Integrated Energy Storage in the United States

8/20/2019 Integrated Energy Storage in the United States

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Integrated Energy Storage

in the United StatesBy Ben Bovarnick December 2015

WWW.AMERICANPROGRESS.ORG


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Integrated Energy Storagein the United StatesBy Ben Bovarnick December 2015


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1 Introduction and summary

3 Storage technologies and applications

7 Key uses and benefits of energy storage

12 Recent cost and usage trends

19 Conclusion and questions for further study

21 Appendix: State-specific approaches to energy storage

28 Endnotes

Contents


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1 Center for American Progress | Integrated Energy Storage in the United States

Introduction and summary

Whe her powering cellphones or keeping lap ops charged, energy s orage has become a daily unc ion in our lives. Now, hese s orage sys ems are poised o helpsupply power o homes, cars, and power plan s. Te rapidly alling cos o energys orage echnologies in recen years is encouraging wider adop ion by u ili ies, com-mercial business, and homeowners, and i is impor an ha policymakers proac-

ively drive grea er in egra ion o energy s orage wi hin he broader elec rici y grid.

Te erm “energy s orage” describes a broad sla e o echnologies ha primarily s oreelec rical energy or la er use, allowing u ili ies and elec rici y consumers o accessi when mos needed. Al hough cellphone and lap op bateries s ore and dischargeenergy in he same way as many commercial and u ili y-scale energy sys ems, heselarge sys ems can hold housands o millions o imes more energy in reserve. Teses orage sys ems are used o improve he efficiency o elec ric u ili y opera ions, sup-por elec ric grid s abili y, and save ex ra elec rici y o mee peak demand.

Energy s orage is a rela ively small bu emerging marke in he elec ric indus ry.1 In recen mon hs, new energy sec or announcemen s have ocused addi ionalaten ion on batery s orage and he range o bene s energy s orage echnolo-gies can provide he elec ric grid.2 esla, he elec ric vehicle and energy s oragecompany, recen ly announced ha i will sell i s Powerwall sys em or residen ials orage and i s Powerpack u ili y-scale li hium-ion bateries a signican ly lowerprices han marke analys s predic ed.3 In ac , recen projec ions or large-scale batery s orage hrough 2020 sugges cos s will all 40 percen o 60 percen rom

he 2015 price poin , driving signican grow h in energy s orage marke s.4

Likewise, here has been movemen on he policy side a bo h he s a e and

ederal level. Cali ornia adop ed an energy s orage manda e in 2014 o requireu ili ies o provide he s a e wi h 1.3 gigawats, or GW, o energy s orage capaci y by 2022 a manda e ha s a e u ili ies are already beginning o mee .5 New Yorkis re orming i s regula ory environmen and incen ives o nance energy s orageprojec s hrough he s a e’s Re orming he Energy Vision ini ia ive, which will


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suppor a new marke or energy s orage.6 Momen um can be seen a he ederallevel oo, wi h Reps. Chris Collins (R-NY) and Mark akano (D-CA) launching

he congressional Batery Energy S orage Caucus las Oc ober.7

His orically, energy s orage has primarily served as emporary backup power or

large commercial buildings, such as hospi als, or cellphone owers ofen usinglead-acid bateries or has been used o increase elec ric grid capaci y in he ormo large pumped hydroelec ric s orage, or PHS.8 Ye wi h he excep ion o newPHS projec s, U.S. energy s orage capaci y remained mos ly a hroughou he20 h cen ury. However, spurred by cos declines and echnical advances, energys orage excluding PHS has grown more han 1,200 percen in he pas 15 years.9 Much o his grow h has been spurred by u ili ies, which have ins alled 85percen o new energy s orage capaci y in U.S. marke s since 2013. By comparison,1.2 percen o new energy s orage capaci y came rom residen ial ins alla ions.10

Te concen ra ion o energy s orage wi hin u ili y projec s is par ly due o hehigh capi al cos s, bu also because energy s orage offers clear bene s or elec ricgenera ors and grid opera ors. Energy s orage can help elec ric u ili ies mee peak-capaci y demand by holding energy in reserve and releasing i when i is mosneeded, balance elec rici y levels owing hrough he grid o preserve grid reli-abili y, and de er cos ly inves men s in new ransmission or dis ribu ion sys ems. Addi ionally, energy s orage can reduce emissions associa ed wi h elec ric genera-

ion by helping renewable energy genera ors ex end he leng h o ime hey canprovide energy and reducing he amoun o elec rici y ha u ili ies mus purchase

rom inefficien na ural gas peaking plan s.

As he cos s o energy s orage echnologies generally and batery s orage in par-icular con inue o all, hese projec s are likely o become increasingly impor an

resources in U.S. elec rici y marke s. Ye many s a es do no have es ablished policiesor incorpora ing energy s orage in o elec ric marke s or o encourage i s usage. Tis

nascen marke offers policymakers and indus ry leaders he chance o consider hows a es and u ili y regula ors can reduce barriers o deploymen and increase oppor u-ni ies or energy s orage in order o provide low-cos , high-value services o supporu ili y opera ions, reduce consumer elec rici y demands, and bols er s a e elec ric

grid efficiency. As energy s orage cos s all, policymakers should ake s eps o ensurehese echnologies play an in egral role in offering exible u ili y solu ions ha maxi-

mize reliabili y while limi ing long- erm elec rici y cos s.


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Capacity: The maximum energy that can be stored or generated andprovided for use under specied conditions

Cycling: The repeated process of storing and releasing energy, oftenused to describe the charging and discharging of batteries

Gigawatt, or GW: 1,000 megawatts, often used to refer to thecapacity of large power plants

Frequency regulation: Increasing or reducing the supply ofelectricity to maintain the alternating current, or AC, frequency on anelectric grid

Kilowatt, or kW: A standard measurement of electric capacity

Kilowatt-hour, or kWh: A unit of measurement for the amountof electricity used continuously for one hour. The typical Americanhome uses 7,200 kilowatt-hours, or kWh, of electricity per year.11

Kilowatt-year: A unit of measurement that quanties the cost of anumber of kilowatts of electricity available for use in a single year

Levelized cost: The cost of electricity over an electric generator orstorage system’s lifetime, based on installed price, fuel costs, opera-tions and maintenance, and electricity production

Load following: Dispatching electric storage or generation cato allow the grid to ramp instantaneously and smoothly

Megawatt, or MW: 1,000 kilowatts, often used to refer to thepacity of power plants and other large sources of electricity.

Megawatt-hour, or MWh: 1,000 kilowatt-hours, a unit of mement for the amount of electricity used continuously for one hooften used to describe output from electricity generation source

Peak shaving: Reducing the amount of energy generation neeto meet peak demand through storage or demand reductions

Ramping: Increasing or decreasing the electric voltage of a syby adding or reducing electric power to regulate the frequency

grid and avoid system wear or blackouts

Transmission deferral: The act of postponing or avoiding inment in new electric transmission to replace components that hworn out or are insufficient to meet demand by extending the liof existing infrastructure or replacing it with more cost-effectivtions, such as energy storage

Voltage support: The capability to produce or absorb electrimaintain the voltage of an electric system

Key terms


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Storage technologiesand applications

Te primary role o energy s orage is o hold elec rici y in reserve un il calledupon o injec i back in o he grid. Tere ore, s orage sys ems are ypically valued based on heir power capaci y, how quickly and efficien ly hey candischarge his s ored energy, and heir abili y o wi hs and repea ed charge anddischarge cycles. Energy s orage can serve as a as -response grid suppor oolor provide bulk s orage o collec energy when genera ion is high and release i when demand spikes or supply is low. Tese s orage echnologies can range in

capaci y rom kilowats 1,000 wats o gigawats 1 billon wats depend-ing on he needs hey are designed o mee and can send elec rici y o he grid wi hin seconds or minu es o demand.

