How a California energy storage boom could save the grid
PA Consulting energy storage expert Dan Finn-Foley is quoted in E&E News discussing the growth in battery storage development to help meet California’s energy demands.
The article notes that the Golden State is betting that battery storage is the answer to summer blackouts, especially as the grid transitions to wind and solar energy.
The state has increased its battery energy storage twentyfold since 2019, to about 5,000 megawatts, according to data released in May by the California Energy Commission. That’s enough to power 5 million California homes. By 2045, the state hopes to install enough storage to power 50 million homes.
Crucially, battery storage can help meet energy demand in the early evenings, when households use more electricity for air conditioning and appliances.
The uptick in installations positions the state as a national leader in the growing storage space. California had the most storage of any state at the end of 2022, according to the US Energy Information Administration. It also leads in development: a report from the American Clean Power Association found that California had 8,280 MW of storage in development, nearly a third of the 19,621 MW in development nationally.
Already, the increase in battery storage has shifted the hours for blackout risk. In 2022, the California Independent System Operator, the grid operator serving most of the state, faced its greatest risk from 6 to 7 p.m.; this year, the state projects “significantly lower risk” leading up to 7 p.m. and “more consistent risk” through 9 p.m.
California has prioritized storage development as part of its push to become a zero-carbon economy by 2045.
The state got nearly 16 percent of its electricity from solar and 11.5 percent from wind in 2021, but those sources depend on the weather. Without battery storage, utilities might be left reliant on fossil fuels in the evening hours.
Dan said: California’s surge in batteries “has been long-planned, driven by modeled capacity shortfalls and mandates for new-build resources.” Lawmakers and regulators made concerted efforts to boost in-state development of storage including passage of the nation’s first energy storage mandate in 2013.
For example, the state required its three large investor-owned utilities to accelerate distributed energy storage development and has offered homeowners incentives to install batteries. Last year, state lawmakers allocated $900 million in upfront incentives for battery storage systems paired with solar panels. And this year, new building codes require storage with solar.
Some efforts have been controversial. State regulators cut net metering payments to rooftop solar owners last year, adopting a new dynamic rate design that rewards homeowners who pair rooftop solar with storage and use stored energy in the evenings.
At the same time, the federal government has stepped up storage incentives to pair with the growth in intermittent wind and solar generation, including the passage of a tax credit for standalone storage projects in the Inflation Reduction Act.
Still, battery deployment has lagged significantly behind solar and wind generation. Technology to extend the life of batteries beyond a few hours has been slow to develop and the relative high cost of storage systems has been a barrier for homeowners.
The need, however, is apparent, clean energy experts said. A forecast from the North American Electric Reliability Corp. found that two-thirds of North America could face power shortages this summer if temperatures rise and electricity demand spikes.
That could make battery storage even more valuable this summer. Indeed, California isn’t the only state hoping to ramp up storage use. Texas, which has seen its grid strain under extreme temperatures and weather, is second among states in adding new storage, according to federal data.
Dan said California is likely to continue to lead the field in battery deployment. “California’s top-down approach to new-resource buildout will be complicated for other markets to replicate due a few factors, most notably the extensive collaboration between the state’s legislators, regulators, utilities, and the grid operator, which will be particularly complex for states that are served by more sprawling multi-stage regional transmission organizations compared to the single-state [California ISO].”