Growing number of states embrace energy storage targets

Jordan Smith
By Jordan Smith August 27th, 2018
For business

The expansion of energy storage capacity could emerge as one of the most significant areas to watch in the energy sector over the coming years. While states like California and New York have led the way, a second group of states is joining the push to create new storage capacity.

California’s neighbor Arizona appears set to adopt ambitious targets for energy storage in the coming months. In January, Arizona Corporation Commission member Andy Tobin released an energy modernization report that recommended setting a goal of 3,000 megawatts of storage by 2030.

In addition, he called for the state to aim to produce 80 percent of its energy requirements from clean sources by 2050.

“Energy storage is high on my list,” said Tobin.

Before a vote can be taken on Tobin’s proposals, the ACC intends to review the financial impact of the plan.

Arizona utilities are well positioned to achieve new storage and clean energy commitments. Earlier this year, the Salt River Project (SRP) announced a plan to create Arizona’s first stand-alone storage plant for peak power supply. The facility, which will be based near Phoenix, will charge up from whatever energy source is available on the grid and supply the stored energy during peak hours.

“The Southwest has a peak that’s shifting later in the day as solar penetration increases,” said Kate McGinnis, Western U.S. director of the energy storage company Fluence. “This peaking unit can help meet that need that comes later in the day after the sun sets.”

Fluence will provide the 10-megawatt system, which will supply power to SRP under a 20-year power purchase agreement.

In addition, SRP, Arizona Public Service, and Tucson Electric Power all unveiled new projects combining solar power with battery storage over the past year.

Other states move towards targets

Another state neighboring California, Nevada, also may implement energy storage goals in the near future.

Nevada’s Public Utility Commission has until October 1 to decide whether a storage target should be adopted.

The commission was asked to research the possibility after legislators passed several measures to increase the use of renewables in the state’s power grid in June 2017. At the time, Green Tech Media described Nevada as “the most exciting state for energy policy.”

Several providers have already announced solar-plus-storage facilities, including a 500-megawatt solar facility owned by NextEra Energy and the Gemini solar project near Las Vegas, which will generate up to 690 megawatts of energy.

In a related development, the PUC recently presented proposals to incentivize the addition of storage capacity to residential solar systems, including a proposal that would cut customers’ utility bills if they send unused energy back to the grid.

Colorado also is reportedly considering the idea of setting storage targets. In March, state legislators adopted regulations confirming that residents have a right to store energy.

Three months later, in June, Colorado Governor John Hickenlooper signed legislation ordering the Public Utilities Commission to establish a framework for investor-owned utilities to purchase energy storage systems.

Across the country, New Jersey became the latest state to adopt an energy storage target in May, committing to 2 gigawatts of storage by 2030. Governor Phil Murphy also plans for the state to obtain 100 percent of its energy needs from clean energy by 2050.

“This effort to increase energy storage capacity in New Jersey will help lower costs for ratepayers and integrate more wind, solar power and distributed energy onto the grid,” said Energy Storage Association president Kelly Speakes-Backman. “In addition, this storage will provide back-up power to critical facilities and enhance the resiliency of the grid during hurricanes and other extreme weather events.”

Two other Northeastern states have joined New Jersey in setting energy storage goals: Massachusetts has said it will have 250 megawatts of storage by 2020, while New York is potentially aiming for 3 gigawatts by 2030.

The future of energy storage

Although the vast majority of states have yet to adopt storage targets, industry experts are optimistic that the coming years will see a dramatic expansion of storage facilities.

A survey by Green Tech Media at an energy conference in December 2017 found that most experts believe energy storage will ultimately replace gas due to its affordability within five to ten years.

The United States introduced approximately 1 gigawatt of energy storage capacity between 2013 and 2017. This rate is expected to double for the period 2017-18.

This will be driven, in part, by the continued decline in costs for lithium ion batteries, which fell by 24 percent from 2016 to 2017.

Jordan Smith is a freelance journalist and translator covering issues related to energy, the environment, and politics. His work has appeared on the independent news site Opposing Views, and at the Canadian Labour Institute.