By Rich Heidorn Jr.

WASHINGTON — Jason Burwen, vice president of policy for the Energy Storage Association, took his audience down memory lane Wednesday, recalling the industry’s growth since he joined the organization in 2015.

At the time, he told an audience of 200 at ESA’s annual Energy Storage Policy Forum, there was only 200 MW of non-hydro storage on the grid, virtually all in front of the meter and less than one hour in duration. The market was almost entirely frequency regulation.

Just five years later, there is more than 1,500 MW of storage online, one-third of it behind the meter, with some batteries capable of injecting energy for up to eight hours. In addition to providing ancillary services, it is also seeking roles as capacity and transmission. It is increasingly being paired with solar and wind generation.

“We are a mature industry,” Burwen said, slowing for emphasis.

It’s not all rosy, however. Burwen decried the Trump administration’s tariffs on storage technology imports.

“We have a global supply chain in the energy storage industry and certainly just as we are getting our legs underneath us, it is [an] incredible setback to have that uncertainty when folks are contracting years down the line,” he said. “So, that’s something that we’re trying to make sure that the administration is aware of — recognizing how much effort is going into promoting resilience and [how] storage can be key part of that.”

Storage remains dwarfed by wind (108 GW) and solar (75 GW) generation in installed capacity. And although ESA formed a political action committee last April, it raised less than $5,000 and disbursed only $2,000 in 2019. The American Wind Energy Association’s PAC disbursed more than $78,000 last year and more than $300,000 in the 2018 cycle. The Solar Energy Industries Association PAC spent almost $179,000 in the 2018 campaigns and more than $63,000 in 2019.

But there’s no doubt storage has gained some clout in D.C. As ESA was having its forum, CEO Kelly Speakes-Backman was testifying before a House Energy and Commerce subcommittee. She spoke in support of HR 4447, which would provide technical assistance to rural electric cooperatives for storage and microgrid projects, and HR 1744, a bipartisan bill that would amend the Public Utility Regulatory Policies Act to require utilities to consider storage in their supply-side resource planning processes.

Burwen said the industry “accelerated dramatically” last year. Congress saw the introduction of more than a dozen bills promoting storage, some calling for an investment tax credit. FERC conditionally approved RTOs’ compliance plans with Order 841, the commission’s 2018 rulemaking requiring the RTOs to allow energy storage resources full access to their markets. (See Storage Plans Clear FERC with Conditions.) New York and California expanded their storage incentives, with Nevada finalizing a storage target and Maine and Virginia recommending them. (Last week, Virginia lawmakers approved a 3,100-MW energy storage target by 2035.)

Battery storage costs have dropped dramatically, along with the cost of solar and wind generation, opening new opportunities.

“In the last two years, projects that pair renewables technologies with large-scale batteries have for the first time become economically viable,” BloombergNEF reported in its 2020 Sustainable Energy in America Factbook, released last week. “In particular, ‘PV-plus-storage’ projects have under-bid natural gas-fired plants to win power-delivery contracts in certain states thanks to a 77% drop in the price of a typical PV module and an 87% decline in battery pack prices.”

ESA says its “vision” is to reach 35 GW of storage by 2025, a 23-fold increase from current levels. “This is undoubtedly ambitious and will require fundamental changes in how the grid is planned and engineered, including a reform of U.S. energy markets and regulations,” ESA said.

It projects that electrifying transportation and buildings will add more than 3,500 TWh of annual demand in addition to current U.S. consumption of 4,200 TWh, with annual additions of storage reaching 7 GW in 2024. Wood Mackenzie Power & Renewables projects a more modest deployment of 4.4 GW in 2024.

To reach its goal, ESA is focusing its policy efforts on three goals: ensuring the ability to interconnect to the grid, which FERC supported with Order 845; including storage in all planning processes and procurements as an alternative to other resources; and winning compensation for the resource’s flexibility and other attributes.

The association has called for updating utility integrated resource planning to consider storage as an option for system capacity. IRPs, Burwen said, will be “the new RPS” (renewable portfolio standard). In the next five years, storage will become a “fully integrated part of” discussions on reaching 100% clean energy targets, Burwen said.

“In some respects, the last five years have been about mainstreaming energy storage as supply. And the next five years, we’re probably talking about mainstreaming energy storage as infrastructure, both in the grid and in the built environment,” he said.

RTOs Discuss Opening Doors for Storage

Panel discussions earlier in Wednesday’s conference included state regulators and officials from CAISO, MISO, PJM, ERCOT and NYISO.