Fas -response energy s orage, such as li hium-ion bateries, can provide elec ric-i y immedia ely o help u ili ies and grid opera ors manage elec ric grid s abili y,as well as provide backup power or homeowners and commercial cus omers.Tese rapid-response s orage sys ems can play an essen ial role in he elec ric grid because grid s abili y requires elec ric genera ion and consump ion o be consis-

en ly in balance. Tis momen - o-momen balance is ypically managed by anindependen elec ric grid opera or an independen service opera or, or ISO, ora regional ransmission opera or, or R O ha procures ancillary services, whichare dedica ed opera ions o main ain grid s abili y hrough requency regula ion,load ollowing, and vol age suppor rom u ili ies and hird-par y providers.12 I

he elec rical ow o a grid alls ou o balance, damage will occur, resul ing in deg-rada ion o elec rical componen s or sys em overloads, which can cause blackou s.Tere ore, energy s orage asse s ha provide requency regula ion, load ollow-ing, and vol age suppor mus be able o quickly respond o grid signals o rapidlydeliver elec rici y or absorb excess energy rom he grid. Tis process o charging

and discharging, known as cycling, can occur dozens o imes per day, subjec ingsys ems o wear and degrada ion over ime.13


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TABLE 1

Selected energy storage technologies

Applications, costs, and technical parameters of storage systems

Storagesystem

How electricityis stored Users* Applications

Levelized costof energy (in2014 dollarsper kWh)**

Capacity(in MWh)

Responsetime

Dischargetime Efficiency

Lifeyears

cyc

Lithium-ionbatteries,or li-ion

Electrochemicalstorage ofelectricity

at low

temperatures

Utilities;commercialbusinesses;residential

customers

Providing electricityat a moment’s notice

for frequency regulation,peak shaving, time

shifting of renewables,

backup power, andoff-grid energy

$347 to$739

0.004 to10

20millisecondsto seconds

Minutesto hours

85% to95%

8 toyears;to 10

cyc

Flowbatteries

Electrochemicalstorage ofelectricity

at lowtemperatures

Utilities;industrialcustomers

Storing renewable energyintegration and timeshifting storage; peak

shaving; distribution lineupgrade deferral; voltagesupport; load balancing;providing standby power;

and providing off-gridelectricity

$290 to$892

2 to60

Secondsto minutes

Secondsto 10 hours

60% to85%

10 tye

12,014,000

Pumpedhydroelectricstorage, orPHS

Mechanicalstorage of

electricity bypumping water

to a higherelevation

Utilities

Storing large amounts ofenergy to provide peak

load generation, a blackstart of electricity gridsafter power outages,

and some gridfrequency control

$188 to$247

500 to8,000

Secondsto minutes

Minutesto hours

70% to85%

50 toyearscyc

By con ras , bulk energy s orage sys ems, such as pumped hydroelec ric acili ies,are used by elec ric genera ors and grid opera ors o conserve elec rici y supplyand release i o he grid when needed o mee demand.14 Tese large-scale asse scan balance elec ric load over ime by s oring large amoun s o elec rici y a nigh when elec rici y is cheap and hen releasing i over a period o several hours dur-

ing he day when here is higher demand.15

Tis energy arbi rage modera es hepeaks and valleys ha spring rom demand uc ua ions over he course o a day.ypically, elec rici y demand ramps up in he morning when people are waking

up and peaks in he early evening as people re urn home rom heir offices be orealling la er in he evening as hey go o bed. Wi h he dawn o a new day, he cycle

repea s. I is up o elec ric genera ors and grid opera ors o ensure ha hey haveelec rici y available o mee peak demand, or hey risk blackou s. Energy s orage isa crucial ool o help allevia e he s rain o some peaks or limi heir dura ion.


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Storagesystem

How electricityis stored Users* Applications

Levelized costof energy (in2014 dollarsper kWh)**

Capacity(in MWh)

Responsetime

Dischargetime Efficiency

Lifeyears

cyc

Compressedair energystorage, orCAES

Mechanicalstorage of

electricity bycompressing

air in aconned space

Utilities

Storing large amountsof energy to align

energy supplywith demand

$192

Verydifferentfor large

and smallscales

1 to 15minutes

Secondsto minutes

40% to75%

25 tyear

cycle

Flywheel

Mechanicalstorage ofelectricity

through a spin-ning wheel

UtilitiesProviding electricity ata moment’s notice forfrequency regulation

$276 to$989***

0.0052 to5

4millisecondsto seconds

15 secondsto 15

minutes

70% to95%

Less20 y20,0100

Advancedlead-acidbatteries

Electrochemicalstorage of

electricity at lowtemperatures

Utilities;commercialbusinesses

Providing electricity ata moment’s notice for

voltage regulation or todisplace diesel generation

for backup oruninterrupted power

$461 to$1,429

0.001 to40

5milliseconds

Minutesto hours

75% to90%

3 toye3,0cyc

Sodium-sulfurbatteries ormolten saltstorage

Electrochemicalor thermal stor-age of electricityat high tempera-

tures

Utilities;industrialcustomers

Integrating renewableenergy by time shiftingelectricity, peak shaving,

transmission upgradedeferral, voltage support,

load balancing, andproviding backup

electricity

$396 to$1,079****

0.4 to244.8

1millisecond

Secondsto hours

70% to90%

12 tye

2,504,4cyc

* This category refers to end users of energy storage functions, not necessarily intermediate storage providers.** Cost estimates by Lazard. They reect transmission system applications unless otherwise indicated.*** Cost estimate for use in frequency regulation.**** Cost estimate for sodium-sulfur batteries only.Sources: Arup, “A ve minute guide to electricity storage,” available at http://www.arup.com/Home/Publications/5_minute_guide_to_electricity_storage.aspx (last accessed November 2015); Dan Rastler, “ElectricityEnergy Storage Technology Options” (Palo Alto, CA: Electric Power Research Institute, 2010), available at http://large.stanford.edu/courses/2012/ph240/doshay1/docs/EPRI.pdf; Daniel H. Doughty and others, “Batteriefor Large-Scale Stationary Electrical Energy Storage,” The Electrochemical Society Interface (2010): 49–53, available at http://www.electrochem.org/dl/interface/fal/fal10/fal10_p049-053.pdf; Deloitte, “Energy Storage: Trathe technologies that will transform the power sector ” (2015), available at http://www2.deloitte.com/content/dam/Deloitte/us/Documents/energy-resources/us-er-energy-storage-tracking-technologies-transform-power-sector.pdf; Energy Flagship, “Electrical Energy Storage: Technology Overview and Applications” (2015), available at http://www.aemc.gov.au/Major-Pages/Integration-of-storage/Documents/CSIRO-Energy-Stor Technology-Overview.aspx; Lazard, “Lazard’s Levelized Cost of Storage Analysis—Version 1.0” (2015), available at https://www.lazard.com/media/2391/lazards-levelized-cost-of-storage-analysis-10.pdf; Xing Luo anothers, “Overview of current development in electrical energy storage technologies,” Applied Energy 137 (1) (2015): 511–536, available at http://www.sciencedirect.com/science/article/pii/S0306261914010290.


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Key uses and benefitsof energy storage

Te li e imes o elec ric in ras ruc ure asse s, including power plan s, ransmis-sion lines, and dis ribu ion cen ers, las many decades. Inves men s made oday will require payoffs over ex ended ime rames. As he cos o energy s orage

alls, hese echnologies in par icular, hose used or as response and load balancing can increasingly bene u ure elec ric grid efficiency and reliabili y.Energy s orage sys ems can be used o mee capaci y needs ins ead o cos lyinves men s in new peak elec ric genera ion or ransmission lines and offer

ancillary bene s ha enhance grid s abili y.

