US energy storage momentum builds with two significant announcements

Enel Green Power carried off the lion’s share of new storage capacity procured by PG&E. Shown here: Enel Green Power technicians at a wind farm in Minnesota. Pic: Enel.

By Jason Deign

The US energy storage sector looks set to enter 2018 at full throttle following developments in two key markets over the last week.

In California, Pacific Gas and Electric Company (PG&E) presented six energy storage contracts, totalling 165MW, to the regulator for review and approval. New York, meanwhile, signed into law an energy storage mandate.

PG&E’s new storage capacity went to Enel Green Power, which won projects for 50MW, 25MW and 10MW, LS Power, which won 50MW, Tesla, with 20MW, and EDF Renewable Energy, with 10MW.

Although Enel Green Power has not disclosed details, it is likely the company’s projects will use the Distributed Energy Network Optimization System (DEN.OS) platform developed by Demand Energy, which Enel bought in January.

Significantly, all the PG&E projects were for lithium-ion battery plants, further consolidating the chemistry’s position as the utility energy storage technology of choice. And all the contracts, bar two, came with 10-year terms. 

Able to secure a 20-year term

Tesla, though, was able to secure a 20-year term, as was Enel Green Energy on its 25MW Cascade Energy Storage project.

Similarly, all the contracts are for transmission grid-connected plants except for EDF’s Calstor project, which is behind the meter, and Tesla’s system, which will be connected to the distribution network.

The first project, Calstor, is due to come online in November of 2020.

Enel Green Power’s 50MW Kingston and 10MW Sierra Energy Storage projects (the latter being built in association with IHI Power Services) will be the last to enter operation, in December 2023.

PG&E presented the projects for approval by the California Public Utilities Commission as part of moves to meet a state-wide 1.325GW investor-owned utility procurement mandate by 2020. 

PG&E contracts for energy storage

PG&E’s share of the mandated capacity is 580MW. Since 2015 the company, one of the largest combined natural gas and electric utilities in the US, has signed contracts for 79MW of energy storage.

The new projects thus mean PG&E will be expanding its energy storage capacity by more than 200%, to achieve around 42% of its mandated quota.

But Martin Wyspianski, PG&E’s senior director for energy portfolio procurement and policy, hinted that the storage contracts may increasingly be about dealing with California’s duck curve rather than merely meeting a quota.

“As our clean energy portfolio grows, so does the importance of storage technology,” he said in a press statement.

“These contracts and the storage capacity they represent will help us better integrate our growing renewable generation sources, and bring increased reliability to the grid.” 

Adopting an energy storage target

New York State, which is also facing a growing influx of renewables on the grid as a result of its Reforming the Energy Vision initiative, last week became the fourth US state to adopt an energy storage target.

New York governor Andrew Cuomo signed into law the state’s Assembly Bill A6571, which establishes a deployment programme “to encourage the installation of qualified energy storage systems.”

The bill, introduced in March and passed through Senate in June, gives the New York Public Service Commission the green light to develop an energy storage procurement scheme for assets to come online by 2030.

Although no indication of the level of procurement has been published, New York already has one of the most advanced energy storage markets in the US.

The state is pursuing energy storage not just as a way of admitting a higher renewable energy fraction onto the grid but also as a potential source of industrial leadership and job creation. 

USD$6.3m for storage technologies

In June, for example, the New York State Energy Research and Development Authority pledged USD$6.3m for storage technologies “that have not yet been commercialized but could support renewable power.”

This strategic intent means New York could come out with an energy storage target second only to California’s, and likely far ahead of the 200MWh mandated by Massachusetts or the non-specific mandate in New Mexico.

“Energy storage technologies serve a critical role in promoting a clean energy economy,” said Cuomo in his memorandum of approval.

“Not only will energy storage technologies relieve pressure on existing transmission and grid infrastructure, but they will enhance the development and uptake of renewable energy and create new ‘green’ jobs.”

Kelly Speakes-Backman, CEO of the Energy Storage Association, said it was “a great day for energy storage in New York.

“By signing the bill into law, the governor joined the unanimous opinion of the legislature that a long-term commitment to deploy energy storage is critical to a more reliable and resilient, affordable and sustainable electric system.”

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