The Reality of Energy Storage Policy Is Different From What Solar-Storage Vendors Expect

The Reality of Energy Storage Policy Is Different From What Solar-Storage Vendors Expect

California may be the countrys key emerging market for battery-backed distributed solar. But that promise is made up of equal parts opportunity and uncertainty.

On the opportunity side, there are the states groundbreaking energy storage mandates, its revamping of demand response programs, and its push to reconfigure the way utilities include distributed energy resources (DERs) into their grid investment plans.

On the uncertainty side, there are coming changes to Californias net metering regulations to consider, as well as a broader rate restructuring that could reduce the return of rooftop solar that doesn't include some ability to manage energy generation and consumption on a day-by-day and hour-by-hour basis.

This is a short summary of the thoughts from companies working in the solar-storage space at last weeks Intersolar conference in San Francisco. Over the past three years, this solar showcase has seen the interest in energy storage grow from a single workshop session back in 2013, to almost a full floor of battery-focused exhibitors at this years event.

In part, this expanded interest is being driven by Californias vanguard efforts to expand energy storage as a viable part of the grid landscape. A 2013 mandate requiring the states big three utilities to procure 1.3 gigawatts of energy storage by 2022 requires that third parties own at least half this amount, and it has pushed massive numbers of project proposals into the pipeline.

A large part of this growth is being driven by the states push to rely on far more distributed renewable energy as a replacement for central power stations. Southern California Edisons procurement of hundreds of megawatts' worth of distributed storage contracts last year was part of a groundbreaking effort to bolster a grid thats facing both system-wide and localized impacts from the loss of the San Onofre nuclear power plant and future natural-gas-fired power plant retirements.

At the same time, state law AB 327 has also required Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric to create distributed resource plans (DRPs). These could give battery-backed solar systems a coequal role alongside billion-dollar utility capital investment plans for expanding and maintaining these utilities low-voltage distribution grids.

These DRPs include proposed pilot projects that are pushing the boundaries on what storage and other DERs [distributed energy resources] can do on the distribution grid, Ted Ko, policy director at behind-the-meter battery startup Stem, said in a Wednesday interview. In simple terms, each utility wants to determine whether batteries can support congested and stressed grid circuits in ways that could defer costly utility upgrades, in ways that solar alone might not.  

 In particular, SDG&Es proposal to create a unique storage tariff, one that would reward battery-equipped customers willing to give the utility control over their batteries, is a really interesting approach to how we can defer distribution grid investments with assets that customers can own, he said.

Finally, Californias grid operator CAISO has proposed a new model for how distributed energy resource providers (DERPs) could bid their aggregated resources into grid energy and ancillary services markets, one that could come into play as early as next year.

Source: Greentech grid

Smart Grid Bulletin February 2019

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