The Energy Storage Report 2024

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To boldly go… Part I

Storage requires a policy push at both national and regional levels to gain momentum. Image: Portland General Electric.
Storage now is in roughly the same position solar was in a decade ago: almost everyone can see its potential, the technology is pretty much there, but the costs are still too high to allow the mass penetration that PV is now starting to see. What is needed is a push from a group of bold policy makers to prove the concept and then let the market do what it does in driving out cost.

Well, some parts of the world are beginning to take the initiative. It’s happening at different scales, led by both national and local authorities, but the first generation of storage leaders is beginning to emerge. We look at some of the areas embracing storage. Part one of this article covers the three leading US states and therefore by extension three of the world's leading regional storage markets, part two will cover notable regions in the rest of the world.

California: Progressive beacon?

Almost all the talk when it comes to solar-rich California has been centred around Assembly Bill 2514, the mandate that orders the state’s investor-owned utilities to put 1.3GW of energy storage to the grid by 2020. This includes behind the meter storage. So in addition to a growing commercial market for demand charge reduction, the state seems well motivated to keep installing batteries. Along with pilot schemes in residential launched by some of the solar industry’s big-hitters, the state is likely to see continued activity across several segments including the scaling up of those pilots.

Yet the USA is a deeply market-oriented culture and regulators and utilities alike are still only just getting to grips with how to look at storage. Many of the problems stem from how to compensate storage when it can perform so many tasks across the electricity network and some of these questions are being tackled first in California. Chris Edgette of the California Energy Storage Alliance (CESA) tells PV Tech Power that to some extent the state’s industry is lucky to have progressive legislators and a progressive regulator, the California Public Utilities’ Commission (CPUC), which issued AB 2514 in the middle of last year. According to Edgette, his organisation was among those which worked with CPUC to launch AB 2514.

CESA is currently also looking at the potential for storage to supply demand-side response, perhaps aggregated from a number of behind-the-meter systems capable of responding to requests from the grid to ramp up or absorb demand. As one of the trendy electric vehicle (EV) capitals of the world, California is home to Tesla, which supplies SolarCity with its battery packs. It will be interesting to see what impact an upturn in EV sales of the kind Tesla is hoping for could have on the wider battery market in California and beyond, although Tesla’s battery production itself will take place at the forthcoming Gigafactory in Nevada. 

New York: Anything you can do I can do bigger

New York is also developing as one of the USA’s storage-hungriest states and like California has some forward-thinking policies and people in high places that are helping move the sector along. Audrey Zibelman, the chair of the New York Public Service Commission, the state’s equivalent to CPUC, was one of the founders of Viridity Energy, one of the first companies in the US to execute aggregated demand response. As a densely packed urban hub on the Atlantic coast rather than a mixture of cities, towns and desert, New York sees wildly contrasting drivers for storage deployment to California. John Cerveny, vice president of NY-BEST, which he describes as part technical trade association, part economic development agency, says that New York is more concerned with easing the burden on its ageing and complex infrastructure than the need to “keep the lights on”. Programmes like the NY SUN Initiative for large-scale solar may change that in future, Cerveny says, but this is still some way off.

While investor-owned utilities in the USA are often seen as resistant to change, one is taking the lead in New York on storage. Seeking to offset the forthcoming loss of a 2,000MW nuclear plant 100 miles up the Hudson River from New York City, ConEdison, which serves most of New York City, has put out a request for 125MW of storage – 25MW of combined heat and power and demand reduction in the order of 100MW. Put out in conjunction with New York State Energy Research Development Authority (NYSERDA) in February this year, the requirement could and probably will be met to some extent with large-scale storage.

ConEdison is also looking to defer costly investment in grid infrastructure using storage and cited that it is seeking to stave off the need to upgrade a substation which could cost around US$1 billion. “When they have 60 [substations] in their territory, the costs are daunting,” says John Cerveny. “In New York as soon as you open up the street, you don’t know what you have. So if you can leave the existing infrastructure in place but use it more efficiently, it’s a much better use of dollars than accidentally opening up a gas line no one knew about.”  NY BEST was itself started up through policy support, with US$25 million of investment, most of which came through NYSERDA. Meanwhile, residential storage for self-consumption is not yet on the agenda in the Big Apple, nor in California. For the most part, net metering, which is in place in 43 US states, is considered a fair enough compensation mechanism, for the time being. Meanwhile power outages are less of a concern in New York than California, so backup power is also less of a market driver there.

Hawaii: Island power

While California and New York get many of the headlines, Hawaii’s storage is notable, particularly to the solar community, as one of the first tests of the limits of renewables integration. With their geographical isolation and tropical climate the islands have a high penetration of solar. More than one in ten customers of one utility, Maui Electric, are estimated to have rooftop solar.

In May Maui Electric’s parent company Hawaiian Electric Company (HECO) issued a request for proposal for 60MW to 200MW of energy storage across one or more systems with 30 minutes of storage capacity. This was followed in late August by HECO’s proposal to meet 65% of the island’s energy needs with renewables by 2030, an ambitious plan that the utility says will require energy storage, along with a tripling of the state’s distributed solar resources. In the state that burns more oil than any other in the USA, this makes solar-plus-storage an attractive enough proposition that HECO has pledged its grid upgrades, distributed solar and energy storage will cut customers’ energy bills by around 20%.

This article appeared in its original form in PV Tech Power, the new downstream solar technology journal from Solar Media.

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