It’s arrived: The evolution of clean power & data centers

The world’s largest internet companies are turning to clean power to run their data centers like never before. This month we saw huge clean power deals from Apple, including big solar projects planned in California and Arizona, and a big wind buy from Google to provide local power for its headquarters in Silicon Valley.

But it wasn’t always this way. It’s only been in the last several years that Apple, Google, Facebook and others have been embracing clean power as a viable option to provide a significant amount of power for their data centers, and it’s taken years for the power industry, and the internet companies themselves, to adjust to and learn about this emerging world.

Google/Connie Zhou

Google data center, image courtesy of Google/Connie Zhou

If we take a peek back at this history, we can see how it slowly emerged. Let’s take the state of North Carolina where Google, Facebook and Apple all have some of the largest data centers in the U.S. to power some of their east coast operations. Work in that region provided key learnings for how these companies developed their individual strategies for how to adopt and embrace clean power.

I took my first road trip around the area in the summer of 2012 and wrote about the companies’ complicated relationship with the region’s dirty and clean power options. In late 2013, I took another trip to investigate Apple’s already built monumental solar farms there.

Facebook's data center in North Carolina.

Facebook’s data center in North Carolina. Image courtesy of Gigaom/Katie Fehrenbacher

Back in 2006, when Google first started looking at the state for building its east coast data center (the facility was announced in early 2007), clean power wasn’t at the top of mind for even Google, who later pioneered using clean power and has invested over a billion dollars into it. In those years, North Carolina’s power grid only generated four percent of its electricity from renewable sources, with coal at 61 percent and nuclear power at 31 percent. Google just plugged into the grid there anyways without a working strategy to incorporate clean power.

Gary Demasi, who has helped lead Google’s efforts purchasing clean power for data centers, told me in an interview for that initial story that Google, at the time, was obviously cognizant of the somewhat dirty energy-generation mix of North Carolina, but that Google has “gotten more proactive and aggressive since then.”

All the internet companies have.

Apple's fuel cell farm next to its data center in Maiden, North Carolina

Apple’s fuel cell farm next to its data center in Maiden, North Carolina

Three years later in 2009 when Apple and Facebook were considering building data centers in North Carolina, clean power was still an early idea. It was attractive in some emerging ways, but the state and local utilities weren’t offering the type of clean power options that the internet companies wanted.

That’s why in late 2011 Apple started building its unusual and massive solar farms in the area. Built by SunPower, these solar farms now stretch across hundreds of acres and now generate more solar power than Apple needs for that facility. The company also has a fuel cell farm built beside the data center. Apple agreed to plug into the state’s grid, but it was also generating its own clean power that went back onto the grid and made up for its use of the dirty grid power.

Apple's solar farm next to its data center in Maiden, North Carolina, image courtesy of Katie Fehrenbacher Gigaom

Apple’s solar farm next to its data center in Maiden, North Carolina, image courtesy of Katie Fehrenbacher Gigaom

Apple’s solar farms ended up putting pressure on local utility Duke Energy and the state to recognize that if there was ample clean power provided to these customers from the power grid, then they wouldn’t need to build their own. In late 2013, Duke Energy officially asked the state’s regulators if it could sell clean power from new sources to large energy customers that were willing to buy it — yes, thanks to restrictive regulations and an electricity industry that moves at a glacial pace, this formerly wasn’t allowed.

Now Duke Energy has a clean energy supply program in the state. And just this week, Duke Energy issued a request for proposal asking for project builders to build 50 MW worth of solar projects in the state.

So utilities and state regulators are adjusting to internet companies’ desires, but the internet companies are learning, too. While Apple’s solar farms and fuel cell farm in North Carolina were the first of its kind and ahead of the curve, Apple’s deals with First Solar in California and local utility Salt River Project in Arizona seem somewhat more sophisticated. They’re far larger, and they were done far in advance of construction.

Apple's solar farm in North Carolina. Image courtesy of Apple.

