Senate Bill Would Create America's First National Energy Storage Target
California gave the U.S. energy storage market a boost in 2013 when regulators set a 1.3-gigawatt target for the state's three investor-owned utilities. The mandate has resulted in a wave of contracts for battery and thermal storage projects in California, including a record-breaking 250-megawatt procurement from Southern California Edison.
Now, one national lawmaker wants to do the same for the rest of the country. Senator
Martin Heinrich (D-NM) quietly introduced legislation to the Energy
Committee last week that would set national targets for energy storage
by 2021 and 2025 in order to meet growing peak demand on the grid and
help the integration of renewable energy.
Under the bill, called
the Energy Storage and Deployment Act of 2015, large retail electric
utilities would need to meet at least 1 percent of their peak demand
from storage by 2021. By the end of 2024, they'd need to meet at least 2
percent of peak load with storage. Half of all procurements would come
from technologies that can provide more than one hour of electricity.
"The
bill is modeled on a successful program in California, which requires
three large utility companies to deploy at least 1,325 megawatts of
storage by the end of 2024," said Whitney Potter, a spokesperson for
Senator Heinrich.
Nearly every kind of storage technology would be
eligible. The list in the bill includes pumped hydro, compressed air,
hydrogen fuel cells, electrochemical batteries, thermal storage,
flywheels, capacitors and superconducting magnets. According to
the Energy Information Administration, summer peaks across the U.S. in
2017 could hit 824 gigawatts. Over the next 35 years, U.S. utilities
will need to procure 40 gigawatts of additional peaking resources.
The
proposed mandate would leverage more than 8 gigawatts of storage by
2021 to meet projected peaks, and roughly 18 gigawatts by the end of
2024. (By 2020, without the target, GTM Research currently
expects America to cumulatively install 4 gigawatts of projects across
all sectors, excluding pumped hydro and thermal.)
Since 2002, lawmakers have tried
more than half a dozen times to get a renewable energy target passed
through Congress. However, even with support in both parties, many
conservatives and opposition groups couldn't bring themselves to support
a mandate. (Senator Heinrich co-sponsored the most recent bill that
would create a renewable energy target.)
Senator Heinrich's bill may face similar opposition. But it also has something else going for it: novelty. "This is one of those middle areas," said Katherine Hamilton, a partner with 38 North Solutions. "It's new. But it is a target." Two years ago, Senator Ron Wyden (D-OR) crafted legislation
that would have given storage systems a 20 percent investment tax
credit for systems above 1-megawatt/1-megawatt-hour and a 30 percent tax
credit for smaller 1-kilowatt/5-kilowatt-hour systems. The bill fizzled
out with minimal support.
Senator Lisa Murkowski (R-AK), the
chair of the Senate Committee on Energy and Natural Resources, has asked
her colleagues to introduce new bills as part of a plan to collect the
best ideas into a comprehensive energy bill sometime this year. During a
committee hearing last week, lawmakers discussed more than two dozen
pieces of proposed legislation.
Senator Angus King (I-ME) introduced a bill earlier
this month that would create a national standard for distributed energy
interconnection, helping open up the market to new technologies.
Supporters are hoping his language makes it into a broader piece of
legislation. Senator Heinrich has tapped Senator King as a
co-sponsor of his storage bill. The bill has very little chance of
passing as a standalone mandate. But as lawmakers start mixing and
matching legislation, the likelihood that storage is included increases.
Even
if Congress passed a storage target, implementation would be complex.
Integrating lots of storage into the grid will require coordination
among regional transmission operators, utilities and regulators to set
rate structures that recognize the value of storage for different uses. "There
are a lot of moving pieces," said Ravi Manghani, a senior storage
analyst with GTM Research. "In a lot of ways, this puts the carrot
before the horse. Meeting the target would require a lot of changes
throughout the grid hierarchy."
http://theenergycollective.com/stephenlacey/2232841/senate-bill-would-create-americas-first-national-energy-storage-target