S orage sys ems can be ins alled a a varie y o poin s on he elec ric grid: a hepoin o elec ric genera ion, in he ransmission and dis ribu ion sys em o bols erelec ric circui s experiencing peak capaci y, and behind he me ers ha are xed

o commercial and residen ial buildings, where hey can reduce elec rici y cos sduring peak demand periods or provide backup power in he even o a power ou -age. In a recen ly released repor , he Rocky Moun ain Ins i u e, or RMI, looked a batery s orage sys ems and iden ied key services hey could provide o u ili ies,grid opera ors such as ISOs and R Os, and residen ial and commercial cus omers.Te repor ound ha by using s orage or mul iple services, energy s orage proj-ec s could yield a subs an ial re urn even a he curren cos s o batery s orage.However, i is s ill rare or companies o use energy s orage or mul iple services

oday.16 Te primary uses or energy s orage curren ly include:

• Mee ing peak-capaci y demand by dispa ching s ored elec rici y o he grid

• Providing ancillary services o improve elec ric grid s abili y and reliabili y

• De erring inves men in ransmission and dis ribu ion o reduce u ili y cos s


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Meeting peak capacity

One o he primary roles o energy s orage pinpoin ed by RMI and o hers is peakshaving, or providing elec rici y o he grid when demand peaks. Elec ric demanduc ua es hroughou he day, and elec ric grid opera ors mus ensure ha su -

cien elec rici y capaci y is available o mee peak demand. Tis means hagrid opera ors mus reserve some elec rici y genera ion o mee in requen peakdemand. Energy s orage can reduce he peak genera ion capaci y ha elec ric gridopera ors mus re ain o mee demand.

Curren ly, his demand is ofen me hrough peaking plan s inefficien combus-ion urbine, or C , plan s ha are usually powered by na ural gas and can come

online wi hin minu es o a demand spike. Tese plan s are cheap o build andopera e bu produce more greenhouse gas emissions han o her ossil uel elec ricgenera ors. C plan s mus ramp up and down quickly and run ar less efficien ly

han advanced combined-cycle na ural gas plan s, which increases heir carbondioxide, ni rogen oxide, and sul ur oxide emissions.17 For example, New York s a e’speaking plan s opera e in requen ly averaging less han 250 hours per year despi emaking up 20 percen o he s a e’s genera ors bu have much higher energy cos s

han baseload power plan s. Te levelized cos o energy rom a combined-cyclena ural gas plan is $52 o $78 per megawat-hour, while he levelized cos o energy

rom a peaking plan is $165 o $218 per megawat-hour.18 Al hough he cos ou ili y-scale s orage is s ill above his, he alling cos o batery s orage sugges s hasuch echnologies will be cos compe i ive in he near u ure.19 A a Sep ember 2015analys con erence in New York, Nex Era Energy CEO Jim Robo said, “Pos -2020,

here may never be ano her peaker [C plan ] buil in he Uni ed S a es very likely you’ll be jus building energy s orage ins ead.”20

A recen repor by Moody’s Inves ors Service corrobora es his predic ion, nd-ing ha he alling price o batery s orage is likely o drive s orage applica ions

ha will limi he requency wi h which u ili ies need o dispa ch peak capaci y.21 In Sep ember 2015,Fortunemagazine repor ed, “U ili ies are s ar ing o buy big batery banks as a way o avoid building and opera ing new expensive na ural gasplan s. I hey can use batery energy during peak grid imes, ins ead o urning o

his expensive so-called [peaker] power plan s, hey can save money in he longrun.”22 In addi ion o inves men by u ili ies, commercial and indus rial users areexpec ed o procure energy s orage, which will limi he amoun o energy regu-la ed u ili ies can sell hem. However, while elec rici y demand grow h is slowing,peak demand is s ill on he rise.23


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Recen ins alla ions o peak genera ors o mee his demand show ha whileenergy s orage is beginning o compe e, i has no ye achieved cos pari y.24 As udy by Sandia Na ional Labora ory concluded ha he levelized cos o capaci y

or a 100-MW na ural gas peaking plan wi h a 5 percen capaci y ac or is $156per kilowat-year, lower han he curren cos o as -response batery s orage. Te

lowes cos or a li hium-ion batery in he Sandia s udy was more han $200 perkilowat-year.25 However, he s udy no ed ha s orage echnologies have ewercons rain s and “can reasonably be expec ed o earn more ne revenues han a C .” While energy s orage sys ems curren ly ace a cos disadvan age when compe ing wi h supply peak capaci y, he addi ional services hese uni s provide can elimi-na e his shor all.26 By par icipa ing in ancillary services marke s (see below),energy s orage sys ems can compe i ively serve he peak-capaci y demand cur-ren ly me by na ural gas urbines.

Providing ancillary services

One o he primary ways ha energy s orage can reap nancial bene s is hroughpar icipa ion in ancillary services marke s. Ancillary services are specic services

ha help elec ric grid opera ors main ain grid s abili y as demand uc ua es, includ-ing requency regula ion, genera ion reserves, and vol age con rol.27 U ili ies canprovide hese services by selling, also known as “bidding,” in o ancillary servicesmarke s opera ed by R Os and ISOs. Grid opera ors u ilize hese ancillary servicemarke s o bols er he efficiency o heir elec ric grids and main ain grid s abili y.

Al hough as -response energy s orage is a rela ively new en ran o elec rici ymarke s, a varie y o s orage echnologies have ound success in he Pennsylvania-New Jersey-Maryland, or PJM, ancillary services marke . Te PJM marke relieson batery s orage, ywheels, and elec ric vehicles or capaci y suppor and basescompensa ion or i s s orage services according o sys em response ime andaccuracy.28 When he PJM marke needs o increase or reduce elec ric load on hegrid, i calls on companies wi h s ored elec rici y or available elec ric capaci y oinjec or absorb elec rici y rom he grid, improving i s s abili y and efficiency. Tegrid requires a precise elec ric balance, and energy s orage services ha can mee

his balance mos effec ively are more valuable han ancillary service op ions hacanno per orm as precisely. Te as -response na ure o bateries or ywheels le scompanies ha are selling heir energy s orage capaci y respond o grid opera orreques s wi hin seconds and vary sys em ou pu rom zero o maximum capaci y.By con ras , na ural gas urbines can ake minu es o dispa ch and are inefficienun il hey reach a prede ermined minimum ou pu .


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In Sep ember 2015, energy s orage provider S em Inc. sold he aggrega e capaci yo i s energy s orage uni s in o Cali ornia’s ancillary services elec rici y marke .29 Te company owns numerous dis ribu ed batery s orage sys ems ha provideenergy s orage o commercial cus omers. By linking he aggrega e capaci y o i ssys ems oge her, S em was able o sell i s capaci y in he Cali ornia ancillary ser-

vices marke and earn addi ional re urn on inves men or i s cus omers.

Deferring transmission investment

In addi ion o replacing peak genera ion and providing ancillary services, energys orage can help u ili ies circumven he cos s associa ed wi h new ransmissionand dis ribu ion inves men s by improving he abili y o exis ing grid in ras ruc-

ure o mee and respond o peak-capaci y loads. In Wes Virginia, or example, American Elec ric Power, or AEP, ins alled sodium-sul ur bateries o avoid

building a new 8-mile ransmission line o reduce ransmission conges ion a acos he could have exceeded $8 million.30 Te 2-MW energy s orage sys em AEPins alled, which was par ially unded by he U.S. Depar men o Energy, or DOE, will improve daily reliabili y and limi power ou ages.31

Te Bratle Group ound ha de erred ransmission inves men s in exas gained by placing batery s orage uni s near specic loca ions s rained by peak demand were wor h approxima ely $36 per kW-year or de erred ransmission inves men sand $14 per kW-year or de erred dis ribu ion inves men s.32 Tese values are based on he nding ha inves men in energy s orage uni s is cheaper han hecos o improvemen s o exis ing ransmission. In loca ions where inves men s oimprove dis ribu ion services incorpora e energy s orage a lower- han-expec edcos s, he savings could be mone ized and re urned o consumers or inves ors oincen ivize such inves men s.

