Hearing Explores Prospects and Barriers to Large-Scale Energy Storage

Hearing Explores Prospects and Barriers to Large-Scale Energy Storage

On 18 July, at the latest of its “Powering America” series of hearings, the House Energy Subcommittee explored the growth of utility-scale energy storage and its implications for electrical grid reliability, as well as for sales in the wholesale electrical market.

In his opening remarks, Energy Subcommittee Chair Fred Upton set the tone for the hearing, noting that: “Large-scale energy storage has benefits and unique attributes that can improve the reliability and resiliency of the nation’s electric grid. Energy storage can help manage peak electricity load; provide essential reliability services such as – voltage and frequency control; improve reserve capacity; and provide black start capability.”

Rep. Greg Walden, chair of the House Energy and Commerce Committee, added, “Clearly, there is great potential for the role that large-scale battery storage can play in the nation’s electricity system, but before that potential is fully realized there are a number of barriers and challenges that are still being tackled. These challenges range from technological limitations and costs, to wholesale market participation rules.”

The witness panel consisted of Dr. Keith Casey (California ISO), Mark Frigo (E.On North America), Kiran Kumaraswamy (Fluence), Dr. Zachary Kuznar (Duke Energy) and Kushal Patel (Energy and Environmental Economics, Inc.)

Dr. Casey, vice president for market and infrastructure development with California ISO, noted that the company manages nearly 2000 MW of energy storage, and has added 134 MW of battery storage in recent years to complement its pumped hydro storage. While noting that the value proposition for large scale hydro storage infrastructure projects is increasingly questioned, Casey noted the company’s increasing emphasis on battery storage, which they see as an integral part of the future grid.

He went to describe that vision: “While development is at a very nascent stage, we believe the future grid will be one where the distribution and transmission networks are highly integrated, providing for bi-directional flow of energy versus the traditional grid where power flows one direction from large centralized power plants to end-use consumers. The grid of tomorrow will have a much more diverse set of smaller resources – with many located behind a customer’s meter and will have the potential to provide services to the host customer, the distribution network, and the transmission network.”

Mark Frigo, vice president and head of energy storage at E.ON, a global renewable power generator with over 3600 MW of renewable capacity operating in the United States, warned that “despite our successes in the market and its great potential to enhance the grid’s reliability and resilience, energy storage remains an emerging technology. While the technology continues to evolve and costs continue to fall, more steps from both a policy and fiscal perspective are needed to unlock this technology’s full potential to support the grid and to save taxpayers money on their electricity bills.”

Frigo called on the U.S. Federal Energy Regulatory Commission (FERC) to ensure that regional transmission organizations (RTOs) and independent system operators (ISOs) faithfully implement FERC Order 841, which calls on them to allow energy storage into their markets to the benefit of customers. He also called on utility commissions in states not included in organized markets to ensure that the utilities they regulate evaluate energy storage resources as a viable and cost-effective tool in the utility planning process. Lastly, Frigo endorsed the idea of an investment tax credit for energy storage deployment.

Kirman Kumanraswamy, market applications director for Fluence, a Siemens and AES company, made a case that energy storage is the next big thing in the U.S. energy landscape. For utilities, storage supports eight different focused applications, including frequency regulation, microgrids, critical power, energy cost control, generation enhancement, peaking power, integration of renewables, and enhanced transmission and distribution.

Dr. Zachary Kuznar, director for energy storage and micro-grid development at Duke Energy, reported that “over the next 5 years, Duke Energy plans to deploy a minimum of 145 MW of energy storage across our regulated businesses, representing approximately $300 million of new investment to help modernize our electric system.” He highlighted the advantages of grid storage to a combined grid manager/operator like Duke Energy, noting that “storage allows us to dispatch energy during times of peak demand, enhance the reliability of our grid, provide energy security and back-up power for customers who provide critical services to our communities, and enable increased flexibility for helping to manage the continued growth of renewable generation on our system.”

In response to questions, Kuznar added “When we look at our makeup as whole, we don’t look at storage as a replacement for baseload generation – that’s still extremely important for our business, but it provides us these abilities to improve our reliability for rural communities, deal with frequency regulation, help us integrate solar, and provide some peaking needs as well.”

Kushal Patel, a partner in San Fran-based energy consulting group Energy and Environment Economics, Inc., referred to energy storage as the Swiss army knife of the electric grid in light of the many benefits and services it can perform. He warned, however, that substantial barriers continue to face energy storage, including high (but declining) costs and the limited ability for storage to earn revenues from the numerous services it can perform. He added “today, clear routes to market exist for only a limited number of storage services; others cannot currently be monetized, while still others, such as those related to integrating larger amounts of renewable energy, may not become valuable until the future and only in certain jurisdictions.”

In a letter submitted for the hearing record, the Edison Electric Institute (EEI) stressed the benefits of energy storage to the electric power industry, which uses more than 90 percent of all energy storage. According to EEI, “while pumped hydropower represents approximately 93 percent of installed storage capacity in the United States, battery storage is a key driver of the energy storage market today. Investment in advanced energy storage is growing rapidly, with an estimated 280 megawatts installed in 2017 alone, up 400 percent from 2014.”

You can view a recording of the hearing or review witness testimonies online at: https://energycommerce.house.gov/hearings/powering-america-the-role-of-energy-storage-in-the-nations-electricity-system/


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