Time to give electric storage proper credit?


By Elisa Wood

AOL Energy


Electricity is a hoarder's worst nightmare. It is difficult to capture and store on a large scale and within seconds of being created it disappears.

"We have an electricity grid that is unusual compared to any other industry in the world. It is the largest supply chain without a warehouse," said William Acker, executive director of the New York Battery and Energy Storage Technology Consortium.

But that could change if Congress adopts an investment tax credit for energy storage technologies. Introduced by U.S. Representatives Chris Gibson, a Republican from New York, and California Democrat Mike Thompson, the bill offers energy storage the same kind of tax advantage that has spurred double digit annual growth in the wind and solar industries.

Financing the expansion
The bill provides $1.5 billion for grid-connected energy storage systems of at least one megawatt through a 20% investment tax credit. Each project can secure no more than $40 million. Smaller, on-site storage systems at businesses or homes would be eligible for a 30% credit.

The credit is meant to make it easier to finance grid-scale projects and ramp up use of storage devices so that manufacturing and installation costs drop. Costs now range dramatically for energy storage depending on location and technology type.

John Zahurancik, vice president of operations and deployment for AES Energy Storage, says his company has four commercial projects already in operation, including the 32-MW Laurel Mountain, a project in West Virginia that operates with 1.3 million battery cells. On line since October, the project helps moderate the swings in output of a 98-MW wind farm and keep the grid in balance.

Zahurancik says energy storage offers a quicker and more precise way to keep supply and demand in balance than our current approach, which may mean ramping up and down the output of a power plant every four seconds.

Jam the gas pedal of a car on and off that much and "that is going to have an impact on the life of your engine, the fuel economy, the emissions," he said. The same is true for power plants.

Energy storage systems, on the other hand, offer a "technical approach to solve the problem that is cost effective, produces fewer emissions and is able to do a superior job," he said. He envisions costs for batteries falling the way costs for solar panels have, and says the tax credit would hasten the price drop.


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