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There are more than 140 policies and regulations in place across America encouraging battery storage, reports Michael Levitin
In the US, where renewables account for an ever-increasing share of the energy market, the capability of storing the power produced is emerging as a leading clean energy industry. California is blazing a trail on battery storage (see Why California’s dreaming about battery storage), implementing policies and legislation to encourage its use.
But California is not the only state where battery storage is taking off. Around the country, bids for renewable power projects that include battery storage systems have become cheaper and more common. According to Baker, there is a total of about 1.5 gigawatt hours (GWh) of battery storage across the US, almost double the 800 megawatt hours (MWh) in 2016. Market projections are for national storage capacity to balloon to 11-12GW by 2022. As of last year, according to Greentech Media, 21 US states had more than 20MW of storage capacity completed or in production, and 10 states had more than 100MW.
Storage will be economic, and once there’s an economic driver you’re going to see an explosion of storage
Baker said the decline in cost for battery technology is helping drive the trend. “Based on what we’ve come to expect in costs, storage will be economic, and once there’s an economic driver you’re going to see an explosion of storage,” he said. The other key factor is legislation. More than 140 policies and regulations are now in place nationwide encouraging growth in the storage sector.
The northeast is another hot spot: New York’s aggressive Reforming the Energy Vision (REV) programme is disrupting that state’s utility industry by providing incentives and implementing a broad mandate to create opportunities for battery storage and microgrids. New York set even bigger targets than California when Governor Andrew Cuomo announced early this year a new state storage target of 1,500MW by 2025. That coincides with New York’s plans to solicit bids for 800MW of offshore wind power. Cuomo also directed the state-sponsored NY Green Bank to invest $200m to further drive down the costs of energy storage.
As a result, New York expects to see some 30,000 jobs created in the storage industry in the coming years. According to Strategen Consulting, battery storage could reduce the Empire State’s greenhouse gas emissions by 75% and help it achieve its climate targets of 50% renewables by 2030 and 80% by 2050. Right now, said Baker, there still isn’t a clear way for utilities to capture the value they’re creating from battery storage, but current policy may change that. “As part of the New York REV process, they have a philosophy that we need to balance renewable energy with the grid and create market mechanisms to reward the types of services that battery storage is providing to the grid.”
Massachusetts has implemented procurement targets of 200MWh in battery storage by 2020. Meanwhile, PJM Energy Market, the independent service operator that manages grid reliability across New Jersey, Pennsylvania, Maryland, Delaware and other states, has established an auction that creates a market for frequency regulation in battery storage. By offering credits to utilities that adopt a variety of battery storage applications, PJM sent a price signal that helps to create an incentive for new battery installations. “PJM demonstrated a very clear market for battery storage,” said Baker.
Elsewhere, Xcel Energy, the largest utility in Colorado, said it’s seeing greater battery use from its suppliers. Tucson Electric Power last year agreed to build a solar and battery storage project, and Florida Power & Light this year added battery storage to a solar plant. Hawaii is moving to incorporate massive battery storage into its energy system. And though it currently has no legislation favouring battery storage, Texas is so flush with utility-scale wind power that analysts consider it a “sleeper state” to watch.
Michael Levitin is a journalist based in Berkeley, California, covering climate and clean energy financing among other topics. He has written for The Atlantic, The Guardian, Time and Newsweek.
This article is part of the in-depth battery storage and microgrids briefing. See also:renewable energy battery storage Reforming the Energy Vision offshore wind