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Is Over-Regulation Holding Back Energy Storage?
Energy storage, a potential solution for integrating intermittent renewables and improving grid stability, again saw rapid growth this past year. A “transition year” for U.S. energy storage, 2016 saw a more diverse market emerge “both in terms of the types of systems (market segments) deployed and the business models.” These trends are expected to continue in the U.S. with combined residential, commercial, and industrial energy storage deployments predicted to surpass 2 GW by 2021.
Despite this rapid growth, there are those who claim that the adoption of energy storage has been slowed by a “web” of regulations at all levels. Some argue that regulations, which can vary from state to state, are in need of modernization in order to facilitate easier integration of energy storage into our nation’s infrastructure. While not necessarily advocating national uniformity for these regulations, energy storage developers hope to avoid a framework as disjointed as that of solar, where they must “navigate 50 different markets with 50 different sets of regulations.”
Recently, the Federal Energy Regulatory Commission (FERC) released a policy statement addressing cost recovery for energy storage, stating these facilities are permitted to earn both cost- and market-based revenue streams in light of the multiple services they provide. This decision serves as an example of the type of modernization that energy storage proponents hope for and serves to ease barriers to grid integration. While there is not necessarily opposition to expanding the nation’s energy storage capacity, there will likely be challenges and objections to specific rules in the future. FERC’s recent statement, for example, was met by some with concerns over equity, possible over-recovery at the expense of the rate payer, and negative impacts on competition within the industry.
1. To what extent are regulations preventing the advancement of grid scale energy storage?
2. What issues with energy storage deserve highest priority for modernization?
3. Should federal and state policy be doing more to encourage energy storage technology?
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