Page 8 - North American Clean Energy May June 2015

Key Drivers for Energy Storage Adoption

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Distributing reliable, high-quality power
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with a range of resources

Fig. 1 The U.S. Energy Information Administration anticipates that renewables will continue t o
By Chris Thompson
be the majority of new additions.

as from flow batteries. For those who have witnessed the emergence of the solar market, these
Fig. 1 he U.S. Energy Information Administration anticipates that Fig. 2 his “duck curve” demonstrates the cumulative impact of ongoing solar additions
Fig. 2 This “duck curve” demonstrates the cumulative impact of ongoing solar additions to th
e
renewables will continue to be the majority of new additions.
price drop curves look very familiar.
to the California grid.
California grid.

THERE IS SUBSTANTIAL BUZZ SURROUNDING GRID-TIED ENERGY STORAGE. But what are the
drivers for grid-tied storage today? here are key industry trends propelling the adoption
of energy storage technology, including: increased renewables penetration, Federal Energy

Regulatory Commission (FERC) orders, battery prices, and state mandates. he overall
beneits of storage have evolved over the past few years, and grid-tied energy storage will
continue to be an important consideration for the future of the grid.

Evolving Renewable Power Contributions on the Grid
Over the last several years, renewables have become a major contributor to new power genera-
tion, with several factors at work that are substantially changing the generation mix on the grid.

Nuclear, though it has been an important contributor for several decades, has begun
to decline. Facing headwinds from massive cost overruns and increased risk concerns
after the Fukushima meltdown in 2011, industry experts anticipate that nuclear power
contributions to the grid will continue to drop. Coal is facing a more rapid decline,

considering expensive Environmental Protection Agency (EPA) regulations.
With traditional grid contributors declining, new additions to the generation mix
have shifted to natural gas and renewables. he United States Energy Information Fig. 3 Navigant Research data estimates price drops of 50 percent over the next few years
Administration anticipates that over the next few years, renewables will become the

majority of new additions, as seen in Fig.1.
he industry has also seen the emergence of the now famous “duck curves” as
response to automatic generation control signals. hese “pay-for-performance” rules allow
intermittent sources continue to dominate the generation mix. Named after the duck-like battery plants to earn a premium over conventional generation methods, as battery storage
Fig. 3 Navigant Research data estimates price drops of 50 percent over the next few years
proile of the curve, the cumulative impact of ongoing solar additions in the California grid systems are approximately 1,000 times faster than conventional combustion generation
State Mandates and Incentives Influencing the Power Mix on the Grid
is shown in Fig. 2. With even more intermittent sources added to the mix, more storage will forms.
be required.
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Impact of Federal Energy Regulatory Commission Orders on highligchotmedpebnesloawtio: n for this unique feature. Before these important orders existed, there was

Energy Storage
negligible monetary beneit from the incredible speed advantage provided by batteries.
California: Expected to be the largest market over the next few years, California is continuing to
Perhaps, equally as important to developing a viable storage market, are the regulatory
In addition to speed, battery-based regulation systems provide substantial beneits from
expand its solar roots by leading the country in battery projects. A 1,325MW mandate for the
mechanisms that provide for compensation for storage developers. Two important orders reduced emissions, highly modular sizing, negligible noise, and zero water requirements.
have been implemented over the past several years by the Federal Energy Regulatory investor-owned utilities is the largest in the nation. In addition, the Self-Generation Incentive
hese beneits contribute to faster site selection and project development, with lower costs.
Program (SGIP) enables developers to use distributed, behind-the-meter storage.
Commission, namely FERC order 755 and FERC order 784.
Combining battery-based beneits with the compensation systems enabled by the FERC
Enacted in 2011, FERC order 755 created a fast regulation service in wholesale power orders, a framework has emerged for low cost and proitable fast-regulation services
Hawaii: With high electricity prices and increasing renewables penetration, storage has high
markets; a mechanism to compensate fast regulation for speed and accuracy based on
provided by battery-based energy storage.
potential value in Hawaii. Hawaii also has more than three years of experience with multiple

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utility scale battery storage systems that have been softening the impact of wind farms.
MAY/JUNE 2015