By Hudson Sangree

SAN FRANCISCO — Can battery storage become a significant part of the grid in the next five to 10 years?

Some who spoke at Infocast’s Storage Week Plus conference last week were optimistic it could happen, while others sounded notes of caution. Some saw batteries as a way of storing excess solar and wind energy for later use, while others said batteries were best at supporting the grid in other ways.

The relative novelty of battery storage and uncertainty surrounding it makes it a “a little bit of a mutant child,” said Holly Christie, associate general counsel at Invenergy.

“I have a hairless cat, and sometimes when I take the hairless cat for a walk, I get a lot of strange looks from people. They’re like, ‘Is it a dog? Is it a rat?’ And I feel like with storage, it’s like that too,” Christie said. “They’re like, ‘Do we paper it up like a power farm?’ No. ‘Do we paper it up like an asset acquisition?’ Not really. It’s not a financial tool.”

Unlike most aspects of the energy industry, there are no standardized forms to fill out or typical deal structures, so each project tends be “cool [and] very organic” but also fraught with financial and legal challenges, Christie said.

What many speakers agreed on was that interest in storage is growing among regulators, utilities and developers, pushing it forward at a surprisingly rapid pace in an industry that’s generally slow to adopt new technologies.

“It’s a very, very exciting time to be in the energy business,” said Barry Worthington, executive director of the United States Energy Association, a D.C.-based interest group. Worthington moderated the panel on standalone storage that Christie appeared on.

“I’ve been in this business for 40 years, and I’ve never seen the rate of change that we’re witnessing now … [including] one of the most exciting parts — storage,” he said.

He was on a storage panel at a conference five or six years ago, he said, “and I think there were six people in the audience at that time. And you look at the audience today … and it’s really quite remarkable.”

Movin’ on Up

The audience for Storage Week Plus filled a sizable meeting room at the historic Westin St. Francis hotel on Union Square. Representatives of RTOs/ISOs, major utilities and green energy groups listened to a dozen panels on storage and renewables, project financing and opportunities for utility-scale storage, among other subjects.

The upscale venue and size of the conference signaled the emergence of storage as a viable solution for reliability challenges, some speakers said.

Neeraj Arora, a partner at law firm Morgan, Lewis & Bockius, moderated a panel on what off-takers, such as utilities and corporations, expect from storage. Five years ago, those expectations were extremely unclear, Arora said. At that time, there was less than 100 MW of installed storage in the U.S. Now there’s less than 1 GW, but the figure is growing fast, and in five years, there will be 5 GW of storage, he said.

“We’re going from a $1 billion market this year to something like a $5 billion market in five years … and as many of you who have been coming to this conference know, we’ve gone from Oakland to the Hotel Kabuki [in San Francisco’s Japantown], and now we’re here at the esteemed Westin, so we can see that industry is certainly maturing.” (See Calif. Needs far more Storage to Decarbonize, Panelists Say.)

One of his panelists at Storage Week, Arora noted, was James Barner, manager of long-term strategic planning at the Los Angeles Department of Water and Power. The department is seeking approval from its board to buy power at record-low prices from the nation’s largest solar-plus-storage project, with 400 MW of solar and 200 MW of storage.

The deal may be an indicator of the future trajectory of storage, some speakers said.

In five or 10 years, storage will be much bigger, said Randolph Mann, founder and president of esVolta, a Southern California company that develops, owns and operates utility-scale energy storage projects.

“I think we’ll have, as an industry, utility-scale storage in every state in the country,” Mann said. “I think that it will be a … core piece of every utility’s platform and tool kit. I think the technology will be reliable enough, the contracting structures will be reliable enough, that we’ll have a lot of institutional capital participating in the industry. And I don’t think we’ll be able to do Storage Week conferences in a room this size.”

Harnessing Expectations

Others, however expressed a degree of skepticism that battery storage, with its high costs and short run times, would be the answer to storing excess wind and solar power for later use, such as meeting peak demand.

Instead, they said batteries were most adept at providing grid support.

For instance, CAISO is nearing completion of a major stakeholder initiative on storage as a transmission asset. (See CAISO Updates Storage as Transmission Asset Plan.) In a pilot project under that initiative, Pacific Gas and Electric will install 7 MW of battery storage at a 70-kV substation near Dinuba. It will be the first dedicated storage transmission asset in CAISO.

The battery will be used only occasionally, including to support transmission operations during emergencies, said Nicole Efron, a PG&E principal who presented at the conference. It will not bid into CAISO’s market, but the storage unit was deemed a more cost-effective solution to reliability concerns than running new conductors, she said.

“This is an instance where a single-use unit could work” because alternatives were more expensive, Efron said.

Barner said pumped storage likely would be the key to longer-term storage and discharge, not batteries. Pumped hydroelectric power provides lower-cost and longer duration discharge than batteries, lasting a full day instead of a few hours, he said.

Kevin Short, the general manager of the Anza Electric Cooperative in Southern California, said storage is essential, but he questioned how fast it might be adopted in an industry that has been hesitant to adopt new tools over the last century.

“If Thomas Edison were alive today, he’d recognize about 90% of what we do,” Short said.

Storage “is a piece of the puzzle we absolutely need to adopt,” he said. “It’s very similar to the trajectory solar took a few years ago.”

Invenergy’s Christie said lithium-ion batteries are prone to fires and explosions and likely will be replaced with newer battery technology.

After her remarks, USEA’s Worthington asked her how she walks her hairless cat. On a leash, she said, with a harness and “little T-shirts.”

“I recommend it,” she said. “Once you go flesh, you’ll never go back to fur.”

“I don’t like cats, but I’m going to have to give some consideration to having a hairless cat,” Worthington said, prompting laughter. “I think the hair part is what makes me not like cats. You learn something every day.”