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Looking Beyond the Eclipse: How the Historic Event Tested Customer Engagement on the Electric Grid

August 21, 2017

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Even if you couldn’t step outside to watch the solar eclipse take place today, it was still possible to participate in this historic event. No, not just by watching the NASA livestream -- but by curbing your electricity usage.

The eclipse will affect around 1,900 utility-scale solar PV power plants across the U.S. today, causing an estimated 9,000 megawatts of solar capacity to go offline as the moon passes in front of the sun. California alone was projected to lose 6,000 megawatts of solar capacity. Generation profiles from the California Independent System Operator show a roughly 5,000-megawatt drop shortly before 12 noon.

All of this generation had to be made up for somehow. The data shows that hydropower and natural-gas-powered turbines largely carried the burden of compensating for lost solar output. Energy storage may have also played a role.

While these large-scale, high-tech responses are critical, the influence of the individual electricity consumer cannot be underestimated, said Michael Picker, president of the California Public Utilities Commission (CPUC). In fact, consumers have to start thinking more about how their energy use fits into a larger system due to the grid needs even on non-eclipse days.

“It’s not clear that we’re going to get people to unplug enough major appliances to result in a 6-gigawatt energy savings for a 2-hour period, but soon we will be asking for that,” said Picker. “We're moving toward a time-of-use program in California, and so [the eclipse] becomes a way to explain to people who believe that just building more solar would solve the problem that it's more complicated.”

Residential solar customers in California are already moving to time-sensitive electricity rates. By 2019, all residential customers will switch to a time-of-use (TOU) plan, incentivizing customers to use energy at off-peak times, enabling them to save money while helping their utility manage peak demand.

The peak, preceded by a fast ramp as solar generation fades (widely known as the duck curve), is only getting more pronounced in California. An analysis of CAISO data from 2011 through mid-2016 by consultancy ScottMadden reveals that California has largely exceeded its 2013 projections for lower net loads and higher ramps in energy demand.

Managing this issue is “going to require people to actually start to think about how their power making choices,” said Picker. “Whether it's to get a rooftop solar panel or to move to a ground-mount geothermal water heater, or to get more energy-efficient appliances -- all these things that they do will also have kind of a time-bound aspect. They need to not just do these things, but they need to think about how and when they do these things.”

Source: ScottMadden

Today’s eclipse is a test run for the electricity community. Leading up to the event, the CPUC received commitments from nonprofits and public awareness groups like Energy Upgrade California, as well as the State of California’s real estate manager, private companies like Google and third-party technology providers to help roughly 500,000 people take steps to reduce their energy usage during the eclipse hours.

Nest is one of those third parties. Over the weekend, the company rolled out an update asking Nest thermostat owners if they wanted to participate in a special Solar Eclipse Rush Hour program that encouraged people across the U.S. to help offset the drop in solar production by precooling their homes. The thermostat’s onboard sensors assess the conditions in each home, including the number of occupants and thermal characteristics, then it automatically adjusts the temperature by a few degrees to reduce energy use during the “rush hour” period, while keeping customers comfortable.

“This is definitely unprecedented scale not just for Nest, but really for anybody,” said Ben Bixby, general manager of energy and safety at the Google-owned company. Nest launched its Rush Hour Rewards program in 2013 to help customers use less energy when everyone else is using more. Today, more than 70 U.S. utilities regularly call on the Rush Hour program. But never before has the company issued a call to millions of Nest customers across the U.S.

The eclipse program is “the world’s largest clean distributed power plant,” said Bixby, who expects to help offset a “good amount” of the drop in solar supply through demand-side management.

“This is a novel point in history and technological capabilities to demonstrate at gigawatt-scale that connected devices are a resource on par with peaker power plants,” he added.

When the last solar eclipse passed over the U.S., there wasn’t any solar capacity to offset, or any internet-connected devices capable of responding to the drop -- in fact, there wasn’t even an internet. Today, grid needs are vastly different, and customer-sided technologies are responding -- not only during eclipse conditions, but also on a day-to-day basis.

“What we've been stressing to people is the situation that we're seeing with the eclipse is actually like 12 to 15 hot summer days where the sun is going down in the west, and south-facing panels start to really lose their overall capacity for generation because they're not getting direct rays from the sun. This is also the same time when people are coming home from work and turning on their air conditioning,” said Picker. “So we have exactly the same challenge on a regular basis within the grid because of solar and the way that it works. It's just a matter of figuring out if the sun goes away what we can do as consumers and decision-makers to make up the difference. That's what helps us to avoid having to depend on these natural-gas peakers.”

“Frankly, engaged customers are far more efficient than battery storage,” he added, when asked what roles he sees various technologies playing.

Picker pointed to Sacramento Municipal Utility District’s TOU pilots as evidence of this. The two-year study, conducted in partnership with the Rocky Mountain Institute, successfully reduced demand by nearly 12 percent during the peak period. With a larger price differential, the utility was able to shave around 25 percent of load during peak hours on peak days.

The results suggest that if around 15 percent of SMUD's customer base could reduce their load on 12 peak days in the summer, the utility could avoid building 500 megawatts of gas peakers, said Picker. “That’s not chump change; that’s a big deal.”

“If we can get that kind of response statewide, that's a huge savings to the system. It comes cheap compared to building battery arrays, and it comes cheap compared to building large capacity storage or new peaker plants,” he added. “So it's absolutely important for us to explore [demand-side management] and to figure out how to make it work. Plus, it gives people more choices.”

Results from the SMUD TOU pilot in 2016 bear this out

California’s three large investor-owned utilities will launch their own TOU pilots next year to see how consumers respond to new pricing signals to alter their energy use at specific times. Consumers have yet to learn how important they are to the larger grid network, and it goes beyond purchasing efficient appliances, home solar or a even a battery, said Picker. It’s how they behave during a small period of time “that makes an enormous difference,” he said.

Charlie Gay, director of the Solar Energy Technologies Office at the Department of Energy’s Office of Energy Efficiency and Renewable Energy, is thinking along similar lines.

“A lot of what we do in solar, and part of the reason I came here to DOE almost a year ago, was to collaborate more closely with folks who happen to be five doors down the hallway from me here in the Buildings Office,” he said. Combining solar with energy efficiency “helps keep electricity costs down and helps us make better use of the existing infrastructure that we've already paid for with all of the wire.”