Apple’s solar farm in North Carolina. Image courtesy of Apple.

Apple will buy solar power from First Solar’s planned solar farm in Monterey County via a fixed, low-cost 25 year power purchase agreement, and will also buy solar power from Salt River Project’s farms in a similar way, too. Apple’s CEO Tim Cook has said that the way that the deal in California, in particular, is structured the company will actually save money in power costs over the long term.

So what was once a more expensive, niche source of power has now become a substantial clean power option — and one that now big name internet companies feel more comfortable embracing. In California, utility-scale solar farms — which is basically what Apple is buying from in Monterey County — can be built for as low as $1.68 a watt, according to GTM Research, thanks to a combination of private markets, a decade of lowering technology costs and federal and state incentives.

Google plans to buy 43 MW over 20 years from new wind turbines being built at Altamont Pass

Google plans to buy 43 MW over 20 years from new wind turbines being built at Altamont Pass

Solar panels are at the cheapest time in history. Wind power, too, is similarly cheap. Google’s deal to buy power from the revamped Altamont Pass shows how wind turbines have come down considerably in price and up in power.

Now, the official embrace of these internet companies and clean power is just one part of the story. There’s a whole host of smaller data center operators that can’t afford to deal at the scale of Google or Apple. But Google and Apple are still paving the way for the smaller companies by changing utilities minds that there’s a good business to be had in clean power.

At the end of the day, data centers are only consuming a couple percentage points of U.S. energy. So they’re not necessarily the leading energy problem these days, but since they are owned by influential and consumer-facing brands, they could do a lot to initiate the development of clean power outside of the tech industry.

12 energy storage startups to watch in 2015

If you care about the world’s transition to clean power, then you should pay attention to the emerging market for energy storage. A lot of times when “grid-scale” energy storage is discussed, it’s usually meant to describe big battery farms, but it can also mean other forms of energy storage like thermal storage (using heating and cooling), and the next-generation of compressed air storage.

It’s been over a year since California set the country’s first ever mandate that says that the state’s utilities need to buy over a gigawatt of energy storage services by 2020. But you don’t have to live in California, to be interested in this new market because what’s happening in the Golden State will likely be emulated elsewhere down the road.

batteries1

Wind and solar power plant owners can use energy storage systems to bank electricity and discharge it at any time when they need it. That helps utilities dispatch solar and wind energy to homes and businesses even when their solar power plants and wind farms aren’t able to generate electricity (like solar panels during the night). The ability to do so makes it possible for utilities to forgo building more fossil fuel power plants, which are able to produce electricity around the clock.

Some companies are selling energy storage services to businesses that can use electricity from battery banks — instead of the power grid — when utility rates are high. Homeowners typically can’t save as much money as businesses can because they don’t face the same special charges on their bills from utilities. These types of battery services will become more attractive to customers once battery system prices drop low enough to make them more affordable.

Here is a list of battery technology and energy storage service startups that have completed sizable demonstration projects or started to deploy their energy storage systems more widely:

1). Aquion Energy: This startup just scored a major customer in a private estate off Hawaii’s Kona Coast, where it will install a 1 megawatt-hour battery that will store electricity from a 176KW solar energy system. Aquion has figured out a novel cocktail of materials for creating the chemical reaction needed to charge and discharge energy. The Pennsylvania-based company uses manganese oxide and activate carbon for the electrodes, sodium sulfate for the electrolyte and a synthetic material with a structure similar to cotton.

Batteries ready to ship at Aquion Energy's factory. Image courtesy of Katie Fehrenbacher, Gigaom.

Batteries ready to ship at Aquion Energy’s factory. Image courtesy of Katie Fehrenbacher, Gigaom.

2). Stem: Software development is key to Stem’s growth. The California company assembles lithium-ion battery cells and power electronics made by other companies. But it creates the software to monitor and predict its customer’s energy demand, and manage the charging and discharging of the battery systems to help customers reduce the use of electricity from the grid when rates are high.

