Major Battery Announcement Expected from Tesla

Photo of Tesla PowerPack with solar panels in background.

Mark your calendar for September 15; according to a tweet by Elon Musk, that is the tentative date for Tesla’s annual shareholder meeting and “Battery Day,” which will include a tour of the company’s cell production system. Musk first described the battery event about a year ago as including “a comprehensive review of cell chemistry, module and pack, architecture, and manufacturing plan that has a clear roadmap to a terawatt-hour per year.”

One terawatt hour is one billion kWh of energy storage, and this capacity is about 30 times that of the company’s existing battery production. Assuming an average 100 kWh of storage per vehicle, a terawatt hour could supply 10 million EVs per year. Tesla batteries can also support stationary storage such as the Powerwall and Powerpack.

Below is a photo of Tesla’s second Gigafactory, a 1.2 million square-foot facility in Buffalo, New York, where the company produces solar cells and modules as well as electrical components for Superchargers and energy storage products.

Aerial photo of Tesla's second Gigafactory.

An increase in manufacturing capacity would be reason enough for a major announcement, but what else might Musk have up his sleeve? A decrease in cost would certainly attract a lot of attention by broadening the market for Teslas, but so too would the following:

  • Better energy density. This would allow for more energy storage per cell, resulting in a smaller and lighter-weight battery while providing the same distance. Alternatively, higher energy density would allow for greater driving range without increasing from today’s size.
  • Faster charging speeds. Faster charging would provide drivers with shorter stops on long road trips, and would also reduce queueing at popular charging stations.
  • More cycles. Battery life is measured in charge cycles. After a certain number of cycles, degradation can become noticeable. Given the near absence of critical parts in an EV that are susceptible to failure other than the battery, lengthening the life of batteries has a near 1:1 effect on the entire vehicle’s life. Longer vehicle life at top performance means better value up front and better residual value on resale (including a second life for the batteries as grid resources after a presumably long life in the vehicle).
Tesla Powerwall (photo courtesy of Tesla)

As discussed above, stationary storage already is a significant market. The Powerwall, for example, is a wall or floor mounted rechargeable lithium-ion battery designed for the residential market to enable self-consumption of solar power, emergency backup, time-based control and other grid service applications. It stores 13.5 kWh of usable power.

The Powerpack is intended for commercial and utility customers and provides from 200 kWh to more than 100 MWh of energy storage. Conceptually similar to the Powerwall, the Powerpack benefits utilities and customers alike through cost savings, reliability and resiliency. Examples of specific benefits include demand response, frequency response, backup power, storage for intermittent resources, load shifting, and potentially the ability to defer costly and time-consuming grid upgrades.

Given Musk’s successful track record and propensity for technological advances, the upcoming announcement could include any number of breakthroughs. Stay tuned for more updates as they become available.

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Audi to Introduce Solar Roofs, Improve Fuel Efficiency and EV Range

Thin-film solar cells in panoramic glass roofs of Audi models: Audi and Alta Devices, a subsidiary of the Chinese solar-cell specialist, Hanergy, are working together on this development project. With this cooperation, the partners aim to generate solar energy to increase the range of electric vehicles.
Photo courtesy Audi AG.

Audi today announced a plan to increase the range of the company’s electric vehicles by generating onboard solar energy using thin-film solar cells. Audi and its partner, California-based Alta Devices, a subsidiary of the Chinese solar-cell specialist Hanergy, are taking an incremental approach and will first integrate Alta’s efficient, thin, and flexible mobile power technology into panoramic glass roofs. A prototype is expected by the end of this year.

Recognizing that drivers demand maximum range from their electric vehicles, and also responding to ever more stringent fuel economy requirements around the globe, Audi and other vehicle manufacturers are going to great lengths to maximize every opportunity to increase overall efficiency as well as replace liquid fuels with electricity. Consistent with this effort, Audi’s next step after integrating solar into glass panels will be to cover almost the entire roof with solar cells.