The DOE’s solar experts are teaming up more and more with the Buildings Office to study the interplay between distributed solar and advanced heat pumps, as well as advanced lighting, hot water heaters and smart air conditioning systems. What makes these devices smart is their ability to communicate, which is where home automation comes into play. Historically, distributed energy resources didn’t have a large enough presence on the grid to play much of a role in grid reliability, but “now that all of us have made so much headway with these technologies, it's much more important that we team up with other offices at the DOE to think of the network [and] the system as a whole,” Gay said.

As for the eclipse, “I think it’s a great teachable moment,” he said. “I don't think consumer behavior with regards to how much electricity consumption changes is going to be all that noticeable, because it's a fleeting moment in time, but the attention that the eclipse [draws] just naturally brings…relevancy to solar and choices that individuals can make.”

The DOE, Nest and a myriad of technology developers and research groups are working on ways to better integrate solar on the grid. When the next eclipse passes over the U.S. in 2024, it’s possible the consumer impact will be much more noticeable.

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Global Solar Capacity Set to Surpass Nuclear for the First Time

August 21, 2017

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The global solar market has been downgraded for 2017. A worrying sign? Hardly.

Even with a 4-gigawatt downward adjustment in projected installations, it's still going to be a record-breaking year for new solar capacity additions -- yet again.

The 81 gigawatts expected this year are more than double the amount of solar capacity installed in 2014. And it's 32 times more solar deployed a decade ago. (In the year 2000, global installations totaled 150 megawatts.)

Those numbers come from GTM Research's latest edition of the Global Solar Demand Monitor, which closely tracks market-moving and market-dooming developments in countries around the world. 

One of the most telling statistics: By 2022, global capacity will likely reach 871 gigawatts. That's about 43 gigawatts more than expected cumulative wind installs by that date. And it's more than double today's nuclear capacity.

In fact, by the end of 2017, solar PV could rival global nuclear capacity. That's a major milestone.

According to the Nuclear Energy Institute, there are 391.5 gigawatts of nuclear plants operating around the world. When the year closes out, there will be roughly 390 gigawatts of solar PV plants spread across the globe, according to estimates from GTM Research. (The final numbers could be larger, since the outlook for China is growing stronger.)

For the first time ever, solar power plants and nuclear power plants will be on equal footing -- at least when it comes to raw capacity. 

Of course, capacity only tells us part of the story. It's all about electrons. And in that regard, nuclear still dominates.

Nuclear generates 2,476,671 gigawatt-hours of electricity every year, accounting for roughly 11 percent of global generation.

Solar, on the other hand, only accounts for 375,000 gigawatt-hours of electricity yearly, or about 1.8 percent of global generation.

The generation gap is significant. But a crossover is approaching.

In 2014, the International Energy Agency looked at PV growth rates through the middle of the century. Under a high-growth scenario -- which basically mirrors the current real-world scenario -- IEA found that the world could get 16 percent of its electricity from PV by 2050, and another 11 percent from concentrating solar power. That would make solar the dominant energy source globally.

In the last three years, growth rates and cost reductions for solar have far exceeded projections. Meanwhile, high costs, slow construction and competitive renewable alternatives are causing the global nuclear industry to falter. 

The trend lines are becoming clearer every year. 

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Global Solar Capacity Set to Surpass Nuclear for the First Time

August 21, 2017

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The global solar market has been downgraded for 2017. A worrying sign? Hardly.

Even with a 4-gigawatt downward adjustment in projected installations, it's still going to be a record-breaking year for new solar capacity additions -- yet again.

The 81 gigawatts expected this year are more than double the amount of solar capacity installed in 2014. And it's 32 times more solar deployed a decade ago. (In the year 2000, global installations totaled 150 megawatts.)

Those numbers come from GTM Research's latest edition of the Global Solar Demand Monitor, which closely tracks market-moving and market-dooming developments in countries around the world. 

One of the most telling statistics: By 2022, global capacity will likely reach 871 gigawatts. That's about 43 gigawatts more than expected cumulative wind installs by that date. And it's more than double today's nuclear capacity.

In fact, by the end of 2017, solar PV could rival global nuclear capacity. That's a major milestone.

According to the Nuclear Energy Institute, there are 391.5 gigawatts of nuclear plants operating around the world. When the year closes out, there will be roughly 390 gigawatts of solar PV plants spread across the globe, according to estimates from GTM Research. (The final numbers could be larger, since the outlook for China is growing stronger.)

For the first time ever, solar power plants and nuclear power plants will be on equal footing -- at least when it comes to raw capacity. 

Of course, capacity only tells us part of the story. It's all about electrons. And in that regard, nuclear still dominates.

Nuclear generates 2,476,671 gigawatt-hours of electricity every year, accounting for roughly 11 percent of global generation.

Solar, on the other hand, only accounts for 375,000 gigawatt-hours of electricity yearly, or about 1.8 percent of global generation.

The generation gap is significant. But a crossover is approaching.

In 2014, the International Energy Agency looked at PV growth rates through the middle of the century. Under a high-growth scenario -- which basically mirrors the current real-world scenario -- IEA found that the world could get 16 percent of its electricity from PV by 2050, and another 11 percent from concentrating solar power. That would make solar the dominant energy source globally.

In the last three years, growth rates and cost reductions for solar have far exceeded projections. Meanwhile, high costs, slow construction and competitive renewable alternatives are causing the global nuclear industry to falter. 

The trend lines are becoming clearer every year. 

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A Call for More Solar in the Wake of South Carolina’s Nuclear Debacle [GTM Squared]

August 18, 2017

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The Threat of Tariffs Is Already Reshaping the US Solar Market

August 18, 2017

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You’ve probably heard about the solar eclipse that will pass across the U.S. on August 21.

But if you’re in the solar industry -- whether a manufacturer, contractor or service provider -- you're no doubt aware of a much more significant eclipse: the United States International Trade Commission (ITC) case on imported crystalline-silicon solar cells and modules.

You may think that this industry eclipse is not a big deal, or that it's someone else’s problem. You’re wrong. It’s time to break out your peril-sensitive sunglasses.