Burwen asked one panel about RTOs’ role in resource adequacy, citing FERC’s controversial Dec. 19 order requiring an expansion of PJM’s minimum offer price rule (MOPR) to cover new state-subsidized resources. State officials have criticized the ruling as an attack on their jurisdiction over resource adequacy; some are considering withdrawing from the capacity market as a result. (See PJM MOPR Rehearing Requests Pour into FERC.)

Michael DeSocio, NYISO’s director of market design, said the issue is the subject of “conversations” in the ISO’s stakeholder processes and proceedings of the New York Public Service Commission.

“What we’re really looking for is a little bit of time. … These are complicated issues,” he said. “The markets have offered a level of transparency that you didn’t have before the markets existed, [which] is really important so you get a fair shake at making a go out of it. … I’d really hate to see that go away. So, we’re working hard to see if we can come up with solutions to those concerns.”

In a second RTO/ISO panel, ERCOT’s Kenneth Ragsdale said that although the Texas grid operator is not under FERC jurisdiction, Order 841 “helped us rationalize why we need to spend more time on storage.”

“We’re looking at how we can integrate [storage] with the system we have. … We’ve looked at allowing bid offer curves to be updated intra-hour instead of once at the hour. … We are trying to find the proper way to represent what this asset can provide to us [for resource adequacy]. We are really trying to get away from, ‘No you can’t interconnect that,’ to ‘Yes.’”

Stacey Crowley, CAISO’s vice president of external and customer affairs, said the ISO and storage providers are in the middle of a “trust-building exercise.”

“The operators are going to need to trust that those resources are there when the resource says they’re going to be there,” she said. “One of our really smart attorneys said, ‘Stacy. This is a marathon. And we are literally just tying our shoes right now.’”

Burwen noted that MISO generated controversy in December when it became the first RTO to file a proposal with FERC for treating storage as transmission.

The RTO’s storage-as-transmission-only assets (SATOA) proposal drew complaints that it would provide transmission owners a monopoly (ER20-588). The RTO said it was an initial step designed to avoid complexities over cost recovery, such as how non-TOs would be compensated for providing transmission services. SATOA resources would be barred from simultaneous participation in MISO’s energy market, at least initially. (See MISO SATOA Proposal Faces Opposition.)

Laura Rauch, MISO’s director of settlements, acknowledged the proposal is “imperfect.”

“If you read our filing, you saw that we acknowledge that this is … only a first step,” she said.

Glick Seeks Tech Conference on Hybrid Resources

In a keynote speech, FERC Commissioner Richard Glick acknowledged his two years on the commission have been “maybe a little more contentious than previous FERCs have been. We’ve had, certainly, quite vivid and interesting debates among the different commissioners and advisers.

“One of the reasons is that the transition to a clean energy future … creates a lot of conflicts,” he continued. “People that were in the business before that see their technologies are maybe on the way out are going to fight very hard. … There are winners and losers. Not everything is a win-win situation.”

“Chairman [Neil] Chatterjee has stated a number of times … he wants to make FERC boring again,” he continued, sparking laughter from the audience. “I have to say, he just hasn’t succeeded quite yet.”

But Glick credited Chatterjee for supporting Order 841 — one of the few times that the chairman voted differently than his fellow Republican, Commissioner Bernard McNamee.

He expressed hope that the commission will return to the issue of aggregated distributed energy resources, which it declined to act on in Order 841. “In my view, we should be ready to go. I don’t think there’s any additional information we need,” he said, noting the commission held a technical conference and received comments on the issue. (See Commenters Divided on DER Aggregation, State, LDC Roles.)

He also expressed confidence that the commission will prevail in a legal challenge over its jurisdiction over storage, noting the Federal Power Act gives it authority over all sales for resale, “even behind the meter.” State regulators, utilities and public power groups asked the D.C. Circuit Court of Appeals in July to overturn FERC’s decision not to allow states to opt out of Order 841. (See States, Public Power Challenge FERC Storage Rule.)

Glick said he wants to learn more about reports that storage providers have been reluctant to enter the energy markets in some regions, saying their involvement will be necessary to accommodate a big increase in intermittent renewables. “Especially if we don’t build as much transmission as we need to build, the only way to deal with this extra intermittency is through storage. A lot more storage.”

He also said FERC should hold a technical conference on hybrid storage. Among the questions the commission needs to answer, he said, is how the addition of storage to an existing solar or wind project affects its position in the interconnection queue and whether it is treated as a dispatchable or intermittent resource. “We need to learn what some of these issues are — what some of the barriers are — for hybrid technologies,” he said.