BESS

Ameresco’s DeRosa won’t go as far as to say the battery energy storage market is commoditized, but it’s getting closer.

“I wouldn’t quite say that yet, because I’ve been in the weeds of the contracting piece,” she observes. “So it’s not quite like contracting for solar.”

“But the efficiencies of the product have increased excessively. I mean, now we’re looking at 20-foot containers that can hold five megawatt hours.”

Indeed, the twenty-foot equivalent unit (TEU) has become the industry standard form factor for battery energy storage systems, according to Clean Energy Associates’ Energy Storage Systems Price Forecasting Report for Q2 2024. Several major integrators have recently shifted from smaller modular units, citing two key advantages: energy density and cheaper/easier shipping.

When she started in the BESS biz, DeRosa says the only products on the market were short-duration storage housed in 50-foot containers or inside buildings. She describes them in a way that invokes memories of old-timey photos of computers taking up entire rooms.

“Back in World War Two, my mother worked at Fort Monmouth in New Jersey, and she was a computer,” DeRosa offers. “That was her title!”

“So I can relate,” she laughs.

Besides massively improved efficiency, DeRosa spots two other trends moving the battery energy storage market forward. One is the price of lithium, which has plummeted from peaks a few years ago.

Per the same CEA report cited above, the cost of lithium has remained relatively low all year. Any hint of a price recovery in the second quarter of 2024 was suppressed by demand concerns stemming from international trade actions, like tariffs from the U.S. and European Union. The projected lithium balance over the next five years is expected to stay in surplus, CEA projects.

The other crucial factor fueling battery adoption? More clean energy generation, and lots more waiting in queue. ERCOT, for example, just proved it can navigate Texas’ summer peak season without issuing energy conservation requests, thanks in part to rapid battery adoption paired with wind and solar.

“With more penetration of renewables on the grid, it becomes imperative to be able to store energy,” insists DeRosa, eager to share some innovative ways her company is doing it.

What’s in store for storage?

DeRosa highlights two Ameresco initiatives that can serve as examples of new ways to think about energy storage.

The first was announced last November: A 50 MW/200 MWh BESS on land owned by the City of Santa Clara that will serve as a wholesale electricity market resource.

“We’re leasing the land but it’s an interesting use case because we’re still behind the municipal meter, but we’re interconnected into the ISO as well,” DeRosa explains.

Kifer Energy Storage will be installed adjacent to the existing Kifer Receiving Station within Silicon Valley Power’s service territory, giving Ameresco combined responsibilities at the substation.

“So it’s a little bit different than just being a greenfield developer,” laughs DeRosa.

“It’s a very interesting use case to put storage in a very high load growth area,” she notes. That part of SVP’s territory is heavy on data center demand, a common trend driving massive renewable development at the behest of tech giants like Google and Meta.

Jacqueline DeRosa, vice president of energy storage systems at Ameresco, is speaking on a panel about fitting battery energy storage systems into big cities at the interconnection event, GridTECH Connect Forum. Don’t miss her insights! Join us in Newport, Rhode Island October 28-30, 2024.

DeRosa also points out gas plus storage as an emerging option. Last summer, Ameresco announced four co-located energy storage projects sited at gas power plants owned by Middle River Power, an independent power company in California, designed to add 379 MWh to the grid.

“I think we’re going to see more of this,” she predicts.

“We have a bunch of sites in California we are looking at where we have existing infrastructure and we’re tying storage into that existing interconnection as basically a material modification to the existing interconnection.”

Ideally, those sites won’t use gas much at all, allowing them to optimize their storage capacity in the wholesale market. But I suppose it’s nice to have options, especially in times of record demand growth.

A BESSy summer

This summer, Ameresco signed a contract with Snohomish County Public Utility District (PUD) in Washington state to construct another innovative project, a 25 MW/100 MWh BESS, the largest standalone battery project in the Pacific Northwest to date.

A 25-year tolling agreement positions Ameresco as the asset owner and Snohomish PUD as the exclusive customer of the project, giving Snohomish PUD the flexibility to utilize the system for charging and discharging activities under the agreement.

“This project represents a paradigm shift in the Pacific Northwest energy industry,” said Nicole Bulgarino, executive vice president at Ameresco. “By collaborating with Snohomish PUD, we are pioneering a unique model where the owner and the customer are distinct entities, showcasing the versatility and scalability of utility-scale storage solutions.”