By generating onboard and clean renewable power for systems such as air-conditioning and seat heaters, the solar cells will reduce the demand on an all-electric vehicle’s main battery, thereby providing a longer range for driving. But solar cells also can improve fuel efficiency in mild-hybrid vehicles by making the gasoline or diesel engine’s output more fully available for moving the vehicle instead of producing electricity for in-cabin use. Eventually, Audi and Alta envision solar energy directly charging a fully-electric vehicle’s main battery. “That would be a milestone along the way to achieving sustainable, emission-free mobility,” said Bernd Martens, Audi’s Board of Management Member for Procurement.

The partnership with premier automaker Audi is a high-profile opportunity for Alta, holder of multiple world records for energy conversion efficiency. “This partnership with Audi is Alta Devices’ first cooperation with a high-end auto brand. By combining Alta’s continuing breakthroughs in solar technology and Audi’s drive toward a sustainable mobility of the future, we will shape the solar car of the future,” said Alta CEO Ding Jian.

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Debate Flares Over Electric Grid Fuel Supplies

Graph showing PJM Cleared ICAP by Delivery Year
Data source: PJM Interconnection

In a thinly-veiled swipe at renewable energy resources, Energy Secretary Rick Perry is reportedly ordering a study to determine whether the proliferation of renewables is threatening grid reliability by causing baseload (i.e., coal) resources to retire prematurely. The target of the report is not renewables, per se, but rather the compensation scheme for wholesale power in restructured markets around the country, and whether these markets are over or under-compensating various resources and therefore resulting in a sub-optimal fuel mix.

The subjects of generator compensation and fuel diversity are hotly contested in the energy world, as new (and renewable) resources such as wind, solar, and storage seek to compete with traditional resources such as gas, coal, and even nuclear. These new resources, which are favored by regulators in many states (including Perry’s home state of Texas), to date have generally complemented the existing resource mix and grid operators have been able to balance increasing quantities of intermittent resources; while industry insiders have debated the merits and value of various resource types, for the most part these arguments have taken place outside of the spotlight.

Now, though, with the new administration’s efforts to support coal power, along with nuclear operators loudly arguing their plants are being under-compensated and threatening shutdowns in New York, Illinois, and Ohio, and also as wind and solar generation reach ever higher levels of penetration and threaten to upend the historical pricing and production models in states such as California and Hawaii, the fight for the future of the grid is bursting into the headlines.

The Federal Energy Regulatory Commission next month will be holding a technical conference, during which Commission staff seeks to discuss long-term expectations regarding the relative roles of wholesale markets and state policies in the Eastern RTOs/ISOs in shaping the quantity and composition of resources needed to cost-effectively meet future reliability and operational needs.

Testimony for the technical conference will be forthcoming, but in the meantime the nation’s largest electrical grid, PJM Interconnection, has issued a report concluding that today’s resource profile “is both reliable and diverse,” and that not only does a more diverse grid not threaten reliability, “[t]he expected near-term resource portfolio is among the highest-performing portfolios and is well equipped to provide the generator reliability attributes.”

As the resource mix moves in the direction of less coal and nuclear generation, according to PJM, generator reliability attributes of frequency response, reactive capability, and fuel assurance decrease, but flexibility and ramping attributes increase. With regard to solar capacity, PJM concludes that this resource cannot feasibly exceed 20 percent of the mix due to unavailability at night. That said, assuming other nighttime resources, PJM “could maintain reliability with unprecedented levels of wind and solar.”

As for the grid’s reliance on individual fuels, PJM advises that heavy reliance on any one fuel type may negatively impact resilience. For example, gas plants can generally be relied upon to serve up to 86 percent of demand, but risks include interruptions in fuel deliverability in extreme conditions such as a polar vortex; for coal plants, operational risks include coal piles freezing or an inability to replenish coal supplies in extreme conditions.

The resource mix within PJM has become more evenly balanced in recent years. In 2005, coal and nuclear resources generated 91 percent of the electricity on the PJM system. Over time, policy initiatives, technology improvements, and economics spurred a shift from coal to natural gas and renewable generation. From 2010 to 2016 in PJM, coal-fired units made up 79 percent of the megawatts retired, and natural gas and renewables made up 87 percent of new megawatts placed in service. PJM’s installed capacity in 2016 consisted of 33 percent coal, 33 percent natural gas, 18 percent nuclear, and 6 percent renewables (including hydro).

