by Julian Spector
April 17, 2017

Author's note: I will be attending the Energy Storage Association conference in Denver April 18-20. If you'll be there and want to say hi, or have a news tip that should appear in the next edition of Storage+, let me know at [email protected].

I lived most of my life in Maryland, but I left it behind when I became a battery reporter for GTM.

The move to Northern California brought me to the epicenter of energy storage and cleantech entrepreneurship. Now, though, Maryland wants a piece of that storage pie, so the legislature passed the first statewide storage tax credit in the U.S.

We can't really judge the policy until we see how it works, but a few initial points come to mind. 

It's crucial to see storage policy innovations coming out of a place that isn't California or New York. Those heavyweights have led the nation in designing the legal and regulatory frameworks that will enable the storage industry to flourish, but they're also outliers. Most states are not ready to venture so far out onto the grid edge. 

Maryland set an approachable example for states that want to give this young industry a boost, but aren't ready yet for a wholesale restructuring of their power system. It's limited to $750,000 a year in tax credits for commercial and residential deployments, and it only runs from 2018 through 2022.

That's not going to break the bank or precipitate any nasty death spirals. The greater risk is that it could leave a lot of potential economic value on the table. The industry there is starting more or less from scratch, though, so we'll reassess when we see if the maximum credits get claimed or if demand isn't there yet.

The particular policy vehicle a state chooses -- mandate, rebate, tax credit, etc. -- ultimately matters far less than the decision to create a storage market in the first place. Mandates have proven effective, and we'll see how an ITC works out, but the goal is not the mandate or the ITC, it's the incubation of a self-sustaining storage industry.

Any other states that, say, have Republican governors and want to promote clean-job growth without telling utilities what to buy will be more likely to replicate Maryland's model than California's. Personally, I'd like to dig in at the first solar-plus-storage powered Chesapeake Bay crab shack and watch the sun set over the water. The Bay's not far from Capitol Hill, so that could make a scrumptious recruiting tool for members of Congress on the fence about applying the policy nationally.

March of the Ice Bears 

I'm always somewhat surprised that thermal storage doesn't get more play on the airwaves. Sure, it's not as dispatchable as a battery, but it's a proven technology that reliably eliminates peak load, serving customers and the grid.

We'll be hearing more about this subsector of the industry, because Ice Energy has kicked off what it's calling the world's largest deployment of behind-the-meter ice storage devices. The company teamed up with NRG Energy to install up to 1,800 commercial and industrial systems providing a total of 25.6 megawatts for Southern California Edison.

SCE needs to procure 250 megawatts of storage. The utility delegated some of that to NRG and Ice Energy, which will give commercial customers free use of the Ice Bear systems. The end users save on their power bills, while NRG and Ice Energy collect on the peak storage capacity via a 20-year power-purchase agreement. Sounds a little complicated, but those Southern California folks know how to chill.

How 'bout them caverns?

Humans have been storing things in caves since before we knew how to farm, so you'd think we'd be a little better at it by now. Compressed-air energy storage (CAES), though, has proven quite difficult. The appropriate caverns are hard to find and expensive to develop, and so the sector has been more or less dormant for years.

I profiled a newcomer called Hydrostor that aims to change that. The company has developed a technique where they dig their own mine shafts and layer in water to maintain constant pressure no matter how much air gets pumped in. This lets Hydrostor install massive amounts of storage in the locations where it's most valuable, and lowers the costs of operation compared to traditional CAES techniques. 

Lithium-ion is dominating the battery race so far, but diversity is key to a healthy industry. There could well be a role for this modernized CAES as the high-capacity, long-duration alternative to the batteries currently running the market.

Big-box battery store

Speaking of sizable SCE storage deployments, retail powerhouse Wal-Mart signed on with Advanced Microgrid Solutions to put 40 megawatt-hours of batteries in 27 Southern California stores. This gives Wal-Mart no-money-down peak shaving and a greater ability to self-consume its considerable onsite generation.

The whole U.S. C&I storage segment deployed 74.1 megawatt-hours last year, so this contract alone will register in a big way for the industry. It also marks a relatively swift follow-through on statements I reported last fall from Mark Vanderhelm, Wal-Mart's VP of energy.

He had expressed an interest in expanding the company's use of storage beyond its 17 pilot projects, and doing so in a highly partner-driven way. Now he's found his partner.

Mad dash for the Australian grid

Storage companies hustled to get in on the Aliso Canyon procurements and show off their wares, but Australia is just nuts right now. The state of Victoria received 110 proposals for a 20-megawatt/80-megawatt-hour project to shore up the grid in the western part of the state. And that came just days after South Australia fielded 90 proposals for a 100-megawatt tender

It's clearly a buyer's market down there, but you have to feel for the people charged with reading through all those applications. Let's see if they respond to the tidal wave of offers with a few more projects to build.