Similarly, elec ric u ili y Consolida ed Edison, or Con Ed, in New York Ci y hasurned o batery s orage and demand-side managemen programs o de er he

cos o building a $1 billion subs a ion. Con Ed plans o inves $500 million inprograms o limi elec rici y demand and equipmen upgrades, including batery

sys ems, o increase grid exibili y and improve peak-demand response. Baterys orage is no subjec o many o he si ing res ric ions associa ed wi h he con-s ruc ion loca ion o o her elec ric in ras ruc ure, giving u ili ies he exibili y

o de ermine placemen . Batery s orage sys ems can also be mobile o mee heevolving peak requiremen s o an elec ric grid.33


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When the Environmental Protection Agency, or EPA, released its nalrules for the Clean Power Plan in August, energy storage was not onthe agency’s list of Best System of Emission Reduction, or BSER, toolsfor reducing power plant emissions—a list that included solar, wind,and natural gas. The EPA highlighted the potential for energy storageto assist with the integration of renewable energy to mitigate emis-sions and increase the efficiency of the electric grid, but the agencydetermined that energy storage would provide only indirect reduc-tions in power plant emissions.34

However, that does not mean that states are not able to call uponenergy storage technologies as a tool to reach their Clean Power Planpollution reduction targets. As the costs of energy storage continue

to fall, these systems can help meet emissions targets by eliminatingthe need for fossil fuel generators to respond to peak demand and byaligning renewable energy generation with demand.

In addition to limiting the fossil fuel emissions associated with peakdemand, fast-response energy storage systems, such as battery stor-age, can improve the efficiency of coal-red power plants and otherfossil fuel generators by reducing the need for ramping and loadfollowing.35 The National Energy Technology Laboratory—an energy

research laboratory operated by the DOE—found that the averaefficiency of U.S. coal plants was 32 percent.36 Moreover, accordto the Congressional Research Service, “Improving the efficienexisting coal plants could potentially result in signicant reducof CO2 emissions per unit of electricity produced.”

37 One approaincreasing efficiency, particularly in states with signicant percages of coal-based electricity, is to use fast-response energy stoto reduce or eliminate the need for ramping, which can inhibit pplant efficiency and cause damage to system components. 38

Energy storage would yield efficiency improvements by reduthe ramping power plants must perform to maintain grid stabiity as demand shifts. Brief uctuations, for instance, could be

by dispatching energy storage instead of ramping, thus allowielectric generators to run at consistent outputs. 39 Battery manfacturer Alevro estimates that incorporating its batteries into plant operations could increase output by 15 percent, 40 improefficiency by 11 percent, and reduce greenhouse gas emissionup to 7 percent. 41 Regulators and utilities could incorporate estorage into state approaches to increase electricity generationtransmission efficiency by reducing peak-demand levels and ramping of fossil fuel plants.

Energy storage and the Clean Power Plan


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Recent cost and usage trends

o da e, he cos or mos energy s orage sys ems has s ill been oo high o be widely compe i ive wi h conven ional elec rici y genera ion and ransmis-sion asse s. Mos li hium-ion batery sys ems cos be ween $350 and $750 perkWh.42 o allevia e his price hurdle, batery s orage sys ems have ofen beendeployed wi h he suppor o public unding or as pilo projec s o ga her da a

or u ure usage. In Glacier, Washing on, Puge Sound Energy deployed a 2-MWli hium-ion batery sys em o provide up o 18 hours o backup power dur-

ing grid ou ages a a cos o $9.6 million. Puge Sound Energy received a $3.8million gran rom he s a e o Washing on or he sys em.43 Similarly, DukeEnergy ma ched a $22 million gran rom he DOE o nance 36 MW o baterys orage or he company’s 153-MW No rees wind arm in exas o offse vari-able genera ion o he arm and o arbi rage power produc ion in response odemand uc ua ions.44 Fur hermore, low na ural gas prices in recen years havesuppressed he cos s o using na ural gas genera ors o provide ancillary servicesand mee peak demand, undermining he cos compe i iveness o energy s or-age in some marke s.45

However, as demand or energy s orage grows, cos s are expec ed o signican lydecrease, par icularly or as -response sys ems such as bateries. Al hough price

rends or differen energy s orage echnologies vary considerably, he allingcos s o batery s orage uni s offer one me ric o rack cos s in he energy s or-age indus ry. Te per-year cos o he li hium-ion cells used in elec ric vehicleshave decreased roughly 8 percen rom 2007 o 2014, and he cos is expec ed ocon inue o decline s eadily.46 A recen Bratle Group s udy predic ed ha ypicals orage cos s will drop more han 50 percen rom 2014 o 2020.47 Recen declinesin batery cos s have been compared o he rapid grow h o he pho ovol aic solar

indus ry, a sec or ha has experienced massive cos drops in recen years.48


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Falling cos s are already reducing he payback period or energy s orage projec sand helping hese projec s compe e in cer ain par s o he coun ry. Te S&CElec ric Company, which provides he energy s orage services ha bid in o hePJM ancillary services marke , could see he inves men in i s 1-MW sys em paid back in as litle as our o ve years.49 Similarly, batery s orage provider S em Inc.,

which con rac s wi h Cali ornia u ili ies o provide demand-response services,projec s a payback period o less han hree years or i s batery sys ems.50

Tese alling cos s or as -response energy s orage are already leading o increasedusage around he coun ry. Excluding pumped hydroelec ric projec s, he numbero energy s orage projec s commissioned in he Uni ed S a es has increased more

han 600 percen in he pas ve years, primarily hrough increasing use o baterys orage.51 Mos recen ly, he second quar er o 2015 saw a 900 percen grow h incapaci y deploymen across he Uni ed S a es. Te majori y o his grow h came

rom he new s orage capaci y added o he PJM In erconnec ion grid, which has

added 100 MW o s orage capaci y since he s ar o 2013.52 Tis grow h con in-ued in he hird quar er o 2015, wi h 60.3 MW o new s orage capaci y added.53 Marke analysis rm G M Research es ima es ha he energy s orage marke willreach an annual capaci y deploymen o 858 MW by 2019 our imes more han

he o al expec ed o be deployed in 2015.54

While he number o energy s orage projec s across he coun ry is increasinghere are curren ly 325 projec s in he Uni ed S a es energy s orage develop-

men is grea ly ou pacing o her areas in a ew s a es.55 For ins ance, Cali orniahas ins alled almos hal o he o al number o nonhydroelec ric s orage proj-ec s racked by he DOE. O her s a e leaders include exas, New York, Hawaii,Pennsylvania, and Illinois.56 Tese projec s are concen ra ed in he Cali orniaIndependen Service Opera or, or CAISO, and PJM elec ric grids. CAISO cur-ren ly hos s 111 projec s ha are opera ing or under cons ruc ion o aling 215.4MW, while PJM hos s 45 projec s o aling 190.3 MW.


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Compared wi h he recen spike in batery s orage, bulk s orage sys ems, such aspumped hydroelec ric s orage, have experienced more gradual grow h hrough-ou he pas cen ury. However, hese sys ems con ribu e signican capaci y o

he U.S. elec ric grid. In he pas cen ury, 41 PHS acili ies have been buil in heUni ed S a es or a o al o 22.37 GW, and 36 o hese acili ies are s ill opera-

ional oday.57

Recen addi ions o he bulk s orage space have come rom hermals orage projec s, primarily smaller 1-MW o 2-MW projec s, bu also he 72-MWNevada Solar One power plan , he 90-MW AS exas Coopera ive, and he280-MW Solana solar genera ing plan .58 Tese bulk s orage acili ies and smallerenergy s orage sys ems provide he Uni ed S a es wi h 24.6 GW o capaci y,enough o s ore 2.3 percen o U.S. elec ric genera ion.59

FIGURE 1

Energy storage projects in the United States

Storage installations by state through 2015

■■■■■■

01–56–1011–1516–2021+

Source: U.S. Department of Energy, “DOE Global Energy Storage Database: Projects,” available at http://www.energystorageexchange.org/projects (last accessed November 2015).