Suniva and SolarWorld are seeking tariffs of $0.40/watt on all imported solar cells and a minimum price of $0.78/watt on solar modules that use imported solar cells. On September 22, the ITC will determine if the crystalline-silicon PV industry was harmed by global trade practices. If harm is determined, a remedy recommendation will be sent to President Trump.

I’m normally a very optimistic guy -- otherwise I wouldn’t be in the solar industry. But a tariff or minimum price of this magnitude would present severe difficulties.

It would effectively double the price of the vast majority of modules installed in America. Current production of solar cells in the U.S. is currently negligible, and it takes two or more years to begin production of solar cells at a new or relocated factory. If a tariff or minimum price is imposed, we can expect that all solar module prices that use imported cells will increase (including those assembled in the U.S.), and this increase will persist for several years until domestic cell capacity ramps up. 

Long-time industry participants have seen a similar story play out before. The worldwide silicon shortage that began in 2004 had a significant effect on solar module pricing.

At that time, the worldwide solar industry was much smaller, and the $1.00/watt increase in prices did not have as big an impact when average installations were still in the $6 to $10/watt range (12.5 percent). However, a $0.40/watt increase today will be applied to utility-scale system prices of $1.00/watt (40 percent), substantially reducing the economic benefits of these large projects. 

Supply chain impacts

Simple economics tells us that the tariff price increase will reduce demand from residential, commercial and utility customers.

Let’s consider what is happening throughout the entire solar supply chain. First, solar module manufacturers are already reacting by accelerating shipments to the U.S. before mid-November. Any shipments that arrive after a tariff decision would be penalized. Building U.S. inventory is a low-risk way to continue to supply the market, but shipments that arrive after the tariff is imposed will be subject to an unknown cost increase.

As soon as this ITC action was initiated, suppliers to worldwide solar module manufacturers started ramping up deliveries of “ingredients” such as glass, aluminum and wafers. But there is only a limited amount of surplus component capacity that can be manufactured into modules -- so shortages are already occurring.

Since a final remedy decision will not be made until January 2018, it is uncertain which countries will be affected and what the size of the tariff will be. Manufacturers are sitting on the sidelines waiting to see what happens before they make any major U.S. investments. During these uncertain pricing times there is unlikely to be any production planned for shipment to the U.S. that would arrive after a tariff imposed.

Savvy consumers of solar modules, primarily utility-scale developers, are taking early delivery of modules for their projects right now -- even if these projects may not be slated to begin construction until 2018. Distributors and installers are also preordering for upcoming projects. Available inventory is getting soaked up like water seeping into a dry sponge.

From a solar module manufacturer’s standpoint, demand is very high and supplies are limited. Since many of these companies were making tiny profits (if at all) before, they are taking the opportunity to increase prices. These prices are being passed on to distributors and installers, who must pass these increases on to their customers or lose profit on jobs.

Customer impacts

Utility-scale customers are deferring purchasing decisions. Since this is the biggest market segment, it should come as no surprise that utility-scale developers and suppliers have mobilized swiftly to fight this tariff action. Companies in the entire utility-scale supply chain will be hit the hardest since a $0.40/watt increase in prices destroys the current economics of most projects.

Financiers, developers, engineers, salespeople, consultants, racking manufacturers and inverter companies are seeing their post-2017 pipelines disappear as customer economics have deteriorated. The C&I solar segment is seeing a similar contraction in demand, although one that's not quite as dramatic, since prices in these segments are higher.

I spend most of my time focused on the residential market segment, where sales cycles are much faster. As such, most residential contractors have not been affected too dramatically -- yet.

Module prices have increased by about 20 percent, and future availability is uncertain. It will indeed be more difficult to sell systems when the price of the main component goes up by about $0.50/watt (the $0.40/watt will be marked up). For contractors who have inventory, sales through the end of 2017 could be brisk. But if contractors need to purchase modules on the spot market at higher prices, they could see their profits completely wiped out.

This same situation happened in 2004 and 2005 when prices of modules went up by about $1.00/watt. Customers generally refused to renegotiate contracts due to higher prices, and some contractors defaulted on contracts or went out of business when they realized they would lose money on their pipeline of jobs.

Overall I expect the U.S. residential market to be smaller than we expected in Q4 of 2017, and for the foreseeable future, until affordable U.S. production of cells and components ramps up.

Companies in all segments of the residential supply chain -- including racking, inverters, financiers, lead generators, software developers and service providers -- will be hit by this slowdown. Attendees at Solar Power International 2017 in Las Vegas next month will have a chance to reconnect with suppliers and friends, but there will be no “selling” among module companies, since they will have no inventory to sell and will not know what their future price will be.

There is a silver lining to this eclipse, but only for a few companies -- primarily thin-film module manufacturers that do not use crystalline-silicon cells.

American module manufacturers are seeing an almost ludicrous demand increase, but since they source cells from overseas, they will also have to pass on the increase in price from a $0.40/watt tariff.

Moreover, these manufacturers have limited ability to quickly increase their capacity. Cell equipment manufacturing companies are seeing an increase in interest, but probably no committed orders until a final tariff determination is made. Remember that it takes two or more years to design, purchase, build, install and configure a new state-of-the-art cell manufacturing line, so the U.S. industry will be in the doldrums for several years.

What can we do to rebuild American solar ​manufacturing?

A Section 201 trade case is an incredibly blunt instrument when applied to a complex global industry like solar module manufacturing. I read with dismay that another component supplier recently shut down operations in Oregon after its biggest solar module customer went bankrupt. Tariffs on solar cells did not work the last time around.

The ITC’s prehearing staff report on this case noted that 26 solar manufacturers shut down operations in the U.S. since 2012.

So what can we do to rebuild U.S. solar manufacturing? Unfortunately, slapping a $0.40/watt tariff on all imported cells may not be enough of an incentive to quickly release the billions of dollars it will take to build gigawatts' worth of state-of-the-art solar cell manufacturing. We need to consider the entire solar module supply chain -- not just the cells themselves.

Because of the complicated supply chain for solar module manufacturing, just building a solar cell plant here in the U.S. that will come on-line in 2020 will not make the U.S. competitive with modules from other countries.

American manufacturers still must import almost all the other components, since domestic supply is either not available at all or priced higher than from other countries. For example, frame extrusions for solar modules cost twice as much in the U.S. than those available at comparable quality from Asian countries.

