Energy storage trends to keep an eye on in the new year
February 23, 2015
During the recent State of the Union address, President Obama reaffirmed his commitment to the environment, calling out climate change as a threat to future American generations, said Mother Jones. Citing warnings from the Pentagon and NASA, Obama's comments about the environment are likely to have a lasting impact on the administration's environmental policy over the next two years. This is good news for energy storage, as the technology has unique advantages for helping facilities and utilities to shift demand, reduce costs and limit emissions during peak periods. With concerns about the power grid at their highest, energy storage seems headed for wider implementation in 2015.
More peakers means more storage
The U.S. Energy Information Administration noted that over 40 GW of extra peak capacity will be added to the grid by way of peaker plants in the next few years. The resource pointed out that these new peaker plans will actually create a big opportunity for energy storage, one that has already begun to play out in 2015. In Arizona, for instance the state's largest utility and local consumer offices have joined forces to require new peaker plants to be built with energy storage accounting for 10 percent of the plant's total capacity. The experiment would be a big win for energy storage, both in commercial and grid sectors, by demonstrating the advantages of reducing peak demand. Even more states will be likely to revisit their peak demand management strategy if Arizona has success with improving the reliability of its power grid with energy storage.
New EPA rules will force states to reduce emissions
According to the Environmental Protection Agency, the organization is in the midst of finalizing the Clean Power Plan proposal. The new environmental laws will set out to reduce dangerous carbon dioxide emissions by setting new standards for power plants. Peaking power plants in particular are known for releasing harmful pollutants into the air as they burn through large amounts of natural gas. This is another factor that could drive the adoption of energy storage, since offsetting peak capacity with storage reduces the amount of resources a peaker plant needs to burn before meeting the peak demands of the local grid.
Projects ramp up in U.S. and internationally
Another telling sign about energy storage adoption in 2015 is the long list of projects that are already underway, both domestically and abroad. Southern California Edison's 250 MW of contracted storage has been well reported, and recently the utility released a request for proposal seeking an additional 16 MW of energy storage, according to Advanced Energy Economy. Other utilities in the state, including San Diego Gas & Electric and Pacific Gas & Electric, have also committed to increasing capacity sustainably via energy storage. Similarly, in Texas, electricity provider Oncor has plans to invest $5 billion in storage as a means of reducing dependence on peaker plants.
In New York State, the NYSERDA-Con Edison program is providing $2,600 per kilowatt (up to 50 percent of total project cost) of stored energy. For projects over 1 MW and 500 kW, there is an extra incentive of 15 percent and 10 percent, respectively. Similar programs can be seen across the country and the widespread use of energy storage suggests the technology has applications for individual buildings or campuses as well.
The United States isn't the only country looking to ramp up energy storage applications this year. Renew Economy reported that Saudi energy giant ACWA has invested in thermal energy storage as a means of supplementing the company's ever-expanding solar farms. Likewise, Japan's Ministry of Economy is considering a $700 million investment in energy storage as a means of supporting the growth of renewable energy sources, said GreenTech Media. Electricity generated from renewable sources is not always available at the same time that demand is at its peak - energy storage provides a means for utilizing that electricity when it's needed most.
