Dive Brief:
- A 2013 order from the California Public Utilities Commission to bring 1,325 MW of energy storage onto the state grid by 2020, with 200 MW to be proposed in 2014, has been inundated with applications amounting to about double the target.
- 1,669 MW of independent batter storage, 44 MW of other independent storage, 255 MW of generation and battery combined projects, and 90 MW of battery and solar combination projects have been proposed thus far to the California grid operator, CAISO.
- The proposals are for connection to the state's high voltage grid only. This does not include storage on the distribution grid or end-of-use storage, which together could make up 875 MW of the target 1,325 MW if they were also included in the initiative.
Dive Insight:
This mass of applications demonstrates the perceived value of energy storage and energy storage combined with generation by investors. All projects will need to be subjected to a study before any approval, is granted to work out how feasible and cost effective they are.
Heather Sanders, who is CAISO's director of smart grid technology and strategy, said that it has prompted the operator to ask itself what the value of energy storage truly is. Energy storage is not like most electricity production where there is only a one-way flow of energy to a consumer. Instead, energy storage devices take in energy and then distribute it, both of which are processes subject to distinct regulation and policy.
A further pricing problem may arise if CAISO does decide to bring distribution and end-of-use stationed energy storage into the wider wholesale market. Adding generation facilities into the mix also confuses value points, said Sanders.
Sanders said that the immediate hope for energy storage is that it will help balance energy demand in the evening. Currently, much of the state's day time energy use is met by solar energy, but this peters out as the evening wears on, driving demand up on the grid and leading to imbalance. This reflects a growing concern with distributed and renewable energy throughout the U.S., as the variability of energy resources has to be balanced in order to preserve the reliability of the grid.