A dozen years ago, when China decided to make a big commitment to the solar industry, it incentivized not just cell and module manufacturers, but also silicon, glass, aluminum, backsheet and junction-box manufacturers. Large-scale module manufacturers designed integrated operations combining almost the entire supply chain.

China planned complete solar manufacturing cities -- like Detroit for cars, but for solar modules. Wafer and cell operations were situated next to extruders, junction box companies and module assembly plants, thereby reducing logistics costs and reducing turnaround time. Of course, many of these companies benefited from favorable government policies -- just as America provides in terms of federal tax credits, as well as state and local incentives.

Here in the U.S., we must put thought into a comprehensive solar industrial policy that considers all aspects of the supply chain. Expecting a better outcome by adding capacity at one point while ignoring other points is insanity.

In order to compete in the global module manufacturing industry, the sum of the costs of all the ingredients, including labor, must be competitive. Right now, virtually every factor of production is more expensive in the U.S. Once this rationalized supply chain policy is in place, existing U.S. module assembly companies will benefit the most -- as well as customers that prefer modules made in the U.S.

In the meantime…

While trade commissioners and legions of lawyers figure things out, many of us have businesses to run. We can see this slow-motion train wreck materializing, so there are actions we can take to reduce the harm to our businesses.

Rhone Resch’s recent GTM article provided terrific advice for project developers. Residential and commercial contractors who operate with fewer resources and shorter time frames can take action to mitigate the risks to their businesses.

Now is a good time to preorder inventory for installations in Q3 and Q4 -- there is still some product availability. If past experiences are any indication, some module manufacturers may cancel purchase orders or increase prices on unshipped orders. Distributors will do the best they can to ration out supplies to their best customers. No company is likely to get all the inventory they want. And everyone should plan on continued price increases.

Contractors must make sure they price jobs based on when they will receive modules for that job. One good strategy is to purchase inventory immediately when a contract is signed, even if the job will not be ready to start for a few months. Customer proposals should have a fairly short time frame during which prices will be honored (say five business days).

Consult with your attorney to see if a “force majeure” clause can be added to your contracts that would allow you to cancel a contract or raise prices if a tariff is imposed. The one shred of good news for contractors is that a 2018 price increase is a good incentive for customers to buy now.

Finally, we should continue to support our solar industry advocacy organizations, including the national Solar Energy Industries Association and the state SEIA chapters. Although not everyone may agree with SEIA’s position on this trade case, we are all on the same page when it comes to building a thriving and sustainable solar industry.


Barry Cinnamon is the CEO of Spice Solar. He's also the host of The Energy Show podcast.

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It’s Been a Decade Since Google Jumped Into Energy. Is It Any Closer to a Moonshot?

August 18, 2017

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It’s been 10 years since Google shifted some of its attention from bits and bytes toward the world of therms and electrons.

It started with a wide-ranging investment and R&D initiative, called RE<C, designed to make renewables cheaper than coal. That initiative was abandoned in 2011 after engineers realized they were tackling the wrong problems.

Today, new renewables are far more competitive than coal. But the economic shift didn't play out in the way Google imagined.

In the decade since, Google has since dabbled in pretty much everything -- power electronics, home energy analytics, smart thermostats, residential geothermal, flying wind, solar lead generation, autonomous cars, and direct corporate procurement.  

What can we conclude about the company's track record? And at a time of uncertainty in both venture capital and government support, is Google the best vessel for cleantech R&D?

In this week's episode of The Interchange, we debate Google's place in energy.

On one side, Stephen argues that Google hasn't lived up to its long-hyped claims about transforming the energy sector.

On the other side, Shayle argues that Google deserves credit for taking such a diverse approach to low-carbon technology development.

We'll also bring on some guests for more context about where energy fits into the X Moonshot Factory. We talk with Mark Bergen, a Bloomberg journalist covering Google, who recently wrote about struggles of Makani Wind under the X Moonshot Factory. And we interview Kathy Hannun, the CEO of geothermal startup Dandelion, about how X deploys resources to energy R&D.

Google's history in energy is extensive. Here's a condensed timeline.

  • In 2006, Google builds a 1.6-megawatt solar system at the Mountain View campus.
  • In 2007, Google launches the RE<C initiative. It invests in geothermal companies AltaRock and Potter Drilling, as well as CSP companies eSolar and BrightSource.
  • In 2009, Google becomes a major tax equity provider for renewables, ramping up massively in wind, and later, solar. It is now the biggest corporate purchaser, with a plan to get 100 percent of its energy from renewables through contacted electrons.
  • In 2010, Google secretly creates X. Engineers at the so-called "moonshot factory" get serious about autonomous vehicles.
  • In 2011, Google ditches RE<C, realizing CSP and enhanced geothermal are extremely challenging. They maintain an equity stake in BrightSource’s Ivanpah CSP project. Engineers later say that conventional renewables aren’t enough to combat climate change.
  • That same year, 2011, Google kills off its home energy suite, PowerMeter. That’s when most tech providers start re-evaluating their approach to the home energy management market.
  • In 2013, Google acquires the flying wind company Makani. 
  • In 2014, Google makes another smart-home play by acquiring Nest for $3.2 billion. Nest has since struggled to define itself under the company, and it’s not clear where the smart-device maker is headed.
  • Today at X (now under the Alphabet umbrella), engineers continue to pursue flying wind, thermal storage, power electronics and even hybrid hydro-solar. But these efforts have either been abandoned, are facing hiccups, or are still too nascent to judge.

After everything, Google's impact has arguably been greatest in conventional wind and solar procurement -- the very technologies that engineers at RE<C once criticized as not enough to address climate change.

This brings us to some of the bigger questions that we try to answer in the podcast.

What can we conclude thus far about Google’s track record?

Does Google's "10x" approach to innovation mean we should judge the company by a different standard? Are there limitations to applying that philosophy to energy?

Where are Google's greatest strengths, and how can it apply them to energy?

Shayle also proposes a plan: Should Google simply buy a utility?

We still haven't witnessed any major energy breakthroughs at the company -- at least compared to the expectations it set back in 2007. But that doesn't mean Google failed. It may simply tell us how difficult it is to scale new energy technologies and business models.

Make sure to subscribe to The Interchange podcast via iTunesSoundCloud or Stitcher, or integrate our RSS feed into the podcast app of your choice.

