5 ms·

Can someone explain their revenue to me? They claim 1m in revenue from their existing product which is: "1.75 megawatts (MW) of peak power output; a 2.2 MW cha

by ds 5y ago

Can someone explain their revenue to me? They claim 1m in revenue from their existing product which is: "1.75 megawatts (MW) of peak power output; a 2.2 MW charge rating; and 10+ megawatt-hours (MWh) of storage capacity" How does that equal 1m in revenue? You have to pay to charge your air-battery during low-cost hours and then discharge it during high cost hours to make the difference in revenue. The issue is, you can buy 2 megawatts of power 24/7 at average datacenter energy pricing (~5c/kwh) for $2400/day or 876k/year. Who is paying more than that for less energy and only at certain hours? Is there some energy company somewhere that sells power during the day at like 50c/kwh and 1c/kwh at night???

323 5y ago
While I don't know about their numbers, having a "grid level battery" is definitely something people (or gov subsidies) will pay for.
_delirium 5y ago
These kinds of utility-run storage facilities usually buy and sell on the wholesale spot market, which swings much more than retail prices do. Somewhat similar economics to gas "peaker" plants, which only fire up when supply is tight and prices spike, making it economical to run a higher-cost generator. The Hydrostor plant is in Ontario. Here's an archive of hourly spot-market electricity prices there (in dollars per MWh): http://reports.ieso.ca/public/PriceHOEPPredispOR/ http://reports.ieso.ca/public/PriceHOEPPredispOR/. So far in 2022, prices have been as low as $0.00/MWh (during a few hours overnight on Jan 5) and as high as $230.87/MWh (during the morning of Jan 11). In 2021, hourly average prices even exceeded $1000/MWh ($1/kWh) twice, on March 28 and October 10.
- ds 5y ago
  I would need to see the math, because nothing adds up to even 1/10th of their claimed revenue. Best case, they bought 10mwh on jan 5th and sold it at the perfect time on jan 11th. This would give them 2k in revenue in 6 days. Wheres the rest? And what about if you cant nostradamus predict the best times to buy and sell?
  - fenixnuke 5y ago
    The other thing that they can be doing is selling standby frequency response services to utilities: https://smartgrid.ieee.org/bulletins/january-2016/energy-storage-is-the-smart-choice-to-meet-primary-frequency-response-needs#:~:text=Energy%20Storage%20is%20the%20Smart%20Choice%20to%20Meet%20Primary%20Frequency%20Response%20Needs,-By%20Kiran%20Kumaraswamy&text=Primary%20Frequency%20Response%2C%20or%20PFR,security%20of%20the%20electric%20grid.&text=PFR%20is%20a%20critical%20system,security%20of%20the%20electric%20grid https://smartgrid.ieee.org/bulletins/january-2016/energy-sto.... Sometimes utilities only need a few minutes of power to cover small gaps while ramping up/down powerplants, or if a cloud passes over a solar generation facility. Since these volumes are very small but critical, the effective price per MWH is extremely high. When Tesla did their grid scale battery installation in Australia, this is how they made their money. Not via energy arbitrage, but with selling frequency response services. I have no idea if this is the same thing, but there are other ways to make money with energy storage as well.
- s1artibartfast 5y ago
  Still seems extreme. IF my math is right, they would need to buy and sell 10MWh every day at a 27c/KWh markup. Given they they deliver at ~2.2 MW, This means that they would have to hit this markup for a 4 hour duration, every day.
fenixnuke 5y ago
They are likely operating on the wholesale markets, which are market priced. For the western grid there is a significantly wider price range of prices. On peak days in the summer, prices can go up above $1,000/mwh in the late afternoon for several days. During the late fall/early spring, there are negative prices in the late morning (like $20-$50/mwh) due to extremely high solar production and low demand, so utilities are literally paying you to use electricity. It's not inconceivable to get to $1 million a year on 1 mwh of storage. Take a look at the price maps and historical pricing data if you are curious https://www.caiso.com/todaysoutlook/Pages/prices.html https://www.caiso.com/todaysoutlook/Pages/prices.html
- ds 5y ago
  Im familiar with energy markets. Im also familiar with the fact that any serious seller or buyer of energy locks in yearly pricing contracts and is unaffected by these swings. Any serious datacenter or industrial buyer is not relying on spot pricing. These energy markets also dont exist in every state.
  - thinkcontext 5y ago
    If you are familiar with energy markets then by all means tell us the percentage breakdown of electricity consumed that is covered by long term contracts vs the spot market.
- reincarnate0x14 5y ago
  A lot of people look at these and think "that doesn't seem like it'd be remotely worth it for something that size" but it's really hard to explain just how badly California has painted itself into a corner on distant generation, huge variance between excess renewable capacity and peak load, and transmission congestion. The numbers don't make sense to people. Pretty much all the solar plants we're putting in now have combined battery storage systems either for voltage support or "peaker" sales opportunities. In some places (like literal islands) it's about capacity smoothing or resilience, but the driving force behind all the investment is the US western interconnect with arbitrage opportunism starting to make real money and looking to make much, much more over the next decade. If government-sachs is betting on this, they've probably got an even more pessimistic take on the CAISO market than I do.
s1artibartfast 5y ago
I agree it does seem like a stretch. IF 10MWh is their daily cycle, they are selling 3,650,000 kWh/year. To hit $1M per year, they would need to be selling ~27c/KWh above their buying price. I get that you can have a big spread if you are being paid to take power, and paid again to sell it.
- thehappypm 5y ago
  I think that’s it basically. New England consumers pay ~$.22/kWh. We’re going to have offshore wind energy in the next decade that might conceivably have surplus power quite a lot. It’s not beyond the realm of possibility that these plants could have a deal with the power plants to take extra power for free so long as they have guarantees on filling the expected gaps or meeting expected spikes in usage. Everyone wins.

by ds 5y ago

323 5y ago

While I don't know about their numbers, having a "grid level battery" is definitely something people (or gov subsidies) will pay for.

