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Storage and Reliability - There's a new prohibition in town

image credit: ID 59799001 © Everett Collection Inc. | Dreamstime

This item is part of the Predictions & Trends - Special Issue - 01/2020, click here for more

With the start of this century’s roaring 20s upon us, there’s a new prohibition in town. This time it extends beyond the borders of the United States, with the global community demanding the transition from carbon-emitting combustible fuels to renewable energy resources. Governments large and small are declaring a climate emergency and investing heavily in both climate change mitigation and adaptation. However, like the prohibition on alcohol in the 1920s, outlawing a resource that is used in abundance has incredible challenges.

Despite the urgency, it’s no longer headline news that nearly 60% of all emissions come from transportation and electricity generation collectively. Policy makers are taking notice, concentrating on regulations and innovation investments in these two sectors. The solution: battery storage.

2020 will be the year of battery storage. Both stationary and mobile batteries will be the major sources of emission reductions in both transportation and electricity generation. Much has been learned since the failed alcohol prohibitions of the 1920s, particularly where carrot-and-stick strategies are concerned. As politicians and industry associations flip-flop on carbon emission limits, taxes and penalizations, government agencies and regulators are putting their best carrots forward by incentivizing the transition to battery storage. Some of the latest evidence of this in North America include:

  • The New Jersey Assembly and Senate on Monday, January 12, approved legislation to advance electric vehicles, setting a target of two million light-duty EVs by 2035 and providing $300 million over 10 years for rebates to consumers who purchase an EV.

  • Hawaii Energy recently launched a new electric vehicle charging station (EVCS) program, awarding $400,000 in rebates for EVCS installation projects completed between January 1, 2020, and June 30, 2021.

  • The Maryland Energy Administration (MEA) launched the Maryland Energy Storage Income Tax Credit Program, providing residential and commercial taxpayers with up to $750,000 in tax credits for energy storage system purchases.

  • In January 2019 the Massachusetts Department of Public Utilities (DPU) approved the inclusion of behind-the-meter battery storage in an energy efficiency plan with a budget amounting to nearly $2 billion over three years.

  • The government of Canada announced $130 million CAD over five years for the deployment of a network of zero-emission vehicle charging stations (level 2 and higher) across Canada  to go along with their consumer and corporate purchases of electric vehicles through the iZEV program managed by Transport Canada.

  • The California Clean Vehicle Rebate Program awarded over $823 million since 2009 in rebates for purchase or lease of a new electric vehicle.

These incentives solidify confidence in storage technology and its potential to support emission reductions. But as seen with other disruptive technologies, large-scale rollout of battery storage comes with its own roster of challenges.

As prices for batteries continue to fall, more and more residential and commercial utility customers are able to afford behind-the-meter units to store their solar PV energy generation. This helps prevent extraneous distributed solar generation from impacting the grid (sayonara duck curve), while allowing rate payers to save on their utility bills by using stored electricity at peak rates. Likewise, vehicle and fleet owners looking to do their part for the environment are replacing their internal combustion engines for a slick new electric vehicle that boasts lower maintenance costs.      

This causes several problems. First, and most obviously, these incentives are only made available to those with the means, ostracizing urban apartment dwellers, small-medium business and corporations with leased office space, transit users and second-hand buyers accessing these incentives. Another inequality is produced when utilities have to increase rates for those not using distributed solar and storage in order to compensate for the projected revenue losses resulting from those that are able to afford these systems.

Another less obvious issue affects utilities directly. With more distributed generation, behind the meter storage and new electric loads, utilities have less visibility into their distribution grids. This could result in inaccurate load forecasting or new unexpected peaks and blackouts.

In 2020, progressive utilities globally are tackling both these issues using innovative business models and software. For example, several community choice aggregators (CCAs) in northern California (including East Bay Community Energy and Marin Clean Energy) are identifying innovative financing schemes, business models and qualifying wholesale market participation initiatives to provide low-income and vulnerable communities with access to stationary energy storage systems as a source of back-up power. By including these communities in the energy transition, these CCAs are able to retain visibility of the new battery fleets while increasing their efficiency through stacked grid services using AI-driven grid balancing software.

Vehicle-to-grid (V2G) technology also provides the potential of more equitable use of mobile batteries in EVs. Nissan has been working with various utilities in Europe, Chile and Canada to implement these systems. With peer-sharing mobility services replacing the ownership model for personal vehicles in large urban centers and the introduction of autonomous ride-hailing services not too far away, there are ample opportunities for EV fleet owners and utilities to work together using V2G to lower traffic congestion, thus significantly reducing noise and air pollution while also providing a clean and reliable mode of transportation and electricity generation.

We can find similar programs around the world, with utilities providing bill savings to individuals and communities that own solar+storage systems, electric vehicles and other distributed energy resources in exchange for the ability to call on these resources to meet energy demand changes. This is particularly valuable in the wake of continual technology disruptions and unpredictable weather events. By aggregating various types of storage (including various makes and models of behind-the-meter battery systems) into a single virtual fleet with the right software, a utility can create a virtual power plant (VPP) and more accurately predict changes in the distribution grid while dispatching the necessary resources at the speed of a conventional power plant. By having the ability to control a fleet of batteries to absorb excess solar during times of high generation, then using those same batteries to provide energy back to the grid during times of peak load, utilities can significantly reduce their costs while ensuring equity, reliability and emission reductions. 

The prohibition of the 2020s is upon us, and thanks to storage, we won’t be experiencing the debilitating withdrawal of letting go of something we’ve always enjoyed. This brave new world of distributed energy brings with it ample opportunity to improve our energy system, strengthen our communities and safeguard the environment in which we live.

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Matt Chester's picture
Matt Chester on Jan 29, 2020 1:54 pm GMT

First, and most obviously, these incentives are only made available to those with the means, ostracizing urban apartment dwellers, small-medium business and corporations with leased office space, transit users and second-hand buyers accessing these incentives.

This was definitely an issue with solar, but it's been getting attention lately as new strategies come about to empower the traditionally disadvantaged communities to reap the benefits of solar. Do you think something similar will come along to aid in the energy storage inequity?

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