Energy storage policy evolving in California

California Energy Commission program manager describes work

Phil Carson | Jul 06, 2011

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I had an impromptu visit yesterday from Avtar Bining, program manager for energy storage at the California Energy Commission (CEC), which advises that state's executive branch on policy and planning.

Bining had noticed my interest in energy storage and informally filled me in on his work and current responsibilities at the CEC, as well as the CEC's priorities.

My recent columns on energy storage may be found at "Straight Talk On Energy Storage" and "Energy Storage Economics 101." 

In the big picture, the CEC is set to deliver a draft report this fall for Gov. Jerry Brown and stakeholders on near-term energy options and possible policy choices for California, which has become a crucible of sorts for these issues. The interest in California's process and policies is widespread, of course, because that state's challenges and solutions may well be coming soon to a theater near you.

Bining's piece of that report will be his latest CEC assignment, energy storage: the attributes of various media, their applications, proximity to commercialization, costs, etc.

Bining shared his own view, which may or may not be reflected in the upcoming report, that a "mix-and-match" approach—using energy storage where it is the best and most cost-effective solution—makes the most sense. He was careful to note that utilities, on the one hand, want to maintain the flexibility to determine the best and most cost-effective solutions, while vendors point out that mandates could produce economies of scale, lower costs and higher uptake.

In the policy realm, one cannot do everything for everyone, Bining noted, but he suggested that policies should provide at least something for everyone to attract consensus.

He said  that energy storage "has the potential to play a big role" in helping California achieve its 33 percent renewable portfolio standard by 2020—the quote actually is from his address to the Energy Storage Association's 21st annual meeting last month in San Jose. He also said at that meeting that a smart grid and energy storage have a "symbiotic relationship." And he connected the dots for his audience on how the CEC has become central to energy storage research, development and policy in the Golden State.

The CEC, launched in 1976, became the home for the Public Interest Energy Research (PIER), launched in 1998. PIER's mission is to "improve the quality of life in California by bringing environmentally safe, reliable and affordable energy services and products to the marketplace." Energy storage is one of PIER's six program areas and it has funded efforts at the proof of concept and field demonstration stages. PIER offers the equivalent of venture capital to early-stage projects with high-risk, high-return, as well as late-stage projects with low-risk, low-return prospects. It does not finance the journey across that technological graveyard known as the "Valley of Death."

That brings us to the CEC's and PIER's role in providing the cost-share for California's $1.3 billion share in 18 projects that attracted federal funds from the American Recovery and Reinvestment Act (ARRA), of which perhaps one-third address energy storage.

One partner in these multi-faceted efforts is the California Institute for Energy and Environment (CIEE), the prime contractor in assisting the CEC in developing its 2020 energy storage vision for the state. That effort's advisory committee includes the gamut of stakeholders, including the California Public Utility Commission, investor-owned and publicly owned utilities, the California Independent System Operator, the Energy Storage Association, the Electric Power Research Institute, the various national labs and others.

(We spoke with the CIEE's Merwin Brown, director of electric grid research, in "Integrating Renewables, Optimizing Transmission," and Sascha von Meier in "Smart Transmission: Which Way to Go?")

This approach may strike some as contrary to a free market model, but I see the glass half-full: the CEC, PIER and CIEE actually are working on behalf of the citizens of California, whose interests, priorities and needs would not otherwise be met.

Bining told me yesterday that early stakeholder participation, transparency and performance are the concepts governing the process of determining the best energy policy options for California. I look forward  to seeing the draft policy report this fall and Bining's report on the progress on those ARRA-funded  storage demos.

That's my view. What's yours?

Phil Carson
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com
303-228-4757

 

 

 

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Comments

the storage argument

I'm a storage proponent and I think that demand response is, along with any other demand-side strategy, the front line of energy planning. We should use less energy overall, and demand-response should be procured to the extent that it can to reduce peak loads. Does it substitute for storage? I don't know. My personal and professional emphasis is on storage not merely as a renewable energy "integration" strategy (i.e., maintaining reliability in the hour-ahead), but as something that leverages renewable energy + storage generating capacity to defer the need for future firm capacity additions. Building new gas peakers and combined cycle plants is more expensive than merely ramping existing surplus generation up and down. There is a momentary glut in generating capacity so there appears to some to be unlimited means for integrating renewables fairly cheaply. But this eats up firm capacity, rather than adding to it. So those storage technologies that can store cost-effectively across the time scales that allow for future CT's and CCCT's to be avoided will, I think, be the most economically competitive solutions. And in that regard, pumped storage and CAES are in the lead. Not to say that there might not be niche opportunities for more distributed storage systems as well.  As for electric vehicles, I saw one serious challenge to that concept , based on the assertion that they just aren't designed for utility storage cycles. I'm not qualified to comment further on that, however.

EVs and storage

Electric vehicles (EV) are storage devices.  They differ from some storage devices in scale (not so big) and that the energy is primarily used for transportation.  But they can help reduce supply/demand mismatches. 

