Steve Berberich is the President and CEO of the California Independent System Operator -- the entity that makes sure there is a balance of electrical generation supply to meet the power demands of 30 million Californians. The organization has a deep familiarity with baseload and synchronous generation sources. Berberich spoke at a recent energy storage event put on by Joint Venture Silicon Valley.

Berberich's speech revealed enthusiasm for storage, moderated by the uncertainty of the regulatory environment and the still-expensive price of energy storage technology.

Berberich said, "It's not a matter of if -- it's a matter of when." But he also remarked, "Yes, it's expensive -- and it has to come down in price."
 
"Storage plus renewables is a marriage made in heaven. Wind moves around a lot and the quality of wind in California is not very good -- it blows at night and dies during the day. We can use storage to help moderate that." Given the 33 percent renewable energy mandate in California, the proliferation of wind, and storage's ability to cover wind cutting out, Berberich notes, "It's the economics of storage we need to sort out."

"We are the balancing operator in California," said Berberich. "I always talk about how supply and demand have to be equal. There is an opportunity to change that law if storage is on the system."

Berberich also spoke about frequency regulation and the ancillary services market as the first opportunity for energy storage. He noted that "regulation is a four-second product," adding that "FERC is working with ways of compensation based on how well you can move." Berberich also contended that "the frequency regulation market exists today."

Berberich said that with cap and trade starting next year, a 33 percent renewables mandate and 12 gigawatts of distributed generation destined for the California grid, "While California is the Petri dish, it's an exciting Petri dish. I'm eager to work with the storage community, the FERC, and the PUC." The CEO notes that "soon there will be 10,000 megawatts of wind on the system," as well as a "march toward renewable energy," so "we're going to see greater variability."

He added, "I'm not a big fan of mandates; I think they distort markets."

"We're not sure how we're going to balance the system. We've run a number of simulations for 2020," he said, adding, "We have a deficit of 4,000 megawatts of ramping capability." That 4,000-megawatt shortfall is partially due to the pending ban on once-through cooling in coastal power plants.   

"We expect to have 10 megawatts to 14 megawatts of sodium sulfur and lithium-ion batteries on the system. We have about 4 megawatts of storage [on the system now] and lots of room to grow."

J.C. Thomas, Regional Manager of investor-owned utility San Diego Gas and Electric (SDG&E), remarked last month at the Greentech Solar Summit, “We see a lot of opportunity [for storage] there, but we don’t have a price signal to help that market mature,” he added. “Why would you put in a battery storage device if you’re getting those services -- net metering and balancing -- at no cost from the utility?”

The California ISO CEO notes that, "The California market is nodal." Along the coast of California, "There are eight or nine local constraint pockets, [... and] storage is worth more" in those pockets. He added that sometimes "the location of a generator is more important than how much it can produce."

The event included a slideshow from the DOE's Imre Gyuk that celebrated the ARRA-funded storage projects now on the grid.

"It's not a technical problem. Utilities are rational actors trying to run a system at the right cost. [...] It comes down to cost," said Berberich, concluding, "It's good stuff, but it's expensive and we have to find business cases."

Tags: ancillary services, batteries, caiso, california independent system operator corporation, caliso, energy storage, ferc, frequency regulation, iso, solar