Without identifying the optimal resource mix, PJM concludes that “there are resource blends between the most diverse and the least diverse portfolios which provide the most generator reliability attributes.”

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California Energy Regulator to Federal Climate Experts: “You’re Hired!”

Photo of CPUC President Michael Picker in front of United States EPA.
CPUC President Michael Picker inviting federal energy and climate employees to work in California.

In response to the White House budget that would decimate the ranks of federal employees working to mitigate climate change, the president of the California Public Utilities Commission, Michael Picker, this week greeted workers arriving at the headquarters of the U.S. Environmental Protection Agency and Department of Energy announcing that California welcomes their talents.

“On climate action, there’s a dark cloud hanging over Washington right now,” said CPUC President Picker. “If climate scientists and experts want the opportunity to continue doing important work for the good of our planet, my message is simple: Come West, California is hiring.”

The CPUC, the California Air Resources Board, and the California Energy Commission are currently hiring dozens of new staff for positions working on climate change, renewable energy, air quality, and clean energy research and development – among many other opportunities.

The budget released this week by the White House proposes to eliminate 50 programs and $2.6 billion from the EPA’s budget, a 31 percent reduction. The cuts would be achieved in large part by eliminating efforts related to climate change, such as the Clean Power Plan, and trimming initiatives to related to air and water quality. If enacted, 19 percent of the EPA’s workforce would be eliminated. The total loss at the EPA alone would be approximately 3,200 jobs.

“Literally and figuratively, this is a scorched earth budget that represents an all out assault on clean air, water, and land,” said Gina McCarthy, EPA administrator during the final years of the Obama administration. “You can’t put ‘America First’ when you put the health of its people and its country last.”

The Department of Energy’s cuts, which under any other administration would be considered draconian, are relatively tame at $1.7 billion, or 5.6 percent. DOE programs on the chopping block include:

  • Office of Energy Efficiency and Renewable Energy
  • Office of Nuclear Energy
  • Office of Electricity Delivery and Energy Reliability
  • Fossil Energy Research and Development Program
  • Weatherization Assistance Program and State Energy Program
  • Advanced Research Projects Agency-Energy (ARPA-E) plus guarantee programs, greenhouse gas reducing technologies, and advanced vehicle programs

Meanwhile, California continues to advance aggressive efforts to decarbonize. For example, the state is on track for its regulated electric utilities to obtain 50 percent of their energy sales from renewable resources by 2030. Legislation signed into law just a few months ago requires statewide greenhouse gas emissions to be 40 percent below 1990 levels by 2030. Other state initiatives include aggressive requirements and goals related to distributed energy resources (including renewable energy), electric vehicles, and electric vehicle charging infrastructure.

Picker’s visit to the federal agencies in Washington this week is a reminder of California Governor Jerry Brown’s comment on the occasion of signing the “50 by ’30” legislation into law: “Climate skeptics don’t quite get it. They are in political Pluto, and we have to bring them back to Earth, where the rest of us live.”

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More Customers to Benefit from Florida Power & Light’s Commitment to Solar

Florida Power & Light Company, the third-largest electric utility in America and the largest generator of solar energy in Florida, this week announced an accelerated timetable to build nearly 600 megawatts of solar capacity across eight locations. The energy these projects will produce, which will be enough to fully support approximately 120,000 homes, will diversify the source of electricity for all customers on the grid and efficiently provide a little more green energy to the entire customer base.

Utility-scale solar is a cost-effective way of delivering renewable energy to everyone, and for customers who rent their homes or whose roofs are not suitable for solar panels, the type of projects FPL is undertaking may represent the only way of obtaining renewable energy. “We have been working hard to drive down the costs of adding solar so we can deliver even more zero-emissions energy to all of our customers. As the first company to build solar power generation cost effectively in Florida, we are proud to continue leading the advancement of affordable clean energy infrastructure. We have proven that it’s possible to cut emissions and deliver reliable service while keeping electric bills low for our customers,” said Eric Silagy, FPL president and CEO. Construction is expected to commence this spring. During peak construction, an estimated 200 to 250 people will be working at each site.