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The Solar Eclipse Could Become a Massive Test Case for Grid Storage

August 18, 2017

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If the temporary blotting out of the sun next week magnifies an inherent weakness of solar power, it also plays to the strengths of energy storage.

Advanced energy storage technologies have the ability to charge or discharge at a moment's notice to shore up the needs of the grid. Whether or not the market structures exist to fully capitalize on those abilities is another question.

There's little grid storage to speak of directly on the path of totality, where the sun will be entirely covered for a period of 2.5 minutes on Monday. That swath cuts southeast from Oregon to South Carolina. Indianapolis Power & Light has a 20-megawatt system just off of the path. Farther from the line, the sun will be 60 to 80 percent obscured above many of the nation's largest solar plants in California, Nevada and Arizona.

The California Independent System Operator expects this to cause a shortfall of 6,000 megawatts that otherwise would have been produced by solar power between 9 a.m. and noon. 

California also wields considerable storage capacity: approximately 3,000 megawatts, said Alex Morris, policy director at the California Energy Storage Alliance. Some 2,600 megawatts of that are from old-school pumped hydro, with newfangled batteries making up the difference.

Members of the storage industry hope their response to the eclipse will demonstrate the flexibility of this tool and expand the opportunities for storage to help the grid in future challenges.

The grid response

Dealing with capacity shortfalls, especially ones with as much advance predictability as this one, is no trouble for grid operators. All they have to do is call up additional gas generators to pump out electrons when the sun starts to darken. This can get expensive, though, and involves a lot more greenhouse gas production than the solar would have.

The other trick is what happens on the back end. Gas generators spin large metal turbines to generate electricity, and there are physical limitations to how quickly those machines can stop spinning without damaging themselves. Many plants also have minimum run times they need to hit to justify the cost of starting up and burning fuel.

Those gas plants will be chugging along to keep the grid running, even as thousands of megawatts of solar generation ramp up in the midday sunshine at a rate of 90 megawatts per minute

CAISO has named pre-curtailment of renewables and limiting the ramp rate of solar's return as potential tools for dealing with the situation. Throwing away gigawatt-hours' worth of electricity, though, wouldn't be popular in California. In some cases, offtaker contracts stipulate a utility has to pay for the generation even if it's curtailed, meaning ratepayers are on the hook whether they get the energy or not.

Source: CAISO

A tool to match the problem

As grid operators balance the primacy of electrical reliability with the desire to maintain economical dispatch, storage offers a middle path.

The functionally instantaneous response time of battery storage allows it to deliver needed capacity faster than a gas plant can be turned on. Its ability to both charge and discharge means it can soak up the influx of generation as solar assets come back on-line and gas plants ramp down.

"It’s a tailor-made use case for storage," said Ravi Manghani, energy storage director at GTM Research. "For many of these assets, it will be business as usual, but on a shorter and faster time scale."

The exact role that storage will play, though, has not yet been decided.

"The ISO won’t be dispatching resources any differently from what we do today, absent an eclipse," CAISO spokesperson Anne Gonzales confirmed in an email. "Our market optimization does not favor one technology over another."

Storage won't have a special role in dealing with extraordinary circumstances; it will have to compete in the market like any other tool.

There are a few avenues for storage to participate.

Much of California's utility-scale storage was deployed with a resource adequacy contract, which lets CAISO call the resources up to use for local capacity at moments of grid stress like this.

CAISO has "reg up" and "reg down" services for frequency regulation, which adjust the moment-by-moment fluctuations in grid frequency. Storage can compete there to maintain grid stability in the midst of Monday's fluctuations.

Storage systems could take advantage of an arbitrage opportunity on the wholesale energy market. If the influx of solar after the eclipse triggers negative energy pricing, qualifying storage units can get paid to charge up on that surplus power. A storage system can't participate in ancillary services like frequency regulation and the energy market at the same time, however, Manghani noted.

Distributed storage can bid in for demand response, providing curtailed load as an alternative to firing up more generation.

Whose job is it?

The demand response option puts grid customers in the position of helping manage the eclipse, whether or not they know it.

"These resources are bid in by companies that are managing all that complexity, so the customer doesn't have to care," Morris said. "You can provide demand response benefits to the grid without sacrificing much at all."

That approach circumvents a certain sort of rhetoric that calls upon the customers to shoulder responsibility for grid stability in the face of an eclipse.

"While our utilities and grid operator have all the tools necessary to manage the grid during the eclipse, what if millions of Californians stepped in to allow our hardworking sun to take a break, rather than relying on expensive and inefficient natural-gas peaking power plants?" asks a website created for the occasion by the California Public Utilities Commission, before asking readers to pledge to reduce their consumption.

Given that ratepayers have already paid to overbuild grid infrastructure to very reliably meet their needs, asking them to sacrifice when the grid comes up against an unusual situation seems like something of a bait and switch. Storage-assisted demand response offers a painless route.

Stem is among those companies that plan to bid in aggregated storage capacity for the day-ahead demand response market, specifically for the first hour of the eclipse. That will mimic a sunset, as the solar power wanes. The process for this is the same as the 150 dispatch events the company has participated in with San Diego Gas & Electric this year, said Chief Commercial Officer Karen Butterfield.

"The technology -- and the business model -- is something we've been developing since we were founded," she said. "Our technology is super fast; it's split-second fast."

Out of the darkness, a new grid service

For Stem, the hope is that it gets selected to reduce demand, offsetting gas peakers as the solar production drops. That would showcase the rapid response capability of storage technology, and let Stem tell its customers that they helped the grid weather an extreme event.

Companies like Stem, Green Charge and AMS draw revenue from managing commercial customers' energy profile and from performing grid services. They may have reason to charge batteries in the aftermath of the eclipse if it helps the customer save money, but they can't bid that activity as a grid service.

"We’re not getting paid for the other half of the coin, which is soaking up the solar power," Butterfield noted. "The eclipse is bringing out this need, but it's a need that exists from May through September or more."

Charging up on the plentiful solar generation is much like soaking up the belly of the "duck curve" on a typical sunny day in California. If storage proves useful on Monday, and aggregators gather data about how much they were able to absorb in the aftermath of the eclipse, it could bolster the case for creating a new grid service product.

This process is already underway. Stem has been working with CAISO to develop a “load consumption” product to better leverage storage to reduce the amount of solar energy California throws away via curtailment, said Polly Shaw, Stem's VP of regulatory affairs and communications.

