California Mandates Energy Storage Goal of 1,325MW for Utilities

October 22, 2013 by Jeff Shepard

The California Public Utilities Commission (CPUC) today established an energy storage target of 1,325 megawatts for Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas & Electric by 2020, with installations required no later than the end of 2024. The guiding principles of today’s decision are 1) the optimization of the grid, including peak reduction, contribution to reliability needs, or deferment of transmission and distribution upgrade investments; 2) the integration of renewable energy; and, 3) the reduction of greenhouse gas emissions to 80 percent below 1990 levels by 2050, per California’s goals. Energy storage systems can be deployed in three "grid domains" -- transmission-interconnected, distribution-interconnected and behind-the-meter-interconnected.

This decision, pursuant to Assembly Bill 2514, directs the utilities to file separate procurement applications containing a proposal for their first energy storage procurement period by March 1, 2014. The decision further establishes a target for Community Choice Aggregators and electric service providers to procure energy storage equal to 1 percent of their annual 2020 peak load by 2020 with installation no later than 2024, consistent with the requirements for the utilities. According to the decision, the state's investor-owned utilities must begin buying a combined 200 MW of energy storage technology by 2014 and reach 1.3 GW (1,325 MW) by the end of 2020. This is expected to increase California's installed capacity sixfold from its current 35 MW. “This decision represents an important first step in encouraging the storage market and supporting grid reliability,” said Commissioner Carla J. Peterman, the lead Commissioner for this proceeding.

Added Commissioner Mike Florio, “This decision implements Assemblymember Skinner’s vision that the deployment of energy storage in California can both help achieve our energy policies and operate the grid. As California looks ahead to meeting needs due to the closure of the San Onofre Nuclear Generating Station and retirement of conventional generation, I look forward to the role that energy storage can begin to play in our mix of resources.”

“I want to thank Commissioner Peterman for her work in developing this new framework to incentivize procurement of energy storage by California’s utilities,” said Commissioner Catherine J.K. Sandoval. “Storage is a game-changer that can help people manage their energy use and expand the capacity of renewable resources to provide power to homes and businesses. This decision will spur investment and innovation in energy storage and help Californians unleash their creative and economic power.”

“Energy storage has the potential to be a game changer for our electric grid, and I fully support the goals of grid optimization, integration of renewable energy, and reduction of greenhouse gas emissions,” said Commissioner Mark J. Ferron. “As the utilities procure storage, we should evaluate the projects on whether or not they fulfill a system need at a reasonable cost.”

In anticipation of the growing market for utility-scale energy storage systems, EnerSys entered the market with its new OptiGrid Stored Energy Solutions, a new turnkey megawatt-hour scale energy management system for utilities and large industrial applications. According to the company, power grid stabilization is a prime concern among today's utilities, as they balance supply and demand and cope with issues such as voltage regulation, frequency regulation, peak management and renewable power integration. In addition, power disturbances are a major cost and concern today for both utilities and industry. It is estimated that the U.S. economy is losing between $119 billion and $188 billion annually from power outages and power quality issues.

"Our new OptiGrid Stored Energy Solutions answers a critical need in the marketplace and, as such, may provide significant growth opportunities for EnerSys," said John D. Craig, chairman and chief executive officer of EnerSys. "Industry analysts forecast that the global market for large scale energy storage over the next 10 to 20 years could be between $200-$600 billion. We believe the large scale energy storage market is poised for growth in the near and long term and could reach two to four gigawatts by 2016."

"EnerSys is uniquely positioned to meet this growing market demand," said Craig. "We have the financial resources, extensive production capabilities and proven product portfolio to provide a complete, competitive and diversified line of energy capacity optimization solutions from a reliable single source supplier."