Stem recently added Total Energy Venture and Constellation Technology Ventures as investors and raised a $27 million series B round. Some of the money will be used to develop, license or buy software technology to boost its energy management service, Stem’s CEO, John Carrington, told me. The company has lined up 85 MW contract with Southern California Edison.

Stem battery storage

3). EnerVault: A flow battery is made up of two tanks containing energy-storing chemicals and liquid electrolyte, which flows through a cell to react with the electrodes inside for generating power. EnerVault celebrated the completion of a 1 megawatt-hour flow battery system, which has iron in one tank and chromium in the other for storing energy, at an almond farm in California’s Central Valley last year. It was an important project for the company to demonstrate its technology. The performance of the system will affect whether EnerVault will line up more customers and financing.

EnerVault's battery on an almond farm in Turlock, California.

EnerVault’s battery on an almond farm in Turlock, California.

4). Sunverge Energy: Raising a $15 million Series B last year and teaming up with SunPower are propelling Sunvege’s growth as a battery system designer and installer. Sunverge integrates lithium-ion battery cells and power electronics into a cabinet and develops software to run the system.

SunPower and Sunverge started a pilot project with KB Home last year to show how a SunPower’s solar energy system could work well with Sunverge’s battery setup. The two companies are now co-marketing that solar-and-battery combination for a commercial rollout this year. One of the Sunverge’s investors is Total Energy Ventures, the investment arm of French oil and gas giant, Total, which owns the majority stake in SunPower.

Photo by Katie Fehrenbacher/Gigaom

Photo by Katie Fehrenbacher/Gigaom

5). Ice Energy: Using electricity to make ice at night, when electric rates are lower, and melting it to provide cool air for the building during the day is what Ice Energy offers as an cheaper alternative to running air conditioning in the hot afternoon, when electric rates are high. Ice Energy’s ice-making system, called Ice Bear, is located near a building’s air conditioning system, which is modified to integrate Ice Bear. The company recently won its biggest deal with Southern California Edison, which wants 25.6 MW of service from Ice Energy systems across different locations.

Ice Energy

6). Advanced Microgrid Solutions: This company was quiet until it got publicity for being selected by Southern California Edison to provide 50 MW of services. Helmed by Susan Kennedy, a former member of California Public Utilities Commission and chief of staff of former California Gov. Schwarzenegger. Advanced Microgrid Solution appears to be a pure project developer which doesn’t do in-house hardware or software development.

A bank of lithium-ion batteries from BYD.

7). Coda Energy: This is not the Coda Energy that wanted to make electric cars, though it was part of that enterprise until a group of investors bought the energy storage business during a bankruptcy sale in 2013. Coda Energy installed several energy storage projects in 2014.

The company designs lithium-ion battery systems and develops the electronics and software to manage the systems. Its largest project, a 510KW system that could deliver 1.05 megawatt hours of energy, is a demonstration project at its headquarters that was co-funded by a state incentive program and the South Coast Air Quality Management District in southern California.

Codea Energy tower

8). Imergy Power Systems: Imergy is a flow battery developer that has developed a process to purify low-grade vanadium, such as those from the waste stream from mines and oil fields, to make the energy storing compound in the liquid electrolyte. The vanadium technology is newer for the company, which sold several dozen iron and chromium flow batteries for off-grid use by telecom firms in India before making the switch a few years back. Imergy has announced several demonstration projects over the past year, including a 100KW system that will deliver 400 kilowatt hours of energy at a microgrid project at a U.S. Navy site in Port Hueneme, Calif.

Imergy's battery, image courtesy of Imergy.

Imergy’s battery, image courtesy of Imergy.

9). GELI: The acronym stands for Growing Energy Labs, Inc., and this startup has developed an operating system to make sure the battery systems work well with other pieces of equipment, such as solar panels or heating and cooling systems. Developing good software to predict energy use of a building and store and dispatch energy from a battery system efficiently is a major pursuit and challenge of any energy storage developer and service provider. You can expect to see more startups in the battery software space as the market grows.