The company expects the new installations will be cost-effective over their operational lifetimes, which is consistent with other reported metrics. For example, FPL reports that its carbon emissions today are lower than the U.S. Environmental Protection Agency’s Clean Power Plan’s goals for 2030, while the company’s typical residential customer’s 1,000-kWh bill is approximately 25 percent lower than the latest national average. Last year, according to the company, FPL’s residential bills were the lowest in Florida among reporting utilities for the seventh year in a row. In addition to the grid-scale projects announced this week, FPL has installed small-scale solar arrays for more than 100 Florida schools and other educational facilities.

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Nevada Solar Dispute Nears Resolution After Court Remands Controversial Ruling

Picture of residential rooftop solar panels.A Nevada state court this week set aside part of the Public Utilities Commission’s controversial decision to change rates on existing solar customers because the Commission’s process lacked adequate notice to the public, but due to ongoing discussions between the parties the hotly contested issue may soon be at least partially settled anyway. Regardless of what happens at the Commission, the subject is certain to be revisited when the legislature next convenes.

The immediate result of the court’s ruling is that the part of the Commission’s order which would have reduced bill credits to customers who already have solar panels is set aside and remanded to the Commission, while the remainder of the ruling upholding the Commission’s order relating to new solar customers is affirmed.

But the court’s remand is likely to be superseded because the Commission, at a hearing coincidentally scheduled for tomorrow, will consider a settlement between utilities and customers to grandfather the 32,000 existing residential rooftop customers on the old rate for 20 years. If, as expected, the Commission ratifies the grandfathering agreement, the remanded case will become moot.

Since 1997, Nevadans have participated in a program called net energy metering, under which customers earn a kilowatt-hour bill credit for each kilowatt-hour of clean power they produce that exceeds their own consumption. The high value of the credit was a key factor in many Nevadans’ decision to install solar because the credit offset a meaningful portion of cost. The Commission’s recent decision radically changed the way credits are calculated and valued, and replaced the framework with a new system that values the excess much lower than before.

Recognizing that a critical element in the financial model for solar installations went away overnight, the Commission’s ruling caused nearly every solar installer to immediately abandon the state. The new formula also caused an uproar in the renewable energy community because it significantly reduces income that solar customers had been expecting to receive, causing what had been good investments to go under water (financially). The move to not grandfather customers also set a precedent that alarmed renewable energy advocates concerned that commissions in other states might follow Nevada’s lead.

While states do periodically shift gears on rates on a going-forward basis, it was well-known in Nevada that customers relied on the net metering tariff in making relatively significant long-term investments. While the Commission is legally entitled to change the tariff in a way that reduces payments to customers for excess solar production, for policy reasons such changes are often made only to new customers, not existing customers.

With regard to the process the Commission followed in this case, the court found that the Commission did not sufficiently notify the public of its intention, and therefore the public was deprived of its right to participate in the proceeding. It is well established in American law that public entities such as the Commission must provide notice of the matters before it. As to the question of how specific notice must be, the Nevada Supreme Court in a previous case explained that “[i]nherent in any notice and hearing requirement are the propositions that the notice will accurately reflect the subject matter to be addressed,” and that “notice must be specific enough to alert all interested persons of the substance of the hearing.” When notice is deficient, the court found, the result is a “denial of fairness and due process.” The requirement, which falls under the legal description “subject matter jurisdiction,” cannot be waived, does not require the affected parties to have been absent from the proceeding, and may be raised by any party or the court at any time.

The notice in this case not only did not include a sufficient description of the issue that was ultimately addressed, the notice specifically excluded the highly controversial matter by saying that the proposal “does not . . . [a]ffect the rights of [existing solar] customers in any way.” Based on the fact that courts as high as the Supreme Court of the United States have, for decades, held notice to be an “inexorable safeguard,” the Nevada court rejected a multitude of arguments that the deficient notice should not result in the court throwing out the Commission’s ruling.

