What's to like about Californiaâ€™s "all of the above" energy storage approach
By: SGN Staff
I've been on the energy storage soapbox for the past few months. I've told you why utilities should start studying storage seriously. About North America's top 4 energy storage projects. About Germany's energy storage subsidy. And, of course, about California's energy storage mandate.
Far too often, policy makers try to pick winners. Not only do they mandate a target, they mandate how to get there. Not so with California's new ruling. As you will read below, it creates a level playing field, so different approaches can battle it out. And who better to explain the importance of this "all of the above" approach than someone from an energy storage company? I invited Ice Energy's Mike Hopkins to explain. - By Jesse Berst
By Mike Hopkins
Many national and state energy policy makers argue for a balanced portfolio of aggregate energy supply â€“ commonly referred to as an "all of the above" strategy. So too does the California Public Utility Commission (CPUC) in its Sept. 3 proposed decision on energy storage. Though it doesn't use that term, the ruling takes an â€œall of the aboveâ€ approach in 1) the types of storage technology considered to fulfill the mandates and 2) their application throughout the energy value chain.
A place for customer-sited storage
The commission mandated 1.3 GW of energy storage into the grid by 2020, including specific and aggressive targets for individual utilities. It suggests a broad approach to evaluating utilitiesâ€™ overall approach to meeting the requirements (and to other rules already in effect). It would treat customer-sited storage -- including permanent peak load shifting -- with the same consideration in the loading order as demand response and other distributed energy resources. This is valuable since many customer-sited technologies have a long and proven track record. And customer-sited storage can provide utilities additional opportunities to deploy multiple strategies including storage, demand response, load management, power quality and other value adding capabilities, while leaving the door open to utility ownership of behind-the-meter storage solutions.
An â€œall of the above approachâ€ could be a good thing for the storage industry, for consumers, for the grid itself, and for utilities. It levels the playing field for assorted storage technologies, developers, utilities and business models to compete towards meeting the stated goals. The CPUC is clearly setting a framework with directional models and value propositions. Those concepts will need to demonstrate their value (just as the solutions themselves must) through targeted analysis of specific proposed applications.
Determining the energy storage winners
In the proposed scenario enabled by the CPUC ruling, storage applications would ultimately compete on cost-effectiveness, the ability to unlock new streams of value (EVâ€™s, PV storage, DR and load shifting), and merit in meeting market expectations for performance and reliability. The price of storage would likely drop over time as technologies moved through innovation cycles, production economies of scale, and systems and processes adjust to take advantage of the new capabilities.