Taking Charge

Battery Storage Projects Have The Power To Create A Cleaner Grid, But Only If Teams Can Resolve Regulatory And Requirements Issues

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BY NOVID PARSI

ILLUSTRATION BY CHIARA VERCESI

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The sun doesn't always shine. The wind doesn't always blow. So project teams are advancing technology to cushion against unreliability.

Globally, storage capacity will grow at a 60 percent compound annual growth rate through 2020.

Source: Navigant Research

With battery costs dropping, grid-scale storage facility construction projects are multiplying—and realizing the promise of a cleaner grid. And electric utilities are moving fast to implement new systems and reap their benefits.

“Renewable energy sources fluctuate, so we will need storage to cover times when they are not available,” says Thomas Walter, PMP, project manager for battery storage systems, Bosch, Stuttgart, Germany. “Nobody wants to turn off their lights because there's no sun or wind.”

Globally, storage capacity will grow at a 60 percent compound annual growth rate through 2020, according to Navigant Research. The U.S. storage market alone will increase tenfold between 2016 and 2022, reaching US$3.2 billion, according to the U.S. Energy Storage Monitor.

Along with bolstering the viability of renewable energy sources, battery energy storage systems also can provide supplemental power during peak demand periods. That's an attractive combination of benefits. “The systems provide the utility industry with improved energy reliability and stability and zero greenhouse emissions,” says David Heard, PMP, project manager, AES Energy Storage, Arlington, Virginia, USA.

The world's largest lithium-ion battery facility is taking shape near Jamestown, Australia.

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PHOTO COURTESY OF TESLA

In Europe and the U.S. state of California, which have mandated reductions in greenhouse gas emissions, battery storage projects are helping organizations meet urgent deadlines. But both the utility organizations that sponsor projects and the contractors that construct them are tasked with introducing a new technology into grid systems that, broadly speaking, haven't changed much in decades. Other thorny obstacles can include securing regulatory approval for not-yet-regulated technology and sponsors’ expectations that projects be completed in a matter of months.

“From a project management perspective, everything with energy storage systems is evolving,” says R. Kent Thomson, senior manager, integrated innovation and modernization project management office, Southern California Edison (SCE), Westminster, California, USA.

California encountered an energy shortage when a natural gas plant there ruptured and spewed huge amounts of gas into the atmosphere in October 2015. So, in 2016, the state's government ordered SCE and other utilities to put more grid-scale energy storage solutions into operation by 31 December 2016. SCE managed to hit that deadline, bringing in Tesla to complete an 80-megawatt-hour (MWh) project in just four months. At the time it was the largest such storage facility in the world.

That's helped to create an industry-wide expectation of very fast project delivery, project professionals say.

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“From a project management perspective, everything with energy storage systems is evolving.”

—R. Kent Thomson, Southern California Edison, Westminster, California, USA

Early this year, the state of South Australia decided to build the world's largest lithium-ion battery facility in a blackout-plagued area—and, befitting the industry, on a tight schedule. The 129-MWh facility would connect a wind farm with the grid to provide greater energy stability for residents. And it would be operational by 1 December, the start of Australia's summer season. To hit the deadline, the procurement team would have to secure contractors no later than July—giving it just enough time to construct the facility, says Jason Schell, COO and chief procurement officer, Department of the Premier and Cabinet, Government of South Australia, Adelaide, Australia.

The high-tech project relied on a low-tech communications solution, Mr. Schell says. He placed all stakeholders on the same floor of a government building so his team could define the project's scope on schedule. They arranged in-person meetings every day, rather than emailing back and forth. “It made a massive difference,” Mr. Schell says. “That's what allowed us to meet the time frame.”

Packed With Power

Battery storage facilities are powering a shift to more renewable-friendly and stable power grids. The benefits of these projects go beyond banking solar and wind power: They also can provide supplemental power during more costly peak energy use.

Southern California Edison's Mira Loma facility

Location: Ontario, California, USA

Timeline: September-December 2016

Megawatt hours (MWh): 80

Surge: The site's 400 batteries can store enough energy to power 2,500 homes per day.

