Bulk Storage Could Optimize Renewable Energy

By Jason Makansi, Pearl Street Inc.

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Avalanche of Support

Last year, DOE Secretary Stephen Chu began to speak publicly about the benefits of bulk energy storage. In the spring, the Federal Energy Regulatory Commission issued a Notice of Inquiry regarding the integration of variable energy resources into the grid and followed that up with a “Request for Comments Regarding Rates, Accounting, and Financial Reporting for New Electric Storage Technologies.” In April, PJM and EPRI jointly sponsored the Energy Storage Summit, held in Valley Forge, Pa. Lawmakers have also been active in developing the proper regulatory frameworks and incentives and subsidies (see sidebar). Most recently, the California ISO released a study of energy storage system requirements for the state to achieve its stated goal of 33% renewable energy.

Policy Frameworks Adapt to Include Bulk Storage

State, regional, and federal policies that would allow energy storage to “play” are advancing at a rapid pace. The following are only some of the higher-profile initiatives:

A technology-neutral investment tax credit is being considered for the federal energy bill now before Congress. Congress is also considering a Clean Renewable Energy Corridors bill and formation of a Clean Energy Deployment Administration (a “green” bank).
The California legislature has been advancing legislation that could support procurement of a set level of storage resources by the state’s utilities. Legislation conducive to bulk storage has also passed or is being considered in Utah, Kansas, and Ohio.
New York State instituted its “Limited Energy Storage Resource” policy, which allows distributed storage devices to provide regulation service in the state.
PJM, MISO, and ERCOT have grid policies in place that allow storage to provide ancillary services, and California (CAISO) is considering the same. MISO is also considering the adoption of a “ramping product” that would support storage applications.
Several bulk storage projects were selected for funding through the federal stimulus program, specifically through the DOE Smart Grid and Electricity Infrastructure development programs.

Up to 40 new PSH facilities either have obtained a preliminary FERC permit or have applied for one, according to data from HDR/DTA Inc. The majority are concentrated in the western U.S. CAES projects are known to be under development in California, Kansas, Iowa, Texas, New York, Ohio, North Dakota, and Vermont. Equipment suppliers report that between a dozen and two dozen CAES projects are seeking technical and budgetary proposals from equipment suppliers. Expect new CAES plants to break ground in the very near future.

—Jason Makansi (jmakansi@ pearlstreetinc.com) is executive director of the Coalition to Advance Renewable Energy through Bulk Storage (CAREBS, http://www.carebs.org), president of Pearl Street Inc. (http://www.pearlstreetinc.com), and principal of Pearl Street Liquidity Advisors LLC (http://www.psliquidityadvisors.com).

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