10). Green Charge Networks: When I caught up with Green Charge’s CEO, Vic Shao, about a year ago, he had lined up $10 million for financing projects that use Green Charge’s software to manage the lithium-ion battery systems designed by the company, using battery cells from suppliers such as Samsung. Like its competitors such a Stem, Green Charge also is going after business and industrial customers, such as 7-Eleven and Walgreens. It has also lined up customers in public agencies, including school and cities.

Green Charge Networks

11). Ambri: The liquid metal battery developer raised a $35 million series C round last year to bring its technology to market. Ambri’s battery, unlike common battery designs, uses liquid anode and cathode, along with a molten salt electrolyte. The company plans to install prototype systems this year, look for a location to build a larger factory and complete the sale of its technology’s commercial version in 2016, according to a Boston Globe article.

Manufacturing equipment at Ambri's prototype plant.

Manufacturing equipment at Ambri’s prototype plant.

12). Solar Grid Storage: The company is part of a growing number of project developers that sell and install a bundle of battery systems with solar panels and electric car charging equipment. When I spoke with Solar Grid’s CEO, Tom Leyden, over a year ago, he talked about the challenge of securing financing separately for the energy storage and solar portion of a project. The company’s projects are mostly on the East Coast.

Solar Grid Storage

Looking for a job? Try the solar industry

The growth rate for jobs in the solar industry last year was almost 20 times higher than the national average employment growth rate in the U.S., according to a new report out from non-profit The Solar Foundation. In 2014, 31,000 new solar jobs were created, delivering a U.S. solar workforce of 173,807, which was 21.8 percent bigger than the U.S. solar workforce back in November 2013.

The solar industry now represents 1.3 percent of all jobs in the U.S., making it larger than some fossil fuel sectors like coal mining. And it grew faster than some growing fossil fuel industries did last year, adding more jobs in 2014 than both the oil and gas pipeline construction industry, and the crude petroleum and natural gas extraction industry.

First Solar panels at Agua Caliente

First Solar panels at Agua Caliente

Over the past four years about 81,000 solar jobs were created, showing growth of 86 percent over four years. These are jobs like installers of rooftops solar systems and ground-mounted solar systems, solar sales and marketers, and corporate jobs at big American solar companies like First Solar, SunEdison, SunPower and SolarCity (added 4,000 jobs in 2014).

Two huge solar panel farms just went online in California, which employed about 400 workers each. For the first three quarters of 2014, more than one third (36 percent) of the new electricity capacity built out in the U.S. came from solar systems, according to a report from the Solar Energy Industries Association.

This year the solar sector expects to add another 36,000 jobs, showing even more growth in 2015, says The Solar Foundation. At the same time, the solar industry is worried that if the federal incentive, the investment tax credit, is lowered (it’s set to expire but could be renewed) in the near future, it could curb some of the recent growth in the sector.

Silver Spring to acquire energy data startup Detectent

Smart grid networking company Silver Spring Networks announced on Wednesday that it plans to acquire startup Detectent, which has developed data analytics for utilities. Utilities have slowly been adopting data tools over the years, from companies like Opower, C3, Silver Spring and others, to help manage their smart meter data, engagement with customers, energy efficiency programs, grid reliability and protection from theft.

Silver Spring Networks said it would spend $12 million in cash on the deal, which will close this quarter, and the acquisition is estimated to be neutral to earnings this year but accretive next year. Silver Spring has been working with Detectent as a partner since May 2014.

GreenNet 2011: Katie Fehrenbacher - Editor Earth2Tech, GigaOM; David Crane - CEO and President, NRG Energy; Eric Dresselhuys - EVP and CMO, Silver Spring Networks

A conversation with David Crane, CEO and President, NRG Energy and Eric Dresselhuys, EVP and CMO, Silver Spring Networks

Silver Spring’s stock dropped slightly on the news this morning and is down just under 1 percent at $7.28 per share. Silver Spring went public at $17 per share in 2013.

