Along with leading the formation of the Global Energy Storage Alliance in 2014 and remaining its chair until earlier this year, Janice Lin, head of Strategen Consulting, is executive director of the California Energy Storage Alliance (CESA). There’s probably nobody better to ask about how California's newly-minted legislation gunning for 100% renewable retail electricity in the state by 2045, SB100, can be viewed in the wider context of what’s happening in California’s energy storage industry.
We heard from commentators at SPI this year that before long it might be more common to see new solar with storage than without. Lin agrees that energy storage is only going to become more closely partnered with clean energy generation.
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“Solar and storage will be like peanut butter and chocolate, they’re way better together! I’ve had developers tell me, at least going forward in the West, they don’t see a lot of solar procurement without storage and they’re proactively including storage in their business now,” Lin says.
And it isn’t just the likes of California’s big investor-owned utilities (IOUs), which are mandated to procure energy storage or to consider it in their resource planning, getting involved. Municipal utility Los Angeles Department of Water and Light uses a 20MW battery at the 250MW Beacon Solar Plant and Beacon Energy Storage System in the Mojave Desert. It provides AC frequency control, voltage support and assists in the utility’s compliance of balancing requirements, helping keep T&D lines stable, while allowing more power to be usable from the PV.
That said, the “beautiful thing” about energy storage is that it can be deployed with solar onsite, but it doesn’t have to be, Lin continues.
“Storage can do so many things for the grid and it need not necessarily be directly coupled with PV. There’s discussion in California to deploy solar but to have it integrated with distributed, customer-sited storage, as the means by which you improve the capacity factor and shift peaks. This is something that can only be done by a community choice aggregator in California. So there’s been creativity on the deployment model – and the lines between utility-scale and behind-the-meter (BTM) are really blurring.”
SB100 is ambitious, but a logical next step
We have often heard that increasing the value of BTM storage could be a question of allowing aggregated residential or C&I storage systems to work together as networks, trading energy or performing virtual power plant (VPP) roles. Lin says there’s already precedence for BTM systems providing services to utilities in this way.
“Where they (utilities) used to procure local capacity in very large contracts with generators, they’re doing it in an aggregated fashion from smaller aggregated assets behind-the-meter.”
So how is the state supporting this shift? Does it even need supporting or will market forces take care of everything? Janice Lin is quick to point out that SB100 has not just appeared from thin air, and the 100% renewables policy sits alongside policy and regulatory initiatives that have already changed the game.
“California historically has been a leader for how to use distributed resources generally for grid support and those aggregated BTM local capacity procurements that happened some years ago here, I think that was the first time anywhere in the world that was done. Now we have multiple programmes to encourage BTM storage.”
These include the SGIP (Self Generation Incentive Program), which gives Californians a discount on energy equipment that achieves greenhouse gas (GHG) savings. The state also has programmes for demand response, another market opportunity for energy storage asset owners.
The challenge, and not only in California, is to raise the market value of BTM storage by allowing greater recognition of the services and benefits it can provide. Previously, we heard from Janice Lin and others on the expected big impact of FERC Order 841, a Federal Energy Regulatory Commission (FERC) ruling which instructs regional or state T&D networks to create frameworks for energy storage to participate in wholesale electricity markets. That ruling is still in the process of being hammered out and so Lin offers a more general comment on how the value of storage can be better recognised.
“One of the challenges for BTM storage is getting the signals – the market signals – right. For the most part, BTM storage is deployed today to help the host customer manage their electric bill. Typically it’s to avoid a demand charge, conduct some energy arbitrage and of course the price signal that guides that behaviour is going to be the electricity tariff. But as we know, electricity tariffs are an artificial construct, they’re regulated and they weren’t designed to optimise shifting on the part of a consumer for the benefit of the grid overall.”
“So we’re still learning about how BTM storage functions, we’re still learning how that impacts GHG emissions. Also, how do you share the asset? If you’re using it for the host but also want to use it to provide, say local capacity, how do you actually implement this multi-use functionality and make it count towards your overall electric power sector planning? In that regard I think we’re really still learning. There’s been a lot of progress but I think from here on out, it’ll just get more exciting and when we overlay the power of smart computing, data analysis, smart algorithms, we’re really just entering a very exciting time where distributed energy resources can be a key tool, for grid planning going forward.”
This interview originally appeared in Volume 17 of PV TECH POWER, Solar Media's quarterly tech journal which includes 'Storage & Smart Power', a section created and contributed by the team at Energy-Storage.news. You can download the magazine in full, free of charge, here (subscription details required).