Orange is the New Black, 40 is the New 30…and Energy Storage Could be the New California Power Plant

Moss_Landing_Power_Plant_p1270026If you follow pop culture, you’ve likely heard that Orange is the New Black, and 40 is the new 30. A perhaps lesser known – but equally important – new comparison that is turning heads in California is that energy storage might just be the new power plant.

This probably warrants a bit of explanation. On a power grid without storage, solar energy is generated during the day when the sun is shining its brightest, providing clean, renewable energy to homes and businesses – thus lessening the hold on the grid of dirty power plants. But what happens when this energy source goes offline? As people come home after work and turn on TVs, run dishwashers, and fire up other hungry appliances (also referred to as “peak” energy hours), the grid must rely on fossil fuel-powered electricity to ramp up production quickly.

However, when energy storage is added into this mix, a shift occurs. If there is enough renewable energy stockpiled during the sun’s most productive hours, between 11 AM and 3 PM, then the use of fossil fuels at peak times can be reduced.  In this way, new fossil fuel power plants that might be necessary to meet increased population and demand can be avoided.  And voila: energy storage is the new power plant.

Per usual, California is ahead of the curve in recognizing the potential of new environmentally beneficial measures – and energy storage is no different. In fact, the state’s Public Utilities Commission recently issued a scoping memo, a document setting forth the scope of a given proceeding, to open a proceeding designed to guide utilities in shaping and potentially revising their 2016 energy storage procurement plans.

California is taking note of the possibilities storage can bring

Despite the Commission not always giving clean energy technologies their due, Environmental Defense Fund (EDF) is hopeful this new storage proceeding will do a better job of recognizing how technologies like storage can help the grid.

The following aspects are especially exciting:

  • The Commission might increase the storage mandate starting in 2018. Though the Commission already made waves in 2013 when it approved an ambitious mandate requiring utilities to procure 1,325 megawatts (MW) of storage by 2020, it isn’t stopping there. Perhaps spurred by entities like Southern California Edison and Tesla demonstrating the abundance of available technology, the Commission has signaled that they might go beyond the previous mandate. This will benefit the grid in ways explained above, as well as decrease harmful air pollution through the increased use of renewable energy.
  • The Commission might rethink the inclusion of managed electric vehicle (EV) charging in its storage procurement mandate. In the original energy storage mandate, the Commission disallowed utilities from counting charging of electric vehicles at times that facilitate storage of renewable energy toward their requirement. However, with this new proceeding, they have agreed to revisit the issue – but only if circumstances have changed enough to warrant a second look. Because San Diego Gas & Electric, Southern California Edison, and Pacific Gas & Electric have all filed applications with the Commission aiming to increase EV deployment, the potential for these vehicles to charge at times when there is an abundance of renewable energy on the grid needs to be harnessed – especially as these vehicles increase energy demand. Thus, the incentive to charge smartly, which could be derived from allowing utilities to count managed charging towards their storage requirement, would be incredibly useful – as long as managed charging is not allowed to edge out new, innovative storage technologies.
  • The Commission will consider changes to how utilities must select energy storage providers. The scoping memo states that parties should comment on “refinements necessary to the [Consistent Evaluation Protocol] to ensure it conforms to the Commission’s adopted energy storage guiding principles,” which includes greenhouse gas reductions consistent with state goals. One important “refinement” to the Consistent Evaluation Protocol – the method by which utilities are mandated to select energy storage providers – is the need to adequately account for the greenhouse gas reduction potential of different storage technologies. Not all are created equal in this respect. Anything less will not abide by the properly ambitious guiding principles laid out in the scoping memo.

As the first state to pass an energy storage mandate, California has once again shown its leadership – but we can do even better. By continuing to expand the energy storage procurement mandate and making important modifications to utility procurement plans, the Golden State can once again prove its reputation as a national trendsetter. Further, we can demonstrate to the rest of the country that storage really is the new power plant – and something more than just a passing trend. With California’s leadership, I am confident that we will soon be able to add this storage-power plant comparison to our cultural dictionary.

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