At a recent conference attended by various participants in the power industry, including regulated utilities and independent energy producers, an astute speaker quipped that \u201cenergy storage proponents are quickly becoming the cool kids in the room.\u201d Everyone chuckled knowingly, because policy makers in various jurisdictions, especially California, are driving the power industry to make energy storage happen in a meaningful way.<\/p>\n
California\u2019s investor-owned utilities are pumping hundreds of millions of dollars into innovative energy storage projects in an effort to satisfy the state\u2019s energy mandate. Although a handful of storage technologies are getting a big boost from that effort, there is little doubt that roughly 75 percent of the state\u2019s energy storage needs in the coming decades will be met by pumped storage hydro, the traditional\u2014and still the most economical\u2014storage solution.<\/p>\n
Demand and Mandate for Energy Storage<\/b><\/p>\n
California\u2019s RPS benchmarks set the timeline for bringing energy storage online. Without storage, sources of renewable power are susceptible to\u00a0curtailment<\/a>\u00a0because they lack the load-following characteristics required by the grid. Additionally, daily load\u00a0ramping<\/a>\u00a0requires spinning reserves or other forms of stand-by power sources that can be brought online quickly to match customer power use at the beginning and end of the work day. Energy storage added to the renewables portfolio\u00a0helps solve those problems<\/a>\u00a0by making renewable power available when needed to match demand.<\/p>\n California\u2019s energy storage mandate (AB 2514<\/a>) added a twist to existing demand for energy storage. Adopted in 2010, the bill required California\u2019s three largest power generating utilities to contract for an additional 1.3 GW of energy storage power generation (meeting certain criteria) by 2020, coming online by 2024.<\/p>\n Although California already leads the way in promoting energy storage, lawmakers determined that\u00a0more efforts were necessary<\/a>\u00a0to support the policy and, in September 2016, adopted four new laws (AB 2861<\/a>,\u00a0AB 2868<\/a>,\u00a0AB 33<\/a>and\u00a0AB 1637<\/a>) to foster and streamline California\u2019s storage market. These laws (i) improved the conflict resolution procedures for interconnection disputes, (ii) directed utilities to consider the role of energy storage as a distributed energy resource that can provide benefits to the grid, (iii) focused on the role of bulk storage (such as pumped storage hydro, compressed air and batteries) in integrating renewables into the electrical grid, directing the California Public Utilities Commission, in coordination with the California Energy Commission, to evaluate the potential for all types of long duration bulk energy storage resources to help integrate renewable generation into the grid, and (iv) expanded funding incentives for customer-sited storage projects.<\/p>\n Supply Pipeline for Energy Storage<\/b><\/p>\n According to records available from the Department of Energy, the following California energy storage projects are announced or underway: Source: Sandia National Laboratories, via http:\/\/www.energystorageexchange.org\/, administered by Strategen Consulting LLC. Used under license.<\/i><\/p>\n Total power output from the table above is approximately 3.1 GW, of which 2.6 GW, roughly 84 percent of that total, comes from projects outside the gambit of the California storage mandate. AB 2514 expressly excludes\u00a0pumped storage hydro >50MW<\/a>, which comprises 2.3 GW. The CAES project uses gas combustion, which is off-pace with the bill\u2019s preference for clean and green storage solutions; and\u00a0PG&E has not submitted<\/a>\u00a0it for qualification under the mandate. Clearly, the investor-owned utilities are contracting to fulfill the state\u2019s gross megawatt requirements for storage, notwithstanding AB 2514. The real impact of AB 2514 is the impact on non-traditional storage solutions.<\/p>\n Disrupting the Grid with Distributed Storage<\/b><\/p>\n Gross megawatts does not tell the whole story. Although lesser in power, the remaining 16 percent of pipelined storage illustrates a new mindset in grid management that looks for localized solutions to localized problems. If anything, AB 2514 is pushing the grid to pay more attention to the \u201cwhere\u201d and \u201chow\u201d of power supply more than \u201chow much.\u201d<\/p>\n A quick pass through the list above shows a breadth of storage technologies in the works. Although the list above is limited to projects greater than 5 MW, the deployments include lithium-ion, zinc-air, thermal, and even flywheel technologies.<\/p>\n Additional solutions not captured in the chart above include over 60 projects with power ratings less than 5 MW. These include a network of batteries by\u00a0Green Charge Networks<\/a>\u00a0for over 30 electric vehicle charging stations.<\/p>\n Also not captured in the list above, at least one utility has inked megawatt-scale energy conservation contracts (provided through smart building management services) awarded to\u00a0AMS and NextEra<\/a>.<\/p>\n Southern California Edison has turned its AB 2514 efforts into a public relations campaign, in conjunction with California lawmakers,\u00a0telling a story<\/a>\u00a0about the complexity of valuing storage that ultimately resulted in a decision to purchase more than five times the amount of qualifying storage required by California\u2019s mandate.<\/p>\n![\"\"](\"http:\/\/www.renewableenergyworld.com\/content\/dam\/rew\/onlinearticles\/2016\/11\/energy.storag.table.png\")
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