Despite its withdrawal from the Paris Climate Agreement, the US still remains committed to combating climate change and achieving the target set by the US Deep Decarbonization Pathways Project (USDDPP) of reducing emissions by at least 80% by 2050 based on 1990 levels 1.
Energy storage has been identified as a major contributory factor towards this decarbonisation effort.With an increase in energy storage projects across the US of 105% from 2013 to 2016 2 and the publication by five states of energy storage targets.
In this two-part series, Powerstar will summarise the scope and detail of the energy storage targets set by: Arizona,California,Massachusetts,New York,and Oregon, starting with this summary of the West Coast states:
Of the 5 states mentioned, Arizona is the state with the most ambitious objectives towards decarbonisation. Its target is to have 80% of its energy mix provided by clean energy sources by 2050, in addition to a significant 3GW (3000MW) energy storage procurement target for 2030. The targets were proposed by Arizona Corporation Commissioner Andy Tobin in the state’s Energy Modernization Plan of January 2018 3.
The plan is intended to reflect the major changes occurring in the energy space and centres on issues such as energy storage, energy efficiency, clean energy, and energy planning. It is expected that thoughtful planning will allow the transition to clean energy to be as successful and smooth as possible.
In order to achieve both of the targets it proposed, Arizona has presented some guiding principles to keep it on track and aid it to accomplish its ambitious decarbonisation objectives. One is to ensure that energy in Arizona is to remain affordable and reliable for all residents which is to be assisted by efforts to empower customers through grid modernisation. This is supported by a Clean Peak Target which necessitates the baseline of clean energy deployed during peak hours to increase by an incremental 1.5% each year until 2030 3.
These principles were set to ensure that the state expands its use of clean energy resources while considering the impact that the deployment of a variety of resources will have on the most expensive, highest demand hours of the energy network to ensure the impact is sustainable and not causing more problems than its solving.
The progress towards the state’s objectives is set to be monitored on an annual basis by the Clean Energy Resource Energy Standard and Tariff (CREST) which is a renaming and redesign of the Renewable Energy Standard and Tariff (REST) 3. The renaming and rebranding of this manifesto suggests at a repositioning and widening of its scope in order to be more inclusive and better aligned to support technologies that can help maximise and smooth out some of the issues that are experienced when renewable generation is added into the energy mix, with energy storage being a prime example of this.
Arizona should be commended for its ambition and could have an important role to play in the clean energy agenda, especially considering the large capacity for solar power in the ‘Grand Canyon State’. However, these ambitious plans are still within their infancy and excitement over the ambitious nature of the objectives should be minimised until there are some tangible results that provide insight into how realistic these targets are.
The next West Coast state to be analysed is California. California has been at the forefront of clean energy for several years as it was the first state to propose a meaningful decarbonisation target back in 2013 by setting a legally binding target for the state’s three largest power generating utilities – Pacific Gas and Electric, San Diego Gas & Electric, and Southern California Edison – to contract for an additional 1.3GW (1300MW) of energy storage power generation by 2020, which are to come online by 2024 4.
Furthermore, in 2017 the big three utility companies were ordered to procure 500MW of behind-the-meter (where a client uses energy to carry out a process) energy storage as an addition to the 2013 target 5. The 2013 target has only recently been beaten for ambition, in December 2017 and January 2018 by New York 6 and Arizona 3 respectively, and the fact that California committed to this initial target in 2013 displays the level of awareness and importance that the clean energy agenda takes in the ‘Golden State’.
Due to the early realisation and adoption of its significant target, California has made itself a barometer of how decarbonisation targets can shape activity, and in this case it is largely positive. The three utility companies previously mentioned have already taken large steps towards a low-carbon future and figures for 2017 show that 28.25% of Southern California Edison’s power comes from renewable sources, 32.9% for Pacific Gas and Electric, and a hugely substantial 43.2% for San Diego Gas & Electric 7.
California’s climate gives it a propensity towards greater uptake of solar (PV) generation and this is evidenced by statistics that reveal almost 14% of the state’s entire electricity generation is provided by solar (PV)8. However, despite this promising increase of renewables into its energy mix, there are concerns about just how much energy storage is being utilised.
This is because during 31 days of the first quarter of 2017, California produced so much solar energy that it had to pay neighbouring states to take excess generation to avoid overloading its power lines, and this number would have been higher still had the state not ordered some solar plants to curtail production 9.
The root cause of this issue is multi-faceted and includes factors such as the price of solar, energy usage habits of customers and the conflicting interests of policy makers; however, it is undeniable that the widespread deployment of energy storage could help maximise the generation and stop the curtailment of renewables and therefore resolve the problem as excess generation could simply be stored and utilised at a later time. This would not only aid progress toward the state’s energy storage goals but would also allow the state to retain its renewable generation and even present the opportunity to sell this energy to neighbouring states, reversing the stituation and creating a lucrative source of income for a state so naturally blessed with an abundance of sunshine.
It must be acknowledged that California appears determined to solve this problem. This was recently evidenced in January 2018 when the California Public Utilities Commission (CPUC) became the first state regulator in the country to issue revenue stacking rules for energy storage projects 10. The rules display a clear way that revenue stacking – using a storage system to generate more than one revenue stream – can be achieved. This is a vital step in the business case for energy storage in the state as it shows a clear route to increased revenue for companies.
In addition,California is in a unique position to become a clean energy leader due to the technology specialisation in the area. California leads the nation in tech industry employment and technology accounted for an estimated 12.6% ($312.1 billion) of California’s economy in 2016 11. With many facets of clean energy and energy storage requiring innovation and proficiency in high technology, it would be expected for California to leverage its specialism in this area to become a global leader in clean energy and energy storage.
The final state of the West Coast trio to be assessed is Oregon. Oregon was another early adopter of energy storage targets, though still considerably behind California’s impressive start. In January 2017, it publicised its target for the state’s big two utility companies – Pacific Power and Portland General Electric – to procure 5MWh of storage capacity by 2020 12.
Many commentators have noted that the particularly small scale target is uninspiring and therefore raises questions about the commitment of the state to decarbonisation through energy storage, and whether it is simply paying lip service to it in order to present itself as a green and clean state.
While the small scale nature of the target certainly invites critique, it could be argued that its willingness towards the early adoption of energy storage, and the complementary target, was simply a way for it to test the waters and start on its journey towards energy storage adoption. Now that more states are gradually getting involved with energy storage and as the technology further develops and gains momentum across the US, it would not be a surprise to see Oregon release a revised target.
In closing, it seems clear that the energy storage agenda on the West Coast is becoming increasingly important as ambitious targets are set and familiarity with the technology grows. The importance of energy storage towards achieving environmental goals cannot be understated as it offers the opportunity to enhance the reliability and therefore viability of renewable energy, particularly within a region that benefits from long, sunny days for the majority of the calendar year.
The second part of this series, which summarises the East Coast, will be able to view next week on Powerstar.com
March 12 2018
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