_delirium 5y ago

These kinds of utility-run storage facilities usually buy and sell on the wholesale spot market, which swings much more than retail prices do. Somewhat similar economics to gas "peaker" plants, which only fire up when supply is tight and prices spike, making it economical to run a higher-cost generator. The Hydrostor plant is in Ontario. Here's an archive of hourly spot-market electricity prices there (in dollars per MWh): http://reports.ieso.ca/public/PriceHOEPPredispOR/ http://reports.ieso.ca/public/PriceHOEPPredispOR/. So far in 2022, prices have been as low as $0.00/MWh (during a few hours overnight on Jan 5) and as high as $230.87/MWh (during the morning of Jan 11). In 2021, hourly average prices even exceeded $1000/MWh ($1/kWh) twice, on March 28 and October 10.

ds 5y ago
I would need to see the math, because nothing adds up to even 1/10th of their claimed revenue. Best case, they bought 10mwh on jan 5th and sold it at the perfect time on jan 11th. This would give them 2k in revenue in 6 days. Wheres the rest? And what about if you cant nostradamus predict the best times to buy and sell?
- fenixnuke 5y ago
  The other thing that they can be doing is selling standby frequency response services to utilities: https://smartgrid.ieee.org/bulletins/january-2016/energy-storage-is-the-smart-choice-to-meet-primary-frequency-response-needs#:~:text=Energy%20Storage%20is%20the%20Smart%20Choice%20to%20Meet%20Primary%20Frequency%20Response%20Needs,-By%20Kiran%20Kumaraswamy&text=Primary%20Frequency%20Response%2C%20or%20PFR,security%20of%20the%20electric%20grid.&text=PFR%20is%20a%20critical%20system,security%20of%20the%20electric%20grid https://smartgrid.ieee.org/bulletins/january-2016/energy-sto.... Sometimes utilities only need a few minutes of power to cover small gaps while ramping up/down powerplants, or if a cloud passes over a solar generation facility. Since these volumes are very small but critical, the effective price per MWH is extremely high. When Tesla did their grid scale battery installation in Australia, this is how they made their money. Not via energy arbitrage, but with selling frequency response services. I have no idea if this is the same thing, but there are other ways to make money with energy storage as well.
s1artibartfast 5y ago
Still seems extreme. IF my math is right, they would need to buy and sell 10MWh every day at a 27c/KWh markup. Given they they deliver at ~2.2 MW, This means that they would have to hit this markup for a 4 hour duration, every day.

fenixnuke 5y ago

They are likely operating on the wholesale markets, which are market priced. For the western grid there is a significantly wider price range of prices. On peak days in the summer, prices can go up above $1,000/mwh in the late afternoon for several days. During the late fall/early spring, there are negative prices in the late morning (like $20-$50/mwh) due to extremely high solar production and low demand, so utilities are literally paying you to use electricity. It's not inconceivable to get to $1 million a year on 1 mwh of storage. Take a look at the price maps and historical pricing data if you are curious https://www.caiso.com/todaysoutlook/Pages/prices.html https://www.caiso.com/todaysoutlook/Pages/prices.html

ds 5y ago
Im familiar with energy markets. Im also familiar with the fact that any serious seller or buyer of energy locks in yearly pricing contracts and is unaffected by these swings. Any serious datacenter or industrial buyer is not relying on spot pricing. These energy markets also dont exist in every state.
- thinkcontext 5y ago
  If you are familiar with energy markets then by all means tell us the percentage breakdown of electricity consumed that is covered by long term contracts vs the spot market.
reincarnate0x14 5y ago
A lot of people look at these and think "that doesn't seem like it'd be remotely worth it for something that size" but it's really hard to explain just how badly California has painted itself into a corner on distant generation, huge variance between excess renewable capacity and peak load, and transmission congestion. The numbers don't make sense to people. Pretty much all the solar plants we're putting in now have combined battery storage systems either for voltage support or "peaker" sales opportunities. In some places (like literal islands) it's about capacity smoothing or resilience, but the driving force behind all the investment is the US western interconnect with arbitrage opportunism starting to make real money and looking to make much, much more over the next decade. If government-sachs is betting on this, they've probably got an even more pessimistic take on the CAISO market than I do.

s1artibartfast 5y ago

I agree it does seem like a stretch. IF 10MWh is their daily cycle, they are selling 3,650,000 kWh/year. To hit $1M per year, they would need to be selling ~27c/KWh above their buying price. I get that you can have a big spread if you are being paid to take power, and paid again to sell it.

thehappypm 5y ago
I think that’s it basically. New England consumers pay ~$.22/kWh. We’re going to have offshore wind energy in the next decade that might conceivably have surplus power quite a lot. It’s not beyond the realm of possibility that these plants could have a deal with the power plants to take extra power for free so long as they have guarantees on filling the expected gaps or meeting expected spikes in usage. Everyone wins.