Yesterday vs.Tomorrow: An overview of building energy storage trends continuing into 2016
January 11, 2016
It would not be an exaggeration to say to that 2015 was a big year for energy storage technologies. Energy storage deployment tripled in 2015. The market for storage is a long ways from reaching its peak, yet deployment has already begun to accelerate rapidly. In fact, a forecast performed by GTM Research predicted that total U.S. deployment in 2015 will triple the amount of energy storage installed the year before. If this trend continues, industry experts may soon be referring to 2016 as another breakout year for energy storage technology.
The pervasive demand for renewables
In 2015, energy storage shined in the spotlight as a means of offsetting the overabundance of renewable generation during off-peak periods that has begun to create problems for the nation's power grids, especially in major renewable hotspots like California and Texas. In Austin, TX for example, thermal energy storage customers that utilize off-peak energy pay a negative energy charge. This issue of overgeneration will continue to spread if renewable energy usage increases, meaning that the energy industry will continue to grapple with the problem headed into the next year.
Meanwhile, Zero Energy Buildings (ZEBs) gain momentum as more on-site renewables match or exceed off-site resources. ZEBs are becoming a badge of honor and a strategy for lower energy costs for commercial building owners. However most ZEBs don't have storage on-site. The problem is that there is virtually no storage on the grid and so currently ZEB's are just outsourcing their storage needs to the grid and society. More on-site storage will be needed as renewables increase in numbers. ZEB metrics will most likely need to include a "capacitance" factor that measures and values storage designed into a building.
Proven solutions like thermal storage continued to deliver savings
While 2015 marked the announcement of several new energy storage installations on the grid, the year also encouraged architects to consider the advantages of long standing storage solutions in buildings. For instance, an interview with Lowell Tacker, principal architect at LPAInc, revealed that Alamo Heights Independent school district's five building campus is saving a lot of money thanks to thermal energy storage. "We've revitalized a 1950s campus and made it cost-effective to operate for another 50 years."
The solution, IceBank thermal storage tanks designed by CALMAC, used proven thermal storage technology to reduce peak energy demand on campus by 17% despite an increase of 12,000 sq.ft. of space for a new building. As the demand for energy storage solutions increases in 2016, technologies that have demonstrated measurable results will stand out among potential options for new adopters.
Utilities aiming to limit peaker plants began to turn to storage
Peaker plants incurred more negative press in 2015 as several proposed construction efforts were met with resistance from local residents and grid experts alike. One of the chief concerns associated with peaker plants is the volume of pollutants created when the facilities consume large amounts of coal to help overburdened utilities meet their energy capacity demands. Energy storage emerged as a cost-effective alternative in 2015, according to Bloomberg Business, so it's likely that this trend will continue into 2016 as environmental concerns regarding peaker plants become more pervasive among business decision-makers and lawmakers in charge of industry compliance standards.
Extended tax credits and state mandates will drive adoption in 2016
Widespread availability of funds and incentives have done wonders to help catapult renewable energy into the mainstream, and the same pattern could be responsible for another year of accelerated storage adoption across the U.S.
The biggest piece of funding news to come out of 2015 was the late approval of a $1.8 trillion federal spending bill by Congress, according to NPR, which included a tax credit extension for clean energy projects. Considering storage research and adoption has been so closely tied to addressing the shortcomings of renewables, solving grid problems and helping businesses shift energy consumption away from peak rate periods, it's more than likely that these extended credits will create even more opportunities for energy storage technologies to flourish in 2016.
In addition, the Tax Extenders Law, section 179D green building tax deduction continues to provide financial support to buildings owners and LEED consultants and architects of government buildings by offering up to $1.80 per square foot to install cooling systems that reduce energy costs by 50% or more compared to ASHRAE standards. That's a 20% reduction in the first costs of ice storage while the chiller is downsized by 35%.
"Tax incentives can result in a 20% reduction in the first costs of ice storage."
These tax credits will also be supplemented by state mandates for increased deployment of energy storage by utilities and large commercial buildings. In California, Utility Dive reported that the passage of AB 2514 will continue to push adoption among utilities across the state in 2016 as operators speed to satisfy the legislation's 1.3 GW energy storage requirement by 2020. Oregon passed similar legislation in 2015, reported Greentech Media, requiring utilities to secure energy storage capacity equal to at least 5 megawatt hours.
Though Oregon's mandate is considerably smaller in scale, the passage of the legislation shortly after major deployment across nearby California could set the table for a regional adoption trend, creating even more opportunities for energy storage deployment in rural Northeast communities where cutting-edge applications like microgrids will need solutions for capacity flexibility and renewable intermittency.