However, the court also explained that its ruling in this case is limited to the procedural requirement of notice for existing customers, not to substantive policy issues related to existing solar customers or to anything relating to new solar customers. In fact, the court specifically rebuffed all objections raised by solar supporters relating to the validity of the Commission’s order on new solar customers, finding that the Commission’s order is not contrary to law, is not arbitrary or capricious, and does not violate the Contract Clause of the U.S. Constitution.

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100 MW Mustang Solar Project Begins Commercial Operation

Photo of Mustang Solar Project.
Mustang Solar Project

Thanks to a large new solar installation constructed by Recurrent Energy, a wholly owned subsidiary of Canadian Solar Inc., approximately 45,000 more homes in California will now have access to 100% renewable energy. The Mustang solar project, spread across 1,000 acres in Kings County, California, has reached commercial operation and is expected to produce 100 MWac/134 MWp of electricity.

“The commercial operation of the Mustang solar project continues a historic year that will see Recurrent Energy complete more than one gigawatt of U.S. solar photovoltaic (PV) projects,” said Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar.

The renewable energy generated by Mustang’s single-axis trackers will be sold under long-term power purchase agreements to Sonoma Clean Power and MCE. The project is expected to produce enough electricity to power approximately 45,000 homes.

Sonoma Clean Power and MCE are both not-for-profit agencies, offering their customers the option of using environmentally friendly power, generated by renewable sources, like solar, wind and geothermal, at competitive rates.

The power purchase agreement allowed Recurrent Energy to secure a tax equity investment commitment from U.S. Bancorp Community Development Corporation. Adam Altenhofen, the bank’s vice president, commented on the reasons for the investment by saying “High-quality solar projects like Mustang are an important strategic investment for U.S. Bank, which provide jobs to local communities, while delivering clean, reliable energy to the state of California.”

Recurrent Energy employed approximately 450 during the peak of construction, and supported the local economy by spending more than $3 million on local construction materials and services such as food and housing. In terms of long-term economic benefits, the project will generate $3.6 million in tax revenue for the county and $8.1 million in tax revenue for the state.

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Tesla’s Elon Musk Updates “Master Plan” – More Vehicles and Technologies Are Coming

Tesla Model X - Front View Doors UpWith the tenth anniversary of Elon Musk’s “Master Plan” approaching, the co-founder, Chairman, CEO, and Product Architect of Tesla Motors this week issued “Master Plan, Part Deux.” In the past decade, Musk has achieved (or is on the cusp of achieving) his previously-stated goals of:

  1. Creating an expensive, low-volume car (the Roadster);
  2. Using proceeds from that car to develop a lower-price medium-volume car (the Model S);
  3. Using proceeds from that car to create an affordable, high-volume car (the Model 3); and
  4. Providing solar power (SolarCity).

Musk remains intent on “accelerating the advent of sustainable energy,” and here is what he plans to do next:

Integrate Energy Generation and Storage

batteryBackupImage_ForWeb-2The goal of integrating energy generation and storage is why Tesla is acquiring SolarCity. Some on Wall Street are expressing skepticism of this transaction, but Musk justifies the combination on the basis of providing customers with a seamless experience that cannot be achieved by two separate companies.

Expand to Cover the Major Forms of Terrestrial Transport

Photo of Tesla Assembly Line

Following the highly-acclaimed Model S and plus the eagerly-anticipated Model 3, Musk reports that Tesla’s model line-up is set to expand with a future compact SUV and “a new kind of pickup truck.” He also writes in his blog that heavy-duty trucks and “high passenger-density urban transport” are in early stages of development and should be ready for unveiling next year.

We don’t know exactly what he has in mind for the Tesla Semi, but Musk says it is expected to deliver a substantial reduction in the cost of cargo transport while being safer than today’s comparable vehicles as well as being “really fun to operate.”

With regard to a new form of urban transport, here Musk is referring to autonomous vehicles that will “transition the role of bus driver to that of fleet manager.” Musk envisions a future of on-demand door-to-door transportation designed to accommodate all passengers, including those with wheelchairs, strollers, and bikes.


