Battery Metals

The world’s biggest-ever solar project — a $200 billion venture in Saudi Arabia — comes with a “batteries included” sticker that signals a major shift for the industry.

SoftBank Group Corp. partnered with the oil-rich Saudis this week to plan massive networks of photovoltaic panels across the sun-drenched desert kingdom. The project is 100 times larger than any other proposed in the world, and features plans to store electricity for use when then sun isn’t shining with the biggest utility-scale battery ever made.

The daytime-only nature of solar power has limited its growth globally partly because the cost of batteries was so high. Utilities that get electricity from big solar farms still rely on natural gas-fired backup generators to keep the lights on around the clock. But surging battery supplies to feed electric-car demand have sent prices plunging, and solar developers from California to China are adding storage to projects like never before.

Affordable batteries have long been the Holy Grail for solar developers. Without them, some of the best U.S. solar markets, like California, have too much of electricity available at midday and not enough around dusk when demand tends to peak.

Wind Wins

While the solar industry has grown, it still accounts for less than 2 percent of U.S. electricity supply and has been outpaced by investments in other green technologies. Wind farms are set to overtake hydroelectric plants next year as the biggest source of renewable energy in the U.S., accounting for more than 6 percent of the nation’s electricity generating capacity, government data show.

Now, the economics of storage is shifting. The price of lithium-ion battery packs tumbled 24 percent last year, according to Bloomberg New Energy Finance, and the U.S. is allowing solar-dedicated storage to qualify for a federal tax credit. More utilities and local energy providers are mandating that new solar farms include batteries to store power.

Adding batteries to solar plants could revolutionize the industry. California has contemplated going all-renewable by 2045. It won’t be able to do that without storage, said Kevin Smith, chief executive officer of SolarReserve LLC, a solar project developer that uses molten-salt energy-storage technology.

More Control

“Storage just adds control,” said Logan Goldie-Scot, a San Francisco-based energy storage analyst at BNEF. “In a number of markets, you are seeing customers seeking a greater deal of control.”

By the end of 2018, it’s possible that U.S. utilities may be asking for batteries on every solar project proposed, said Ravi Manghani, an energy analyst at GTM Research. That would mean the country is about to embark on a major battery boom. Only about 1 gigawatt of storage had been installed in the U.S. through the third quarter, according to BNEF.

Several large developers already are proposing storage units as part of their projects, including NextEra Energy Inc.

Cypress Creek Renewables LLC, which builds clean-power plants, is contemplating batteries at every one of its early-stage solar projects, according to Chief Executive Officer Matthew McGovern. The company installed batteries at 12 solar farms last year.

The shift isn’t just in the U.S.

The Saudi-SoftBank project calls for an astonishing 200 gigawatts of generating capacity that would be built over the next decade or so, with the first electricity being produced by the middle of next year. Based on BNEF data, the project would dwarf the total solar panels that the entire photovoltaic industry supplied worldwide last year.

Evening Hours

A key feature of the project will be the construction of “the largest utility-scale battery” in two to three years that will supply “evening hour” power to consumers, Masayoshi Son, SoftBank’s founder, told reporters in New York this week.

Tesla Inc., the Palo Alto, California-based carmaker that’s building batteries with Panasonic at a giant factory in Nevada, will supply the storage units for a solar project in the Australian state of Victoria. Houston-based Sunnova Energy Corp. is selling solar and battery systems in Puerto Rico, where Hurricane Maria devastated the island’s power grid in September and tens of thousands of people still don’t have electricity.

China-based Trina Solar Ltd., once the world’s largest maker of photovoltaic panels, is seeking to invest 3.5 billion yuan ($556 million) in integrated energy projects this year that could include power generation, distribution grids and storage, Vice President Liu Haipen said Wednesday in an interview in Beijing. Most of the investment will be in China, but the company is exploring opportunities in Germany, Spain, Australia and Japan, he said.

Cheaper batteries are even providing a boost in the residential market for solar systems.

“It’s a game-changer,” said Ed Fenster, executive chairman of San Francisco-based Sunrun Inc., the largest U.S. installer of residential solar systems. “The demand that we’re seeing is outstripping our expectations.”

A Southeast Side neighborhood that’s been a dumping ground for decades finally got some relief Tuesday from the release of potentially harmful manganese dust, but not enough to satisfy area residents.