California

Texas

Pennsylvania

Hawaii

New York

Colorado

Illinois

Minnesota

Arizona

North Carolina

Michigan

Massachusetts

Electrochemical Pumped hydroelectricElectromechanical and thermal

Project totals by state

California:

124total projects

20

15

15

12

11

10

9

8

7

7

6


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Deployment barriers

In spi e o hese recen gains, energy s orage s ill aces signican hurdles.Many sys ems are no ye cos compe i ive wi h conven ional echnologies.Cheap na ural gas suppresses he marke or peak-load shaving and ancillary

services.60

S a es lack he regula ory s ruc ures necessary o acili a e energys orage deploymen or reward u ili ies or heir inves men s in s orage projec s.Fur hermore, he value o s orage ofen serves many par ies, whe her or no heyall con ribu e o an inves men . Tis inabili y o spread he cos o inves menamong all beneciaries is ano her hurdle o overcome.

Market valuation

Te diverse value po en ial o s orage sys ems can impede companies rom

collec ing he ull bene s offered by an energy s orage projec . For example,a ransmission and dis ribu ion u ili y ha ins alls an energy s orage sys emins ead o cons ruc ing new, expensive wires o improve elec rici y dis ribu ioncan accrue savings rom he cheaper op ion bu no necessarily earn addi ionalpro rom he ancillary services or peak shaving heir sys em could offer hegrid.61 Tis ragmen a ion o incen ives can resul in underinves men in energys orage and affec s almos any energy s orage use case, no jus ransmission anddis ribu ion de erral.62

Energy s orage may also be undervalued due o a lack o indus ry amiliari y wi hnew energy s orage echnologies or applica ions. While a recen Black & Vea chsurvey o u ili ies ound ha almos wo- hirds o responden s el energy s or-age would be impor an or he in egra ion o variable energy resources and 70percen said one o he mos valuable unc ions o energy s orage is mee ingpeak-capaci y requiremen s, 54 percen o responden s s a ed ha hey were noinvolved in energy s orage programs or were unaware o heir involvemen .63

Some hesi a ion is unders andable. For ins ance, in 2014, a $2 million solar-rming lead-acid batery sys em designed o smoo h uc ua ions in solar ou pu

due o shifing wea her paterns on he island o Kauai in Hawaii was almoscomple ely useless afer jus wo years o usage, even hough i was expec ed olas eigh years. Repea ed deep cycling o he sys em’s bateries had degraded hem

as er han expec ed, and he company ha sold hem la er declared bankrup cy.64


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Newer echnologies such as li hium-ion, mol en sal , and ow bateries are muchless suscep ible o hese ypes o problems, bu vas differences be ween s orage

echnologies can make research and procuremen a daun ing ask or companiesor heir inves ors. While he energy s orage indus ry is gaining experience, manyu ili ies and developers pre er o wa ch rom he sidelines.

Regulatory restrictions

In addi ion o marke hurdles and compe i ion wi h conven ional energy sources,energy s orage projec s ace regula ory limi a ions o deploymen . Te novelna ure o as -response energy s orage means ha many s a es do no have a regu-la ory environmen ha has sufficien ly adap ed o suppor in egra ion o energys orage in o exis ing u ili y marke s. Fur hermore, he mul iple roles energy s or-age can play in elec rici y marke s make hem more difficul o regula e.65 Effor s

o pro rom he mul iple services ha energy s orage sys ems can provide have been s ymied in s a es ha are insufficien ly prepared o regula e he versa ilecharac eris ics o energy s orage sys ems.

In ISO independen service opera or and R O regional ransmission opera-or regions, many s a es lack sufficien clari y on wha services energy s orage

can provide o differen elec rici y marke s because hey have regula ions designedo limi simul aneous par icipa ion in wholesale elec rici y genera ion marke s

while providing elec rici y dis ribu ion services. Tis divide preven s u ili ies romusing elec rici y ra es o recover cos s o inves men in an energy s orage sys em

or ransmission services while also genera ing revenue by bidding he sys emcapaci y in o ancillary services marke s or by selling elec rici y back o he grid a

imes o peak demand. Such an arrangemen would likely require approval rom bo h he Federal Energy Regula ory Commission, or FERC, and s a e regula ors, which drives projec uncer ain y and signican ly hinders inves men .66

Tese regula ory barriers are par icularly acu e in exas, where laws or hes a e’s elec rici y grid, which is ou side o FERC jurisdic ion, are designed olimi monopoly ownership o elec rici y asse s. In exas, elec ric genera ors

are prohibi ed rom owning ransmission and dis ribu ion asse s, while elec ricransmission u ili ies are barred rom owning elec rici y-producing sys ems.

Tis res ric ion has preven ed Oncor, a exas ransmission and dis ribu ionu ili y, rom reaping he ull value o wo batery s orage sys ems he u ili y


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deployed o enhance grid reliabili y. Oncor was limi ed o using s orage o sup-por ransmission and dis ribu ion and could no use he bateries o par icipa ein compe i ive power marke s.67 Effor s o re orm marke rules have been me wi h resis ance rom u ili y and indus ry groups, and no legisla ive proposalshave been considered o re orm he curren regula ions.68

Meanwhile, s a es wi h radi ional u ili y regula ory s ruc ures have o es ablishclear valua ion o energy s orage asse s o send s rong marke signals o elec ricu ili ies. In hese s a es, elec ric u ili y inves men decisions are based in par on

he abili y o he u ili y o recover inves men s hrough elec rici y ra es. S a eu ili y regula ors or legisla ors mus offer guidance o u ili ies on he value oenergy s orage o provide ancillary services, improve reliabili y, and offse inves -men s in ransmission, dis ribu ion or peak genera ion elsewhere. Addi ionally,regula ors need o consider how hese inves men s migh bene ra epayers a heexpense o radi ional sources o revenue or u ili ies, similar o energy efficiency

inves men s. Fur hermore, he ver ically in egra ed s ruc ure o hese u ili ieslimi s he oppor uni ies or hird-par y developers o marke energy s orageservices. In hese s a es, regula ors and policymakers may need o re orm he ra e

rea men o energy s orage asse s in order o reduce regula ory barriers.69

Ou side o u ili y inves men s in energy s orage, one signican marke orenergy s orage sys ems is commercial and residen ial consumers. Tese sys-

ems generally known as behind- he-me er, or B M, sys ems are ofensmaller han u ili y-scale projec s and deployed by hird-par y companies or u ili-

ies. Individually, B M sys ems do no necessarily provide he capaci y neededo provide measureable value o an elec ric grid. However, when aggrega ed

wi h many o her sys ems, hey can provide hundreds o housands o kilowatso capaci y. CAISO has developed rules ha allow hird-par y owners o energys orage o bid aggrega e sys ems in o he s a e’s ancillary services marke . OnSep ember 3, 2015, S em Inc. in par nership wi h Pacic Gas and Elec ric, orPG&E, used his model o bid he capaci y o i s aggrega e uni s in o Cali ornia’selec rici y marke and genera e a new source o revenue or i s cus omers.70 However, o her s a es have no ye adop ed similar rules, hindering he oppor u-ni y or owners o B M sys ems o pro hrough he sale o aggrega e capaci y.71

Curren ly, he marke or demand-response echnologies is also acing uncer-ain y while FERC Order 745 is being considered by he U.S. Supreme Cour

in Federal Energy Regulatory Commission v. Electric Power Supply Association.72


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Order 745 requires ISOs and R Os o compensa e companies or demand-sidemanagemen response. I upheld, his rule would require wholesale elec ricmarke opera ors o pay companies or reducing heir elec rici y load duringhigh-demand periods a he expense o wholesale elec ric genera ors.73 Energys orage, which can serve similar unc ions as au oma ed demand response, could

be similarly compensa ed or providing elec rici y o he grid a imes o highdemand. However, i he Supreme Cour over urns Order 745, he Cour couldconclude ha demand response is par o s a e regula ory au hori y or requireFERC o es ablish new rules or demand response, crea ing addi ional uncer-

ain y or energy s orage inves ors.74


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Conclusion and questionsfor further study

Energy s orage is likely o play an increasing role in U.S. elec rici y marke s in hecoming decade. Prices are expec ed o all, and elec ric u ili ies will become more

amiliar wi h s orage sys ems and he bene s hey can offer. I is impor an hapolicymakers, regula ors, and indus ry leaders an icipa e he role energy s orage willplay when planning u ure inves men s in elec rici y genera ion and ransmission.

