Dive Brief:

• Pennsylvania should enact policies to encourage pairing energy storage with solar energy to build a more resilient and cleaner grid, according to a new report released by the Pennsylvania Department of Environmental Protection (DEP). 
• The Pennsylvania Energy Storage Assessment, prepared by Strategen Consulting, recommends building grid-scale solar energy arrays coupled with battery storage. The report also identifies several policy measures that could increase storage development, including setting an energy storage target, using public funding for storage projects and evaluating electricity rates tied to grid services. 
• "This is the first key step to identifying strategies to overcome any barriers we might have to getting the full value of energy storage," said David Althoff Jr., director of the energy programs office for the Pennsylvania Department of Environmental Protection. "We recognize that our need for storage is expanding … as part of our larger market opportunity for renewables in our state and states around us."

Dive Insight:

Pennsylvania currently has about 1.5 GW of energy storage capacity across 22 operational or announced storage projects. More than 1 GW of that is traditional pumped hydro storage and 18 MW are lithium-ion batteries, according to the DEP. An additional 7,000 MW of storage are in the interconnection queue for PJM on the East Coast, including 64 solar-plus-storage projects in Pennsylvania.

Expanding that capacity will play a "critical role" in increasing renewable energy while maintaining grid stability, said Paul Ohodnicki, an associate professor in mechanical engineering and materials science at the University of Pittsburgh and the Pitt faculty director of the Advanced Magnetics for Power and Energy Development consortium. 

"The optimal combination of storage and renewables, such as solar-plus-storage installations, can yield competitive economics for higher solar penetration in a state such as Pennsylvania that does not have the same quality of solar resources as California or Nevada," Ohodnicki said in an email. "In addition to mitigating adverse impacts of intermittent solar generation, solar plus storage installations can also be leveraged to provide additional grid services that would not otherwise be possible with solar or energy storage resources alone."

Pennsylvania's Solar Future plan, a separate document from the storage assessment, recommends increasing in-state solar energy to 11 GW by 2030 to get 10% of electricity from solar. Pairing 25% of that solar target with 1.5 GW of battery storage, the report found, could save $273 million in wholesale energy costs and reduce 2.5 million metric tons of carbon emissions each year. 

The storage assessment notes that one barrier to expanded development is the state's lack of an energy storage target, like ones set in seven other states. Althoff said DEP plans to convene an issues forum to discuss storage deployment, which could inform future policy discussions. DEP will also explore funding opportunities, including through President Joe Biden's infrastructure proposal and proceeds from allowance auctions when the state joins the Regional Greenhouse Gas Initiative.

The report also recommends evaluating the state's electricity retail rates, which it says "do not necessarily reflect a robust representation of grid cost drivers." A system that ensures retail customers receive "price signals that reflect the values that storage can provide," including integrating demand charges, could incentivize the market to expand storage capacity. 

Energy storage could offer an economic opportunity for Pennsylvania, Althoff said, noting the state's long history in manufacturing and export.

"This sort of fits within the supply chain dynamics and energy sector culture of Pennsylvania," said Althoff. "There is an opportunity for our manufacturing base and technical energy sector to really play a leading role in this marketplace not just for our state, but the Mid-Atlantic region, the country and the world."