The City Council’s Zoning Committee approved an ordinance championed by Mayor Rahm Emanuel that would effectively prohibit new facilities from storing or handling materials containing more than trace amounts of manganese, a heavy metal used in steel making known to cause brain damage.

The mayor’s ordinance would not apply to facilities where manganese has been stored for at least a year. But it would prohibit those companies from expanding operations that involve the heavy metal.

Violators would be punished by fines of $1,000-a-day that, Ald. Brendan Reilly (42nd) warned, could easily be built into the cost of doing business.

Prior to the final vote, Southeast Side residents, including a local elementary school student who lives near S.H. Bell Co., talked about the “game of wack-a-mole” that requires them to organize anew “every time there’s a new pollutant” dumped on their neighborhood.

They warned that, in Emanuel’s haste to appease Southeast Side residents and their local Ald. Susan Sadlowski-Garza (10th), the ordinance does not go nearly far enough.

“My children have sleep apnea, asthma and allergies. You need to wake up. We are damaging our DNA structure,” said Sara Hernandez.

“It brings me frustration to see my community — African- American and Hispanic — [victimized]. They don’t have time to come here because they work double-shifts. They cannot come here to speak up. They’re going through suffering. Our kids having mental illnesses. Depression….At school, they have to call me every single time. Have empathy for our kids.”

Gina Ramirez, a third-generation resident of the Southeast Side with a 3-year-old child, said she’s grateful the city is “taking action to halt the expansion of facilities handling manganese.” But she’s concerned about “the exemption from the prohibition on new and expanded manganese operations for manufacturing establishments, which can also result in manganese flowing into the community.”

Ramirez also urged the city to do more to “address the existing problem”— by banning manganese handling in certain areas and phasing it out in others. She noted that “many of these handlers and users have been in operations for decades” in the 10th Ward.

“I question every day if my son has been exposed. Not having strong enough restrictions puts my family and so many others at risk,” Ramirez said.

“I ask you to think if this was your neighborhood and you were raising a child in this environment, would this ordinance be strong enough? I am asking you today to protect people – not polluters.”

Peggy Salazar, director of the Southeast Environmental Task Force, noted that manganese is a “known neuro-toxin” and that S.H. Bell is located across the street from residential homes.

“I ask you, aldermen, have you taken the time to review the air monitoring data? Have you seen the recent soil testing results? Do you know that 40 local children have demonstrated elevated levels of manganese in their system? Do you know if the petcoke ordinance that was passed fixed the problem?” Salazar asked aldermen.

“If you can’t answer, ‘yes’ to all of these questions, I urge that you consider what it is that you’re supporting and ask yourselves, ‘Is it enough?’ We can’t afford for the city not to get this right.”

Sadlowski-Garza described the ordinance as a “living breathing document” that can be amended if it doesn’t go far enough. She argued that this is “only the beginning” of the legislative crackdown against manganese.

“You’re right. It’s wack-a-mole. We’re constantly fighting polluters…We’re tired,” Sadlowski-Garza said.

“The 10th Ward has always been the dumping ground for the city and it continues to be that way…Things have to change.”

Earlier this year, S.H. Bell yielded to pressure from city and federal authorities and agreed to stop outdoor storage of manganese. The company further agreed to suspend barge transfers of the toxic material during high winds to prevent manganese dust from blowing into surrounding neighborhoods.

Roughly 20,000 people live within a mile of the company’s Chicago plant. More than 1,700 of them are young children.

A plan to protect Chicago residents from a brain-damaging pollutant found at high levels on the Southeast Side fails to go far enough, said a group of residents and advocates who spoke during a City Council committee hearing Tuesday.

Mayor Rahm Emanuel introduced an ordinance last month that would amend city zoning rules to prohibit new facilities from storing or handling materials containing more than trace amounts of manganese, a heavy metal used in steelmaking that can cause neurological defects similar to Parkinson’s disease at high exposure levels.

For companies that currently handle manganese, the ordinance would require them to file quarterly reports with the city showing amounts of manganese shipped and received.

But residents and advocates say the ordinance falls short because it exempts facilities that manufacture manganese, rather than store or process it, and does not require filter-based monitors that would measure levels of manganese emissions, which pose a potential risk to nearby residents.