In order o beter unders and he role energy s orage may play in u ure inves -

men decisions and wha oppor uni ies exis o in egra e energy s orage sys emsin o he U.S. elec rici y marke s, u ili ies, regula ors, and policymakers shouldconsider he ollowing ques ions:

• Maximizing value streams: How can energy s orage provide mul iple servicessimul aneously? How can owners be compensa ed ully or hem?

• Asset ownership: Who should own energy s orage sys ems u ili ies, hird par-ies, or individuals? How can s a es ensure ha exis ing or u ure regula ions do

no res ric inves men by in eres ed par ies?

• Investment planning: How can s a es and u ili ies bes plan or a u ure o low-cos energy s orage? How should regula ed u ili ies incorpora e energy s oragein o in egra ed resource plans?

• Encouraging deployment: Wha policies can suppor developmen o hemarke or energy s orage and sys em price reduc ions? Wha s a e policies areshowing he mos success?

• Energy storage and the Clean Power Plan: How can energy s orage sys emsassis s a e energy efficiency and help s a es and u ili ies comply wi h CleanPower Plan arge s?


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As he Uni ed S a es reshapes i s 21s -cen ury elec ric grid, i is impor an noo le 20 h-cen ury hinking drive new inves men s. U ili ies ha his oricallyocused on u ilizing large-scale baseload power genera ors should now shifheir ocus o exible grid solu ions ha use resources more efficien ly o mee

peak elec ric demand. Many s a es and u ili ies are working o reduce peak elec-

rici y needs hrough demand-response programs, and new energy s orage ech-nologies will bols er hese effor s. Wi h he projec ed cos declines expec ed orenergy s orage in he coming years, i is impera ive ha policymakers and hepriva e sec or consider he roles hey can play in offseting cos ly inves men sin conven ional genera ion, ransmission, and dis ribu ion. Energy s orageinves men s will increase grid exibili y and resilience, while helping u ili iesde er inves men in new genera ion and ransmission o mee peak demands. Asenergy s orage cos s all, policymakers should ake s eps o ensure hese ech-nologies play an in egral role in offering exible u ili y solu ions ha maximizereliabili y while limi ing long- erm elec rici y cos s.


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Appendix: State-specificapproaches to energy storage

California: Storage procurement mandate

In 2010, he Cali ornia Legisla ure passed A.B. 2514, which direc ed heCali ornia Public U ili ies Commission, or CPUC, o de ermine a process orincorpora ing u ili y-scale elec rici y s orage in o he s a e’s elec ric grid. On June 10, 2013, CPUC announced manda ory procuremen requiremen s or hes a e’s hree inves or-owned u ili ies, or IOUs.75 Te IOUs mus mee increasing

procuremen benchmarks every wo years, o aling 1,325 MW by 2020. Sou hernCali ornia Edison, or SCE, and Pacic Gas and Elec ric, or PG&E, each musprocure 580 MW, while San Diego Gas and Elec ric, or SDG&E, mus procure165 MW.76 Tese procuremen s will provide u ili y s orage capaci y equivalen o1 percen o Cali ornia’s peak elec rici y usage in 2020.77

Te manda e does no prescribe specic echnologies or uses or energy s oragesys ems. As a resul , u ili ies can procure s orage sys ems wi h a varie y o unc ions

ha serve he grid opera ed by he Cali ornia Independen Sys em Opera or, orCAISO. Tese unc ions include ancillary services; balancing elec rici y demand;elec rici y price arbi rage; ransmission and dis ribu ion services, including peak-capaci y suppor and conges ion relie ; and cus omer services, including power-ou age mi iga ion and energy cos managemen . CAISO requires ha sys ems offergrid op imiza ion services or “greenhouse gas emissions-reducing atribu es.”78

SCE has led Cali ornia’s IOUs in s orage inves men s. Te u ili y, which ini iallysough o procure 50 MW o s orage in 2014, ul ima ely secured 264 MW hrougha combina ion o batery s orage and hermal s orage. Te 264 MW will help SCEreplace elec ric capaci y los o he closure o he San Ono re Nuclear Genera ing

S a ion.79

Te s orage procuremen s included 100 MW o batery s orage builin o exis ing power genera ion si es; 135 MW o behind- he-me er batery s orageused by commercial and indus rial cus omers rom wo providers; and 25.6 MWo behind- he-me er hermal energy s orage hrough cooling uni s linked o com-mercial building air condi ioning uni s, which can reduce day ime energy needs.80


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Oncor canno sell batery s orage services o elec ric genera ion marke s. Oncorproposed he op ion o “own and opera e he bateries” bu auc ion off excess s or-age capaci y o hird par ies, which could hen bid he capaci y in he genera ionmarke .113 However, under exas’ curren u ili y regula ory s ruc ure, Oncor mays ill no be able o own and opera e he bateries i sel .

In spi e o hese hurdles, Oncor has deployed 225 kW o li hium-ion bateries114 or microgrid sys ems a i s service acili ies o enhance reliabili y, spinning reserve

capaci y, and onsi e renewable genera ion shifing.115 In he rs six mon hs sincehe sys ems were commissioned, he bateries have repor edly saved Oncor morehan 900 minu es o ou ages.116

In addi ion o he wo sys ems owned by Oncor, exas has 18 energy s orage sys-ems deployed, or a o al o 160 MW o energy s orage capaci y, and more energy

providers are seeking s orage oppor uni ies as well.117 Duke Energy and OCI Solar

Power have bo h procured batery s orage sys ems o beter in egra e heir solarand wind genera ion wi h he elec ric grid and o s agger he delivery o renewableelec rici y in order o increase i s value.118 Aus in Energy is similarly consideringprocuremen o a 1.6-MW batery s orage sys em o augmen a 2.5-MW commu-ni y solar plan he u ili y is cons ruc ing. Te batery sys em will likely supporu ili y effor s o mee peak capaci y during unusually high-demand periods.119

Al hough energy s orage is gaining ground in exas, i s ill aces persis en bar-riers. Te exas elec rici y marke he Elec ric Reliabili y Council o exas, orERCO does no have a clear value or capaci y, in con ras wi h CAISO orPJM. ERCO also lacks demand-response incen ives ha would compensa eu ili ies or a reduc ion in elec rici y delivered due o improvemen s in efficiency,despi e he savings energy s orage could yield. Tere is unlikely o be broad sup-por or he removal o hese sys emic barriers. A repor by he Bratle Group

ound ha exas elec ric genera ors are likely o oppose perceived compe i ionrom ransmission and dis ribu ion u ili ies in he ge nera ion marke and would

resis legisla ive changes o he curren regula ory compac .120


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About the author

Ben Bovarnick is a Research Assis an wi h he Energy Policy eam a he Cen eror American Progress, where he works on domes ic clean energy deploymen and

in erna ional clima e policy. He holds a bachelor’s degree in chemis ry and poli i-

cal science rom he Universi y o Roches er, where he ocused on he in ersec iono he wo elds.

Acknowledgements

Special hanks o Greg Do son, Vice Presiden or Energy Policy a he Cen er; AlisonCassady, Direc or o Domes ic Energy Policy a he Cen er; and Myriam Alexander-Kearns, Research Associa e a he Cen er, or heir con ribu ions and inpu .

Tanks also o Billy DeMaio and Yangshengjing (Ub) Qiu, ormer in erns wi hhe Cen er, or heir research suppor on his repor .


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Endnotes

1 Mark Chediak, “Energy Storage Surging as More U.S.States Look to Batteries,” Bloomberg, September 2,2015, available at http://www.bloomberg.com/news/articles/2015-09-02/energy-storage-surging-as-more-u-s-states-look-to-batteries.

