Bulk energy storage: a modest proposal
- Posted on April 15, 2012
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Today we hand the floor to one element of the energy storage community: the Coalition to Advance Renewable Energy Through Bulk Storage or CAREBS.
First (as always) a few thoughts.
There's a natural tension between the innovations created by vendors and the constraints that bind their customers. Those constraints include, in no particular order, the effectiveness of the solution technically and financially, cost recovery prospects and the impact on customers, including costs.
Second, let's keep in mind that it's difficult to generalize in these discussions because issues and conditions that exist for one utility may not apply to another.
Nowhere are these factors more apparent than in the nuances and complexities of utility-scale energy storage, where new technologies have been developed to augment traditional pumped hydro.
We've documented the sometimes tortuous and frustrating process of determining policies for utility-scale energy storage at the California Public Utilities Commission (CPUC), charged with implementing policies that acknowledge the application-specific nature of "storage" and its myriad possible roles and valuations and attendant impacts on utility customers.
All that said and with those caveats in mind, today I'll briefly provide a glimpse at what utility-scale storage vendors are saying through CAREBS, courtesy of a recent policy document aimed at power industry stakeholders. Included below will be a few links to past coverage on the CPUC's deliberations, individual utility policy statements and the debates that have filled our forums.
As I will only touch upon a few key statements that introduce "Getting Bulk Energy Storage Projects Built," please use the link to read the concise document itself, which spans a dozen pages with footnotes.
Though market and policy conditions necessary for commercial bulk storage facilities are favorable, what's missing is the ability to monetize their benefits to the grid, according to CAREBS. So the organization would like to redefine the grid balancing function to identify the value streams, treat cost recovery for such projects in a regional manner similar to transmission lines as "multi-value projects" and bring transparency to all balancing technologies for evaluation by stakeholders.
The CAREBS position paper articulates its view of the "policy gap" around cost recovery or financial returns, which is affected by electricity market mechanisms. In regulated markets, storage isn't a "sanctioned" asset class like generation, transmission or distribution assets for cost recovery purposes, CAREBS notes. In de-regulated markets, "monetizing the costs of bulk storage through energy, capacity, renewable energy credits and/or ancillary services typically leaves substantial benefits unpaid for," their position paper states.
You'll have to read for yourself the list of seven, bulleted policy proposals that CAREBS cites, all of which come from other parties or jurisdictions. But "creating markets for grid ancillary services," including frequency regulation, tops the list and somewhere down the line are mandates for minimum levels of storage procurement and developing methodologies for assigning a "resource adequacy" value to storage, which echo discussions we've heard at the CPUC.
CAREBS makes four additional policy suggestions of its own, which some may see as complementing or contradicting aspects of the preceding seven.
- Simplify integration of renewables into grid operations without further distorting existing ratemaking or market mechanisms or sacrificing reliability;
- Avoid picking winners and losers and protect existing or future asset classes by focusing on the grid or market functional need and not the technology or the asset;
- Minimize government intrusion into the market while supporting core objectives of expanding access to renewables without sacrificing reliability or burdening ratepayers;
- Leave the choice to invest to owners/operators of the grid.
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