For all the cosmic spectacle of the sun going dark, the eclipse isn't that different from the ups and downs of a typical day for the evolving grid. Solar power will generate, be disrupted, and generate some more. Grid operators will coordinate a growing menagerie of flexible loads and generators to balance supply and demand. Storage will work around the edges to bridge that gap.

"Being reliable, being dependable and continuing to build this reputation of being there when needed is really what comes out of this for the industry," said Matt Roberts, VP of the Energy Storage Association.

Energy storage won't be called on to do anything it hasn't already done. Still, the stakes are high, and public attention will focus on the grid in a way it rarely does. A successful showing in those circumstances could pave the way to more responsibility down the road.

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Does Steve Bannon’s China Tirade Tell Us Anything About the Solar Trade Case Outcome?

August 17, 2017

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White House Chief Strategist Steve Bannon (who is reportedly leaving, as of Friday) gave an interview this week in which he said America is locked in "an economic war with China."

Bannon mentioned arcane sections of the 1974 Trade Act to penalize China for alleged steel and aluminum dumping. Could solar be on the list, too? 

Bannon's comments suggest he's also paying attention to Section 201 of the trade act -- which is the foundation of Suniva and SolarWorld’s case for slapping severe penalties on imported solar cells and modules from Asia and the rest of the world.

Those companies, plus dozens of other heavy hitters in solar, were in Washington this week to argue their case in front of the International Trade Commission.

In this week's show, we’ll have the latest on solar trade politics.

Then, we'll dig into a fascinating new study on second-order climate beliefs. It’s not just about what you believe -- it’s about what you believe others believe.

Finally, we’ll revisit the rise of non-wires alternatives. More utilities are opting for distributed resources in place of traditional wires upgrades on the grid. We’ll discuss a new project in Arizona and then look across the landscape of other projects.

This podcast is sponsored by Mission Solar Energy, a solar module manufacturer based in San Antonio, Texas. Visit Mission Solar at the upcoming Solar Power International conference at Booth 3975. You can find out more about Mission’s American-made, high-power modules at

Recommended reading:

  • GTM: The Messy Politics Surrounding the Solar Trade Case
  • GTM: War of Words: Top Quotes From the Solar Industry’s Latest Salvo Over Trade
  • Harvard study: The Importance of Second-Order Opinions for Climate Politics
  • GTM: APS Buys Energy Storage From AES for Less Than Half the Cost of a Transmission Upgrade
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War of Words: Top Quotes From the Solar Industry’s Latest Salvo Over Trade

August 17, 2017

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On Tuesday, more than 40 witnesses spoke in front of trade commissioners in Washington, offering up their thoughts about a controversial petition submitted by Suniva and SolarWorld.

The two financially troubled solar manufacturers are lobbying for harsh penalties on imported solar panels. Most others in the U.S. solar industry want commissioners to quash the case, fearing the downstream consequences.

The commission is expected to complete its investigation of the Section 201 petition by September 22. In the meantime, we’ve compiled some noteworthy quotes to give readers a sense of how the day played out.

To set scene, let’s begin with Suniva and SolarWorld’s rationale for why the U.S. needs solar import tariffs and price minimums.

Suniva’s attorney, Matthew McConkey:

“If there’s ever been a 201 case where a finding of serious injury is warranted, it’s this one,” said McConkey in his opening remarks. “The United States is literally strewn with the carcasses of shuttered solar manufacturing facilities.”

“The data set forth in the commission’s staff report reveals a domestic industry that is literally on the precipice of being extinguished. U.S. module manufacturers suffered net losses exceeding a billion dollars over a five-year period,” said McConkey. “If this isn’t serious injury, then that concept has no meaning.”

“Even as U.S. demand for solar products increased from 2012 to 2016, foreign suppliers -- including those in China, Korea, Canada and Malaysia -- began capturing an even larger share of the U.S. market. But then we saw module prices drop by a third in the second half of 2016, during a year when all imports increased by 50 percent from the previous year.”

SolarWorld’s attorney, Tim Brightbill:

“As the commission is well aware, the domestic industry in this case has been largely wiped out by the global import surge,” said Brightbill.

“There is massive global overcapacity among many producers. In addition…foreign producers have production operations in multiple countries and are able to shift that production and those exports, rapidly, from country to country.”

Juergen Stein, CEO of SolarWorld:

“The domestic solar manufacturing industry has been driven to the brink. Relief under Section 201 is our last hope,” said Stein. “Unless we act promptly and decisively, the United States may find itself with no solar manufacturing sector left at all.”

“Solar cell and module prices fell in 2016, even as the price of polysilicon -- the most valuable raw material within a cell -- was rising. This is an unsustainable situation, and what I would call ‘the circle of death.’”

“We had to let go many workers who had been with the company for many years. These job losses should not be happening in an industry where demand is so strong and good profit margins are a given in the overall value chain.”

Dozens of solar industry experts and executives attempted to debunk the petitioners’ claims. Multiple witnesses portrayed Suniva and SolarWorld as subpar companies that had failed to adapt to the fast-paced solar industry.

Matthew Nicely, attorney for the Solar Energy Industries Association and SunPower:

“Have some companies failed? Yes. But that’s the core nature of a high-tech industry. You must innovate to keep up and deliver quality, reliable products at scale. The petitioners have failed badly, and their failure has nothing to do with imports.”

“That the two petitioners would even bring this case demonstrates their poor business judgment and their hubris. They seek a public remedy for their own private failing. If successful, they will undermine the hard work and innovation that is making solar a viable alternative to conventional energy sources.”

Craig Cornelius, senior VP of renewables for NRG Energy:

“Neither of the petitioners in this case had a product that they offered at [our] specifications, and certainly not at the scale or quality we required. In addition to this inability to meet our essential technical requirements, there were other reasons why we, and other purchasers like us, were unable to purchase products from the petitioners during the period of investigation.”

James Lamon, CEO of Depcom:

“Depcom’s experience with SolarWorld was unsatisfactory,” said Lamon. “Depcom had to exert oversight and pressure to get SolarWorld to deliver its product, which was never delivered on time -- a product we believed...was made in America…when in fact, per the label on the modules, was manufactured in Germany and Thailand.”