2 Diane Cardwell, “Energy Storage Industry GainingMomentum,” The New York Times, October 25, 2015,available at http://www.nytimes.com/2015/10/26/busi-ness/energy-environment/energy-storage-industry-gaining-momentum.html.

3 Davide Savenije, “All you need to know about Tesla’sbig battery announcement,” Utility Dive, May 1,2015, available at http://www.utilitydive.com/news/all-you-need-to-know-about-teslas-big-battery-announcement/393175/. Note that this price doesnot include inverter or installation costs, which areexpected to raise the price slightly. See also ZacharyShahan, “Tesla Powerwall Price vs Battery StorageCompetitor Prices (Residential & Utility-Scale),” Clean- Technica, May 7, 2015, available at http://cleantechnica.com/2015/05/07/tesla-powerwall-price-vs-battery-storage-competitor-prices-residential-utility-scale/ .

4 Robert Walton, “Report: Storage boom to rival solar asbattery prices drop 40-60% by 2020,” Utility Dive, Au-gust 4, 2015, available at http://www.utilitydive.com/news/report-storage-boom-to-rival-solar-as-battery-prices-drop-40-60-by-2020/403411/.

5 Katherine Tweed, “SCE, PG&E Issue First Energy StorageRequests to Comply With AB 2514,” Greentech Media,December 3, 2014, available at http://www.greentech-media.com/articles/read/sce-pge-issue-rst-energy-storage-requests-to-meet-ab-2514 .

6 David Roberts, “New York’s revolutionary plan to re-make its power utilities,” Vox, October 5, 2015 , availableat http://www.vox.com/2015/10/5/9453131/new-york-utilities-rev.

7 Geof Koss, “Bipartisan Duo to Launch House BatteryStorage Caucus,” E&E News, October 26, 2015, availableat http://www.eenews.net/eedaily/2015/10/26/sto-ries/1060026887.

8 Battery University,” Lead-based Batteries Information,”available at http://batteryuniversity.com/learn/article/lead_based_batteries (last accessed November 2015).

9 Energy storage from electrochemical, electromechani-cal, and thermal storage projects grew from 70 MW to900 MW between 2000 and 2015. U.S. Department ofEnergy, “DOE Global Energy Storage Database,” avail-able at http://www.energystorageexchange.org/ (lastaccessed November 2015).

10 Installed capacity since the rst quarter of 2013:156.6 MW total; 132.6 MW in utility capacity; 13 MWin nonresidential capacity; and 1.8 MW in residentialcapacity. See GTM Research, “U.S. Energy StorageMonitor Q2 2015: Executive Summary” (2015), availableat http://energystorage.org/system/les/attachments/

us-energy-storage-monitor-q2-2015-es-nal.pdf .

11 Union of Concerned Scientists, “How is Electricity Mea-sured?”, available at http://www.ucsusa.org/clean_en-ergy/our-energy-choices/how-is-electricity-measured.html#.VlYl73arS70 (last accessed November 2015).

12 A stable electric grid can be thought of as a car drivingon a hilly road that must maintain a constant speedof 60 miles per hour. As the car begins to go up a hill,more power is needed to keep the car going at thesame speed. In the United States, this “speed” is the60-hertz frequency of the electric grid.

13 Melissa Lott, “Technology Roadmap” (Paris: Interna-tional Energy Agency, 2014), available at http://www.iea.org/publications/freepublications/publication/ TechnologyRoadmapEnergystorage.pdf.

14 Herman K. Trabish, “Beyond batteries: The diverse tech-nologies vying for the bulk storage market,” Utility Dive,September 14, 2015, available at http://www.utilitydive.com/news/beyond-batteries-the-diverse-technologies-vying-for-the-bulk-storage-marke/405189/ .

15 Ivan Penn, “How Edison uses water to store excesspower,” Los Angeles Times, August 22, 2015, availableat http://www.latimes.com/business/la--big-creek-20150823-story.html .

16 Garrett Fitzgerald and others, “The Economics ofBattery Energy Storage” (Boulder, CO: Rocky MountainInstitute, 2015), available at http://www.rmi.org/Con-tent/Files/RMI-TheEconomicsOfBatteryEnergyStorage-FullReport-FINAL.pdf .

17 Chet Lyons, “Guide to Procurement of Flexible PeakingCapacity: Energy Storage or Combustion Turbines?”(Boston: Energy Strategies Group, 2014), available athttp://www.energystrategiesgroup.com/wp-content/uploads/2014/10/Guide-to-Procurement-of-New-Peaking-Capacity-Energy-Storage-or-Combustion- Turbines_Chet-Lyons_Energy-Strategies-Group.pdf .

18 Lazard, “Lazard’s Levelized Cost of Energy Analysis—Version 9.0” (2015), available at https://www.lazard.com/media/2390/lazards-levelized-cost-of-energy-analysis-90.pdf.

19 Lazard, “Lazard’s Levelized Cost of Storage Analysis—Version 1.0” (2015), available at https://www.lazard.com/media/2391/lazards-levelized-cost-of-storage-analysis-10.pdf.

20 Eric Wesoff, “NextEra on Storage: ‘Post 2020, There MayNever be Another Peaker Built in the US,’” GreentechMedia, September 30, 2015, available at http://www.greentechmedia.com/articles/read/NextEra-on-Stor-age-Post-2020-There-May-Never-be-Another-Peaker-Built-in-t.

21 Swami Venkataraman and others, “US Regulated andUnregulated Utilities: Batteries Charge Up For the Elec-tric Grid” (New York: Moody’s Investors Service, 2015),available at https://s3.amazonaws.com/solar-media/assets/presentations/SFIUSA2015/Batteries+Charge+Up+for+the+Electric+Grid.pdf .

22 Katie Fehrenbacher, “This Will be a Breakout Year forBatteries,” Fortune , September 3, 2015, available athttp://fortune.com/2015/09/03/battery-record-tesla-storage/ .

23 Roberts, “New York’s revolutionary plan to remake itspower utilities.”

24 Herman K. Trabish, “Big storage procurements leavemore questions than answers,” Utility Dive, November

13, 2014, available at http://www.utilitydive.com/news/big-storage-procurements-leave-more-questions-than-answers/333031/ .

25 Abbas A. Akhil and others, “DOE/EPRI 2013 ElectricityStorage Handbook in Collaboration with NRECA”(Albuquerque, NM: Sandia National Laboratories, 2013),available at http://www.sandia.gov/ess/publications/SAND2013-5131.pdf .

26 Fitzgerald and others, “The Economics of BatteryEnergy Storage.”

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ity.com/learn/article/lead_based_batterieshttp://batteryuniversity.com/learn/article/lead_based_batterieshttp://www.eenews.net/eedaily/2015/10/26/stories/1060026887http://www.eenews.net/eedaily/2015/10/26/stories/1060026887http://www.vox.com/2015/10/5/9453131/new-york-utilities-revhttp://www.vox.com/2015/10/5/9453131/new-york-utilities-revhttp://www.greentechmedia.com/articles/read/sce-pge-issue-first-energy-storage-requests-to-meet-ab-2514http://www.greentechmedia.com/articles/read/sce-pge-issue-first-energy-storage-requests-to-meet-ab-2514http://www.greentechmedia.com/articles/read/sce-pge-issue-first-energy-storage-requests-to-meet-ab-2514http://www.utilitydive.com/news/report-storage-boom-to-rival-solar-as-battery-prices-drop-40-60-by-2020/403411/http://www.utilitydive.com/news/report-storage-boom-to-rival-solar-as-battery-prices-drop-40-60-by-2020/403411/http://www.utilitydive.com/news/report-storage-boom-to-rival-solar-as-battery-prices-drop-40-60-by-2020/403411/http://cleantechnica.com/2015/05/07/tesla-powerwall-price-vs-battery-storage-competitor-prices-residential-utility-scale/http://cleantechnica.com/2015/05/07/tesla-powerwall-price-vs-battery-storage-competitor-prices-residential-utility-scale/http://cleantechnica.com/2015/05/07/tesla-powerwall-price-vs-battery-storage-competitor-prices-residential-utility-scale/http://www.utilitydive.com/news/all-you-need-to-know-about-teslas-big-battery-announcement/393175/http://www.utilitydive.com/news/all-you-need-to-know-about-teslas-big-battery-announcement/393175/http://www.utilitydive.com/news/all-you-need-to-know-about-teslas-big-battery-announcement/393175/http://www.nytimes.com/2015/10/26/business/energy-environment/energy-storage-industry-gaining-momentum.htmlhttp://www.nytimes.com/2015/10/26/business/energy-environment/energy-storage-industry-gaining-momentum.htmlhttp://www.nytimes.com/2015/10/26/business/energy-environment/energy-storage-industry-gaining-momentum.htmlhttp://www.bloomberg.com/news/articles/2015-09-02/energy-storage-surging-as-more-u-s-states-look-to-batterieshttp://www.bloomberg.com/news/articles/2015-09-02/energy-storage-surging-as-more-u-s-states-look-to-batterieshttp://www.bloomberg.com/news/articles/2015-09-02/energy-storage-surging-as-more-u-s-states-look-to-batteries


