Battery + Storage Podcast

After a short introduction and a yearlong hiatus, Troutman Pepper Battery + Storage Podcast host Bill Derasmo and his guest Andy Flavin discuss recent national developments (e.g., FERC’s Broadview Solar decision), but focus the lion’s share of Episode 7 on the energy storage market in Virginia. Specifically, the podcast examines the Virginia Clean Economy Act, legislation establishing a mandatory renewable portfolio standard (RPS) and specific targets for construction/acquisition of solar, wind, and energy storage facilities. Episode 7 also covers energy storage regulations set by the State Corporation Commission, as well as Virginia energy storage siting requirements and what approach to take in other states without such requirements. Finally, Bill and Andy look at electric transmission considerations for utility-scale storage facilities, both in Virginia and more broadly in RTO markets.

In Episode 6 of the Battery + Storage Podcast co-host Cliff Sikora provides an overview of reported trends regarding on-the-ground impacts of COVID-19 on battery and storage project deployment and financing. The podcast focuses on the Energy Storage Association (“ESA”) member survey about COVID-19 impacts published during the week of April 19,2020. The podcast highlights the survey’s results, and cites other data, regarding: (a) work force issues; (b) supply chain choke points (upstream and downstream); and (c) financial performance expectations for the storage sector. Regarding financial performance, the podcast reports on differences between: (1) in-the-pipe projects v. go-forward development decisions in near-term out-years; (2) hybrid projects (with renewables and storage) v. stand-alone-storage; and (3) observations of possible differences in investor perceptions between exchange traded equities and private equity.

In Episode 5, the Battery + Storage Podcast team highlights 2019 developments in the grid-level storage market, and sets the stage for battery project development and finance issues that face industry stakeholders in 2020. The team references its first four episodes of the podcast, in particular, the discussion with Mike Hopkins in Episode 2 regarding challenges facing stand-alone grid-level battery finance. The team discusses a Q1 2020 Wall Street stock analyst’s report describing stand-alone battery finance as driven by merchant plays (in comparison to integrated utility entities that develop such assets on the company’s balance sheet). The team concurs with the analyst’s report, noting that they have seen stakeholders face interesting issues in developing PPA-type contracts to secure battery financing, including risk identification and mitigation associated with product and service definition(s), performance assurances, warranties and other issues. Battery merchant risks are borne by developers to the extent Regional Transmission Organization product markets are underpriced, or not yet in existence. The team discusses state-federal regulatory issues that linger over battery project development, but shouldn’t. They focus on the parties’ briefs to the DC Circuit on appeal of Order No. 841, and raise a “Listener Mail” question about how to think about Standards of Conduct compliance for a hybrid (generation-transmission) battery.

In Episode IV, the Battery + Storage Podcast team interviews John Fernandes, Senior Consultant for Customized Energy Solutions (“CES”). In this episode, John discusses how FERC Orders 755, 841, 1000, and 2000 impact battery storage, as well as how battery storage has evolved over the years. John notes, when discussing FERC order 841 for example, that storage resources can get qualified for capacity credit in certain regions if an entity demonstrates it could deliver capacity for a four-hour peak, and how in a few years this number may soon be reduced to a two-hour peak. He also discusses how battery storage is becoming a cheaper and faster way for addressing the incredibly expensive and complex challenges associated with building more transmission lines (e.g. removes the need to obtain permits and resolves interconnection challenges). John specifically states that storage’s “flexibility” and ability to move around removes the risk of stranded assets and can improve a utility’s timeliness and financial risk exposure. In thinking about bulk power, John discusses how battery storage may in the future be deployed on the bulk power system as distribution, transmission, and generation, as well as the challenges that may arise with such an allowance. John also analyzes ancillary services and how battery storage qualifies to deliver those services as devices aimed at regulation and primary frequency response. He specifically notes, for example, that storage is “… well positioned to earn revenues from a service like regulation.” He further notes how CES specifically models its projects for its clients and is designed as a storage platform that generally relies on lithium-based batteries. In the last portion of the show, John discusses the potential pitfalls and merits of the roles the various players should play regarding distribution planning in the storage sector, as well as for the RTOs and ISOs. 

