Energy storage will reap the benefits of a foundation laid in 2017 — when regulated utilities took the helm of massive storage projects.
The resource's market growth is expected to continue well into this year, analysts say, as states begin compelling utilities to include it in their long-term planning processes.
Notable examples include New Mexico and Oregon, whose regulators carved out a place for storage in the states' Renewable Portfolio Standard. Another more recent example is the debate in California over the proposed Puente Power Plant, a natural gas facility.
Stakeholders have pressed California regulators to consider cleaner sources of energy as an alternative to the plant. In the end, the developer NRG Energy suspended its application, while the utility Southern California Edison said it would consider storage as one of the resources.
These examples are part of a broader trend of utility investment in storage. To highlight where the sector sees energy storage heading into the new year, Utility Dive solicited forecasts from prominent experts.
1. DER aggregation begins in earnest — Jon Wellinghoff, former Chairman of the Federal Energy Regulatory Commission
In 2018, developers will begin to aggregate distributed energy resources (which include distributed generation, demand response, storage, control management systems etc.) to provide multiple grid services and collect revenue from multiple value streams.
We are seeing several prospective opportunities in California. East Bay Clean Energy (a community choice aggregation agency in Alameda County) and PG&E announced the West Oakland Clean Energy Project. There aggregated DERs will provide transmission services that would otherwise be provided by a new conventional 230 kV transmission line.
The California PUC announced over 700 MW of DER aggregation opportunity to substitute for three RMR (CASIO Reliability Must Run) power plants the CPUC wants shut down due to expense of keeping those plants operational to meet reliability needs only several hours of the year. Aggregation of DERs can supply that need while also realizing additional revenue opportunities during other hours of the year when the need is not there.
So aggregated DERs will institute a transformation where such resources, both in front of and behind the meter, will provide not only energy, capacity, and ancillary services, but transmission services as well. And get paid for each discreet service offering, making aggregated DERs truly the most cost effective “all purpose tool” on the grid.
2. Energy storage growth to triple — Chris Nelder, manager of mobile practice at Rocky Mountain Institute and host of the Energy Transition Show.
After several years of laying the groundwork for storage, including evolving market rules for the participation of storage in electricity markets, sharply falling prices for lithium-ion batteries, production at Tesla’s Gigafactory battery factory in Nevada ramping up, ten other large battery factories now under development, sustained demand from the EV sector, and two utility-scale battery systems successfully deployed in Southern California and South Australia, conditions seem ripe for storage to really come into its own.
I expect a jump in utility-scale energy storage deployments in 2018, perhaps on the order of three times 2017 levels, and possibly including some large storage systems that are not based on lithium-ion batteries. By the end of 2018, I expect that grid operators will have gleaned some interesting fresh insights on how utility-scale storage performs.
Given the continued cost declines for utility-scale solar, I think we’ll also see a new record-low price for a solar project in the U.S. With recent projects in Mexico, the UAE, Chile, and Saudi Arabia having been signed for $35/MWh or less, unsubsidized, I think we’ll see a utility-scale solar PPA in the U.S. near $35/MWh, unsubsidized, in 2018.
3. It’s the year of the electric vehicle — Matt Stanberry, vice president of market development for Advanced Energy Economy.
At AEE, we expect 2018 to be the Year of the EV. Sales of plug-in electric vehicles (EVs) have grown at a compound rate above 50 percent annually since 2011, and more rapid growth is expected even as the numbers pile up.
GM, with its Chevy Bolt, and Tesla, with its Model 3, have opened a mass market in passenger EVs, and with battery costs – the major barrier to purchase price competitiveness – dropping rapidly, all major automakers have plans to introduce a full range of models. Companies like BYD and Proterra are selling heavy-duty EV buses to transit systems and port facilities around the country and UPS has pre-ordered 125 electric Semi tractors from Tesla.
A real leap in EV adoption is likely to come from corporate fleets, where savings in total cost of ownership complement sustainability commitments. When it comes to charging infrastructure, more than a dozen states saw some sort of legislative or regulatory action in 2017, and momentum is building for more this year, fueled in some cases by VW settlement funds.
One state to watch is Michigan, the home of the U.S. auto industry, where the Public Service Commission opened an EV docket in 2017, and proposals for utility pilots in infrastructure deployment are expected early in the new year.
4. Puerto Rico Ground Zero for storage-plus-solar development — Julia Hamm, President of the Smart Electric Power Alliance.
Unfortunately we head into 2018 with some uncertainty about what the year will hold for solar energy deployment in the United States, largely dependent upon President Trump’s decision in January about tariffs resulting from the Section 201 trade case.
Regardless of that decision, I expect in 2018 there will be an expanded focus by communities and utilities on preparing for a changing climate, more intense weather systems, and cybersecurity threats. Building on the tragic destruction of Puerto Rico’s power system and accompanying humanitarian crisis, the electric power sector will step up its plans to create a more resilient grid.
My recent visit to Puerto Rico—talking with people who deeply understand the unique circumstances on the island—underlined the need for a broad, ambitious but pragmatic vision for rebuilding the island’s power system. I saw so many possibilities for the use of distributed energy resources— including microgrids—to provide solutions to both short-term restoration and long-term system resilience.
I expect we’ll see more deployment of solar in coordination with energy storage to build microgrids at facilities and communities not just in Puerto Rico and the U.S. Virgin Islands, but across the entire country.