California Proposes First-in-Nation Grid-Scale Energy Storage Targets

The California Public Utilities Commission (CPUC) this month proposed an order requiring the state’s investor-owned utilities to procure 1,325 megawatts (MW) of grid-scale energy storage (excluding large-scale pumped storage) by 2020. The procurement targets address three grid storage domains: transmission-connected, distribution-connected, and behind-the-meter (Table 1, below) and are designed to dramatically increase the amount of advanced energy storage capacity on the state’s electric system and to catalyze market transformation in the emerging energy storage industry.

An aerial photo of the Seneca Pumped Storage Generating Station in Warren, PA

An aerial photo of the Seneca Pumped Storage Generating Station in Warren, PA

Energy storage is a suite of technologies that capture and store energy for use at a later higher value time.  Energy can be stored in many ways: chemically (e.g. batteries), gravitationally (e.g. pumped hydro, pictured here), mechanically (e.g. flywheels) and thermally (e.g. molten salt).  On the electric grid, where supply must always equal demand, energy storage increases efficiency by avoiding expensive transmission and distribution upgrades and substituting for the most polluting “peaker” power plants. Energy storage is also expected to play a key role in enabling the grid to integrate large quantities of variable renewable energy resources such as solar and wind.

In a keynote speech at this month’s Energy Storage North America conference, CPUC Commissioner Carla Peterman, who authored the proposed decision, emphasized that the CPUC’s energy storage procurement policy was guided by three principles:

1)      The optimization of the grid, including peak reduction, contribution to reliability needs, or deferment of transmission and distribution upgrade investments;
2)      The integration of renewable energy; and
3)      The reduction of greenhouse gas emissions to 80 percent below 1990 levels by 2050, per California goals.

One point of controversy has been whether large-scale (50 MW or more) pumped storage projects should be included or excluded under the procurement framework. The proposed decision excludes pumped storage because the sheer size of pumped storage projects would dwarf other smaller, emerging technologies and, as such, would inhibit the fulfillment of market transformation goals.

The CPUC’s proposed “Energy Storage Procurement Framework and Design Program,” which will be considered for approval on October 3, 2013, establishes specific targets (Table 2, below) to be procured by Pacific Gas and Electric Company, Southern California Edison Company and San Diego Gas & Electric Company by 2020 and sets a schedule for solicitation of energy storage.  The decision also requires community choice aggregators to procure energy storage equal to 1 percent of their annual peak load by 2020 and electric service providers to procure energy storage equal to 1 percent of their annual peak load by 2016. 

The proposed decision implements California Assembly Bill 2514, which became California law in 2010.

In an interview with BERC, Janice Lin, co-founder of the California Energy Storage Alliance, a membership-based advocacy group, hailed the proposed decision as “the market signal that is going to launch energy storage as a mainstream resource used for electric power system planning.”

Key Dates

  • On October 3, 2013, the CPUC will meet to consider the proposed decision and order.
  • If approved, the order would require the investor-owned utilities to procure energy storage through competitive solicitations.
  • The initial competitive solicitation would be scheduled for no later than December 1, 2014, and every two years thereafter.

 Solicitation Eligibility

All energy storage resources as defined by Pub. Util. Code § 2835(a), except for pumped storage resources 50 MW or greater, are eligible to bid into the energy storage solicitations.

Further Reading

CPUC Energy Storage Site (includes cost-effectiveness studies and use cases): http://www.cpuc.ca.gov/PUC/energy/electric/storage.htm

 

Table 1: Grid Storage Domains and Use Cases

Storage Grid Domains

(Grid Interconnection Point)

Regulatory

Function

Use-Case

Examples

Transmission-Connected

Generation/Market

(Co-Located Energy Storage)

Concentrated Solar Power,

Wind + Energy Storage,

Gas Fired Generation + Thermal Energy Storage

(Stand-Alone Energy Storage)

Ancillary Services,

Peaker,

Load Following

Transmission Reliability (FERC)

Voltage Support

Distribution-Connected

Distribution Reliability

Substation Energy Storage (Deferral)

Generation/Market

Distributed Generation +

Energy Storage

Dual-Use

(Reliability & Market)

Distributed Peaker

Behind-the-Meter

Customer-Sited Storage

Bill Mgt/Permanent Load Shifting,

Power Quality,

Electric Vehicle Charging

 

Table 2: Proposed Energy Storage Procurement Targets (in MW)

Storage Grid DomainPoint of Interconnection

2014

2016

2018

2020

Total

Southern California Edison

 

 

 

 

 

Transmission

     50

     65

     85

   110

      310

Distribution

     30

     40

     50

     65

      185

Customer

     10

     15

     25

     35

         85

Subtotal SCE

     90

   120

   160

   210

      580

Pacific Gas and Electric

 

 

 

 

 

Transmission

     50

     65

     85

   110

      310

Distribution

     30

     40

     50

     65

      185

Customer

     10

     15

     25

     35

         85

Subtotal PG&E

     90

   120

   160

   210

      580

San Diego Gas & Electric

 

 

 

 

 

Transmission

     10

     15

     22

     33

         80

Distribution

       7

     10

     15

     23

         55

Customer

       3

       5

       8

     14

         30

Subtotal SDG&E

     20

     30

     45

     70

      165

Total – all 3 utilities

   200

   270

   365

   490

   1,325