In Episode III, the Battery + Storage Podcast team interviews Mathy Stanislaus, Interim Director of the Global Battery Alliance (“GBA”). In this episode, Mathy discusses the incredibly important role GBA and the World Resource Institute play in the battery storage space. He shares how batteries are a vehicle to jump-start economies and keep them moving in a sustainable way. This will be essential, as battery consumption projections are expected to increase “13-fold” by 2030. Battery storage, Mathy said, is at an inflection point and will serve as one of the major drivers toward mitigating greenhouse gas emissions in accordance with the Paris Agreement (click here to view the full report). However, this increased demand and reliance on battery storage has resulted in a wealth of human rights concerns. Mathy presents the example of the Democratic Republic of Congo, where child labor is exploited in artisanal mining of cobalt, a critical element used in the production of lithium-ion batteries. In response, Mathy discusses the complex challenges of addressing such human rights concerns, given the critical role batteries will play in the worldwide energy future. He posits that it is the responsibility of the entire value chain to fix this problem and shares that GBA is rolling-out a roadmap for a sustainable battery value chain. Mathy concludes by sharing his thoughts on how proactive policy approaches are needed to respond to the growing battery demand and the importance of having more pro-competitive conversations solving both the opportunities and problems of the future. Be on the lookout for another episode with Mathy in the coming weeks as we continue the conversation.

In Episode 2, the Battery + Storage team interviews Mike Hopkins, CEO of Bakken Midstream, who is, objectively, destined for immortality on “Storage Mt. Rushmore;” (2:40), (although, as he adamantly tells the team, he is still, very much “alive”). While focusing on storage, Mike provides a 360 degree view of the evolution of North American energy markets including his intimate background with the Canadian natural gas industry in Alberta (6:30), and how that experience shaped his thoughts about the role of government and regulatory intervention in markets (in particular, with respect to California’s involvement in fostering the in-state battery and storage markets)(16:00). He says that if government intervention is required they should “. . . as soon as possible, return to what I would think of as normal regulatory policy which is about ensuring that resources are fully valued and the value is efficiently extracted.” The podcast covers how the Energy Storage Act in California was revolutionary for storage, taking the asset from an R&D concept to the facilitator of a tradable commodity. We hear about Mike’s experience as a first-mover storage proponent with Ice Energy in SCE’s revolutionary 2014 all-source RFP, his views on the future of project finance and PPAs for battery resources, his views on how battery project development is funded in 2019 (and investor risk assessments of the same efforts), the future of repeatable C&I battery deployment (like rooftop solar), the importance of communication and control systems on the distribution grid to facilitate commercial values (and the need for price transparency), the necessity of reflecting customer demand in product development, and details regarding ICE Energy’s storage technology and its market success.

In this episode of the Battery & Storage Podcast partners Cliff Sikora and Bill Derasmo interview Hon. Philip D. Moeller, Executive Vice President Edison Electric Institute (EEI).The episode covers:Commissioner Moeller’s dedication to the values of public service (4:15)the importance of relationships and courtesy in Washington, DC (5:44)his view of industry restructuring while at FERC (9:00) partisanship (15:40)EEI’s position on how batteries should be classified as either transmission or distribution, and the launch of Order No. 841 (17:28)approval of FERC’s direction (even with no state opt-out) (18:58)understanding of differences in regional system peaks (19:29)batteries are the ultimate “utility infielder;” and require flexibility in regulatory oversight (20:01)view on FERC’s transmission’s NOI and the future of CAPEX deployment and RTO planning (21:35)the success of MISO’s MVP projects (24:00)ownership of batteries and control of functionality, microgrids (27:37)electric vehicles (34:03)non-discrimination requirements for storage access to markets (28:45)and environmental justice (29:12)