The ordinance also does not require the zoning commissioner to set a limit for manganese emissions, they said.

“At a minimum, the language of the ordinance should be strengthened before it is passed,” said a group of environmental advocates and residents in written comments to the City Council’s Committee on Zoning, Landmarks and Building Standards.

The letter, signed by members from the Southeast Side Coalition to Ban Petcoke, Southeast Environmental Task Force and several other groups, again pressed the city to ban manganese altogether, which the groups have been calling for since early 2017.

Residents have renewed those calls recently in light of a study published in January that found a significant link between higher concentrations of manganese in hair samples and declines in IQ, mental processing speed and working memory among children in Ohio.

Preliminary results from an ongoing study of toxic metals on the Southeast Side found that children there had higher levels of manganese in their toenails than children in other parts of the city, though researchers said it was too early to draw conclusions about health impacts from the exposure.

“The city needs to do more,” residents and advocates said in their letter, adding that the city should at minimum require companies to begin phasing out their use of manganese.

Concerns over exposure to the heavy metal surfaced in 2015 when air monitors set up by the Environmental Protection Agency to measure emissions of petcoke dust from facilities along the Calumet River happened to also detect manganese.

In their letter, advocates also called on the city to engage community members earlier in the land-use planning process “so that residents are no longer playing whack-a-mole in response to the discovery of the new threats to public health.”

In response to residents’ concerns, the city’s Department of Public Health provided a statement that read in part: “After reviewing feedback from community leaders, CDPH has committed to reviewing the bulk handling rules within the year as well as having increased communication with the Department and Planning and Development. CDPH will continue to partner with community leaders and elected officials to help ensure cleaner air for all communities.”

Massachusetts has dropped Northern Pass, the $1.6 billion project from Eversource that was set to deliver hydropower from Canada through a 192-mile transmission line in New Hampshire.

The decision to terminate the earlier selection of Northern Pass was announced Wednesday by the Massachusetts Office of Energy and Environmental Affairs. The state will instead move toward an agreement with New England Clean Energy Connect, a $950 million hydropower project proposed by Central Maine Power Co.

CMP’s proposal includes a 145-mile transmission line linking electrical grids in Quebec and New England.

Maine Gov. Paul LePage’s energy czar, Steven McGrath, said his boss would “push this right through” the rest of the permitting process handled by the Maine Department of Environmental Protection.

“My governor is an action-oriented-guy,” McGrath told the Bangor Daily News previously. “This will happen quickly.”

New Hampshire regulators voted to reject Northern Pass last month over concerns about potential negative impacts on the environment and tourism.

Eversource asked for reconsideration, but the Site Evaluation Committee said it would not do so until May, well past the deadline set by Massachusetts for moving forward with a large-scale clean energy project mandated under a 2016 law.

Like in New Hampshire, the Maine project will face opposition from some environmental groups.

“[J]ust like Northern Pass, CMP’s proposed New England Clean Energy Connect power line across Maine would significantly harm Maine communities and the environment,” Dylan Voorhees of the Natural Resources Council of Maine said in a statement Wednesday. “And, just like the Northern Pass proposal, there is absolutely no evidence that the Maine power line would reduce climate-changing emissions at all.”

Shareholders of electric car and solar panel maker Tesla Inc. have approved an ambitious pay package for iconic CEO Elon Musk that could net him more than $50 billion if he meets lofty milestones over the next decade.

A company filing March 21 with the Securities and Exchange Commission showed shareholders supported the pay deal by a large margin.

Tesla says the all-or-nothing package is worth $2.6 billion at current stock values, but that would rise dramatically if Musk meets 12 incremental goals including raising the company’s market capitalization tenfold to $650 billion. Also included are targets to increase adjusted pretax income and revenue.

If the goals are reached, Tesla would be fourth-most-valuable U.S. company and Musk would be among the richest people in the world.

Two firms that evaluate proxies for investors recommend that shareholders vote against the pay plan, which they say is unprecedented in size for a U.S. public company.

The firms, Institutional Shareholder Services and Glass Lewis, both peg the current value of Musk’s package at $3.7 billion. Tesla has yet to turn a full-year net profit even though it’s been in business for 15 years.

At least two large shareholders and Tesla’s board supported the plan, saying it’s necessary to keep Musk in the fold and reach the goal of switching the world from burning oil for transportation to sustainable electric vehicles.

