Energy Storage Teaches Utilities How To Hurry

Accustomed to conservative planning that can stretch across decades, electric utilities are learning to install energy storage in a matter of months—not just to back up coming renewables, but also leaky gas facilities, shuttered nuclear plants, and because it's a good idea anyway.
California utilities are leading the way, prompted by progressive government policies and a few emergencies, like the unexpected shut downs of the San Onofre Nuclear Power Plant and the Aliso Canyon natural-gas storage facility.
"It is incredibly unusual that we are trying to bring on assets anywhere near this rapidly," said Mark Irwin, director of technology development for Southern California Edison, during the opening session of the STUDIO Energy Storage Technical Conference Monday night at San Francisco's Park Central Hotel.
SCE is accustomed to natural-gas projects that take seven to 10 years for planning and permitting, Irwin said. At the end of May, the company launched a rapid deployment, within 6 months, of energy storage to meet demand that normally would be met by power plants fueled by Aliso Canyon gas.
But the energy-storage rush isn't confined to California. AES Corp. recently installed 20 MW of storage capacity in Indiana, in a process that took 12 months—still quick by industry standards.
"California really is the first domino in accepting storage as a solution. The problems that it’s solving exist everywhere," said Praveen Kathpal, AES vice president for energy storage.
"It doesn’t really matter whether we’re talking about three months or 12 months, because it’s extremely fast as far as the utility procurement and planning timelines go. It’s already a paradigm shift, that a lot of the other things we usually do to maintain reliability haven’t or potentially won’t catch up to."
Nonetheless, six to 12 months can seem like a snail's pace to those innovators who are pioneering storage, watching its cost curve drop, and seeing its potential to spread across the grid.
A year ago, Tesla Motors CEO Elon Musk insisted Tesla's utility-scale Powerpack battery doesn't need renewables to sweep across a "staggeringly gigantic" market. By December, Tesla began installing them, but most of the potential remains untapped.
"I think everybody in this room can agree that storage presents tremendous benefits," said Janice Lin, executive director of the California Energy Storage Alliance. "It can be deployed quickly, it’s resilient, it diversifies the mix, it helps size the infrastructure more adequately to demand, it just makes the whole thing more efficient. So we agree that there’s great promise, we know that it works… so how do we make it go faster?"
AES estimates the U.S. will need to add 40 GW of peaker plants in the coming decade—unless it can offset the need by installing storage instead. Peaker plants start up quickly in response to demand, usually run on natural gas, and tend to be costlier and dirtier than conventional plants that operate more routinely.
At the end of each day, Kathpal asks his team, "What did you do today to stop new peaking generation being built?"
Decades of aging infrastructure are waiting for storage to enhance capacity, flexibility and reliability, but in each state utilities and regulators have to determine how to implement it and recover its costs.
"We’re not talking about whether the technology works, because we know that it does," Kathpal said. "We’re not talking about whether it can be integrated reliably, because we know that it can. And to a large degree we’re not really talking about whether it’s cost effective, because we know that it is. We’re talking about the other things that get it in place."
While California is ahead of other states, California regulators still are struggling to figure out the best way to integrate storage, said Ehren Seybert, an advisor to California Public Utility Commissioner Carla Peterman.
Regulators have to develop rules for charging and for station power, ways to aggregate storage "behind the meter" at customer homes and businesses, ways to capture value streams to pay for storage, and ways for storage to participate in the wholesale market.
"There’s an enormous amount of momentum within the market," Seybert said.
"I think everyone agrees that storage is uniquely positioned to meet both the flexible and fast ramping needs and the increasing renewable curtailment that’s anticipated with the 50 percent RPS in California. And increasingly renewables everywhere. But at the same time, we’re still very much evaluating the technical capabilities and specific-use cases that storage can provide."
Watch the opening session of the STUDIO Energy Storage Technical Conference (the proceedings start at 53:00 minutes):