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Legislation Spotlights Building-Scale Energy Storage Mark M. MacCracken Smart Grid News, July 25, 2013

Our power grid is decreasing in reliability while demand is simultaneously increasing. That is certainly setting the stage for a major problem in the U.S., especially as summer temperatures continue to soar.

This year, heat waves have already been fatal in the Southwest and residents in Northern California have been asked to reduce energy consumption to avoid blackouts. But do utilities really expect customers to be uncomfortable and hot in order to conserve power? The average person is not going to think about the power grid when making a visit to the thermostat.

Why storage is so essential

Energy storage allows people to crank up the air conditioning without adding any stress to the power grid. Most renewable energy does not provide a consistent flow of electricity. The amount of sunlight differs throughout the day and the wind isn't always blowing. Using energy storage allows for power to be dispatched quickly in order to compensate for intermittent availability. This also allows for two-way flow of electricity and will ultimately keep electricity prices lower than if new power plants and infrastructure needed to be built.

This is why recent legislation, policies and programs have been proposed to encourage the implementation of building-side energy storage. This year, senators from across the country introduced the bipartisan Storage Technology for Renewable and Green Energy Act of 2013, offering a tax credit for the deployment of energy storage technologies that can be used to lower peak demand.

While there are attempts to foster adoption on a national level, some states, most notably California, are trying to achieve this with their own policies. The California Public Utilities Commission (CPUC) recently released a proposal that would ultimately incorporate 1.3 gigawatts of storage into the grid by 2020.

The CPUC also introduced Resolution E-4586. This will implement a permanent load shifting (PLS) program to the public utilities, SCE, PG&E and SDG&E.

The PLS program supports technologies such as thermal energy storage and batteries that can shift energy usage from one period of time to another on a recurring basis. This is done through storing energy generated during off-peak times, or when energy is in low demand such as night, and using the energy during times of peak demand.

Don't forget about ice

Ice-based energy storage is one of the thermal technologies that would qualify under the new PLS program. Using an ice-based thermal energy storage system, a building can leverage a standard chiller to create ice overnight. The ice is stored in tanks and used the next day to cool the building when the building is full of occupants, outside temperatures are at their highest, and demand for electricity is peaking. Building-side energy storage also helps accelerate the integration of renewable energy.

According to the amendment, the PLS program will commence 90 days from the issuance of the resolution, which was May 13. It will provide $32 million in energy storage incentives, with customers receiving $875 for every kW shifted away peak periods and a cap of $1.5 million per project. Incentives will be capped at 50 percent of total eligible project costs. To qualify a project for the program a study must be done by a qualified mechanical engineer, but customers can receive 25 percent of cost of the study, or up to $10,000. The program also requires quarterly reporting and for the project to be operational and under warranty for a minimum of 5 years.

This program is a great stepping stone to create a more efficient power grid. The technology and its benefits are proven. These recent initiatives will set an example for addressing the growing power grid issues that are felt across the country.