- Energy Technologies
- Energy Technologies
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- Policy and Regulation
- Policy and Regulation
Energy Storage Association Offers a Call to Action for New Policy
In collaboration with Navigant Research, the Energy Storage Association (ESA) recently published its latest white paper, 35x25: A Vision for Energy Storage, analyzing the evolving needs of the electric grid and the market drivers powering rapid energy storage industry growth. The study introduces the current state of the industry along with a vision where widespread storage deployments result in major economic, environmental, and social benefits.
Key to the paper’s findings is a call to action section outlining policies and programs being implemented around the country to support the growth of the industry. Over the coming years, changes in both government and regulatory policies will have a substantial effect on how the market develops and at what scale. Players in the market should ensure they fully understand the changes that may be coming and how they will shape future opportunities.
ESA’s call to action highlights considerations and actions for both legislators and industry regulators that seek to capitalize on the multitude of benefits provided by energy storage. For legislators, there are four primary categories of initiatives being explored that offer both direct and indirect support as follows:
- Energy storage impact studies: A strong understanding of the benefits of energy storage is a great first step, allowing local stakeholders to quantify the impacts of storage deployments, such as upfront and ongoing expenses, grid operating cost savings, improved reliability, emissions reductions, and job creation.
- Procurement targets or mandates: Multiple states have implemented targets that serve to clarify long-term policy objectives for the industry, spurring action from utilities and providing operational experience for stakeholders.
- Incentive programs: Including subsidies, grants, and tax credits, which lower the costs for new storage projects to accelerate market growth and establish a sustainable local industry.
- Clean energy standards: A clean energy standard, or clean portfolio standard, is similar to a renewable portfolio standard; however, it often has a broader focus. States including Connecticut and Vermont have implemented standards to ensure storage is compared side-by-side with other resources in planning processes and require electricity providers to implement new technologies.
Many of the legislative actions taken to support energy storage, such as subsidies and procurement mandates, have received significant media attention. However, in many cases, the local regulators have more influence over a market’s growth. Out of an obligation to protect ratepayers and oversee utility investments, regulators must work collaboratively with all stakeholder groups to facilitate constructive dialogue around the deployment and integration of storage systems. ESA’s white paper outlines steps that can be taken by regulators as follows:
- Clear rules regarding storage: Do current regulations adequately account for energy storage participation? If not, work with utilities, industry participants, and research organizations to better define participation methods and strategies for new technologies.
- Updated modeling in proceedings: Many of the modeling tools used in integrated resource planning proceedings today lack sufficient granularity and an evaluation methodology that properly incorporates energy storage. For example, models for storage should assess the effect of deployments at specific locations and over sub-hourly time intervals.
- Streamlined interconnection standards: Despite efforts, current interconnection procedures often pose a significant barrier to new entrants. Streamlining interconnection processes is critical to enable grid modernization.
- The effects of rate design: New rate structures that accurately reflect the locational and time-based costs and benefits of integrating distributed energy resources, including energy storage, should be explored.
At this stage, it is critical that industry participants with in-depth knowledge on the true costs and benefits of energy storage technologies participate in policy development to ensure a level playing field is created. Along with greater detail on the policy initiatives listed above, ESA’s white paper quantifies the diverse benefits of energy storage and how this disruptive technology can transform the electricity industry.