Innovations in electricity storage are needed if the US is to take advantage of clean energy resources, and two Senators have proposed an investment tax credit to accelerate storage solutions.
Senators Jeff Bingaman (Democrat for New Mexico) and Ron Wyden (Democrat for Oregon), the two ranking Democrats on the Energy and Natural Resources Committee, told an Energy Storage Association forum they are sponsoring a bill, S.1845, with Maine Republican Senator Susan Collins, for a storage investment tax credit (ITC). It would be similar to credits now available for solar installations.
Storage Scale Problems
Large-scale storage, which can take electricity generated when it is not needed and release it when demand rises, has been a holy grail for renewables advocates. It is particularly important for wind, which tends to blow most power demand is low. But electricity storage technology has been costly to assemble in the megawatt sizes that generators need.
Praveen Kathpal, Vice President of AES Energy Storage, and Mike Jacobs, Director Regulatory Affairs and Public Policy, Xtreme Power, said their grid-based storage solutions are commercial now. They cited projects in East Coast states and Hawaii, respectively.
Asked why an ITC is needed if storage is already commercial, Wyden said storage goes beyond grid operators and “we are far from the place where (storage) needs no government support.”
Electric Vehicles Only The Beginning
His bill would provide credits to anyone installing storage equipment – not just grid operators but also commercial businesses and homeowners with on-site storage, including electric vehicles. Wyden noted there’s extensive research under way in storage, and technologies range from pumped hydro to batteries of varying materials to flywheels and other concepts.
Craig Glazer, Vice President of grid operator PJM., said storage could include such non-traditional things as home hot water heaters and the batteries of school bus fleets that sit unused all summer.
Ongoing research and development are why it’s important for the tax credit to be “technology neutral,” Wyden said, and to reward storage “anywhere in the system, even your basement.”
The credit should also be “taxpayer neutral,” available to utilities, retailers and homeowners alike, he said, and “electron neutral,” ensuring all generation is used more efficiently. Now, grid operators sometimes must dump electricity if it is generated when the grid cannot use it.
Wyden said tough choices have to be made about government spending, and government must have a “targeted role” and remove subsidies once they’re now longer needed. But right now, he said, storage has “a long way to go,” especially in an industry where so much of the traditional system has had government support.
The Invisible Fuel
Chris Shelton, President of AES Energy Storage and chairman of ESA, said storage was “mostly left out of policy and regulatory frameworks.”
Federal Energy Regulatory Commissioner John Norris said FERC has been wrestling with the changes needed to enable storage as a “significant part of the mix.” He said, “There is no way to tap into our huge renewable resources without tapping into storage.”
Glazer said regulators need to recognize energy storage’s value and price it accordingly. Without storage, he said, grid operators will not be able to maximize the value of other taxpayer investments, including in hydropower dams and wind.
Norris warned that, whatever happens, “we are not going to lower the cost of energy,” but he said storage can help ensure the system is more efficient.
Asked whether S.1845 had any chance in the currently divided Congress, Wyden said he sees storage as bipartisan, “an opportunity for Democrats and Republicans to gather around a unifying concept.”
Congress is debating whether to extend a series of previously approved tax benefits, including expiring credits for ethanol, biodiesel, natural gas vehicle fuels, and refueling infrastructure. The wind lobby is also trying to get its production tax credit extended. That credit doesn’t expire until next year, but the industry lobby says uncertainty is already slowing projects.
Photo Caption: View of the Torresol Energy Gemasolar thermasolar plant in Fuentes de Andalucia near Sevilla, southern Spain, taken on October 4, 2011. Gemasolar is the first commercial-scale plant to apply central tower receiver and molten salt heat storage technology. AFP PHOTO / CRISTINA QUICLER