Thomas Prusa, chair of the economics department at Rutgers University:

“Imports are always dominated by one or more factors. As shown in the residential market, imports are near the bottom of the list of factors, dominated by grid-parity issues and technology-driven cost changes. The utility market is also similar,” said Prusa, referring to the results of an economic study. “In summation, empirical analysis formally rejects the claim that imports are the most important cause for declining prices over the period.”

Other opponents spoke of the damages that tariffs would have on the larger solar industry.

Amy Grace, head of North America research for Bloomberg New Energy Finance:

“Utility-scale solar must be competitive with the operating cost of an efficient natural-gas plant -- roughly $20 to $30 per megawatt-hour -- or it will not be built,” said Grace. “It is now price-competitive with wind and wholesale power in several parts of the country, but just barely.”

“Any increase in the price of solar offered to electricity purchasers…would result in fewer contracts being signed and lower solar deployment.”

Tom Werner, president and CEO of SunPower:

“We have more than 14,000 direct and indirect workers,” said Werner, who described his company as the country’s second-largest solar provider. “These workers would be vulnerable to solar market decline.”

“Tariffs would adversely impact the U.S. economy, burden domestic manufacturers and suppliers, raise prices for customers and eliminate tens of thousands of jobs.”

Matthew Nicely, attorney for the Solar Energy Industries Association and SunPower:

“Solar is an American success story whose future remains bright. Its continued success could be destroyed by the misguided actions of the two petitioners and their small group of supporters.”

The commission also heard testimony from government officials from Minnesota, North Carolina, Georgia, Maryland and Virginia. All spoke against the petition, except for the mayor of Norcross, Georgia, which was home to Suniva’s headquarters and one of its cell plants.

Bucky Johnson, mayor of Norcross, Georgia:

“Suniva became part of the DNA of our city, until there was a turn in the story,” said Johnson, noting nearly 300 jobs were lost in Norcross due to Suniva's bankruptcy. 

“I sadly learned there were other communities that experienced the same impact as Norcross,” he continued. “Do all that you can do to give Suniva a fighting chance.”

Jason Saine, North Carolina state representative:

“Imposing tariffs on imported modules is not the way to go. […] The remedy would do more harm than good here.”

Lauren McDonald, member of the Georgia Public Service Commission:

Import duties will “deprive consumers of the benefit of competitively priced solar projects,” said McDonald. “Any tariffs imposed would distort the market, threatening tens of thousands of American jobs.”

“[Suniva and SolarWorld] are here because their products are not economic and their business model is not competitive.”

Representatives for half a dozen countries and the European Union took turns explaining why their nations should be excluded from solar import duties.

Reynaldo Linhares Colares, second secretary for the Embassy of Brazil:

The World Trade Organization’s Agreement on Safeguards “states safeguard measures shall not be applied against a project originating in a developing country member, as long as its share of imports…does not exceed 3 percent,” said Colares.

Brazilian solar exports from 2012 to 2016 “accounted for only 0.01 percent of the total value imported by the USA in the same period,” he continued. “Therefore…imports from Brazil should be excluded.”

Carrie Goodge O’Brien, trade policy counselor for the embassy of Canada:

“The Canadian and U.S. supply chains are integrated and complement one another,” said O’Brien. “The imposition of duties on solar products would risk undermining this important relationship, negatively impacting both Canadian and U.S. industry and consumers.”

“The imports from Canada must be excluded from any safeguard measure if they do not account for a substantial share of total subject import, and they do not, in this case,” she said, referencing a provision of the North American Free Trade Agreement.

While the vast majority of witnesses opposed the tariffs, a handful of solar executives testified in support of Suniva and SolarWorld.

Edward Harner, chief operating officer of Green Solar Technologies:

“Absent much-needed trade relief, these import trends will only worsen,” said Harner. “Without relief, I am concerned that foreign producers will complete their goal of eliminating U.S. competition.”

Steven Shea, former vice president of Beamreach Solar:

Beamreach “could not keep pace with the rapid reduction in market prices driven by imports -- first in China, and then from countries like Taiwan, Vietnam, Malaysia, Korea and others,” said Shea, whose solar manufacturing company employed 100 workers in California before going bankrupt in January.

“Beamreach was a well-established company,” said Shea. “However, this flood of imports, and the resulting price collapse starting in 2016, eroded Beamreach’s competitiveness in a matter of merely months.”

Representatives for Suniva and SolarWorld rejected allegations that they had been responsible for their own financial woes. Suniva filed for bankruptcy in April, while SolarWorld Americas recently secured a $6 million lifeline after its German parent company filed for insolvency.

Suniva’s attorney, Matthew McConkey:

“Arguments have been raised…that Suniva and SolarWorld somehow brought their gargantuan problems on themselves. Not only are these arguments factually false, they’re offensive,” said McConkey.

“The almost 30 members of the domestic industry that have gone out of business in the last five years -- as well as Suniva and SolarWorld -- all of them made bad business decisions or substandard products?” he asked, incredulous. “Please.”

Seth Kaplan, president of International Economic Research:

“The issue is that prices were falling faster than costs, causing serious injury,” said Kaplan. “The idea that the semiconductor industry, at large, is barred from Section 201 relief because technology improves over time is, frankly, nuts.”

SolarWorld’s attorney, Tim Brightbill:

“For part of today, we heard an inaccurate smear campaign [from] SEIA,” said Brightbill. “How do you scale up when you’re under an avalanche of imports?”

The panel of four commissioners, comprising two Republicans and two Democrats, spent hours questioning both sides.

Questions to petitioners:

“What would you recommend might help the broader solar industry?” asked Commissioner Meredith Broadbent.

“Our goal is to put a remedy in place that assists U.S. manufacturing…and continues to encourage solar growth in the United States,” said Brightbill. “We value manufacturing jobs. We value all jobs in the solar industry.”

“We’re not out to kill the industry,” answered Matt Card, Suniva’s VP of commercial operations. “We are very open to a solution that works for all parties.”

“In your fact sheet…you estimate that U.S. solar cells and module manufacturing employment would increase between 37,500 and 45,500 workers. These job increases are substantial,” said Broadbent. “What would occur on the ground that would result in this job growth?”