“We believe as a board and executive team that we can actually achieve these milestones,” said board member Antonio Gracias, who points out that under a 2012 incentive package, Musk raised Tesla’s market capitalization by 17 times to more than $50 billion last year. “It’s very important to think about the specifics of Tesla and what we have already achieved.”

For each of 12 milestones Tesla achieves, Musk, who already owns over 20 percent of the company, will get stock worth 1 percent of Tesla.

“The shareholders get 99 percent, Elon gets 1 percent,” Gracias said.

To get there, Musk will have to expand Tesla’s product lineup to include previously announced semis, a new SUV and a pickup truck. Plus the company’s solar roofs will have to be successfully integrated into its energy storage business.

There’s also the issue of production delays, which have occurred on all of Tesla’s current vehicles. The company currently is trying to raise production to meet demand of its Model 3, a mass-market electric car that starts at $35,000.

Gracias says shareholders realize that Tesla often is optimistic about hitting production milestones and is working hard to achieve them.

“We always hit our goals eventually. We are sometimes late,” he said. “Sometimes the application of engineering takes longer than we think.”

The package is an incentive for Musk to focus on Tesla, which has been a concern for investors. Musk also is the founder and CEO of rocket company SpaceX and co-founder of OpenAI, a nonprofit that researches artificial intelligence. He also recently started The Boring Co., a tunnel-building firm.

ISS, in recommending against the plan, wrote that Musk could get a substantial portion of the award even if Tesla doesn’t reach sustained profitability. The plan would be suspended but not automatically forfeited if Musk takes a leave of absence, the firm wrote in a note to investors.

“These issues both potentially undermine the board’s given objectives of retaining Musk and further aligning his interests with those of shareholders,” ISS wrote.

But investment firm T. Rowe Price and others supported the package, saying the board addresses Tesla’s challenges in the right way by thinking creatively.

“We believe the final plan is well aligned with shareholders’ long-term interests,” the company said in a statement.

Young companies such as Tesla usually experience incredible growth over short periods, then level off for a period as they regroup, said Todd Saxton, associate professor of strategy and entrepreneurship at Indiana University.

That puts Musk’s “stepwise goals that assume constant acceleration” at risk of not being met, Saxton said.

Such packages can encourage CEOs to take risks in order to meet the milestones, Saxton said. But he doesn’t think Musk will do that.

“I really do believe that Musk will act in the best interest of Tesla,” he said. “He’ll come as close to winning as he can.”

The future is bright for electric distribution cooperatives in battery energy storage according to a new report from CoBank’s Knowledge Exchange Division. The entire battery storage market could grow from $300 million a year to as much as $3 billion by 2020, and electric distribution cooperatives are well positioned to own a share of this growth and move battery technology forward.

The battery energy storage industry, where growth is dominated by lithium-ion technology, is undergoing significant expansion leading to economies of scale for the manufacturing of cells and battery packs. This translates to lower capital costs for stationary systems which could drop below $300 per kilowatt hour this year.

“The landscape for battery storage is rapidly evolving across the U.S.,” said Taylor Gunn, lead industry economist with CoBank. As costs fall, interest in lithium-ion batteries is spreading to electric cooperatives outside Alaska and Hawaii. “After multiple interviews with managers and CEOs of electric distribution cooperatives, we found that there are clearly defined use cases, such as reducing peak demand, that are driving growth in the electric cooperative space.”

However, the lack of historical operational data for lithium-ion batteries create uncertainty when evaluating this new technology, said Gunn. Therefore, electric distribution cooperatives are actively seeking partnerships with leading vendors and service providers that are fully committed to utility-scale battery storage as they can provide strong maintenance agreements and guarantee output over the useful life of the system.

Electric distribution cooperatives have the ability to reduce their peak demand representing a clear incentive for early adoption of this technology. However, this benefit is reduced with every additional battery that is installed by other member cooperatives.

The future of batteries among electric cooperatives will be driven by developing applications beyond shaving peak demand and how the technology will be defined in wholesale power contracts between electric distribution cooperatives and their generation and transmission providers.

A video synopsis of the report, “Positively Charged: The Emergence of Battery Energy Storage among Electric Distribution Coops” is available and the full report is available at

About CoBank

CoBank is a $129 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.

CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.