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27 Brendan J. Kirby, “Frequency Regulation Basics and Trends” (Oak Ridge, TN: Oak Ridge National Laboratory,2004), available at http://ferc.gov/EventCalendar/Files/20100526085937-Kirby,%20Frequency%20Regu-lation%20Basics%20and%20Trends.pdf.

28 PJM, “Ancillary Services Fact Sheet” (2015), available athttp://learn.pjm.com/Media/about-pjm/newsroom/fact-sheets/ancillary-services-fact-sheet.pdf.

29 Business Wire, “Stem launches real-time energy sales inCalifornia ISO energy market,” Press release, September3, 2015, available at http://www.businesswire.com/news/home/20150903006196/en/Stem-launches-real-time-energy-sales-California-ISO#.VgBLwt9VhBe.

30 S&C Electric Company, “America’s First Battery-BasedEnergy Storage System for Islanding Applications”(2011), available at http://www.sandc.com/edocs_pdfs/EDOC_070188.pdf .

31 Troy Miller, “Three Ways Utilities are Using EnergyStorage for T&D Deferral,” GridTalk, September 25,2014, available at http://www.sandc.com/blogs/index.php/2014/09/three-ways-utilities-are-using-energy-storage-for-td-deferral/.

32 This value is based on the average annual transmissionand distribution costs per k ilowatt of the Texas summerpeak load.

33 Jim Eyer, “Electric Utility Transmission and DistributionUpgrade Deferral Benets from Modular ElectricityStorage” (Albuquerque NM: Sandia National Laborato-ries, 2009), available at http://prod.sandia.gov/techlib/access-control.cgi/2009/094070.pdf.

34 Seth Mullendore, “Energy Storage and the Clean PowerPlan,” RenewableEnergyWorld.com, August 14, 2015,available at http://blog.renewableenergyworld.com/ugc/blogs/2015/08/energy_storage_andt.html.

35 Richard J. Campbell, “Increasing the Efficiency of Exist-ing Coal-Fired Power Plants” (Washington: Congressio-nal Research Service, 2013), available at https://www.fas.org/sgp/crs/misc/R43343.pdf .

36 N. Kumar and others, “Power Plant Cycling Costs”(Sunnyvale, CA: National Renewable Energy Laboratory,2012), available at http://www.nrel.gov/docs/fy12o-

sti/55433.pdf .

37 Campbell, “Increasing the Efficiency of Existing Coal-Fired Power Plants.”

38 Kumar and others, “Power Plant Cycling Costs.”

39 Will Nichols, “Alevo exists stealth mode to charge upenergy storage market,” BusinessGreen, October 28,2014, available at http://www.businessgreen.com/bg/feature/2377956/alevo-exits-stealth-mode-to-charge-up-energy-storage-market.

40 Katherine Hamilton, “Energy Storage: State of theIndustry” (Washington: Energy Storage Associa-tion, 2015), available at http://www.eia.gov/confer-ence/2015/pdf/presentations/hamilton.pdf .

41 Suzanne Goldenberg, “Power Storage Group Alevo

Plan US$1 Billion Battery Plant,” Our World, October 30,2014, available at http://ourworld.unu.edu/en/power-storage-group-alevo-plan-us1-billion-battery-plant.

42 Nadya Ivanova, “Lithium-ion costs to fall by up to 50%within ve years,” Energy Storage Update, July 30, 2015,available at http://analysis.energystorageupdate.com/lithium-ion-costs-fall-50-within-ve-years .

43 John Roach, “Will Huge Batteries Save Us FromPower Blackouts?”, National Geographic , April 29,2015, available at http://news.nationalgeographic.com/energy/2015/04/150429-batteries-grid-energy-storage/ .

44 Duke Energy, “Duke Energy Renewables completesNotrees Battery Storage Project in Texas; North Amer-ica’s largest battery storage project at a wind farm,”Press release, January 23, 2013, available at http://www.duke-energy.com/news/releases/2013012301.asp.

45 Eric Hittinger and Roger Lueken, “Is inexpensivenatural gas hindering the grid energy storageindustry?”, Energy Policy 87 (2015): 140–152, availableat http://www.sciencedirect.com/science/article/pii/S0301421515300811 .

46 Bjorn Nykvist and Mans Nilsson, “Rapidly Falling Costsof Battery Packs for Electric Vehicles,”Nature ClimateChange 5 (2015): 329–332, available at http://www.nature.com/nclimate/journal/v5/n4/full/nclimate2564.html?WT.ec_id=NCLIMATE-201504.

47 Judy Chang and others, “The Value of DistributedElectricity Storage in Texas” (Cambridge, MA: TheBrattle Group, 2014), available at http://www.brattle.com/system/news/pdfs/000/000/749/original/The_Value_of_Distributed_Electricity_Storage_in_Texas.pdf?1415631708.

48 Jesse Morris, “Helping Battery Cost Declines KeepGoing and Going…,” Rocky Mountain Institute,August 28, 2014, available at http://blog.rmi.org/blog_2014_08_28_helping_battery_cost_declines_keep_going_and_going.

49 Katherine Tweed, “Battery Storage Payback Takes Only aFew Years in PJM, S&C Finds,” Greentech Media, May 13,2015, available at http://www.greentechmedia.com/articles/read/battery-storage-pays-back-in-less-than-ve-years-sc-nds; Seth Mullendore, “Energy Storageand Electricity Markets” (Montpelier VT: Clean EnergyGroup, 2015), available at http://www.cleanegroup.org/assets/2015/Energy-Storage-And-Electricity-Markets.pdf.

50 Peter Kelly-Detwiler, “Stem Well Positioned in On-SiteEnergy Storage Market,” Forbes, January 29, 2015,available at http://www.forbes.com/sites/peterdetwil-

er/2015/01/29/stem-well-positioned-in-on-site-energy-storage-market/ .

51 U.S. Department of Energy, “DOE Global Energy StorageDatabase.” In the past 10 years, 356 battery and thermalstorage projects totaling 1.16 GW were operationalor under construction in the United States, more thantriple the 109 projects that were operational or underconstruction in the preceding 10 years and more than10 times the available capacity from those projects.

52 Herman K. Trabish, “What’s behind the 900% growthin energy storage in Q2 2015,” Utility Dive, September8, 2015, available at http://www.utilitydive.com/news/whats-behind-the-900-growth-in-energy-storage-in-q2-2015/405186/ .

53 GTM Research, “U.S. Energy Storage Monitor Q3 2015:Executive Summary” (2015), available at http://www.

greentechmedia.com/research/subscription/u.s.-ener-gy-storage-monitor .

54 GTM Research, “U.S. Energy Storage Monitor Q2 2015.”

55 U.S. Department of Energy, “DOE Global Energy StorageDatabase.”

56 Ibid.

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