Dive Brief:

• The California Public Utilities Commission has issued an order requiring the state’s three investor owned utilities to procure 500 MW of behind-the-meter energy storage, reports The National Law Review.

• The order implements legislation signed into law in 2016, AB 2868, that requires the IOUs to procure distribution connected or behind-the-meter storage with a minimum 10 year life span.

• The mandate builds on a previous standard set in 2013 requiring utilities to procure 1,325 MW of storage. Procurements under the new order are also not subject to the 2020 procurement deadline or the 2024 target online date of the earlier mandate. 

Dive Insight:

California has by far the most robust mandates for energy storage in the nation.

Under AB 2514, passed in 2013, the state’s utilities are required to procure 1,325 MW of storage, split between the state's three IOUs — Pacific Gas and Electric, Sand Diego Gas & Electric and Southern California Edison.

The PUC has emphasized that the 500 MW of storage authorized under AB 2868 in 2016 is separate, and does not raise the targets set by AB 2514. But in practice it will result in another 500 MW of storage being deployed.

The state’s IOUs have been instructed by the PUC to hold at least two workshops by the end of the year to develop consistent standards for storage procurements.

Those utility purchases will also be separate from private deployments spurred by the state's self-generation incentive program (SGIP), which re-opened on Monday with about $448 million of incentives earmarked for energy storage. That includes $391 million for large-scale storage projects (10 kW or bigger) and $57 million for residential storage projects equal to or less than 10 kW.

Those SGIP storage incentives could result in hundreds of megawatts of storage deployment, depending on how subsidies are awarded. Since 2001, SGIP has allocated $1.2 billion for over 2,150 MW of solar, wind, storage, fuel cell and combined heat and power projects.