Storage will play a crucial role in eradicating carbon from California’s grid, but there’s no reason to assume it will all be the lithium-ion batteries popular today.
For one thing, other technologies have a major head-start. Pumped hydro energy storage, which lifts water to a raised reservoir and uses it to turn a turbine when power is needed, outguns battery storage at an epic scale. For all of California's leadership in installing grid batteries, 98 percent of its grid storage comes from its seven pumped hydro facilities, totaling about 4,000 megawatts.
That technology has fallen on hard times, however. Compressed air energy storage, which jams pressurized air into massive underground caverns, has similarly been unable to deliver new projects in recent years.
Put simply, it’s hard to build massive infrastructure these days, particularly projects that disrupt the surrounding environment in considerable ways.
Unless you really need to. When asked to procure capacity from a mind-bogglingly big construction effort or a couple of gas turbines from GE, there’s really no choice. But California just voted to ban fossil fuels from its electrical grid by 2045, and that creates an entirely new market context.
Lithium-ion batteries, and the people who sell and install them, stand to win big from this decision. The inexorable march of California’s renewables penetration creates a practically unlimited addressable market for batteries. That technology can easily handle energy shifting from midday solar generation to evening peak consumption, but it’s simply not capable of economic shifting from sunny months to cloudy months.
"It's going to take some significant technological breakthroughs," said Daniel Finn-Foley, an energy storage analyst at Wood Mackenzie Power & Renewables. "Either some technology we don't recognize yet, or revolutionizing the way we apply a known technology."
To close the final gap between mostly clean and entirely clean, California will need dispatchable, zero-emission capacity. This may be the best shot in years for unconventional storage technologies that have had trouble competing in today’s markets but can deliver large amounts of electrons on demand.
Pumped hydro potential: Unleash the Kraken!
There are already a few pumped hydro projects in the early stages of development.
San Diego recently upgraded the San Vicente Dam, doubling its water storage capacity (the other kind of storage, the drinkable kind). In January, the city and water authority also retained engineering firm Black and Veatch to evaluate proposals for a 500-megawatt energy storage facility at the dam site.
This would entail building a new reservoir above the big water storage facility, with reversible pump-turbines to lift water up during moments of surplus and drop water down to generate during moments of need.
When a major project is listed in the “assessing the potential” phase, don’t hold your breath for it. That said, SB 100 allows 27 years of lead time, and that might be just enough to get this one across the finish line. A spokesperson for Black and Veatch did not have any further details on project timeline.
It’s worth noting that, at 500 megawatts, the San Vicente Energy Storage Facility would out-power the largest lithium-ion battery ever proposed. The largest pumped hydro facility in California, PG&E's Helms, can provide 1,212 megawatts and can fully ramp in 8 minutes.
San Vicente would add clean capacity without disrupting any stream flows that haven’t already been irrevocably blocked. This looks like the kind of project we’ll start seeing more of as California’s share of intermittent generation gets past 60 percent.
But the Kraken got stuck…
So far, it’s been really hard to build new pumped hydro, even as solar and wind additions flock to the California grid.
The Sacramento Municipal Utility District canceled the 400-megawatt Iowa Hill pumped hydro project in 2016, noting that other energy storage technologies were looking more attractive. The utility wasn’t going to need all that new capacity until 2030, so locking up $1.45 billion for years didn’t seem like the best investment.
The 500-megawatt Lake Elsinore Advanced Pumped Storage south of Riverside has a FERC license but is still under limited additional review. It too remains in the very early stages of development.
Then there’s Eagle Mountain, which proves that large tubs of water can generate drama, not just electrons.
This facility would repurpose abandoned open pit mines as closed-loop reservoirs capable of generating 1,300 megawatts.
One might think that turning a scarred industrial landscape into a giant holding tank for clean, renewable energy would win support or at least neutrality from environmentalists, but the site abuts Joshua Tree National Park and has faced persistent land-use criticism.
More pressingly, developers failed to start construction by the deadline in their federal authorization, even after a two-year extension, The Desert Sun reported. Construction hasn’t started because the developers reportedly haven’t found a buyer for the power.
No offtaker, blown deadlines — sounds pretty dire. This development, though, has a formidable ally in renewables developer NextEra, which signed on as a co-developer.
It's all about the timeframe of analysis
This summer, the Florida-based heavyweight applied its best argumentation and thousands of dollars in campaign donations to float a bill in Sacramento to force utilities to procure "one or more long-duration bulk storage projects" of 1,000 to 2,000 megawatts (again, check out The Desert Sun's reporting on this). It just so happens that Eagle Mountain fits that specific qualification, which perhaps no other actionable project would fulfill.
This storage bill flew under the radar amid all the other clean grid bills hustling through Sacramento this season.
Despite explicit opposition from the California Public Utilities Commission, the bill overwhelmingly passed the Assembly. It also cleared the Senate Energy, Utilities and Communications as well as Appropriations. It didn’t get a Senate floor vote in time for the legislative deadline, though.
The CPUC dissented on the grounds that requiring this specific resource procurement would distort the planning system crafted by previous clean energy laws to select a diverse, low-cost portfolio of grid resources.
“AB 2787 (Quirk) would lead to substantial electric ratepayer cost increases because large bulk energy storage resources can cost in the hundreds of millions, if not billions, of dollars to develop and operate long-term when other, likely more cost-effective, energy resource alternatives exist,” staff wrote.
This is no doubt true: as capacity resources, batteries cost less and take much less time to construct. A short-term cost benefit analysis would likely favor them, as in fact happened with SMUD’s project.
But SB 100 forces a new, longer-term planning horizon, one which ends in a world without gas. In that context, success in 2045 will depend on massive storage facilities that can run at full bore for longer than the four hours for which lithium-ion batteries do so well.
The planning conversation will have to evolve from “What’s lowest-cost right now?” to “What’s the lowest-cost way to balance a carbon-free grid?” The winning portfolio will look very different for each of those questions.
Now that the state has committed to carbon-free, it has some hard work to do.
First, policymakers need to figure out how to evaluate projects that are more expensive than other options for the near-term provision of capacity, but which ultimately make sense for the zero-carbon endgame. Three decades of lowest-cost procurements won't add up to the lowest-cost zero-carbon grid.
That's not to say that pushing parochial purchase mandates through the legislature is the best way to run this process.
Second, when the state moves forward with the inevitable megaprojects, it has to figure out how to balance the drive for clean electricity with the land-use concerns surrounding California's frequently stunning landscapes.
The 20th-century dam-building spree ruined many a beautiful river system, and any disruptive project deserves robust scrutiny. But the clean energy revolution has a material footprint, and California will have to make hard choices about which landscapes bear the brunt of that. That's a political question, not a technical one, and it's far from resolution.