CEC directive on storage policy

The bottom line is always the customer; their satisfaction, economics and health. The CEC is approaching this right. Storage at all levels does the following, it reduces costs by utilizing  renewables thru clean integration, produces a better product which does reduce cost and improves health by eliminating emissions produced by NG integration methods thus reducing costs associated with health care. Now what is all those benefits worth? in therms of dollars and how will the CEC apply them in a market format so storage is a viable element to the energy system? The solution goes way beyond the difference between integrating storage and weighing the savings against the current practices; the value determination has to consider the hidden benefits found in health issues and reliability or quality of product. Hopefully the CEC has some visionary folks figuring this out.

What is Storage Worth

It's not that I think storage is worthless, because it clearly has value.  However there's an enormous gap between the monetary benefits provided by many storage applications and the cost of the devices.  If the readily monetized benefits from storage are only half the cost, the hole that needs to be filled is quite large.

There are some recently released studies ordered by the CPUC and performed by the California IOUs and the Cal ISO that, among other things, estimate the cost of carbon abatement, most of which is driven by substituting renewables for fossil-fired generation.  I have not been able to verify the figures, but they're in the range of $200/ton of CO2 reduction.  The key question here is not so much whether CO2 reduction is worth the cost.  Instead, it;s whether there are less costly alternatives.

Putting in storage for its own sake wastes the money of people who cannot make other choices.  I'd argue that poorly thought-out mandates, particularly for expensive technologies, are not much different from Madoff's frauds.  Storage has to compete with the alternatives on the basis of costs and benefits.  If there are cheaper ways to provide the same benefits storage provides, I'd like someone to explain why we should take the more expensive path.

What I want to hear the storage advocates say to the CEC and teh CPUC is, please authorize some programs with cost reduction objectives to help us up the technology curve.  What I'm not prepared to accept is an expensive mandate with no clear path to competitive pricing.

Jack Ellis, Tahoe City, CA

What is Storage Worth

It's not that I think storage is worthless, because it clearly has value.  However there's an enormous gap between the monetary benefits provided by many storage applications and the cost of the devices.  If the readily monetized benefits from storage are only half the cost, the hole that needs to be filled is quite large.

There are some recently released studies ordered by the CPUC and performed by the California IOUs and the Cal ISO that, among other things, estimate the cost of carbon abatement, most of which is driven by substituting renewables for fossil-fired generation.  I have not been able to verify the figures, but they're in the range of $200/ton of CO2 reduction.  The key question here is not so much whether CO2 reduction is worth the cost.  Instead, it;s whether there are less costly alternatives.

Putting in storage for its own sake wastes the money of people who cannot make other choices.  I'd argue that poorly thought-out mandates, particularly for expensive technologies, are not much different from Madoff's frauds.  Storage has to compete with the alternatives on the basis of costs and benefits.  If there are cheaper ways to provide the same benefits storage provides, I'd like someone to explain why we should take the more expensive path.

What I want to hear the storage advocates say to the CEC and teh CPUC is, please authorize some programs with cost reduction objectives to help us up the technology curve.  What I'm not prepared to accept is an expensive mandate with no clear path to competitive pricing.

Jack Ellis, Tahoe City, CA

Energy storage policy evolving in California

I too look forward  to seeing the draft policy report this fall and Bining's report on the progress on those ARRA-funded  storage demos. I am especially interested to see if Ice Storage is addressed. I was providing ice storage systems as early as 1990 in Southern California with numerous sucessful installations yet this storage system seems of little interest to incentive programs like the SGIP and is seldom mentioned in the overall scheme of things. I hope that a forward looking draft policy like Bining's finally makes note of Ice Storage for use in climates like Southern california.

Thermal storage was mentioned

Avtar Bining did mention thermal storage and it is listed as one of the areas that PIER is assessing.

Regards, Phil Carson

My Thoughts?

We keep hearing how essential energy storage is for meeting the 33% mandate, but no one has provided a single technical report or even a back-of-the-envelope analysis that backs this statement up.

I'm on the steering group for a series of studies being performed under the direction of the California ISO that looks at the impact of the 33% RPS goal in 2020.  Thus far, those studies have shown pretty convincingly that more storage would not be useful, let alone cost-effective.

Moreover, in response to a question posed by CEC Chair Weisenmiller at a May 5 workshop on storage, Byron Washom of UC San Diego noted that manufacturing economies of scale would likely not lead to significant reductions in the cost of storage technologies at this time.

Furthermore, as I have noted before on these pages, subsidized grid scale storage could defeat other policy objectives, like demand response and off-peak electric vehicle charging.  Policymakers need to do some careful thinking about what they really want, because they will not be able to do everthing they're talking about.

The "something-for-everyone" approach is great if you're on the receiving end, but at this stage I'd like to see intelligent expenditures on programs that target technology improvements and cost reductions before storage vendors are handed hundreds of millions of dollars so they can ramp up production.

Jack Ellis, Tahoe City, CA

Thanks

Jack,

In particular, the detail that scaled manufacturing won't reduce costs is an assertion that begs a response from advocates. However, I think your point about unintended consequences from policy initiatives -- i.e., subsidized storage undercutting the motivation to respond to demand response and off-peak EV charging is well taken.

I'd love to hear from the storage proponents on this, as well as the renewable crowd. Any takers out there?

Regards, Phil Carson