Image of Autopilot

Recognizing that fully self-driving technology involves far more than simply installing cameras, radar, sonar, and computing hardware, Musk nonetheless continues to forecast Tesla vehicles that are fully autonomous and possess “fail-operational capability,” which means that any given system in the car could break and the car will still drive itself safely. As for today’s Autopilot mode, Musk explains that the name is derived from autopilot in aircraft, where pilots are expected to continue to pay attention, monitor the technology, and be prepared to take control at any moment. In other words, Autopilot is actually partially, not fully, autonomous, and does not justify driver complacency. Moreover, even today’s Autopilot, despite extensive internal validation, remains in beta and will continue to be labeled as such until the technology is 10 times safer than the U.S. vehicle average.

In addition to the technological hurdles, Musk acknowledges that there will be a significant time gap, which will very widely by jurisdiction, before true self-driving is approved by regulators. Musk anticipates that worldwide regulatory approval will not occur without six billion miles of experience. Assuming today’s pace of 3 million miles of such experience per day today, we are about five years from the target.


Uber NY Request Screenshot

Musk envisions privately-owned vehicles being available to shuttle others around using self-driving capabilities when not needed by the owner. With most cars sitting idle 90% to 95% of the day, the ability to hire one’s car out can generate income and offset the cost of owning or leasing. To make this easy, Tesla expects to incorporate a car-sharing feature into its phone app.

Musk also writes that in cities where demand exceeds the supply of customer-owned cars, Tesla will operate its own fleet.


In short, the goals outlined in Musk’s updated Master Plan are to:

  • Create stunning solar roofs with seamlessly integrated battery storage;
  • Expand the electric vehicle product line to address all major segments;
  • Develop a self-driving capability that is 10X safer than manual via massive fleet learning; and
  • Enable your car to make money for you when you aren’t using it.

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Smart City Challenge Winner Is Columbus, Ohio

Smart City Banner - Columbus, Ohio

The U.S. Department of Transportation has announced that Columbus, Ohio, is the winner of the Department’s Smart City Challenge. As winner of the Challenge, which attracted 78 applicants, Columbus will receive up to $40 million from the DOT and up to $10 million from Paul G. Allen’s Vulcan Inc. This $50 million will supplement an impressive $90 million “Acceleration Fund” that Columbus has already raised from other private partners to carry out its plan.

Key to Columbus’s proposal, which will be a model for cities across America, is the “Smart Columbus Electrification Plan,” which is comprised of five strategies:

  1. Displace carbon-intensive electricity generation with zero-carbon renewable power;
  2. Decarbonize regional vehicle fleets, relying mainly on electricity with efficiency and alternative fuels assisting;
  3. Build out smart transportation systems that reduce GhGs while improving mobility for residents, visitors and freight;
  4. Drive significant electrification into personal mobility through policy, investments and education; and
  5. Build out infrastructure for smart charging with EV grid-connectivity to lower EV adoption barriers.

Skyline of Columbus, OhioAchievement of the above strategies will be measured based on the following:

  1. Electricity Supply Decarbonization (including 915 MW of commercial/industrial wind/solar statewide, 3.4 MW of residential solar, and 1.33% annual improvement in grid and building efficiency);
  2. Fleet Electrification (300 EVs in public fleets, 448 EVs in private fleets, and 30 EVs for car/ride sharing);
  3. Transit, Autonomous and Multi-Modal Systems in the city (including a completed Bus Rapid Transit corridor and 3000 Dedicated Short Range Communications (DSRC) connected vehicles, 6 deployed autonomous electric vehicles for last-mile service and 10 kiosks w/common payment platform, and car/bike sharing);
  4. Driving Consumer Adoption (3,200 registered EVs by 2018 (encouraged by $1000/vehicle consumer rebates and $200/vehicle dealer payments), 100 events (such as multi-day EV test drives) with 7,500 consumers, and 15 dealer trainings with 200 participants); and
  5. Charging Infrastructure (1,000 new residential Level 2 chargers, 300 new public Level 2 chargers, and 10-15 public DC-fast chargers).