The company’s stock sank considerably over the past year due to issues like a delay in closing several big utility deals — the company is dependent on securing large many-year deals from utilities, and these deals can be difficult to get and close in a predictable manner. For the nine months ended September 30, 2014, Silver Spring generated revenue of $113.88 million, compared to $229.69 million for the same period in 2013. Net loss over the same period grew to $89.67 million in 2014, up from a loss of $67.17 million in 2013.

Companies selling smart grid services to utilities are racing to develop and acquire the best data analytics tools out there. Grid company EnerNOC acquired Pulse Energy last month. Data analytics company Tendril recently teamed up with solar giant SunPower as an investor and a partner. After a decade of discussion about the “smart grid,” energy companies are finally becoming data companies.

SunPower backs Tendril & plans to use its energy software

Decade-old energy company Tendril has struck an important deal with giant solar panel maker and project developer SunPower, the companies announced on Monday. SunPower has invested $20 million of growth capital into Tendril and has licensed Tendril’s energy software for solar data-related services.

Tendril started out life by building a platform to connect wireless sensors with an emphasis on ZigBee, and as the company grew it started to look for problems that its platform could solve, like building automation. Eventually it started focusing on smart meters and home energy management. For a long time, Tendril focused on utility customers and a few years ago bought Grounded Power, a startup that used behavioral science to create customer engagement for utilities (similar to what Opower’s original software does).

SunPower California solar ranch

In 2012, with a still early and pretty competitive market around home-energy software, Tendril went through a shakeup and did a substantial round of layoffs. But as Tendril stabilized, some like Smart Grid News’ Jesse Berst predicted that Tendril could now finally be positioned for substantial growth, as the market had been growing significantly for home energy software and Tendril has been an early mover in new ways to use energy data.

So it looks like the booming solar market could be part of that recovery, and Tendril’s new growth strategy. Both Tendril and Opower have recently expressed interest in teaming up with solar companies.

Solar was the second largest source of new electricity in the U.S. (behind natural gas) for the first three quarters of 2014, according to a recent report from SEIA. Tendril will be able to use SunPower’s solar data to develop its platform for solar-related services for utilities and other energy service providers, according to the release.

Austin's 's Pecan Street Project. Photo courtesy of Pecan Street Inc.

Austin’s ‘s Pecan Street Project. Photo courtesy of Pecan Street Inc.

Solar companies have been eager to both build and acquire energy data products to help manage solar panels on the grid, and to help solar customers engage with their solar systems more. SunPower makes its own panels, it manages large solar panel farms for utilities and commercial companies, and it also has a growing business around leasing solar panels for homes.

SunPower launched this residential solar leasing program in 2011 and it provided a bright spot of revenue for the company during the more difficult times in the manufacturing downturn. SunPower is now looking to grow that residential leasing program substantially and recently has started to focus on owning the relationship directly with the residential customer. SunPower has said it wants to be sort-of a Dell of solar, and the company is working on launching a new online retail portal and a new consumer marketing strategy.

I would guess that it’s SunPower’s new residential consumer solar strategy that is at the heart of the partnership with Tendril. With the funding from SunPower, Tendril has raised over $100 million, and other investors include Siemens Venture Capital, GE, VantagePoint Venture Partners, Good Energies, and RRE Ventures.

Mind you, Tendril does have a long history of announcing partnerships with big companies, like BMW, that tend not to move beyond a demonstration project. But this partnership involves a substantial investment as well as a licensing deal, so it sounds pretty significant. Competitors with Tendril include Opower, C3, Silver Spring Networks, Aclara and others.

Super efficient perovskites are dazzling solar cell researchers

There’s a lot of excitement about a class of materials called perovskites that promise to deliver efficient and cheap solar cells. In a pursuit to lower production cost, one team at the Northern Illinois University recently demonstrated the possibility of replacing gold with nickel to conducting electricity.