DeRosa says the Snohomish site is about 1.5 acres and includes 37 shipping containers housing Tesla batteries; Ameresco is technology agnostic, but found Tesla’s offerings worked best for this project. Construction involves building a new substation called Crossland, and a 115 KV line for grid connection into Bonneville Power Authority via the Arlington Microgrid.

“This makes it really nice for us because the site is already pretty well groomed and so makes it easier when we can come into a situation where we don’t have to worry about a lot of flooding or other types of challenging existing infrastructure,” DeRosa observed.

When the Snohomish project is operational (expected late 2025), Ameresco says the BESS will provide the PUD with enhanced electrical system reliability and flexibility while reducing exposure to energy price volatility. It should increase reliability for customers and ultimately lower their costs.

“I think there’s quite a bit of conversation within Bonneville Power Authority about counting energy storage resources for resource adequacy, as we do in California and other states,” DeRosa adds. “And so that would be an advantage for Snohomish PUD as well.”

In late July, Ameresco and electric cooperative United Power celebrated the construction of Colorado’s largest distributed battery energy storage system, an eight-site undertaking providing 78.3MW/313.34MWh of capacity. It’s Ameresco’s largest wholly-owned BESS asset portfolio. Strategically positioned throughout United Power’s service territory, these eight systems are pivotal to enhancing load balancing and integrating renewable resources seamlessly, the co-op says.

“The use of batteries on our distribution network is essential to a resilient and responsive power grid, and we are excited to be moving ahead with one of the most aggressive plans for such systems. These battery energy storage systems will allow us to balance our power needs throughout the day and incorporate local renewables more efficiently,” said Mark A. Gabriel, president and CEO of United Power.

The Ameresco-owned assets consist of four 11.75 MW and four 7.84 MW battery energy storage systems across the eight different substation sites owned by United Power, located in Adams, Broomfield, and Weld counties. Ameresco integrated Stem’s AI-driven clean energy software to operate and maintain the systems.

What’s next?

Jacqueline DeRosa seems to have a firm grasp on what’s coming in the storage industry, and I kept prodding her for things to keep an eye on. She left me with two tokens:

First, education still needs to improve, specifically understanding of fire codes and the NFPA 855 (Standard for the Installation of Energy Storage Systems), a new-ish National Fire Protection Association Standard being developed to define the design, construction, installation, commissioning, operation, maintenance, and decommissioning of stationary energy storage systems.

“You don’t have to be, like, 8 million feet away from residences,” DeRosa says with a smile. There’s a lot more to it, of course, but the gist is that we’re getting a better handle on how to safely construct an energy storage system and react appropriately if something goes wrong.

Second, and perhaps more importantly, she fears we’re in for some challenges dealing with tariffs. The tariff rate on lithium-ion EV batteries and battery parts from China will increase from 7.5% to 25% this year, and the tariff rate on lithium-ion non-EV batteries will go up from 7.5% to 25% in 2026.

“If we’re going to limit what we can purchase internationally, we have to have domestic production,” she warns. “And that truly doesn’t happen overnight. In storage, we don’t even have the same infrastructure that solar has to build cells here in the U.S., so it’s a transition period and it’s a pivotal transition period.”

But we will build batteries here, she predicts, as reflected in massive investments by major players across the country, bolstered by billions of dollars of investment from the Department of Energy.

“This is an industry that is starting to take off,” DeRosa notes. “But it could fly into the ground if things aren’t set up properly.”

As market designs evolve, so do the standards around battery energy storage. Testing, commissioning, and other rules aren’t exactly consistent yet, she cautions.

“Anytime things aren’t uniform, you know it causes more risk. And who is going to take on that risk? Is it going to be the developer? Is it the EPC? The off-taker? What about the insurance? What about the financing? All these things have to come together.”

It sounds like a mess, and I’m sure it feels that way for a lot of the parties involved. But you could never tell from DeRosa’s attitude- or her serene setup, pups snoozing away as she chatters about storage market policy.

“You can tell some people think we’re there, but we’re not exactly there,” DeRosa concludes.

“But it’s exciting for me to see the evolution, and I think we will get to that tipping point… And the industry will succeed.”

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