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PHOTO COURTESY OF EDISON INTERNATIONAL

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South Australia Government's Tesla-Neoen facility

Location: Jamestown, Australia

Timeline: July-December 2017

MWh: 129

Surge: The facility is 60 percent larger than any other battery storage unit in the world.

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“We are demonstrating that renewable energy can provide dependable, distributable power.”

—Jason Schell, Government of South Australia, Adelaide, Australia

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Mitsubishi Corp. and Eneco's EnspireME facility

Location: Jardelund, Germany

Timeline: April-December 2017

MWh: 50

Surge: The facility will be Europe's largest battery storage system.

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“The biggest project management challenge for battery storage systems in Europe is the lack of regulations and codes.”

—Thomas Walter, PMP, Bosch, Stuttgart, Germany

With a clearly defined scope, the team quickly identified the contractors that could deliver. It selected a joint venture of Tesla and the French renewables organization Neoen because of each company's track record. Tesla CEO Elon Musk's bold promise didn't hurt either, Mr. Schell says. “Delivering the facility 100 days after the agreement was signed or else it was free—that was obviously a standout.”

The pressure for project teams to keep their schedules short and their budgets low is especially high in California, where, since 2016, “an unrealistic perception of on-schedule execution” exists, Mr. Heard says.

To establish more realistic expectations of on-time delivery, Mr. Heard clearly lays out expectations in AES Energy Storage's contracts with utilities. “It's about communication, contract negotiation and managing expectations by educating the client on a proper schedule,” he says.

In July, Arizona Public Service Electric Company hired AES to construct an 8-MWh energy storage system by the first quarter of 2018. Mr. Heard had to get the design approved and permitted and have the equipment in place by December. To manage this tight schedule, Mr. Heard fast-tracked the project: He had his internal team work concurrently with external engineers. At the project's start, he determined his internal team's future workload, then calculated the external support needed and factored that into the contract.

“In project management, gathering requirements and planning are half the battle,” he says.

MEET THE REGULATORS

In the European Union, a big part of the battle is on the regulatory front.

“The biggest project management challenge for battery storage systems in Europe is the lack of regulations and codes,” Mr. Walter says. The systems are “unknown in the regulatory arena.” That means project teams require expert knowledge on battery storage systems so project plans can get approved through existing power-sector regulations.

In January 2017, Bosch launched a six-month pilot project to demonstrate a prototype system's ability to load and discharge energy for public utilities. Mr. Walter's team faced two key risks: not getting the permit on time and, even worse, not getting it at all. So he engaged the regulatory authorities as early as possible—well before his organization officially submitted project plans—to address their concerns. Mr. Walter had Bosch engineers meet with regulatory officials and share their knowledge about batteries. Education wasn't enough, however: His team also helped put measures in place to allay any safety concerns. For instance, it provided the local firefighting brigade with special foam to extinguish battery fires.

In the end Mr. Walter's team secured the permit in just six weeks—half the time scheduled for the permitting process. As a result, the entire project came in six weeks under schedule.

PREPARE FOR CHANGE

Another common challenge facing battery storage project teams is how to effectively transition new installations to operations teams—which often have never managed such facilities before. Mr. Thomson's approach is to plan for this handoff from the start. While working on the 80-MWh project that SCE hired Tesla to execute in the final quarter of 2016, “a big focus was this transition,” he says. From day one, he engaged members of SCE's power generation team, which would take over the facility after project completion. By mid-project, his team had resolved all of their questions.

Mr. Thomson enabled this efficient resolution process by creating two websites that housed all of the project's documentation, as well as discussion boards. These boards included an internal site for the SCE team and an external site for the Tesla team. Mr. Thomson also ensured regular communication by assembling team members for weekly meetings that ramped up to daily meetings in the project's final month. “I had to get my arms around the many stakeholders and their roles, both internally and externally,” he says. “It was a big job, requiring a high degree of communication and collaboration.”

With new storage capabilities quickly in place, benefits can start flowing through the grid faster, positioning utilities to provide customers with more reliable and cleaner power. “We are demonstrating that renewable energy can provide dependable, distributable power,” Mr. Schell says. PM

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“In project management, gathering requirements and planning are half the battle.”

—David Heard, PMP, AES Energy Storage, Arlington, Virginia, USA

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