by Julian Spector
July 23, 2020

Could energy storage help bring the U.S. economy back to life? Joe Biden’s new clean energy platform does not explicitly ask that question, but it is strongly implied.

After taking the counsel of the Biden-Sanders Unity Task Force, the campaign accelerated its clean grid deadline from 2050 to 2035 and pledged to front-load clean energy investments in the next four years. That both gets the ball rolling on decarbonization efforts and stimulates the coronavirus-stricken economy.

This week in Storage Plus, I’ll parse the fine print on the Biden plan to see what it means for energy storage, which gets more mentions than it’s had in past presidential campaigns.

“We’re pleased to see storage recognized at this level as essential infrastructure to transition to a clean electric power system,” said Kelly Speakes-Backman, CEO of the U.S. Energy Storage Association.

The attention shown in the document is matched by engagement with industry participants, said storage developer Brandon Keefe of Plus Power, who interacted with the campaign as part of a group of clean energy industry donors.

“They’re in an active dialogue and listening, and trying to figure out what would have a substantial impact,” he said.

Decarbonization by 2035 would drive a bigger market for storage, faster than the status quo. And there’s a good deal of spending promised on battery research and development and American-based manufacturing.

But the language of the platform raises questions about who the intended audience is. For a love letter to the clean energy industry, it seems preoccupied with concerns that few in the industry have raised, and it's somewhat fuzzy in its understanding of how the industry has succeeded thus far. What's more, core storage industry concerns around open access to power markets don’t get mentioned at all.

Now that’s a deadline!

Wind and solar are already dominating new capacity additions, but storage is just getting started. Power producers in most states still default to gas plants when they need capacity.

A clean-grid deadline of 2035 would change that, because it would make it all but impossible to build power plants that emit carbon, starting now. Not to say utilities won’t try getting ratepayers to pay them for a 30-year asset in 15 years — or less, given the time to develop and permit new gas plants. But that’ll be a very hard sell, and regulators are increasingly getting wise to unnecessary gas plants even without a federal mandate.

The result of this policy would be to ramp up the scale of battery deployment to meet capacity needs going forward, perhaps significantly. That’s not a stretch in terms of feasibility: Even though hardly any batteries currently operate at the 100-megawatt scale, numerous developers already are constructing or preparing to build such projects. There aren’t any technological breakthroughs required to build more or at bigger scale.

“If this industry can thrive in a Trump environment, imagine what we can do with a tailwind?” Keefe said.

Build your own batteries

Remember back when the industry could gather in a big room to bump elbows and hear leaders remark on the future, and how all those speeches built toward one overarching vision: that a lack of battery cell manufacturing on U.S. soil was hobbling the industry’s growth prospects?

I don’t remember it coming up, actually. I’ve heard more excitement from developers when they nabbed high-quality cells from China at a good price. Indeed, battery projects owe a good chunk of their competitive edge to a highly streamlined global supply chain that continuously pushes costs down.

The platform, though, asserts that “Biden will ensure that these batteries are built in the United States by American workers in good, union jobs.” That’s a major shift from today’s industry, which depends on cells from foreign companies.

Onshoring some of the battery supply would help not just with jobs but also with industrial security, said Lindsay Gorrill, CEO of Kore Power, which plans to manufacture batteries in the U.S.  “The sooner the United States can rely on its domestic supply chains, the faster we will no longer be bound to foreign governments’ control of those materials and components that our domestic energy system relies upon.”

The Energy Storage Association supports assistance for domestic storage manufacturing, Speakes-Backman said. But she cautioned that the form of that support matters, as recent history demonstrates.

“We’ve seen from the Section 301 tariffs imposed with only several weeks’ notice in September 2019 that sudden, punitive rules regarding this focus can be detrimental, rather than supportive,” she said. “Growing a domestic storage supply chain will be most likely to succeed if it is pulled by market demand, which investment tax credits can drive.”

This policy raises the question of how many jobs would actually come from battery manufacturing, given that cells are typically pumped out from highly automated production lines.

The U.S. manufacturing sector would have a lot of catching up to do for battery cells, all for the pleasure of competing on a highly commodified product under constant global price pressure. Other stages of the value chain offer better margins and fit for American electrical expertise, but the Biden platform doesn’t distinguish which stages of storage manufacturing it sees as most valuable.

