Inside California?s Aggressive Energy Storage Mandate

By Mark MacCracken As we all know (as much as we may hate to admit) California has often been ahead of the times. It is the state that gave birth to the personal computer, punk rock, and martinis after all. California has also often been the first to push new innovations in energy technology, like solar and wind. So it is no surprise that in October 2013 California became the first state to pass legislation with aggressive energy storage targets: 1,325 megawatts (MW) by 2020. According to the California Public Utilities Commission (CPUC), 1 the reasons for the energy storage mandate: 1. Increase energy storage at the grid level will optimize the grid, including peak reduction, contribution to reliability needs, or deferment of transmission and distribution upgrade investments 2. Integrate renewable energy 3. Reduction of greenhouse gas emissions to 80 percent below 1990 levels by 2050, per California?s goals. Basically, the goal is to make it more efficient and environmentally friendly for California?s big three investor-owned utilities to meet their energy demands. For instance, if you think about a gas plant that is 100 MW in size with a minimum capacity of 50 MW, it can only vary in energy output from 50 to 100 MW. If you take that same plant and use an energy storage solution, the 100 MW plant can now discharge at 100MW but also absorb at 100 MW, so it now has a range of 200 MW ? effectively doubling its power potential.

What is the Mandate?

The energy storage target of 1,325 megawatts of energy storage by 2020, including renewable energy generated from solar and wind, is a product of Commissioner Carla Peterman?s groundbreaking proposal that was approved by the CPUC. The targeted amount is approximately the amount of energy used by one million homes in a year. Utilities must begin quickly, with a mandate to buy a combined 200 MW of energy storage technology by the end of 2014. The utilities impacted by the mandate are Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas & Electric. The mandate is technology neutral, meaning the utilities can choose from a wide variety of energy storage technologies and approaches available. However, there are still certain logistics and processes that need to be developed. The installation of energy storage solutions comes with the caveat that projects need to be reasonable in cost. In the short term, this will be determined by evaluation software tools, but eventually a protocol will be used for benchmarking and general reporting purposes. But this still leaves the questions of what is considered ?cost-effective??

The Big Picture: Renewable Energy

There is a tremendous need and push for the integration of renewable energy into our power grid as we attempt to phase out fossil fuels like coal and oil. Evidence of this push can be seen in the California Renewables Portfolio Standard. This program, the most ambitious of its kind, requires investor-owned utilities, electric service providers, and community choice aggregators to procure 33 percent of total energy from renewable sources by 2020. 2 Despite this goal already being aggressive in nature, there are many legislatures pushing to increase that target. However, the fossil fuels we are replacing with renewables are not just forms of energy, they are forms of stored energy. Renewables like wind or solar are pure energy and considered variable generation sources. They are intermittent in nature and hard to predict because they lack the energy storage aspect of fossil fuels. The inability for renewables to match demand with the fluctuating supply can reduce the stability of the grid. Every utility ultimately wants to smooth peak demand and have a good load factor in order to supply electricity as efficiently as possible. In order to replace fossil fuels, it is time to start thinking about how to add storage capabilities to renewable sources. Integrating energy storage into the grid is the only way to make renewables a viable, sole energy source, mitigating intermittency of solar, wind and other sources. It also solves many other problems along the energy supply chain: T&D deferral, demand response, power quality & reliability, and frequency control.

So what are California (and other) utility companies thinking about today?

Utility companies have a big learning curve when it comes to energy storage, and some big investments in pilot programs ahead. Here are the three areas that are likely on the top of their minds. 1. Power quality: Typically utilities must maintain their power to a frequency of 60 Hz in the US. With current systems, utilities experience energy loss as demand for energy oscillates above and below this frequency. Energy storage can help utilities smooth frequency to meet the 60 Hz cycle at all times. 52 ElectricEnergy T&D MAGAZINE I MARCH-APRIL 2014 Issue

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