California’s status as the vanguard in pushing energystoragetechnologies onto the power grid is now official. On Thursday, the California Public Utilities Commission unanimously approved its proposed mandate (PDF) that will require the state’s big three investor-owned utilities to add 1.3 gigawatts of energy storage to their grids by decade’s end.
Now comes the hard part: putting in place a complex set of regulations to guide the development of an unprecedented number of batteries, thermal energy storage and other forms of grid power and energy capture-and-release technologies, all keeping to the mandate’s requirement that they be “cost-effective.”
CPUC’s ruling comes after years of work jump-started by a 2010 state law, Assembly Bill 2514, which originally called for the statewide energy storage mandate to enable a “market transformation” for these new technologies.
Large-scale energy storage doesn’t really exist today beyond massive pumped hydro projects. But California’s aggressive renewable energy goals and greenhouse gas reduction mandates will be hard to meet without a lot more energy storage to help balance intermittent wind and solar resources while keeping the grid stable.
An initial proposal was released in June, and after comments from utilities, industry representatives, and other stakeholders, it was adapted to a proposed decision issued last month. Thursday’s vote affirms all the key parts of that decision, including the key targets for storage procurements that utilities Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric must begin securing, starting next year.
It also retains the rule that utilities may own no more than half of the storage assets they procure -- something that the state’s IOUs opposed. That opens the path for a massive growth of merchant storage, customer-owned energy assets and other arrangements that will be a challenge to incorporate into today’s utility and grid regulatory and economic frameworks.
Specific details pertaining to how the CPUC will regulate customer-owned storage assets, beyond existing programs like the state’s Self-Generation Incentive Program, will be “addressed in a future rulemaking,” Thursday’s decision notes. The ruling creates three separate classes of storage at the transmission-connected, distribution-connected, and customer-side levels. But just how utilities and third parties will manage the interplay of ownership and operation of those distinct assets remains a question to be answered in the future as well.
On the critical question of cost-effectiveness -- something that AB 2514 requires for all mandated storage projects -- CPUC will be relying on energy storage evaluation software tools developed by the Electric Power Research Institute (EPRI) and by utility consultancy DNV Kema at first.
But in the longer term, it will insist that a “consistent evaluation protocol will be used for benchmarking and general reporting purposes, in addition to allowing utility-specific proprietary evaluation protocols,” according to Thursday’s decision -- while noting, once again, that this consistent evaluation protocol has yet to be created. Building an energy storage ecosystem that can serve a multitude of revenue-generating and grid- and customer-serving functions is one of the biggest challenges facing today’s electricity generation and delivery system.
California is a hotbed for grid batteries, ranging from massive utility-operated sodium-sulfur and lithium-ion batteries to cabinet-sized battery arrays sitting inside solar-equipped buildings and homes.
And that’s not mentioning the thermal energy storage systems that turn rooftop air conditioners and campus-wide cogeneration plants into virtual grid energy-shifting arrays, or the compressed-air energy storage (CAES) system being developed by PG&E, or the plug-in electrical vehicle storage projects underway at SCE, or the microgrid projects in SDG&E territory.
All of these technologies and configurations will need to be matched with the right set of regulatory and market mechanisms to allow them to even be measured in terms of their costs and benefits, let alone judged on whether or not they’re effective on those measures. Get ready for a long and complicated process to work it all out.