Brownfield revival

Biden’s plan places recurring emphasis on the idea of revitalizing abandoned industrial spaces: “Properties idled in communities left behind, like brownfields, will once again become critical hubs for the growth of our economy.”

This approach risks putting aesthetics before actual needs: Are communities really clamoring for revitalized brownfield sites, or are they more focused on new jobs and opportunities, which in some cases could be located on dirty, old industrial lots if there isn’t a better option?

However, this approach could resonate with storage if it encourages more of a trend that has already begun: swapping out fossil fuel generators for batteries at existing power plants. This strategy makes use of existing structures, interconnection and grid network capacity, and has allowed developers to move quickly on battery projects of unprecedented scale. Examples are Vistra’s efforts at Moss Landing and Oakland, and the proposed Ravenswood redevelopment in New York City.

Doing this in urban settings, where power plant pollution harms vulnerable communities, would serve Biden’s goals of addressing environmental justice and racial health disparities while building a cleaner power grid.

This is already happening in a few places without federal action. All it takes is a legacy power plant owner that can see a business case for batteries. But presidential support could help convince more plant owners to give it a try.

Surge of research and development

Biden promises “historic R&D” spending on battery technology. One of the concrete goals of that effort is to unlock “grid-scale storage at one-tenth the cost of lithium-ion batteries.”

Lithium-ion has already become competitive with other resources at today’s prices, but it’s only storing power economically for up to four hours, sometimes five. To dump gas power by 2035, the system likely requires much longer-duration storage, and that depends on radically cheaper costs for longer-duration technology.

This is still an early effort for the storage industry. Startup Form Energy signed a deal to supply a 150-hour aqueous battery to Minnesota’s Great River Energy in late 2023. Other companies brand their products as long-duration but actually are only chasing 6- or 8- or 12-hour durations. Concentrated federal support for radically cheaper storage could unlock new business models for “firm” or “baseload” renewables.

Biden also proposes an Advanced Research Project Agency on Climate (ARPA-C) to execute this storage cost reduction, as well as to expedite advanced nuclear reactors, hyper-efficient buildings and green hydrogen. That will no doubt excite climate hawks, but it’s also oddly duplicative of the Department of Energy’s already-formed and much-loved ARPA-E, which currently funds research on cool things like, let's see, cheap long-duration storage, advanced nuclear reactors, hyper-efficient buildings and green hydrogen.

That program enjoys strong bipartisan support: Congress kept funding ARPA-E’s budget, usually around $350 million, when the Trump White House repeatedly tried to destroy it. It would be easier to boost funding for the existing agency than to create a whole new one to do similar things. But if decarbonization becomes a top federal priority, the government could expand that research budget considerably.

No mention of market access

The Biden platform notably ignores one of the crucial areas where federal action really could help the storage industry: fair access to power markets.

Where storage can get paid for serving grid needs, projects are already built or moving forward. But significant barriers remain in the form of power-market rules written for previous technologies that disadvantage storage.

A classic example is PJM’s insistence that batteries can only provide capacity value if they have 10 hours of duration. That effectively blocks batteries from competing for capacity there. Nobody’s building batteries with 10-hour duration today, yet plenty of other markets and regulated utilities have found batteries to be perfectly capable of serving reliable capacity with shorter durations.

“The relevance of regulatory reforms to support a grid with higher penetrations of renewable energy can’t be understated,” Speakes-Backman said. “We’re working with grid operators and stakeholders to ensure that the contribution of storage to reliability is reflected properly in capacity rules, so it can be there to support the goals of a clean electric power system in the near-term future.”

Other use cases, such as storage as a substitute for new transmission lines, need even more regulatory work. The clear role for a president is to appoint commissioners to the Federal Energy Regulatory Commission who will expedite rulemakings on the crucial barriers to storage and other clean energy assets competing in the organized markets. They might want to reassess recent rulings that penalize clean energy in the PJM and New York wholesale markets.

Biden doesn’t mention FERC, regulation or wholesale power markets in his clean energy plan, but changes there will be vital to the storage acceleration needed to fulfill the 2035 clean power goal.

The plan also mentions extending clean energy tax credits, but Speakes-Backman noted these currently do not apply to standalone storage projects. She hopes to see a move to “a level playing field” for storage in future clean energy tax credits.