California energy regulators believe energy storage capacity could reach up to 8,000 MW by 2020, and could be further accelerated by renewables targets and the ongoing closure of one of two of the state’s nuclear power plants.
Michael Gravely, deputy chief of R&D at the California Energy Commission said he anticipated “fairly substantial amount of increase in services” in energy storage to balance the grid and integrate renewables over the next decade.
“We expect a floor of a 1,000 MW or 2,000 MW of energy storage by 2020 on the basis that 4,000 to 8,000 MW could be the real number,” he said.
Gravely told delegates at the Energy Storage Week Summit in San Jose, California, that after 25 years working in energy storage the sector was now at its peak. But he warned that the skills and knowledge from two dozen energy storage projects in California funded privately and through the American Recovery and Reinvestment Act 2009 were at risk of being lost.
“The challenge is to keep those projects going once the funding wraps up and do follow on projects of 10-20 MW,” he said. “There’s going to be a challenge in not losing all of the knowledge and manufacturing capacity that we have now. The market hasn’t risen up fast enough.”
Waiting on the Commission
The California Public Utilities Commission is due to issue its final decision on the implementation of SB2514, which will mandate the adoption of an energy storage procurement target for load serving entities by 2015.
Dadipya Patwa, from the renewable integration division of Pacific Gas & Electric, said that the company does not support mandates, targets or technology carveouts.
“They lead to inefficient market outcomes,” he said. “Reliability and economics drive the future.”
“We need more experience of emerging technologies. Many of the storage systems with newer chemistries don’t have a lot of sustained operating experience. We’d like to have more information.”
Gravely also warned of technology risk: “A lot of new technology is being produced and demonstrated but none of it has a 5 -10 year history that the grid requires. The grid is a very conservative environment. Utilities have to be comfortable with a 20-year investment.”
Nuclear Accelerates the Need
Arthur O’Donnell, senior regulatory analyst at the CPUC said that adoption of energy storage technologies could be accelerated by the ongoing closure of the San Onofre nuclear power plant.
“2017 is the next time that utilities in California, particularly in the south, may need to procure a significant amount of new [storage] resources,” he said. “That timeline could be expedited depending on the outcome of San Onofre. If the outtage continues past the summer we may see a need not in a 10 year time parameter but a five year time frame. Storage may well be a solution because of the flexible capacity it can provide.”
O’Donnell added that the recent extension of the Self Generation Incentive Program, which provides a $2/watt incentive for clean distributed generation for energy storage, had caused the number of applications to increase from 6 in 2010 to 147 in 2011. Most of those applications came from SolarCity’s partner program with Tesla Motors that would use the electric vehicle maker’s lithium ion batteries with the PV installer’s systems.
San Diego Gas & Electric have four energy storage projects due to launch this summer, said Lee Krevat, director of smart grid at the utility.
A 500 kw microgrid pilot would launch in Borrego Springs using technology developed by Saft; Borrego Springs customers will also be offered a home energy storage service; SNL will be the technology provider for a 25 kw community storage project; three hours of storage capacity would be piloted at an SDG&E substation for the first time.
Solar Speeds Adoption
High rates of adoption of PV have created a sense of urgency for SDG&E without assurance of approval of the ratecase before the CPUC that would enable the utility to pass through the cost of energy storage to consumers.
“We’re now at 5% PV on low load conditions. We’re going to be in trouble. Ten per cent of our circuits are on about 15% PV penetration on low load days and we have a number of circuits that have over 30% to 70%.
“We’re seeing some crazy things in those circuits and that’s why storage is very important to us in the short term to smooth out the energy and supply quality power.
It’s a ‘now’ issue. We feel we have a very limited amount of time to get good at this and we couldn’t wait any longer for a decision on our rate case.” – Lee Krevat
As of 2011, the US had 2,968 MW of storage capacity – 22,000 MW including pumped hydro.
Despite the opportunity for growth in the US, other regional markets also looked promising said other delegates.
David McQuilkin of KyuMaru Pacific Alliances, said that the Fukushima disaster in March 2011 had turned Japan’s grid from one of the most reliable in the world, to one of the most fragile, now that it was operating without its nuclear fleet.
Japan plans to have 14 GW of solar installed by 2015 and 28 GW stimulated by a 52¢/kWh feed in tariff guaranteed for 20 years. But utilities are required to couple renewable energy with storage capacity, said McQuilkin.
Examples From Abroad
The government estimates that more than 25 GW per 100 GWh of storage will be needed to cope with renewable targets by 2020.
NGK, the world’s largest grid-scale battery company, had to recall its batteries after one caught fire in September 2011.
“NGK’s stumble creates new window of opportunity for new players,” said McQuilkin.
India also presented emerging manufacturers with great opportunities, said Raj Chintapalli of Customized Energy Solutions. Feed in tariffs and renewable energy credits were growing the market for wind and solar exponentially, with an estimated 200-450 GW of additional capacity across all resources in the next five to 10 years, he said.
Cell phone use had driven the predicted growth in transmitter towers from 4,000 in 2002 to 550,000 by 2015. Most of these towers use diesel generators which could be easily switched to battery storage from hybrid solar/wind systems, said Chintapalli.
