Update on Energy Storage

by Bob Shively, Enerdynamics President and Lead Facilitator

Earlier this year on Energy Currents we explored how storage is changing paradigms in electricity system design and operations. Given that storage use is evolving rapidly, it is worth a bit more discussion on some key current issues involving energy storage.

storage deployment across gridSource: EIA Today in Energy


Technology Development

While hydro-pumped storage still dominates the overall electrical storage capacity in the U.S. (and other markets worldwide), rechargeable batteries are the quickest growing source.

Energy storage deployments in US

Source: U.S. Energy Storage Monitor: Q3 2017 Executive Summary, Energy Storage Associate and GTM Research


Rechargeable battery types include lead-acid, nickel-metal-hydride (NiMH), litium-ion (Li-ion), sodium sulphur (NaS), and vanadium redox flow (VRB). Li-ion and VRB types have seen significant performance improvements and cost reductions in recent years. Currently Li-ion batteries make up close to 95% of new installations, with VRB accounting for most of the rest according to the U.S. Energy Storage Monitor.

Li-ion installations are popular because the battery performance is acceptable, costs are relatively low compared to other battery technologies, and the technology is readily available in the market. An example of a recent use are three large-scale projects in Southern California that were built quickly in response to the Aliso Canyon Gas Storage facility leak. The facility was shut down thus eliminating a source of gas supply for gas-fired power plants that were required to maintain the electric grid in Southern California. In response, the California Public Utilities Commission (CPUC) approved construction of up to 100 MW of electricity storage in the Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E) service territories.  The result was multiple projects[1] all completed by January of this year including:

  • SCE’s Alta Gas Pomano Energy Facility (20 MW/ 80 MWh) built by Greensmith Energy using Li-ion batteries from Samsung SDI
  • SCE’s Mira Loma Battery Storage Facility (20 MW/ 80 MWh) built by Tesla using Li-ion batteries from Tesla/Panasonic
  • SDG&E’s Escondido Substation (30 MW/ 120 MWh) built by AES also using Li-ion batteries from Samsung SDI

The projects have shown that battery facilities can substitute for gas-fired generation units as a grid resource  Indeed, California is now debating the economics of batteries combined with distributed energy resources versus construction of a new gas -fired combustion turbine power plant in Oxnard.

Regulatory and Market Issues Are Holding Back Battery Storage Development

How rapidly battery storage grows will depend not only on technology development but also regulatory developments. At both the federal level (FERC) and state level (state commissions) issues must be addressed including:

  • Who should own storage assets (third parties, regulated transmission owners, regulated distribution companies, and/or end-use customers)
  • How markets should evolve to compensate storage owners for the services they provide the grid (capacity, storage, traditional ancillary services, new flexibility-based ancillary services, energy, T&D deferral, power quality, etc.)
  • How retail rate structures should evolve to recognize behind-the-meter storage
  • How compensation for distributed energy resources such as net-metering affect energy storage
  • How tariffs at the wholesale and retail level can create a level playing field for the various technologies that might compete to provide grid services including battery storage, other forms of storage, demand response, central power plants, and transmission or market expansion to wider geographic regions

As the technology develops rapidly, it may be regulatory and market issues rather than technology developments that hold back storage. We will continue to watch these as things progress.


[1] For a list of all projects, see Greentech Media,  Tesla, Greensmith, AES Deploy Aliso Canyon Battery Storage in Record Time


About Enerdynamics

Enerdynamics was formed in 1995 to meet the growing demand for timely, dynamic and effective business training in the gas and electric industries. Our comprehensive education programs are focused on teaching you and your employees the business of energy. And because we have a firm grasp of what's happening in our industry on both a national and international scale, we can help you make sense of a world that often makes no sense at all.
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