Welcome to the latest edition of FairGreen where we discuss LDES commercialization in the context of the energy trilemma.
This newsletter is packed with insights on LDES manufacturing, financing and deployment.
Deployment Maturity Index (DMI)
DMI measures field reliability of LDES technologies at scale. It is an input to technology risk evaluations alongside product-level cycling and reliability testing data.
DMI itself is a composite of 3 metrics, namely total deployed capacity (scale of adoption), geographical distribution (robustness across environments) and project count (repeatability and customer diversity). In essence, the 3 factors answer the following questions:
Total deployed capacity: Has the product(s) moved beyond pilot size?
Geographical distribution: Does the product(s) work in different grids, climates and regulatory regimes?
Project count: Is this a one-off success or a repeatable product?
Methodology
The 3 inputs are converted into DMI through a weighted logarithmic function.
DMI = 0.5 C + 0.3 G + 0.2 P
Where:
C = Capacity score; G = Geography score; P = Project Count Score
Each component is normalized to a 0 - 10 score to align with the scoring range typically used by investment committees (ICs). The geographic score function has an upper bound of 8, reflecting the 8 major current LDES markets.
Score | Weighting | Logic |
|---|---|---|
Capacity | 50% | Strongest signal of field reliability and market acceptance |
Geography | 30% | Reduces risks of hidden failures and overfitting to 1 market |
Project Count | 20% | Prevents overrating of single mega-projects |
Logarithmic scaling is used to calculate the 3 scores to prevent single mega-projects and large technology providers from dominating and to reflect diminishing marginal validation, that is, each additional unit of validation provides less incremental certainty than the one before it.
DMI is scored on a 0 - 10 scale and the results interpreted as follows:
Score | Interpretation |
|---|---|
0 - 2 | Pilot stage |
2 - 4 | Early commercial |
4 - 6 | Emerging commercial |
6 - 8 | Proven commercial |
8 - 10 | Bankable |
DMI is a technology provider-level score as opposed to a product-level score. This is because the more mature technology providers tend to deploy various generations of their product(s) across projects and the deployed product generation is not always identified.
Limitations
The current iteration of the DMI has a few weak points which are listed in the table below with their associated mitigation measures.
Limitation | Mitigation |
|---|---|
Does not capture project quality | Covered by technical due diligence |
China deployments may skew scale | Geography factor partially offsets |
Time dimension missing | Can be added through simple filters |
DMI Ranking of LDES Technology Providers
The LDES Tracker currently contains over 180 operational LDES projects supplied by more than 45 different technology providers. The projects are deployed across 8 major LDES markets including China, USA and Spain.
For the purpose of the DMI, LDES projects are defined as follows:
Definition 1: A project with discharge duration equal to or greater than 8 hours at rated power, regardless of the energy storage system (ESS) technology.
Definition 2: A project leveraging a non-lithium ESS designed to have a discharge duration of 8 hours and above, even though the project itself might have a discharge duration lower than 8 hours.
Technology Provider | Technology | DMI (out of 10) |
|---|---|---|
Rongke Power | Vanadium Redox Flow Battery (VRFB) | 6.4 |
Sener | Molten Salt Thermal Energy Storage (TES) | 4.7 |
Invinity Energy Systems | Vanadium Redox Flow Battery (VRFB) | 4.6 |
TSK Flagsol | Molten Salt Thermal Energy Storage (TES) | 3.9 |
Cobra | Molten Salt Thermal Energy Storage (TES) | 3.9 |
Bluestar Chemical | Molten Salt Thermal Energy Storage (TES) | 3.9 |
LANPEC Technologies | Molten Salt Thermal Energy Storage (TES) | 3.8 |
Eos | Zinc-hybrid Battery | 3.5 |
Siemens Energy | Compressed Air Energy Storage (CAES) | 3.4 |
CellCube | Vanadium Redox Flow Battery (VRFB) | 3.4 |
Find the individual capacity, geography and project count scores in the LDES Tracker.
Discussion
Of the top 10 LDES technology providers (based on DMI):
Capacity score: 7 have each deployed 2+ GWh
Geography score: 5 have deployments in 2+ markets
Project count score: 7 have deployed 6+ projects
Based on the score interpretation scale provided in the methodology section, the technology providers fit into the following categories:
Bankable: None
Proven commercial: Rongke Power
Emerging commercial: Sener and Invinity Energy Systems
Early commercial: TSK Flagsol, Cobra, Bluestar Chemical, LANPEC Technologies, Eos, Siemens Energy and CellCube
The following OEMs deserve an honorable mention and they missed out on the top 10 list for the following main reasons:
Sumitomo Electric: low capacity
VRB Energy: low project count
Energy Dome: low project count
Highview Power: low capacity
Polar Night Energy: low project count
Rondo Energy: low project count
ESS: low capacity
Hydrostor: low capacity
Conclusion
DMI serves as a strong indicator of technology risk, one of the major inputs in the bankability assessment of technology providers. Based on DMI alone, the technology providers farthest along the path of bankability are flow battery companies such as Rongke Power and molten salt TES companies such as Sener.
The most impactful levers for a majority of the reviewed technology providers to improve their DMI are total deployed capacity and project count.
You can support the DMI initiative in 2 ways:
Provide feedback on the DMI methodology
Provide a list of deployed projects for addition to the LDES Tracker to improve accuracy
Remember that DMI is useful as a screening tool but that an accurate assessment of technology risk can be only obtained from technical due diligence firms like DNV.
Stay tuned for a bankability index in the coming months!
In Case You Missed It
Join the Global LDES Commercialization Forum on LinkedIn for further discussions on LDES commercialization with the global LDES community: [Link to group]
Get a front-row seat on LDES commercialization through the LDES Tracker: [Link to Tracker]
This newsletter strives to become your #1 LDES commercialization platfrom. Remember, consistency is key!
Let us know how we are doing.
Until next time :)
