ScottMadden says energy storage on the rise in California, elsewhere

California policy is advancing the commercialization of energy storage technology, ScottMadden Management Consultants said in a recent industry update.

The recently-published ScottMadden document is 33 pages and is subtitled “Changes: Turn and Face the Strange.”

In the six-month report, the consulting firm updates everything from mergers and acquisitions affecting U.S. utilities to the changing landscape of domestic electric generation and transmission to Germany’s embrace of renewable energy.

On the domestic front, ScottMadden said that both installation energy storage projects by power companies and consumer purchases of electric vehicles (EV) are on the rise.

In October 2013, the California Public Utilities Commission (CPUC) ordered state investor-owned utilities to procure 1,325 MW of storage capacity by 2020,

The CPUC decision mandates specific, biennial storage procurement targets beginning in 2014 and increasing over time. Energy storage systems can be deployed in three “grid domains”—transmission interconnected, distribution interconnected, and behind the meter, the consulting firm notes in its report.

For example last September Edison International (NYSE:EIX) subsidiary Southern California Edison (SCE) unveiled the Tehachapi Energy Storage Project, the largest battery energy storage system (BESS) in North America.

The 32-MWh (8 MW x 4 hours) demonstration project uses lithium-ion batteries to evaluate the ability of BESSs to improve grid performance and assist in integrating large-scale variable renewable energy resources like wind and solar power.

Texas is also venturing into battery storage. The Lone Star state is home to the largest battery storage power plant in the United States, the 36-MW battery at Notrees Windpower.

In addition the companies Apex and Chamisa are planning 904 MW of compressed air energy storage (CAES) in Texas.

In July 2014, Beacon Power brought online 20 MW of fast-response flywheel energy storage in PJM’s footprint. AES has had a 32-MW battery storage facility in West Virginia since 2011, related to a 98-MW wind facility.

Storage opportunities are more attractive in the wake of FERC Order 755 (2011), which mandated higher rates for fast-responding frequency regulation sources.

Utah, which has a major role in a mammoth compressed air project, is currently listed as the top state for planned and operating energy storage followed by Texas and California. (That’s not including hydroelectric pumped storage projects).

Electric car sales growing, albeit slowly

The ScottMadden report says that EV sales continued to increase in 2014 but not as rapidly as in the prior two years.

Nationwide less than one out of every 1,000 registered vehicles is powered by electricity. There a few early-adopting areas, like California, where EVs account for at least three of every 1,000 vehicles.

A number of states with high EV penetration, such as California and Georgia, have attractive state tax incentives to reduce upfront costs of EVs. But it’s unclear how domestic plug-in EV sales will respond to the recent significantly-lower natural gas prices, ScottMadden said.

Many electric utilities are looking at ways to promote transportation electrification – and the resulting extra power sales. This includes finding ways to reduce “range anxiety.”

Some power companies are supporting EV ownership by residents of multi-unit dwellings that don’t have residential charging infrastructure (particularly in metropolitan areas with high concentrations of early adopters and multi-unit developments), the firm said.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.