“The assumptions that go into those job estimates are that there is new investment in cell and module production capacity that would raise U.S. cell capacity to 3 gigawatts per year and module capacity to 3.6 gigawatts per year,” said Warren Payne, an international trade adviser for the law firm Mayer Brown, which conducted the jobs analysis.

“And that could happen in four years?” asked Broadbent.

“Yes,” said Payne. “The industry has the ability to scale up rapidly.”

“What inspired Suniva and then SolarWorld to revive the use of the dormant Section 201 global safeguard law?” asked Vice Chairman David S. Johanson, noting it had not been used in a case since 2001.

“Whack-a-mole,” said McConkey, explaining that companies would keep popping up in new countries to circumvent anti-dumping laws. “We would be chasing this product all around the world.”

Questions to petition opponents:

“What accounts for the substantial number of module assemblers leaving the U.S. industry over the period of investigation?” asked Broadbent.

“There are a variety of reasons,” said Nicely. “There are many instances in a high-tech industry in which companies bet on the wrong technology, and they invest a lot of money in technology that doesn’t work out. To then turn around and blame that on imports is a bit of a stretch.”

“What are we to make of all the domestic plant closings since 2012?” asked Johanson. “What does this tell us about the state of the domestic industry?”

“The predominant reason we saw the failures is, you didn’t have scale with a lot of these companies when they came in. A lot were startups and new ideas,” said Dan Shugar, founder and CEO of California-based NEXTracker. “You didn’t have large companies making big, sustained investments to getting their products fully qualified…so that they would develop a long-term sales model.”

“I heard people were talking about shortages right now. Is that in the U.S. market?” asked Commissioner Irving Williamson.

“Yes. Particularly buyers trying to buy in the spot market right now are seeing significant price escalation and difficulty in supply, from what we’ve heard in the market,” said Ed Fenster, co-founder and executive chairman of Sunrun.

“SolarWorld suggested a variety of countries invested in [crystalline silicon photovoltaic] capacity in response to the anti-dumping and countervailing duty orders on China and Taiwan. Do you agree that this was the reason? Why did they invest in such capacity in countries that do not have a sizable home market demand for solar products?” asked Broadbent.

“We have multiple places where we make modules,” said Tom Werner, president of SunPower. “We have those sites compete and then share best practices, and I think that’s part of what you’re seeing here.”

“We made our decision to invest in Singapore in 2008,” said Steven O’Neil, chief executive officer of REC Solar. “The market there is small, but we set up there because of the access to all global markets…and proximity to raw materials, so we could export around the world.”

For more on the politics surrounding the case, read our earlier coverage.

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Study: We’re Still Underestimating Battery Cost Improvements

August 17, 2017

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Batteries have been beating expectations in recent years as costs continue to fall. That's good news for the storage industry, but reveals a shortcoming in the scientific understanding of the trend.

That discrepancy prompted UC Berkeley professor Daniel Kammen to devise a new model, recently published in Nature Energy -- and it ended up predicting that future cost declines will occur at a pace faster than identified in previous analyses.

Scholars have modeled clean-energy cost declines based on single factors, like annual production or cumulative production. These one-factor models approximate reductions from learning by doing: The more an industry deploys its product, the better it gets at it.

These models have a high explanatory value, but they didn’t see the recent battery-cost drops coming. They overestimate lithium-ion costs in the 2010-2015 period, the most recent years in the data set Kammen and his colleagues examined.

Their new model explains cost as the function of two variables: production volume and cumulative patents issued under the international Patent Cooperation Treaty.

When the researchers plugged in the latest battery production forecasts, with the assumption that patent activity continues at the average rate from the last five years in the dataset, they found a striking prediction.

“We find lower cost reductions than existing forecasts in the literature, which in the past has found a systematic underestimation of falling electric-vehicle battery costs,” the study says.
At the battery pack level, lithium-ion needs to hit the $125 to $165 per kilowatt-hour range to compete with internal combustion engines (based on 2015 gas prices). The two-factor model predicts EV cost-competitiveness will arrive between 2017 and 2020. This is earlier than the previous literature predicts.

The model also covers solar with batteries. If the solar industry in the U.S. hits the Department of Energy SunShot goal of deploying PV for $1 per watt (which it has for large projects), residential solar-plus-storage will be widely competitive by 2020. The combination would offer a levelized cost of energy of $0.11 per kilowatt-hour.

That would transform residential storage from a niche item for powering affluent families' homes during blackouts into a cost-effective investment for anyone who pays a lot for electricity.

Since the model includes both deployment and research, the scientists could toggle the dials of those two variables to see how one fares without the other.

Scientific innovation comes out on top.

In one test, the authors scaled down the rate of patent development by one-third. To still beat the energy storage cell cost of $100 per kilowatt-hour by 2020 in this scenario, the industry would need to deploy an additional 307 gigawatt-hours globally.

Keep in mind that Tesla’s Gigafactory aims to produce 35 gigawatt-hours, and it’s not yet completed. Deployment alone is not a practical way to achieve cost declines if scientific innovation drops off.

“At the most extreme case of no new innovation, the opportunity cost of meeting cost reduction targets through deployment alone would be extremely high, in exceedance of $140 billion through 2020,” the authors write. 
That point is more than academic. The Trump administration has proposed sweeping budget cuts across the Department of Energy, which has traditionally spurred energy innovation through research funding.

Reports surfaced this week of impending layoffs on the order of 525 jobs at the national labs run by the DOE. Labs in that network performed groundbreaking early-stage research that led to the commercialization of lithium-ion technology, and they continue to break ground on the sort of next-generation chemistries that could spur the “learning by innovation” curve described in Kammen’s model.

“Right when batteries are doing this great stuff, we’re seeing a trail-off in investment,” Kammen said. “We need the Department of Energy to step up; we need the private sector.”

The White House has signaled the opposite intention, although the DOE retains stronger support in Congress, which ultimately controls the budget.

If there's a bright spot here, it's that lithium-ion costs are following the path of solar, only faster.

“For the same amount of money invested and patents generated, batteries are equal to or ahead of where solar was,” Kammen said.

To keep up that pace, he added, it will be important to maintain a robust research ecosystem with many different labs, companies and universities competing for funds and patents. When money gets concentrated in a few monopolies, they tend to under-innovate.

It also helps that storage has an array of viable technologies, although lithium-ion has dominated the market thus far. This diversity bodes well for continued innovation.

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