Permitting delays, supply chain bottlenecks and safety rules for construction teams resulting from the COVID-19 crisis have had their impact on large-scale energy storage project developers in North America, but customer interest remains strong and investors remain committed, Energy-Storage.news has heard.
Two major developers, Key Capture Energy and Convergent Energy + Power responded to a few short questions from Energy-Storage.news on the impacts of COVID-19 on their work. Both companies featured in our recent feature article which looked back on 2019's market landscape and looked ahead to the coming decade, ‘#SmartSolarStorage2020: A developers’ eye view on North America'.
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Direct impacts of COVID-19
“As with everyone, the impacts are changing day by day and we continue to monitor the latest news and adapt accordingly. We modify our efforts across the board based upon local, state and federal guidance to ensure the safety and well-being of our team, consultants, and contractors,” Dan Fitzgerald, chief operating officer of Key Capture Energy said.
Key Capture Energy had finished 2019 with more than 1GW of battery energy storage projects in development, from a scale of 5MW to 200MW, including projects in Texas, New England and New York, where at the beginning of the year KCE had commissioned one of the state’s first large-scale storage systems and kicked off work on several more.
“Remarkably during this time, it seems that we are busier than ever and are effectively working remotely from home. In fact we’re even hiring and on-boarding employees remotely. Our development and operations teams are able to continue with nearly all of their work at this time. We have seen minor, but manageable, impact to our construction work,” Fitzgerald said.
Meanwhile, Convergent Energy + Power’s CEO Johannes Ritterhausen said that at the moment, “our team is working remotely and has suspended all travel to protect the health and safety of our employees, customers, vendors, partners, and communities.”
Financially, Convergent Energy + Power is ready to ride out any coming market turbulence, the CEO said. The company was acquired by investor Energy Capital Partners in June 2019, an equity fund which as it stands has around US$19 billion in capital commitments.
“The acquisition provides us with strong financial backing and the resources to continue funding projects throughout the years to come, no matter the economic impact of COVID-19,” Convergent CEO Johannes Ritterhausen said.
Impacts on partners such as EPCs, contractors and suppliers
As we heard a little while ago from Danny Lu, executive VP at Oregon-headquartered energy storage systems manufacturer Powin Energy – which counts Key Capture and other major developers among its customers – supply chains for the battery space were shaken by the early 2020 impact of COVID-19 on its biggest supply base, China. While China is gradually coming back to work, the global situation has meant the industry is carefully recalibrating its overall supply chains.
“COVID-19 has slowed battery storage supply chains, since the majority of battery cells (and solar arrays) are built in China. We are also looking closely at the impact on the supply chains for the other system components as manufacturers suspend operations across the world, including here in the US. We’re hopeful that social distancing and the rapidly increasing response in North America will help to ‘flatten the curve’,” Convergent Energy + Power’s Johannes Ritterhausen said.
Responding to our questions on Monday this week, Key Capture Energy COO Dan Fitzgerald said that in terms of work out in the field, it was so far, so good, for the most part. However, as has been experienced across the board – and perhaps understandably so – permitting work and engagement with local authorities has been a bit trickier.
Energy-Storage.news has already seen some signs of local government working to remedy this, with New York State making the speedy permitting of large-scale clean energy projects part of its already-announced set of measures to make an economic recovery. Some parts of California are also implementing remote ‘no touch’ permitting processes for smaller scale solar-plus-storage installations.
“While we have had to alter some schedules, we have not experienced any major delays to date,” KCE’s Dan Fitzgerald said.
“In some cases, such as in New York State, where there are greater measures being taken, some efforts associated with our permitting studies have been delayed, given that some of this work does not fall under essential services. We have been in communication with New York State regarding minor timeline impacts thus far, as well as ideas for potential mitigation, should any significant delays occur.”
Mitigating those impacts and planning ahead
“We’re in close communication with the robust list of Tier-One suppliers we’ve worked with over the last ~10 years and are doing all we can under the circumstances. Because Convergent has remained “technology neutral,” we are always in a position to find the best supplier and product for each individual customer we work with,” CEO Johannes Ritterhausen said, of measures his company has – or might yet take – to mitigate the impacts of the novel coronavirus’s spread.
Meanwhile for KCE’s Dan Fitzgerald, it’s a question of always keeping in contact with partners, customers and suppliers and keeping the situation under continual review where possible. Fitzgerald said the company is “continuing internal and external consultation on a regular basis”.
“We are working with our construction teams to create safety plans in order to minimise contact, while continuing work where it is deemed essential. We are also looking further out and talking with suppliers about alternate manufacturing locations based upon expected peaks in COVID19 rates,” Fitzgerald said.
Best way to keep moving forward: safely
Of course, for mission-driven companies such as those in the renewable energy space, it can seem like there’s never a good time to call a halt to their work, but both companies reiterated that health and safety are the most important things on which value cannot be placed highly enough. That said, both said they are committed to carrying on wherever possible.
“While it is important to ensure the health and safety of everyone during this unprecedented event, it is also important for us to continue to work on enhancing the grid and enabling the further penetration of renewable energy,” Key Capture Energy COO Dan Fitzgerald said.
“At Key Capture Energy, we work hard every day to continue to push forward to the best of our ability, as we believe that we must do all that we can do to keep our projects on track and support the greater economy.”
Convergent Energy + Power’s Johannes Ritterhausen said similarly that the company is “closely monitoring the situation and keeping communication lines open with our suppliers to do all we can to keep projects moving without compromising the safety of our employees, vendors, customers, or communities.”
“Since our founding in 2011, safety has always been—and remains—paramount to our business.”
Cover Image: Convergent Energy + Power's 21MWh behind-the-meter battery storage project in Sarnia, Ontario, Canada. Credit: Convergent Energy + Power.