With the goal of developing a nationally replicable EV adoption and transportation decarbonization model for mid-sized cities, Columbus and its partners will explore a variety of financing mechanisms and policies necessary to attain scale. Examples include vehicle leasing for fleets based on total lifetime cost of ownership, solar financing including Property Assessed Clean Energy (PACE), Environmental Impact Bonds (EIBs), electric vehicle infrastructure banks (EVIBs), and regulatory approvals for utility investments in “smart” EV charging infrastructure at scale. The Smart Columbus team will also pilot innovative rebate programs to spur consumer investments in EVs and charging infrastructure.

The competition’s final round included brief videos from each participant; here is Columbus’s:

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Grid-Scale Solar / Battery Project Advances in Hawaii

Kauai SolarCity Solar Array

With the recent approval by the Hawaii Public Utilities Commission (PUC) of a landmark power purchase agreement (PPA) between the Kaua‘i Island Utility Cooperative (KIUC) and SolarCity Corporation, construction is expected to begin soon on what the parties believe will be the world’s first dispatchable utility-scale solar array.

Rather than providing power only when the sun is shining (but when load may be insufficient to require additional supply and thus result in curtailment of a valuable resource), the project’s innovative integrated storage enables the solar panels to generate and store power for use later in the day, when it’s needed (including after the sun goes down). This time-shifting is particularly important in Hawaii, which suffers from an abundance of solar generation when loads are relatively low, resulting not in the California “duck” curve, but the even more dramatic “Nessie” Curve:

HECO Nessie Curve

The PUC specifically expects KIUC to make the facility “curtailment neutral” by maximizing storage and dispatching the facility to manage peak loads, thereby also reducing the need to dispatch conventional oil-fired units. The parties expect to meet this requirement by storing 80-85% of the panels’ output in the on-site batteries for use during ramps and peaks.

The project, located next to KIUC’s Kapaia power plant, will consist of a 17 MW-DC (13 MW-AC) solar photovoltaic system, a 13 MW-DC (52 MWh) battery energy storage system, and related interconnection facilities. According to the terms of the PPA, SolarCity will build, operate, maintain, and repair the approved facilities. A news release from KIUC states that the energy storage system will be built with Tesla Powerpack lithium-ion batteries. (SolarCity’s Chairman is Elon Musk, who is also the CEO of Tesla Motors, Inc.)

Tesla Model S PowerWall

KIUC’s key arguments in support of its application to the PUC included:

  • SolarCity’s proposed contract price for solar generation with storage was significantly lower than that offered by others, which ranged from $230 to $300 per MWh;
  • This project offers the ability to schedule solar energy dispatch by storing approximately 80-85% of the panels’ output in batteries for use when needed (during ramps and peaks), thereby reducing the need for oil-fueled units by an expected 37,474 barrels per year; and
  • The facility will contribute nearly 5% to KIUC’s 2017 renewable portfolio standard goal and help KIUC attain its goal of meeting 50% of its annual electricity sales with renewable resources and obtaining 100 MWh of storage by 2023.

According to the Commission’s order approving the PPA, the contract price will be $145.00/MWh ($0.145/kWh), without escalation, for the entire 20-year initial term. The contract price takes into consideration the fact that SolarCity lacks the in-state income to fully utilize Hawaii’s renewable infrastructure tax credit. Instead, SolarCity will utilize the tax refund mechanism, which at $350,000 is 70% of the amount of the $500,00 credit. Should SolarCity obtain tax equity financing to fully monetize the state tax credit per system, the contract price will be adjusted to $139.00/MWh ($0.139/kWh).

Following the initial 20-year term, KIUC may request an extension of an additional 10 years; the contract price for the extension term, if one is entered into, will be agreed upon when the option is exercised.

All three PUC Commissioners, Randall Iwase, Michael Champley, and Lorraine Akiba, voted to approve KIUC’s application. Construction and commissioning of the facility is expected to take 6 to 9 months.

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